Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 15, 2020 | |
Cover [Abstract] | ||
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000060977 | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-7665 | |
Entity Registrant Name | LYDALL INC /DE/ | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 06-0865505 | |
Entity Address, Address Line One | One Colonial Road | |
Entity Address, City or Town | Manchester | |
Entity Address, State or Province | CT | |
Entity Address, Postal Zip Code | 06042 | |
City Area Code | 860 | |
Local Phone Number | 646-1233 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | LDL | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Small Business | false | |
Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 17,733,429 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 207,085 | $ 205,274 | $ 553,772 | $ 644,110 |
Cost of sales | 169,155 | 168,918 | 448,856 | 520,423 |
Gross profit | 37,930 | 36,356 | 104,916 | 123,687 |
Selling, product development and administrative expenses | 32,227 | 28,909 | 95,418 | 94,011 |
Impairment of goodwill and other long-lived assets | 0 | 0 | 61,109 | 0 |
Restructuring expenses | 14,984 | 0 | 14,984 | 0 |
Operating (loss) income | (9,281) | 7,447 | (66,595) | 29,676 |
Employee benefit plans settlement expenses | 0 | 186 | 385 | 25,701 |
Interest expense | 4,537 | 3,666 | 11,870 | 11,025 |
Other expense (income), net | 276 | (885) | 106 | (1,359) |
(Loss) income before income taxes | (14,094) | 4,480 | (78,956) | (5,691) |
Income tax (benefit) expense | (2,334) | 1,574 | (4,944) | (5,519) |
Income from equity method investment | (50) | (98) | (24) | (120) |
Net (loss) income | $ (11,710) | $ 3,004 | $ (73,988) | $ (52) |
(Loss) earnings per share: | ||||
Basic (USD per share) | $ (0.67) | $ 0.17 | $ (4.26) | $ 0 |
Diluted (USD per share) | $ (0.67) | $ 0.17 | $ (4.26) | $ 0 |
Weighted average number of common shares outstanding: | ||||
Basic (shares) | 17,384 | 17,270 | 17,364 | 17,264 |
Diluted (shares) | 17,384 | 17,330 | 17,364 | 17,264 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (11,710) | $ 3,004 | $ (73,988) | $ (52) |
Other comprehensive income (loss): | ||||
Foreign currency translation | 8,245 | (8,726) | 3,434 | (6,396) |
Pension and other postretirement benefit plans, net of tax | (49) | 21 | 282 | 19,395 |
Unrealized gain/(loss) on derivative instruments, net of tax | (1,963) | (148) | (2,202) | (2,174) |
Comprehensive (loss) income | $ (5,477) | $ (5,849) | $ (72,474) | $ 10,773 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 122,043 | $ 51,331 |
Accounts receivable, net of allowance for doubtful accounts of $2,465 and $1,842, respectively | 113,258 | 107,786 |
Contract assets | 27,186 | 28,245 |
Inventories | 71,167 | 80,544 |
Taxes receivable | 6,636 | 3,427 |
Prepaid expenses | 6,117 | 3,814 |
Other current assets | 8,516 | 8,450 |
Total current assets | 354,923 | 283,597 |
Property, plant and equipment, at cost | 491,291 | 487,371 |
Accumulated depreciation | (286,713) | (265,729) |
Property, plant and equipment, net | 204,578 | 221,642 |
Operating lease right-of-use assets | 21,522 | 23,116 |
Goodwill | 85,385 | 133,912 |
Other intangible assets, net | 99,445 | 115,577 |
Other assets, net | 7,785 | 8,093 |
Total assets | 773,638 | 785,937 |
Current liabilities: | ||
Current portion of long-term debt | 9,844 | 9,928 |
Accounts payable | 101,785 | 73,426 |
Accrued payroll and other compensation | 24,806 | 17,198 |
Accrued taxes | 10,125 | 5,638 |
Other accrued liabilities | 39,214 | 23,668 |
Total current liabilities | 185,774 | 129,858 |
Long-term debt | 273,195 | 262,713 |
Long-term operating lease liabilities | 17,369 | 18,424 |
Deferred tax liabilities | 27,016 | 34,561 |
Benefit plan liabilities | 18,770 | 18,957 |
Other long-term liabilities | 3,201 | 3,004 |
Commitments and Contingencies (Note 16) | ||
Stockholders' equity: | ||
Preferred stock | 0 | 0 |
Common stock | 255 | 253 |
Capital in excess of par value | 96,536 | 94,140 |
Retained earnings | 266,641 | 340,629 |
Accumulated other comprehensive loss | (24,465) | (25,979) |
Treasury stock, at cost | (90,654) | (90,623) |
Total stockholders’ equity | 248,313 | 318,420 |
Total liabilities and stockholders’ equity | $ 773,638 | $ 785,937 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 2,465 | $ 1,842 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (73,988) | $ (52) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Gain on divestiture | 0 | (1,459) |
Depreciation and amortization | 42,349 | 36,682 |
Impairment of goodwill and long-lived assets | 61,109 | 0 |
Deferred income taxes | (6,911) | (12,849) |
Employee benefit plans settlement expenses | 385 | 25,701 |
Stock-based compensation | 2,508 | 2,073 |
Other, net | 47 | 0 |
Loss (gain) on disposition of property, plant and equipment | 164 | (43) |
Income from equity method investment | (24) | (120) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (8,288) | 10,528 |
Contract assets | 1,269 | (4,330) |
Inventories | 10,117 | (6,206) |
Accounts payable | 28,391 | 13,427 |
Accrued payroll and other compensation | 7,192 | 4,935 |
Accrued taxes | 4,558 | 1,810 |
Other, net | 5,735 | (7,133) |
Net cash provided by operating activities | 74,613 | 62,964 |
Cash flows from investing activities: | ||
Capital expenditures | (20,540) | (27,236) |
Collections of finance receivables | 4,257 | 0 |
Proceeds from divestiture | 0 | 2,298 |
Proceeds from the sale of property, plant and equipment | 14 | 297 |
Business acquisitions, net of cash acquired | 0 | 869 |
Net cash used for investing activities | (16,269) | (23,772) |
Cash flows from financing activities: | ||
Proceeds from borrowings | 20,000 | 0 |
Debt repayments | (9,500) | (38,185) |
Proceeds from servicing receivables | 207 | 0 |
Common stock issued | 32 | 5 |
Common stock repurchased | (31) | (50) |
Net cash provided by (used for) financing activities | 10,708 | (38,230) |
Effect of exchange rate changes on cash | 1,660 | (1,280) |
Increase (decrease) in cash and cash equivalents | 70,712 | (318) |
Cash and cash equivalents at beginning of period | 51,331 | 49,237 |
Cash and cash equivalents at end of period | $ 122,043 | $ 48,919 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Cash Flows [Abstract] | ||
Non-cash capital expenditures | $ 4.8 | $ 3.8 |
Basis of Financial Statement Pr
Basis of Financial Statement Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Financial Statement Presentation | Basis of Financial Statement Presentation Description of Business Lydall, Inc. and its subsidiaries (collectively, the “Company” or “Lydall”) design and manufacture specialty engineered nonwoven filtration media, industrial thermal insulating solutions, and thermal and acoustical barriers for filtration/separation and heat abatement and sound dampening applications. Recent Developments: COVID-19 The impact of the novel strain of the coronavirus (“COVID-19”) has grown throughout the world, including in all global and regional markets served by the Company. During 2020, governmental authorities implemented numerous measures attempting to contain and mitigate the effects of COVID-19, including travel bans and restrictions, quarantines, social distancing orders, shelter in place orders, and shutdowns of non-essential activities. The Company’s manufacturing facilities are located in areas that have been affected by the pandemic and shutdowns. Certain Company facilities in the United States, Europe, and Asia carried out shutdowns as a result of government-imposed restrictions or in conjunction with customer plant closures during the first quarter. The Company’s Asia facilities resumed operations in late February and other facilities ramped back up moderately, in line with customer demand, during the second quarter. In the third quarter, the Company has seen a stronger recovery in the Performance Materials segment, specifically in the Filtration business, and in the Thermal Acoustical Solutions and Technical Nonwovens segments as discussed below. Performance Materials (“PM”) Developments Performance Materials sales were down 4.6% in the first half of 2020 from the comparative period in 2019 with incremental demand for specialty filtration media products more than offset by softer demand in the Sealing and Advanced Solutions business. PM’s Filtration sales continued to be very strong in the third quarter, up approximately 37.8% from the comparative period in the prior year, led by continued demand for fine fiber meltblown media used in personal protective equipment such as N95 respirators and surgical and medical masks. This demand is expected to moderate into the fourth quarter and expected to be down slightly on a sequential basis due to normal seasonality. Weaker demand in automotive, agricultural, and construction equipment markets resulted in a sales decline of approximately 1.7% in the Sealing and Advanced Solutions business in the third quarter of 2020 from the comparative period in 2019. As a result of continued strong demand for filtration products, the Company approved investments to add two production lines in Performance Materials’ Rochester facility for the production of fine fiber meltblown filtration media used in the N95 respirator and surgical and medical masks. In addition, the Company has an agreement with the U.S. Government that provides partial funding of the investments in the production lines and funding for other technical resources. In the third quarter of 2020, the Company announced an investment in a new fine fiber meltblown production line in its French facility to support the European Union face mask production and air filter production in the fight against COVID-19. The Company has a tentative agreement with the French Government to partially fund a portion of this investment. In the third quarter, the Company initiated actions to close underperforming operating locations in Europe and discontinue production of a lower efficiency air filtration media product and, in turn, fully depreciated the supporting machinery and equipment in North America. These actions are part of the Company's ongoing assessment of underperforming assets and focus of resources on the significant investments to expand fine fiber meltblown production. These actions are expected to be completed in 2021 and projected to improve overall segment margin performance beginning in 2021. For additional information, see Note 12, "Restructuring". Technical Nonwovens (“TNW”) Developments During the first half of 2020, TNW experienced slowdowns in all geographic locations; predominantly in its facilities in South Carolina, the United Kingdom, and China. TNW’s Texel business in Canada, however, is a leading supplier of nonwoven products used in the production of healthcare applications including medical wipes, pads, and gowns. In response to the COVID-19 pandemic, the Company re-prioritized its manufacturing capabilities in North America and Europe to focus on serving customers for these products. TNW’s sales in the first half of 2020 declined 18.8% from the comparable period in 2019 on generally slower demand in industrial end markets globally. In the third quarter of 2020, sales increased 12.5% on a sequential basis from the previous quarter but decreased 8.5% compared to the prior year quarter. Softer industrial end markets and lower sales into automotive applications resulted in the year-over-year sales declines in the quarter. Third quarter 2020 sales were down 10.0% in Industrial Filtration and 6.8% in Advanced Materials businesses from the same period in the previous year. Thermal Acoustical Solutions (“TAS”) Developments As previously disclosed, the Company ramped-down its TAS operations in North Carolina in the United States, as well as in France and Germany, coinciding with the shutdown of its major automotive customers' facilities in those regions beginning in late March 2020. During the first half of 2020, TAS sales decreased 35.4% from prior year, heavily impacted by customer shutdowns during March, April, and May. TAS began to ramp-up production in mid-second quarter of 2020 in North America and Europe as customers began to re-open their plants in these regions. During the third quarter 2020, part sales were down 0.8% from the previous year as TAS continued to see stronger demand in North America and Europe with sales increasing significantly compared to second quarter 2020. As customer demand increased in North America, the Company began to experience an increase of COVID-19 cases, particularly at its North American operation, resulting in workforce shortages and other operational inefficiencies causing higher overtime, outsourcing costs, and logistics costs. In addition, recent recoveries in the manufacturing industries are causing higher commodity pricing in North America. In late third quarter 2020, as a result of labor shortages and operational inefficiencies directly related to COVID-19, TAS was unable to manufacture parts timely, resulting in customer production line stoppages. In early October 2020, due to the unforeseen and unforeseeable nature of the COVID-19 pandemic, which is out of the Company’s control, the Company invoked force majeure or commercial impracticability as legal excuse for delayed performance of contracts and defense to any claim that may be asserted by customers. A recent resurgence of cases in that same facility has caused the Company to expand its declaration of force majeure or commercial impracticability to other impacted customers. The Company has taken various actions to resolve these issues and expects TAS to continue to incur incremental costs in the fourth quarter of 2020. Liquidity and Cash Preservation The Company continued to experience working capital cash flow improvements through September 30, 2020, generating $74.6 million in cash from operating activities. As the Company continues to ramp-up production and invest in new fine fiber meltblown production equipment to meet customer demand, the Company expects cash outflows to support working capital requirements and capital projects. During the first nine months of 2020, the Company took significant measures to reduce its overall cash expenditures, including the furlough or lay-off of hourly/salary plant workers and select furloughs of corporate and other salaried employees, deferred company contributions to its pension plans and matching contributions under the Company's 401(k) defined contribution plan, reduction of purchase obligations for raw materials, and reduction/delay of non-critical capital spending. As a result, the Company reduced its monthly cash expenditures. The Company may elect to continue certain actions if the COVID-19 pandemic continues. In addition, the Company has taken advantage of specific benefits, including wage recovery provided by social programs in Europe and China and deferred domestic employer tax in the U.S. through the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. Through September 30, 2020, the Company benefited from $2.0 million in social cost reimbursements predominately in Europe and China. The Company may pursue, wherever it qualifies, governmental assistance and take advantage of governmental programs. The Company cannot guarantee, however, that it will qualify for, or receive, any additional assistance that it pursues. As noted above, the Company reached an agreement with the U.S. Government in June 2020 that provides funding to cover a portion of the cost to install two new production lines for the production of meltblown material for N95 respirators, surgical and medical masks, and for other technical resources. The Company will receive monthly payments in accordance with the agreement to fund up to $13.5 million. Additionally, the Company has a tentative agreement with the French Government to fund up to 30% of the Company’s investment in its facility in France supporting the European Union face mask production and air filter production. In addition to the significant measures taken to reduce and contain costs, the Company took actions in March 2020 to provide additional liquidity, primarily including a $20.0 million draw down on its amended credit facility. On May 11, 2020, the Company entered into an amended credit agreement (see Note 6, "Long-term Debt and Financing Arrangements" for the key amended terms and conditions) to modify certain financial maintenance covenants, at least one of which the Company expected to fail during the second quarter of 2020 as a result of the impact of COVID-19. On October 14, 2020, the Company amended its 2018 Credit Agreement to allow certain restructuring and other charges, as defined by the amendment, to be excluded from EBITDA in the calculation of the Company's financial covenants. The Company was in compliance with those modified financial covenants as of and for the three-month period ended September 30, 2020, and management does not anticipate noncompliance in the foreseeable future. Through September of 2020, the Company generated $74.6 million of net cash provided by operations and had cash on hand of $122.0 million as of September 30, 2020. The Company continues to maintain the necessary capital to meet its debt obligations and interest payments. As previously disclosed in late 2019, the Company entered into arrangements with a banking institution to sell trade accounts receivable balances for selected customers. The Company continues to sell trade accounts receivable balances under these arrangements. See Transfer of Financial Assets in this Note 1, “Basis of Financial Statement Presentation” for more information. The spread of COVID-19 and the measures taken to constrain the spread of the virus have had, and will continue to have, a material negative impact on the Company’s financial results, and such negative impact may continue well beyond the containment of such outbreak. There is inherent uncertainty in the assumptions the Company uses to estimate its future liquidity due to the impact of the COVID-19 outbreak. In addition, the magnitude, duration, and speed of the global pandemic is uncertain. Consequently, the impact on the Company's business, financial condition or longer-term financial or operational results is uncertain. However, management believes, based on the actions taken to reduce cash expenditures and the Company’s financial position, that net cash provided by operations combined with its cash and cash equivalents and borrowing availability under its Credit Facility will be sufficient to fund its current obligations, capital spending, debt service requirements, and working capital needs over at least the next twelve months. Steps Taken to Protect Employees The Company continues to monitor the global outbreak and spread of COVID-19 and take steps to mitigate the potential risks to the Company and its employees posed by the spread, related circumstances, and economic impacts of COVID-19. As the Company brings employees back to work, it has implemented changes to help ensure the safety and health of all its employees and continues to assess and update its business continuity plans in the context of this pandemic. The Company established the Lydall Emergency Preparedness Team (“LEPT”), implementing strict travel restrictions, enforcing rigorous hygiene protocols, increasing sanitization efforts at all facilities and implementing remote working arrangements for the majority of its employees who work outside the plants. The Company will continue its work to ensure it maintains a safe and healthy work environment and continue to allow remote working arrangements as long as necessary, where appropriate. Basis of Presentation The accompanying Condensed Consolidated Financial Statements include the accounts of Lydall, Inc. and its subsidiaries. All financial information is unaudited for the interim periods reported. All significant intercompany transactions have been eliminated in the Condensed Consolidated Financial Statements. The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The year-end Condensed Consolidated Balance Sheet was derived from the audited financial statements for the year ended December 31, 2019, but does not include all disclosures required by U.S. GAAP. In the opinion of management, the condensed consolidated financial information reflects all adjustments necessary for a fair statement of the Company’s consolidated financial position, results of operations, and cash flows for the interim periods reported, but do not include all the disclosures required by U.S. GAAP. All such adjustments are of a normal recurring nature, unless otherwise disclosed in this report. Certain amounts in prior year financial statements and notes thereto have been reclassified to conform to current year presentation. The statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations, and financial condition, including sales, expenses, reserves and allowances, manufacturing, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including the result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it. The Company has made estimates of the impact of COVID-19 within its financial statements and there may be changes to those estimates in future periods. Actual results could differ from those estimates. Recent Accounting Pronouncements Adopted Effective January 1, 2020, the Company adopted the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2016-13, "Financial Instruments - Credit Losses (Topic 326)." The new standard amends guidance on reporting credit losses for assets held at amortized cost basis. The Company has determined the only financial assets subject to the new standard are its trade receivables and contract assets. The adoption of this ASU did not have any impact on the Company’s consolidated financial statements and disclosures. Effective January 1, 2020, the Company adopted the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement," which adds, amends, and removes certain disclosure requirements related to fair value measurements. Among other changes, this standard requires certain additional disclosure surrounding Level 3 assets, including changes in unrealized gains or losses in other comprehensive income and certain inputs in those measurements. Please refer to Note 5, “Impairments of Goodwill and Other Long-Lived Assets”, for discussion of the inputs used in the quantitative impairment assessments for the three-month period ended March 31, 2020. Effective January 1, 2020, the Company adopted FASB issued ASU 2018 - 15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40); Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." The amendments in this update require implementation costs incurred by customers in cloud computing arrangements (i.e., hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software, and deferred over the noncancellable term of the cloud computing arrangement plus any option renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements and disclosures. In March 2020, the FASB issued ASU 2020-04, " Reference Rate Reform (Topic 848); Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The amendments in this update are elective, and provide optional expedients and exceptions in accounting for contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The guidance in this update is effective for transactions entered into between March 12, 2020 and December 31, 2022. The Company adopted this ASU upon issuance and notes no impact to the Company's consolidated financial statements and disclosures as of September 30, 2020. Recent Accounting Pronouncements Not Yet Adopted In August 2020, the FASB issued ASU 2020-06, "Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)." The amendments in this update are intended to simplify the accounting for convertible debt instruments and convertible preferred stock. This ASU is effective for fiscal years and interim periods beginning after December 15, 2021 with early adoption permitted. The Company does not expect the adoption of this update to have a material impact on its consolidated financial statements and related disclosures. In January 2020, the FASB issued ASU 2020-01, "Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)." The amendments in this update are intended to reduce diversity in practice and increase comparability of the accounting for interaction of equity securities, investments accounted for under the equity method of accounting, and the accounting for certain forward contracts and purchased options accounted for under Topic 815. This ASU is effective for fiscal years and interim periods beginning after December 15, 2020 with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes". The new standard is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in Topic 740, and by clarifying and amending existing guidance in other areas of the same topic. This ASU is effective for fiscal years and interim periods beginning after December 15, 2020 with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." This ASU requires entities to disclose the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates. This ASU also requires entities to disclose an explanation for significant gains and losses related to changes in the benefit obligation for the period. This ASU is effective for fiscal years beginning after December 15, 2020 with early adoption permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements and disclosures. Significant Accounting Policies The Company’s significant accounting policies are detailed in Note 1, “Significant Accounting Policies” within Part IV, Item 15 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Risks and Uncertainties Worldwide economic cycles, political changes, and the COVID-19 pandemic affect the markets that the Company’s businesses serve and affect demand for the Company's products and could impact profitability. Among other factors, disruptions in the global credit and financial markets, including diminished liquidity and credit availability, changes in international trade agreements, swings in consumer confidence and spending, and unstable economic growth and fluctuations in unemployment rates has caused economic instability and can have a negative impact on the Company’s results of operations, financial condition, and liquidity. Transfers of Financial Assets In December 2019, the Company entered into two arrangements with a banking institution to sell trade accounts receivable balances for select customers. Under the programs, the Company has no risk of loss due to credit default and is charged a fee based on the nominal value of receivables sold and the time between the sale of the trade accounts receivables to banking institutions and collection from the customer. Under one of the programs, the Company services the trade receivables after sale and receives 90.0% of the trade receivables in cash at the time of sale and the remaining 10.0% in cash, net of fees, at the earlier of customer payment or 150 days. In the three-month and nine-month periods ended September 30, 2020, under both programs, the Company sold $21.3 million and $64.3 million, respectively, in trade receivable balances, received $59.1 million in total cash under the programs, and incurred $0.2 million in fees. The Company expects to receive the remainder, net of fees, in the fourth quarter of 2020. Condensed Consolidated Statements of Comprehensive Income In connection with the preparation of its 2019 audited financial statements, the Company identified that in its previously filed unaudited interim financial statements for the three-month and six-month periods ended June 30, 2019 and the nine-month period ended September 30, 2019, the Company had incorrectly excluded, from its Condensed Consolidated Statements of Comprehensive Income, the impact to comprehensive income resulting from the settlement of its U.S. Lydall Pension Plan (see Note 11, "Employer Sponsored Benefit Plans"). As a result, unaudited comprehensive income for such periods was understated by approximately $19.0 million. This error did not have any impact on the Company’s corresponding previously filed Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations or Condensed Consolidated Statements of Cash Flows. Management has concluded that such errors did not result in the previously issued unaudited financial statements being materially misstated. In connection with the filing of this Quarterly Report on Form 10-Q, the Company has revised the Condensed Consolidated Statements of Comprehensive Income for the nine-month period ended September 30, 2019 as follows: Nine Months Ended September 30, 2019 In thousands As reported As revised Pension liability adjustment, net of tax $ 379 $ 19,395 Comprehensive (loss) income $ (8,243) $ 10,773 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with CustomersThe Company accounts for revenue in accordance with ASC 606, "Revenue from Contracts with Customers". Revenues are generated from the design and manufacture of specialty engineered filtration media, industrial thermal insulating solutions, automotive thermal and acoustical barriers for filtration/separation and thermal/acoustical applications. The Company’s revenue recognition policies require the Company to make significant judgments and estimates. In applying the Company’s revenue recognition policy, determinations must be made as to when control of products passes to the Company’s customers which can be either at a point in time or over time. Revenue is generally recognized at a point in time when control passes to customers upon shipment of the Company’s products and revenue is generally recognized over time when control of the Company’s products transfers to customers during the manufacturing process. The Company analyzes several factors, including but not limited to, the nature of the products being sold and contractual terms and conditions in contracts with customers to help the Company make such judgments about revenue recognition. Unfulfilled performance obligations are generally expected to be satisfied within one year. Contract Assets and Liabilities The Company’s contract assets primarily include unbilled amounts typically resulting from sales under contracts when the over time method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. These unbilled accounts receivable in contract assets are transferred to accounts receivable upon invoicing, typically when the right to payment becomes unconditional in which case payment is due based only upon the passage of time. The Company’s contract liabilities primarily relate to billings and advance payments received from customers and deferred revenue. These contract liabilities represent the Company’s obligation to transfer its products to its customers for which the Company has received, or is owed consideration from its customers. Contract liabilities are included in Other long-term liabilities on the Company’s Condensed Consolidated Balance Sheets. Contract assets and liabilities consisted of the following: In thousands September 30, 2020 December 31, 2019 Dollar Change Contract assets $ 27,186 $ 28,245 $ (1,059) Contract liabilities $ 3,414 $ 1,441 $ 1,973 The $1.1 million decrease in contact assets from December 31, 2019 to September 30, 2020 was primarily due to timing of billings to customers. The $2.0 million increase in contract liabilities from December 31, 2019 to September 30, 2020 was primarily due to an increase in customer deposits, offset by $1.1 million of revenue recognized in the first nine months of 2020 related to contract liabilities at December 31, 2019. Disaggregated Revenue The Company disaggregates revenue from customers by geographic region, as it believes this disclosure best depicts how the nature, amount, timing, and uncertainty of the Company's revenues and cash flows are affected by economic factors. Disaggregated revenue by geographical region for the three-month and nine-month periods ended September 30, 2020 and 2019 were as follows: For the Three Months Ended September 30, 2020 For the Three Months Ended September 30, 2019 In thousands North America Europe Asia Total Net Sales North America Europe Asia Total Net Sales Performance Materials $ 45,759 $ 18,776 $ 3,282 $ 67,817 $ 42,693 $ 15,203 $ 2,104 $ 60,000 Technical Nonwovens 34,727 17,318 6,464 58,509 42,128 16,544 5,240 63,912 Thermal Acoustical Solutions 57,841 22,861 4,821 85,523 61,315 22,208 4,403 87,926 Eliminations and Other (4,569) (195) — (4,764) (6,405) (159) — (6,564) Total Net Sales $ 133,758 $ 58,760 $ 14,567 $ 207,085 $ 139,731 $ 53,796 $ 11,747 $ 205,274 For the Nine Months Ended September 30, 2020 For the Nine Months Ended September 30, 2019 In thousands North America Europe Asia Total Net Sales North America Europe Asia Total Net Sales Performance Materials $ 131,866 $ 52,552 $ 7,092 $ 191,510 $ 136,892 $ 47,589 $ 5,201 $ 189,682 Technical Nonwovens 101,694 49,674 16,551 167,919 121,984 53,384 23,228 198,596 Thermal Acoustical Solutions 137,517 57,825 11,390 206,732 189,152 73,853 12,506 275,511 Eliminations and Other (11,914) (475) — (12,389) (19,139) (540) — (19,679) Total Net Sales $ 359,163 $ 159,576 $ 35,033 $ 553,772 $ 428,889 $ 174,286 $ 40,935 $ 644,110 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories as of September 30, 2020 and December 31, 2019 were as follows: In thousands September 30, December 31, Raw materials $ 31,442 $ 36,322 Work in process 14,228 14,873 Finished goods 25,497 29,349 Total inventories $ 71,167 $ 80,544 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill The Company performs an assessment of its goodwill for impairment at least annually in the fourth quarter, and whenever events or changes in circumstances indicate that the carrying value may exceed its fair value. There were no such events or changes in circumstances during the three-month period ended September 30, 2020. See Note 5, "Impairments of Goodwill and Other Long-Lived Assets", for discussion of the goodwill impairment recorded during the three-month period ended March 31, 2020. The changes in the carrying amount of goodwill by segment as of and for the nine-month period ended September 30, 2020 were as follows: In thousands December 31, Currency translation adjustments Impairment September 30, Performance Materials $ 80,658 $ (22) $ (48,671) $ 31,965 Technical Nonwovens 53,254 166 — 53,420 Total goodwill $ 133,912 $ 144 $ (48,671) $ 85,385 Goodwill Impairment During the three-month period ended March 31, 2020, the Company performed a goodwill impairment analysis in the Performance Materials and Technical Nonwovens reporting units and recorded a goodwill impairment charge of $48.7 million in the Performance Materials reporting unit. See Note 5, "Impairments of Goodwill and Other Long-Lived Assets", for further discussion of the goodwill impairment. Other Intangible Assets The table below presents the gross carrying amount and, as applicable, the accumulated amortization of the Company’s acquired intangible assets other than goodwill included in “Other intangible assets, net” in the Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 In thousands Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Amortized intangible assets Customer Relationships $ 141,784 $ (44,636) $ 142,400 $ (30,648) Patents 791 (670) 759 (607) Technology 2,500 (1,102) 2,500 (977) Trade Names 7,322 (6,544) 7,293 (5,143) License Agreements 629 (629) 610 (610) Other 570 (570) 551 (551) Total other intangible assets $ 153,596 $ (54,151) $ 154,113 $ (38,536) |
Impairments of Goodwill and Oth
Impairments of Goodwill and Other Long-Lived Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairments of Goodwill and Other Long-Lived Assets | Impairments of Goodwill and Other Long-Lived Assets During the three-month period ended March 31, 2020, the Company experienced disruptions in some operations from lower customer demand directly attributable to the COVID-19 pandemic. Many of the Company's automotive customers temporarily ceased operations due to the impact of the COVID-19 pandemic on the global economy resulting in the following: • The Company’s China facilities carried out a planned shutdown in conjunction with the lunar New Year in late January, which was extended to late February as a result of government imposed restrictions. The facilities did not resume operations until late February and ramped back up moderately in line with customer demand. Currently, all of the Company’s plants in China are operating and all of its automotive customer plants in China have re-opened. The Company has not experienced any significant disruption it its supply chains in China since resuming operations; • On March 20, 2020, the Company announced ramp-downs at its Thermal Acoustical Solutions ("TAS") operations in North America and Europe as a direct result of customer stoppages. The Company's facilities in North America and Europe have since resumed operations; • Leading economic indicators began to signal a broad economic recession and a future decline in automotive sales; • Certain of the Company’s Performance Materials ("PM") and Technical Nonwovens ("TNW") operations with exposure to automotive end markets also experienced reductions in sales, which, in some cases, have been partially offset by increases in sales of other products. These operations also have exposure to various industrial end markets. Leading economic indicators for certain of these markets also signaled a downturn in demand; and • The Company's share price and market capitalization experienced a significant decline. During the three-month period ended March 31, 2020, the Company considered the combination of the above to be triggering events that required an impairment analysis for the goodwill held at the PM and TNW reporting units, and for certain long-lived assets. Therefore, during the three-month period ended March 31, 2020, in accordance with both ASC 350 Intangibles - Goodwill and Other , and with ASC 360 Property, Plant & Equipment , the Company performed an impairment analysis of its goodwill held by the PM and TNW reporting units, and on certain of its long-lived assets (principally land, machinery and equipment, customer relationships, and buildings and improvements). As a result of these impairment tests, the Company recorded the following impairment charges during the three-month period ended March 31, 2020: In thousands Performance Materials Technical Nonwovens Thermal Acoustical Solutions Totals Impairment of goodwill $ 48,671 $ — $ — $ 48,671 Impairment of other long-lived assets 12,438 — — 12,438 Total impairments $ 61,109 $ — $ — $ 61,109 Goodwill During the three-month period ended March 31, 2020, the Company performed a quantitative goodwill impairment assessment for both the PM and TNW reporting units. In the quantitative impairment assessment, the Company weighted equally both an income approach (discounted cash flow model) and a market approach to determine the fair value of the reporting units. The Company’s significant assumptions in the discounted cash flow model included, but were not limited to, future cash flow projections, the weighted average cost of capital, the terminal growth rate, and the tax rate. Lower expected demand in automotive and other end markets due to the COVID-19 pandemic resulted in a reduction in sales and cash generation projections as compared to prior projections for the reporting units. Projected future cash flows includes management estimates and assumptions that are based on the best available information as of the date of the assessment. Future cash flows can be affected by numerous factors including changes in economic, industry or market conditions, changes in the underlying business or products of the reporting unit, changes in competition, and changes in technology. The cash flows of the Company's reporting units can be significantly affected by the depth of the estimated decline in automotive and other end markets and the Company's estimates of the pace and level of their recovery as well as the ability of the Company to increase production in response to the recovery. The weighted average cost of capital for the PM reporting unit increased from 9.2 percent in the three-month period ended December 31, 2019 to 11.5 percent in the three-month period ended March 31, 2020. The weighted average cost of capital for the TNW reporting unit increased from 9.2 percent in the three-month period ended December 31, 2019 to 10.8 percent in the three-month period ended March 31, 2020. There are inherent uncertainties and management judgment required in an analysis of goodwill impairment. The Company believes the income approach was appropriate because it provided a fair value estimate based upon the reporting unit's expected long-term operations and cash flow performance. The Company also used a form of the market approach, which was derived from metrics of publicly traded companies or historically completed transactions of comparable businesses. The selection of comparable businesses is based on the markets in which the reporting unit operates giving consideration to risk profiles, size, geography, and diversity of products and services. The EBITDA multiples used in the market approach for both reporting units declined from the three-month period ended December 31, 2019 to the three-month period ended March 31, 2020 due to market-related changes in the industries in which these reporting units operate as a result of COVID-19. Other assumptions included adding an implied control premium to the valuation based on estimating the fair value on a controlling basis, which was derived from research on control premiums observed in recent mergers and acquisitions in the industries in which the Company operates. The control premium for both reporting units increased by 5 percent from the three-month period ended December 31, 2019 to the three-month period ended March 31, 2020. Control premiums can be higher in periods of depressed stock prices. The Company believes the market approach was appropriate because it provided a fair value using multiples from companies with operations and economic characteristics similar to the PM reporting unit. The Company also performed an overall reconciliation to corroborate the fair value derived from the income and market approaches to the Company's overall market capitalization. The revised projections, together with a deterioration in the inputs described above, drove a reduction in the fair value of both reporting units. As a result, the carrying value of the PM reporting unit was determined to exceed its fair value by $48.7 million, resulting in the impairment charge. After recording the impairment charge during the three-month period ended March 31, 2020, the remaining goodwill associated with the PM reporting unit was $31.9 million. The fair value of the TNW reporting unit exceeded its carrying value and, therefore, no impairment was required. Any declines in financial projections, including changes to key assumptions, could have a material adverse impact on the fair value of the reporting units, and therefore could result in further impairment charges. In the three-month period ended December 31, 2019, as part of its annual impairment assessment, the Company determined that the fair value of the PM reporting unit was less than its carrying value and recorded a goodwill impairment of $63.0 million. Other Long-Lived Assets During the three-month period ended March 31, 2020, the Company performed the following impairment assessments for long-lived assets in accordance with ASC 360: • As a result of the COVID-19 pandemic and the Company's action plan to address the risks associated with it, the Company accelerated certain actions. One such action was a review of an underperforming European plant within the PM segment. As a result of a strategic shift regarding this plant, the Company performed an impairment assessment on the long-lived assets of the plant. To determine the recoverability of this asset group, the Company completed an undiscounted cash flow analysis (income approach) and compared it to the asset group carrying value. The impairment test concluded that the assets were not recoverable because the undiscounted cash flows were less than the carrying amount. The Company determined that the carrying value of the assets exceeded the fair value and recorded a long-lived asset impairment charge of $12.4 million. • As a result of the temporary plant closures announced on March 20, 2020 in response to the COVID-19 pandemic's effects on the automotive sector, the Company performed impairment assessments on the long-lived assets for its TAS plants. The Company considered each operating plant's asset group, primarily consisting of machinery and equipment, and buildings and improvements. To determine the recoverability of each asset group, the Company completed an undiscounted cash flow analysis (income approach) and compared it to each asset groups' carrying value. For two of the asset groups, the undiscounted cash flows exceeded the carrying value of the asset group so no further assessment of impairment was necessary. For two of the European plants, the undiscounted cash flows did not exceed the plants' carrying values. As part of step two of the impairment assessment, the Company used the market approach to determine fair value based on independent appraisals of the long-lived assets. The Company determined that impairment was not necessary since the fair value of the long-lived asset groups for each operating plant exceeded their carrying amounts. There were no events or circumstances during the three-month period ended September 30, 2020 that indicated any further triggering events under ASC 360 were present. Changes in future operating results could result in a future non-cash impairment charge. During the three-month period ended December 31, 2019, the Company determined that fair value of a certain asset group in the PM segment exceeded its carrying value and recorded a long-lived asset impairment charge of $1.2 million. |
Long-term Debt and Financing Ar
Long-term Debt and Financing Arrangements | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Long-term Debt and Financing Arrangements | Long-term Debt and Financing Arrangements On August 31, 2018, the Company amended and restated its $175 million senior secured revolving credit agreement ("2018 Credit Agreement"), which increased the available borrowing from $175 million to $450 million, added three additional lenders, and extended the maturity date from July 7, 2021 to August 31, 2023. On May 11, 2020, the Company amended its 2018 Credit Agreement ("2020 Amendment") which, among other changes, decreased borrowings from $450 million to $314 million and modified certain financial covenants contained in the 2018 Credit Agreement. 2018 Credit Agreement Under the terms of the 2018 Credit Agreement, the lenders provided up to a $450 million credit facility (the “Facility”) to the Company, including a term loan commitment of $200 million and revolving loans to or for the benefit of the Company and its subsidiaries of up to $250 million. The Facility was secured by substantially all of the assets of the Company. Interest was charged on borrowings at the Company’s option of either: (i) Base Rate plus the Applicable Rate, or (ii) the Eurodollar Rate plus the Applicable Rate. The Base Rate is a fluctuating rate equal to the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate as set by Bank of America, and (c) the Eurocurrency Rate plus 1.00%. The Eurocurrency Rate means (i) if denominated in LIBOR quoted currency, a fluctuating LIBOR per annum rate equal to the London Interbank Offered Rate; (ii) if denominated in Canadian Dollars, the rate per annum equal to the Canadian Dollar Offered Rate; or (iii) the rate per annum as designated with respect to such alternative currency at the time such alternative currency is approved by the Lenders. The Applicable Rate is determined based on the Company’s Consolidated Leverage Ratio (as defined in the 2018 Credit Agreement). The Applicable Rate added to the Base Rate Committed Loans ranged from 0.00% to 1.25%, and the Applicable Rate added to Eurocurrency Rate Committed Loans and Letters of Credit ranged from 0.75% to 2.00%. The Company paid a quarterly fee ranging from 0.15% to 0.275% on the unused portion of the revolving commitment. The Company has an interest rate swap in place to convert a portion of the Company's borrowings from a variable rate to a fixed rate. See Note 7, "Derivatives" for additional information. The Company is permitted to prepay term and revolving borrowings in whole or in part at any time without premium or penalty, subject to certain minimum payment requirements, and the Company was generally permitted to irrevocably cancel unutilized portions of the revolving commitments under the 2018 Credit Agreement. The Company is required to repay the term commitment in an amount of $2.5 million per quarter beginning with the quarter ending December 31, 2018 through the quarter ending June 30, 2023. The 2018 Credit Agreement contained covenants required of the Company and its subsidiaries, including various affirmative and negative financial and operational covenants. The Company was required to meet certain quarterly financial covenants calculated from the four fiscal quarters most recently ended, including: (i) a minimum Consolidated Fixed Charge Coverage Ratio, which requires that at the end of each fiscal quarter the ratio of (a) consolidated EBITDA to (b) the sum of consolidated interest charges, redemptions, non-financed maintenance capital expenditures, restricted payments and taxes paid, each as defined in the 2018 Credit Agreement, may not be lower than 1.25 to 1.0; and (ii) a Consolidated Net Leverage Ratio, which required that at the end of each fiscal quarter the ratio of consolidated funded indebtedness minus consolidated domestic cash to consolidated EBITDA, as defined in the 2018 Credit Agreement, could not be greater than 3.5 to 1.0. 2020 Amendments to the 2018 Credit Agreement On May 11, 2020, the Company amended its $450 million senior secured revolving 2018 Credit Agreement. The principal purpose of the Amendment was to modify certain financial covenants contained in the 2018 Credit Agreement, at least one of which the Company expected to fail as early as the second quarter of 2020 as a result of the impact of COVID-19. The amended terms and conditions included the following: • Modified the financial covenants as follows: ◦ Consolidated Net Leverage Ratio, which requires that on the last day of each fiscal quarter the ratio not be greater than 6.5:1 through the period ending March 31, 2021, 4.50:1 for the period ending June 30, 2021 through the period ending March 31, 2022, and 3.50:1 for the periods ending June 30, 2022 and thereafter; ◦ The minimum Consolidated Fixed Charge Coverage Ratio, which requires that on the last day of each fiscal quarter the ratio not be lower than 1.10:1 calculated on a trailing twelve month basis through the period ending June 30, 2020, 1.25:1 calculated on a distinct quarterly basis for the periods ended September 30, 2020 through June 30, 2021, and 1.25:1 calculated on a trailing twelve month basis beginning with the period ending September 30, 2021 and thereafter; • Required the Company maintain a minimum cash and cash equivalents balance of $40 million, excluding deposit accounts in China; • Decreased the term loan facility from $200 million to $144 million and decreased the revolving credit facility from $250 million to $170 million for a total overall facility of $314 million; and eliminated the accordion feature; • Established a floor on the Base and Eurocurrrency Rate of 1%; • Modified the definition of the Applicable Rate, as determined based on the Company’s Consolidated Net Leverage Ratio, by increasing the range for the Base Rate for Committed Loans to 2.00% to 3.25% and increasing the range for the Eurocurrency Rate Committed Loans and Letters of Credit to 3.00% to 4.25%; • Increased the quarterly commitment fee to 0.375% on the unused portion of the revolving commitment; and • Required the Company to pay an amendment fee to the Lenders based on their commitment levels. There was no modification to the maturity date of the facility. On October 14, 2020, the Company further amended its 2018 Credit Agreement to allow certain restructuring and other charges, as defined by the amendment, to be excluded from EBITDA in the calculation of the Company's financial covenants. The Company believes that its liquidity resources, including the Facility, are sufficient to meet its working capital needs and other cash requirements. The Company was in compliance with those modified financial covenants at September 30, 2020, and management does not anticipate noncompliance in the foreseeable future. At September 30, 2020, the Company had $283.5 million of borrowings outstanding and standby letters of credit outstanding of $1.8 million. The borrowings outstanding included a $138.5 million term loan, net of $0.5 million in debt issuance costs being amortized to interest expense over the debt maturity period. The Company had available borrowings of $23.7 million and $121.6 million at September 30, 2020 and December 31, 2019, respectively. In addition to the amounts outstanding under the Facility, the Company has various foreign credit facilities totaling approximately $9.4 million. At September 30, 2020, the Company's foreign subsidiaries had $0.2 million in borrowings outstanding as well as $1.3 million in standby letters of credit outstanding. The Company also has a finance lease agreement for equipment at a North America operation requiring monthly principal and interest payments through October 31, 2020. Total outstanding debt consists of: In thousands Effective Rate Maturity September 30, 2020 December 31, 2019 Revolver loan 5.25 % 8/31/2023 $ 144,500 $ 126,500 Term loan, net of debt issuance costs 5.25 % 8/31/2023 138,536 146,106 Finance leases 1.60 % 10/31/2020 3 35 283,039 272,641 Less portion due within one year (9,844) (9,928) Total long-term debt, net of debt issuance costs $ 273,195 $ 262,713 The weighted average interest rate on long-term debt was 5.2% for the nine-month period ended September 30, 2020 and 4.3% for the year-ended December 31, 2019. |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives The Company selectively uses financial instruments to manage market risk associated with exposure to fluctuations in interest rates and foreign currency rates. These financial exposures are monitored and managed by the Company as an integral part of its risk management program. Interest Rate Hedging The Company’s interest rate exposure is most sensitive to fluctuations in interest rates in the United States and Europe, which impacts interest paid on its debt. The Company has debt with variable rates of interest based generally on LIBOR. From time to time, the Company enters into interest rate swap agreements to manage interest rate risk. These instruments are designated as cash flow hedges and are recorded at fair value (see Note 8, "Fair Value Measurements" for additional information). In November 2018, the Company entered into a five three On May 11, 2020, the Company amended its 2018 Credit Agreement, see Note 6, "Long-term Debt and Financing Arrangements". The amendment included, among other modifications, the establishment of a floor on the base and Eurocurrency rate of 1%. As a result, the Company determined that the critical terms of the swap no longer matched the critical terms of the hedged debt and performed an assessment of the effectiveness of the interest rate swap agreement. The Company concluded the interest rate swap agreement is no longer effective. The Company also concluded that the hedged forecasted transaction (the occurrence of variable interest rate payments on the hedged debt) continues to be probable of occurring. Therefore, as of May 11, 2020, the Company discontinued hedge accounting. After May 11, 2020, any fair value gains or losses on the derivative agreement are recorded as interest expense in the Company's Consolidated Statement of Operations. The cumulative loss on the discontinued hedge relationship through May 11, 2020, which was recorded in Accumulated Other Comprehensive Income, will be amortized into earnings / (losses) through August 31, 2023, the maturity date of the hedged debt. The loss included in Accumulated Other Comprehensive Income related to the discontinued hedging relationship at September 30, 2020 was $4.5 million, net of tax. The amount reclassified out of other comprehensive income into interest expense on the Company's Condensed Consolidated Statement of Operations for the three and nine-months ended September 30, 2020 was $0.9 million and $1.4 million, respectively. The Company expects $3.1 million to be reclassified from Accumulated Other Comprehensive Income over the next twelve months. Net Investment Hedges The Company’s operations are subject to certain risks, including foreign currency exchange rate fluctuations. From time to time, the Company enters into cross-currency swaps designated as hedges, recorded at fair value (see Note 8, "Fair Value Measurements"), to protect the Company's net investments in subsidiaries denominated in currencies other than the US dollar. In November 2019, the Company entered into three fixed-to-fixed cross-currency swaps with banking institutions with aggregate notional amounts totaling €67.8 million ($75 million U.S. dollar equivalent). These swaps hedge a portion of the Company's net investment in a Euro functional currency denominated subsidiary against the variability of exchange rate translation impacts between the U.S. dollar and Euro. These contracts require monthly cash interest exchanges over the life of the contracts with the Company recognizing a reduction to interest expense due to the favorable interest rate differential between the U.S. dollar and Euro. Also, settlement of the notional €22.6 million ($25 million U.S. dollar equivalent) cross-currency swaps occur at maturity dates of August 2021, August 2022 and August 2023. The Company assesses hedge effectiveness of the cross-currency swaps quarterly by ensuring the critical terms of the swaps continue to match the critical terms of the designated net investment. The Company elected to assess effectiveness using the spot method, and as a result, records the interest rate differential monthly in the Company's Statement of Operations. Derivative instruments are recognized as either assets or liabilities on the balance sheet in either current or non-current other assets or other accrued liabilities or other long-term liabilities depending upon maturity and commitment. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods in which the hedge transaction affects earnings. Any ineffective portion, or amounts related to contracts that are not designated as hedges, are recorded directly to earnings. The Company's policy for classifying cash flows from derivatives is to report the cash flows consistent with the underlying hedged item. The Company does not use derivatives for speculative or trading purposes. The following table sets forth the fair value amounts of derivative instruments held by the Company presented in the Condensed Consolidated Balance Sheets as Other current assets and Other accrued liabilities: September 30, 2020 December 31, 2019 In thousands Asset Derivatives Liability Derivatives Asset Derivatives Liability Derivatives Interest rate contracts $ — $ 5,967 $ 2 $ 4,538 Cross-currency swaps — 3,310 — 1,817 Total derivatives $ — $ 9,277 $ 2 $ 6,355 The following table sets forth the (loss) income recorded in accumulated other comprehensive (loss) income, net of tax, for the three and nine-month periods ended September 30, 2020 and 2019 for derivatives held by the Company and designated as hedging instruments: For the Three Months Ended For the Nine Months Ended In thousands 2020 2019 2020 2019 Cash flow hedges: Interest rate contracts $ 706 $ (148) $ (1,059) $ (2,174) Cross-currency swaps (2,669) — (1,143) — Total derivatives $ (1,963) $ (148) $ (2,202) $ (2,174) |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value MeasurementsFair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company uses a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: • Level 1 - Quoted prices in active markets for identical assets or liabilities. • Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data. • Level 3 - Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The following table presents the carrying value and fair value of financial instruments that are not carried at fair value: September 30, 2020 December 31, 2019 In thousands Carrying Value Fair Value Carrying Value Fair Value Debt $ 283,500 $ 288,891 $ 273,000 $ 269,434 The fair values of the Company’s long-term debt outstanding were computed based on discounted future cash flows (observable inputs), as applicable, which falls under Level 2 of the fair value hierarchy. Differences from carrying values are attributable to interest rate changes subsequent to when the transactions occurred. The fair values of cash and cash equivalents, accounts receivable, net and accounts payable approximate their ca rrying amounts due to the short-term maturities of these instruments. Recurring Fair Value Measures The Company holds derivative instruments for interest rate swap contracts and cross-currency swaps that are measured using observable market inputs such as forward rates and its counterparties' credit risks. Based on these inputs, the derivative instruments are classified within Level 2 of the valuation hierarchy. At September 30, 2020 and December 31, 2019, these derivative instruments were included in other current assets and other accrued liabilities on the Consolidated Balance Sheet. Based on the Company's continued ability to trade and enter into interest rate swaps and cross-currency swaps, the Company considers the markets for their fair value instruments to be open. Nonrecurring Fair Value Measurements During the three-month period ended March 31, 2020, the Company incurred a $48.7 million impairment charge for goodwill at its Performance Materials segment and a $12.4 million impairment charge for a certain asset group at one of the Performance Materials' European businesses. See Note 5, "Impairment of Goodwill and Other Long-Lived Assets" for information regarding the calculation of fair value. |
Equity Compensation Plans
Equity Compensation Plans | 3 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Equity Compensation Plans | Equity Compensation Plans As of September 30, 2020, the Company’s equity compensation plans consisted of the 2003 Stock Incentive Compensation Plan (the “2003 Plan”), and the Amended and Restated 2012 Stock Incentive Plan, (the “2012 Plan” and together with the 2003 Plan, the “Plans”) under which incentive and non-qualified stock options and time and performance based restricted shares have been granted to employees and directors from authorized but unissued shares of common stock or treasury shares. The 2003 Plan is not active, but continues to govern all outstanding awards granted under the plan until the awards themselves are exercised or terminate in accordance with their terms. The 2012 Plan, amended and approved by stockholders on April 24, 2020, authorizes 3.0 million shares of common stock for awards. The 2012 Plan also authorized an additional 19,720 shares of common stock to the extent awards granted under prior stock plans that were outstanding as of April 24, 2020 are forfeited. The 2012 Plan provides for the following types of awards: options, restricted stock, restricted stock units and other stock-based awards. During the fourth quarter of 2019, additional shares of common stock were issued pursuant to separate inducement share agreements with two individuals as material inducement to their employment with the Company (the "Inducement Grants"). The Inducement Grants awarded stock options and restricted stock to the two individuals. Amounts shown below are inclusive of the Plans and the Inducement Grants. The Company accounts for the expense of all share-based compensation by measuring the awards at fair value on the date of grant. The Company recognizes expense on a straight-line basis over the vesting period of the entire award. Options issued by the Company under its stock option plans have a term of ten years and generally vest ratably over a period of three four two four three The Company incurred equity compensation expense of $0.7 million and $0.6 million for the three-month periods ended September 30, 2020 and 2019, respectively, and $2.5 million and $2.1 million for the nine-month periods ended September 30, 2020 and 2019, respectively, for the Plans, including restricted stock awards. The Company also incurred equity compensation expense of $0.2 million and $0.2 million for the three-month periods ended September 30, 2020 and 2019, respectively, and $0.5 million and $0.5 million for the nine-month periods ended September 30, 2020 and 2019, respectively, for stock awards granted to Directors. No equity compensation costs were capitalized as part of inventory. Stock Options The following table is a summary of outstanding and exercisable options for the three and nine-month periods ended September 30, 2020: For the Three Months Ended September 30, 2020 For the Nine Months Ended September 30, 2020 In thousands except per share Shares Weighted- Shares Weighted- Stock Options outstanding at the beginning of the period 748 $ 25.36 683 $ 27.15 Granted 11 $ 16.27 180 $ 17.37 Exercised — $ — (4) $ 8.67 Forfeited or Expired (71) $ 26.25 (171) $ 25.46 Stock Options outstanding at September 30, 2020 688 $ 25.11 688 $ 25.11 Exercisable at September 30, 2020 305 $ 32.54 305 $ 32.54 Unvested at September 30, 2020 383 $ 19.20 383 $ 19.20 There was no cash received from exercise of stock options during the three-month period ended September 30, 2020. The amount of cash received from the exercise of stock options was less than $0.1 million during the nine-month period ended September 30, 2020. The intrinsic value of stock options exercised was less than $0.1 million with a tax benefit of less than $0.1 million during the nine-month period ended September 30, 2020. At September 30, 2020, the total unrecognized compensation cost related to non-vested stock option awards was approximately $2.1 million, with a weighted average expected amortization period of 2.7 years. Restricted Stock Restricted stock includes both performance-based and time-based awards. The following is a summary of the Company's unvested time-based restricted shares for the three and nine-month periods ended September 30, 2020: For the Three Months Ended September 30, 2020 For the Nine Months Ended September 30, 2020 In thousands Shares Shares Unvested at the beginning of the period 220 159 Granted — 77 Vested (5) (8) Forfeited or Expired (12) (25) Unvested at September 30, 2020 203 203 The following is a summary of the Company's unvested performance-based restricted shares for the three and nine-month periods ended September 30, 2020: For the Three Months Ended September 30, 2020 For the Nine Months Ended September 30, 2020 In thousands Shares Shares Unvested at the beginning of the period 161 129 Granted 5 71 Vested — — Forfeited or Expired (18) (52) Unvested at September 30, 2020 148 148 |
Stock Repurchases
Stock Repurchases | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stock Repurchases | Stock Repurchases During the nine-month period ended September 30, 2020, the Company purchased 2,340 shares of common stock valued at less than $0.1 million, through tax withholding, pursuant to provisions in agreements with recipients of restricted stock granted under the Company’s equity compensation plans, in which the Company withholds that number of shares having fair value equal to each recipient’s minimum tax withholding due. |
Employer Sponsored Benefit Plan
Employer Sponsored Benefit Plans | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Employer Sponsored Benefit Plans | Employer Sponsored Benefit Plans The Company maintains one domestic pension plan: the Retirement Income Plan for Employees of Interface Performance Materials, Inc. ("IPM Pension Plan"). During the three-month period ended March 31, 2020, the Company settled the pension obligation of the Interface Sealing Solutions, Inc. Pension Plan ("ISS Pension Plan") through lump sum distributions to participants or by irrevocably transferring pension liabilities to an insurance company through the purchase of a group annuity contract. This purchase, funded with pension assets, resulted in a pre-tax settlement loss of $0.4 million in the three-month period ended March 31, 2020, related to the recognition of accumulated deferred actuarial losses. The settlement loss and expenses were included as non-operating expense in the condensed consolidated statements of operations. The IPM Pension Plan covers a portion of Interface's union and non-union employees. The plan is closed to new employees and benefits are no longer accruing for the majority of participants. The Company expects to make required contributions of approximately $1.2 million to the IPM Pension Plan during 2020. There were no contributions made during the three-month period ended September 30, 2020, as the Company took advantage of the delay in minimum funding contribution due dates as allowed under the CARES Act, and is delaying payment of the minimum funding contributions of $0.3 million originally due during April 2020, and $0.3 million originally due during July 2020. These and other required minimum funding contributions for the remainder of 2020 will be made later in 2020. Contributions of $0.4 million were made during the nine-month period ended September 30, 2020. Contributions of $0.3 million and $1.1 million were made during the three-month and nine-month periods ended September 30, 2019, respectively, inclusive of contributions made to the ISS Pension Plan. Prior to 2020, the Company also maintained the U.S. Lydall Pension Plan. During the second quarter of 2019, the Company settled the pension obligation of the U.S. Lydall Pension Plan through lump sum distributions to participants or by irrevocably transferring pension liabilities to two insurance companies through the purchase of group annuity contracts. The following is a summary of the components of net periodic benefit cost for the domestic defined benefit pension plans for the three-month and nine-month periods ended September 30, 2020 and 2019: For the Three Months Ended For the Nine Months Ended In thousands 2020 2019 2020 2019 Components of employer benefit cost Service cost $ 40 $ 30 $ 120 $ 90 Interest cost 428 530 1,285 2,356 Expected return on assets (532) (488) (1,597) (2,105) Amortization of actuarial loss — — 2 464 Net periodic benefit cost $ (64) $ 72 $ (190) $ 805 Settlement loss — 186 385 25,701 Total employer benefit plan cost $ (64) $ 258 $ 195 $ 26,506 The Company reports the service cost component of net periodic benefit cost in the same line item as other compensation costs in operating expenses and the non-service cost components of net periodic benefit cost in other income. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring During the third quarter of 2020, the Company’s Performance Materials segment undertook actions to discontinue production of a lower efficiency air filtration media product and, in turn, fully depreciated the supporting machinery and equipment in North America and consolidated certain product lines and began exiting underperforming facilities in Europe. These restructuring activities, which are projected to conclude in the first half of 2021, are expected to reduce operating costs, increase production efficiency, and enhance the Company’s flexibility by better aligning its manufacturing operations with the segment's customer base. Accordingly, the Company expects to record total pre-tax expenses of approximately $17.0 to $20.0 million, primarily related to severance and employee retention expenses, in connection with these restructuring activities, of which approximately $11.5 to $14.5 million are expected to result in cash expenditures. The Company incurred non-cash expenditures of approximately $5.5 million, which consisted of fully depreciating and/or amortizing long-lived assets and, to a lesser extent, writing-off inventory. In North America, the Company decided to shut down two underperforming nonwoven manufacturing carded lines and ancillary equipment, originally acquired in 2018, that served commercial and residential HVAC markets with low to medium efficiency air filtration media. The Company experienced lower demand as a result of COVID-19, which accelerated a market shift from lower efficiency air filtration media to higher performance rated air filtration media. As a result, the Company recorded a pre-tax restructuring charge of $5.4 million, primarily due to accelerated depreciation of property, plant and equipment and other intangible assets. The Company does not anticipate incurring additional restructuring expenses related to the closure of these manufacturing Carded lines. The Company undertook actions to consolidate global production facilities in the Sealing & Advanced Solutions business from five facilities to four, resulting in the closure of an underperforming facility in Germany. In the first quarter of 2020, the Company performed an impairment analysis of the long-lived assets and determined that the carrying value of the assets did not exceed their fair value and recorded an impairment charge of $12.4 million (see Note 5, “Impairments of Goodwill and Other Long-Lived Assets” for additional information). The closure is expected to be completed in the first quarter of 2021. In addition, the Company decided to close a small volume membrane filtration production facility in the Netherlands. In the fourth quarter of 2019, the Company performed an impairment of the long-lived assets for this facility and recorded an impairment charge of $1.2 million. The assets have been fully depreciated through September 30, 2020. The closure is expected to be completed in the second quarter of 2021. As a result of the two facility closures in Europe, the Company recorded pre-tax restructuring charges of $9.6 million consisting of severance costs, legal expenses, and inventory write-offs and anticipates it could incur an additional $2.0 million to $5.0 million in restructuring expenses, primarily related to severance costs from these facility closures. The following table summarizes the total restructuring charges by cost type: In Thousands Severance and Related Expenses Facility Exit and Asset Write-Off Expenses Total Expense incurred during quarter ended: September 30, 2020 $ 9,484 $ 5,500 $ 14,984 Total pre-tax expense incurred $ 9,484 $ 5,500 $ 14,984 For the three and nine-month periods ended September 30, 2020, $15.0 million was included in restructuring expenses on the Company’s Condensed Consolidated Statements of Operations with $14.8 million recorded in the Performance Materials segment and $0.2 million recorded within Corporate Office expenses. There were cash outflows of $0.2 million for the restructuring program for the three and nine months ended September 30, 2020. The following table summarizes the accrued liability balance by cost type for the restructuring actions: In Thousands Total Balance as of December 31, 2019 $ — Pre-tax restructuring expenses, excluding asset write-off expenses 9,485 Cash paid (203) Currency translation adjustments (119) Balance as of September 30, 2020 $ 9,163 The above accrued liability balances were included in Other accrued liabilities on the Company’s Condensed Consolidated Balance Sheets. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three-month period ended September 30, 2020, the Company's effective tax rate was 16.6% compared to an effective tax rate of 35.1% for the three-month period ended September 30, 2019. For the three months ended September 30, 2020, the rate was negatively impacted by valuation allowance activity of $2.0 million, offset by a state tax benefit of $0.8 million. resulting in a lower effective tax rate when in a pre-tax loss position. For the three months ended September 30, 2019, the effective tax rate was negatively impacted by losses in jurisdictions in which no tax benefit can be recognized. For the nine-month period ended September 30, 2020, the Company's effective tax rate was 6.3% compared to an effective tax rate of 97.0% for the nine-month period ended September 30, 2019. For the nine months ended September 30, 2020, the Company had a pre-tax loss primarily resulting from impairment charges of $61.1 million. The impairment charges significantly impacted the Company's effective tax rate because $48.7 million of the impairment charges related to non-deductible goodwill, resulting in a low effective tax rate for the nine months ended September 30, 2020 when in a pre-tax loss position. Additionally, the effective rate was negatively impacted by valuation allowance activity of $2.7 million. For the nine-month period ended September 30, 2019, the Company recorded a tax benefit of $5.5 million primarily driven by $10.5 million of tax benefit related to the pension plan settlement. Excluding the tax benefit of the pension plan settlement, the Company's effective tax rate for the nine months ended September 30, 2019 was 25.2%. This was negatively impacted by $1.8 million from losses in jurisdictions in which no tax benefit can be recognized, partially offset by the Company's geographical mix of earnings. The Company and its subsidiaries file a consolidated federal income tax return, as well as returns required by various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities, including such major jurisdictions as the United States, Canada, China, France, Germany, Hong Kong, India, the Netherlands, and the United Kingdom. With few exceptions, the Company is no longer subject to U.S. federal examinations for years before 2016, state and local examinations for years before 2015, and non-U.S. income tax examinations for years before 2013. The Company’s effective tax rates in future periods could be affected by an increase or decrease in earnings in countries where tax rates differ from the United States federal tax rate, the relative impact of permanent tax adjustments on earnings from domestic operations, changes in net deferred tax asset valuation allowances, including valuation allowances on loss carryforwards in which no tax benefit can be recognized, stock vesting, pension plan terminations, the completion of acquisitions or divestitures, changes in tax rates or tax laws and the completion of ongoing tax planning strategies and audits. On July 20, 2020, the U.S. Treasury Department and IRS released T.D. 9902 final regulations for publication in the Federal Register related to the global intangible low-taxed income (“GILTI”) high-tax exception. The final regulations largely adopt the framework of the 2019 proposed regulations, with certain key departures. The most significant departures are that an election to apply the GILTI high-tax exception may be made annually instead of once every five years, and that the calculation is made with respect to each “tested unit” of a controlled foreign corporation, rather than on a qualified business unit by qualified business unit basis. The company has evaluated the final regulations and included the impacts of these changes in the Company’s third quarter financial statements. |
(Loss) Earnings Per Share
(Loss) Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
(Loss) Earnings Per Share | Loss) Earnings Per Share For the three-month and nine-month periods ended September 30, 2020 and 2019, basic earnings per share were computed by dividing net (loss) income by the weighted average number of shares of common stock outstanding during the period. Unexercised stock options and unvested restricted shares are excluded from this calculation but are included in the diluted earnings per share calculation using the treasury stock method as long as their effect is not antidilutive. The following table provides a reconciliation of weighted-average shares used to determine basic and diluted earnings per share: For the Three Months Ended For the Nine Months Ended In thousands 2020 2019 2020 2019 Basic weighted-average common shares outstanding 17,384 17,270 17,364 17,264 Effect of dilutive options and restricted stock awards — 60 — — Diluted weighted-average common shares outstanding 17,384 17,330 17,364 17,264 Dilutive stock awards totaling 77,707 and 28,085 shares of Common Stock were excluded from the diluted per share computation for the three-month and nine-month periods ended September 30, 2020, as the Company reported a net loss during those periods and, therefore, the effect of including these options would be antidilutive. Dilutive stock options totaling 53,892 shares of Common Stock were excluded from the diluted per share computation for the nine-month period ended September 30, 2019, as the Company reported a net loss during that period and, therefore, the effect of including these options would be antidilutive. For each of the three-month periods ended September 30, 2020 and 2019, stock options for 658,654 shares and 584,725 shares of Common Stock were not considered in computing diluted earnings per common share because they were antidilutive. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information As of September 30, 2020, the Company’s reportable segments were Performance Materials, Technical Nonwovens, and Thermal Acoustical Solutions. Performance Materials Segment The Performance Materials segment includes filtration media solutions primarily for air, fluid power, life science and industrial applications (“Filtration”), and sealing and gasket solutions, thermal insulation, energy storage, and other engineered products (“Sealing and Advanced Solutions”). Filtration products include LydAir® MG (Micro-Glass) Air Filtration Media, LydAir® MB (Melt Blown) Air Filtration Media, LydAir® SC (Synthetic Composite) Air Filtration Media, and Arioso® Membrane Composite Media. These high efficiency specialty filtration products constitute the critical filtration media component of clean-air systems for applications in Indoor Air Quality (commercial, residential, and specialized HVAC applications such as cleanrooms and hospital environments), respiratory Personal Protective Equipment (N95 respirators and surgical masks), power generation, and specialty industrial process applications. Lydall has leveraged its extensive technical expertise and applications knowledge into a suite of media products covering the vast liquid filtration landscape across the transportation and industrial fields. The LyPore® Liquid Filtration Media series address a variety of application needs in fluid power including hydraulic filters, air-water and air-oil coalescing, industrial fluid processes and diesel fuel filtration. LyPore® media and Solupor® ultra-high molecular weight polyethylene membranes also serve critical liquid filtration/separation applications such as biopharmaceutical pre-filtration and clarification, lateral flow diagnostic and analytical testing, potable water filtration and high purity process filtration such as those found in food and beverage and medical applications. Sealing and Advanced Solutions products include nonwoven specialty engineered materials for a multitude of applications. Interface fiber-reinforced gasket materials serve the heavy-duty diesel, automobile, small engine, transmission and compressor markets. These products handle demanding sealing challenges with a diverse range of metallic, non-metallic, rubber-coated and laminate materials that comprise the extensive Sealing materials portfolio. Interface Engineered Components are ready-to-use soft and hard gasket parts sold directly to OEMs and aftermarket applications. An example is Select-a-Seal® rubber-edged composite (REC) technology that provides robust sealing, compression, adhesion, and shear strength for driveline applications. Advanced Solutions’ nonwoven veils, papers, and specialty composites for the building products, appliance, energy, and industrial markets include Manniglas® Thermal Insulation Papers, and Lytherm® Insulation Media for high temperature technology applications. The Company's Cryotherm® Super-Insulating Media, CRS-Wrap® Super-Insulating Media and Cryo-Lite® Cryogenic Insulation products are industry standards for state-of-the-art cryogenic insulation designs used by manufacturers of cryogenic equipment for liquid gas storage, piping, and transportation. Additional specialty composite materials include specialty fiber calendar bowl products to service the printing and textile industries and press pad materials for industrial lamination processes. Technical Nonwovens Segment The Technical Nonwovens segment primarily produces needle punch nonwoven solutions for a multitude of industries and applications. Products are manufactured and sold globally under the leading brands of Lydall Industrial Filtration, Southern Felt, Gutsche, and Texel. Industrial Filtration products include nonwoven rolled-good felt media and filter bags used primarily in industrial air and liquid filtration applications. Nonwoven filter media is an effective solution to satisfy increasing emission control regulations in a wide range of industries, including power, cement, steel, asphalt, incineration, mining, food, and pharmaceutical. Advanced Materials products include nonwoven rolled-good media used in commercial applications and predominantly serves the geosynthetics, automotive, industrial, medical, and safety apparel markets. Automotive media is provided to Tier I/II suppliers as well as the Company's Thermal Acoustical Solutions segment. Technical Nonwovens segment products include air and liquid filtration media sold under the brand names Fiberlox® high performance filtration felts, Checkstatic™ conductive filtration felts, Microfelt® high efficiency filtration felts, Pleatlox® pleatable filtration felts, Ultratech™ PTFE filtration felts, Powertech® and Powerlox® power generation filtration felts, Microcap® high efficiency liquid filtration felts, Duotech membrane composite filtration felts, along with the porotex® family of high temperature filtration felts including microvel® and optivel® products. Technical Nonwovens Advanced Materials products are sold under the brand names Thermofit® thermo-formable products, Ecoduo® recycled content materials, Duotex® floor protection products, and Versaflex® composite molding materials. Technical Nonwovens also offers extensive finishing and coating capabilities which provide custom engineered properties tailored to meet the most demanding applications. The business leverages a wide range of fiber types and extensive technical capabilities to provide products that meet customers’ needs across a variety of applications providing both high performance and durability. Thermal Acoustical Solutions Segment The Thermal Acoustical Solutions segment offers a full range of innovative engineered products tailored for the transportation and industrial sectors to thermally shield sensitive components from high heat, improve exhaust gas treatment and lower harmful emissions as well as assist in the reduction of noise, vibration, and harshness (NVH). Within the transportation sector, the Company’s products are found in the interior (dash insulators, cabin flooring), underbody (wheel well, aerodynamic belly pan, fuel tank, exhaust, tunnel, spare tire) and under hood (engine compartment, outer dash, powertrain, catalytic converter, turbo charger, manifolds) of cars, trucks, SUVs, heavy duty trucks, and recreational vehicles. Thermal Acoustical Solutions segment products offer thermal and acoustical insulating solutions comprised of organic and inorganic fiber composites that provide weight reduction, superior noise suppression and increased durability over conventional designs, as well as products that efficiently combine multiple layers of metal and thermal - acoustical insulation media to provide an engineered shielding solution for an array of application areas. Lydall’s dBCore® is a lightweight acoustical composite that emphasizes absorption principles over heavy-mass type systems. Lydall’s dBLyte® is a high-performance acoustical barrier with sound absorption and blocking properties and can be used throughout a vehicle’s interior to minimize intrusive noise from an engine compartment and road. Lydall’s ZeroClearance® is an innovative thermal solution that utilizes an adhesive backing for attachment and is used to protect vehicle components from excessive heat. Lydall’s flux® product family includes several patented or IP-rich products that address applications which include: Direct Exhaust Mount heat shields, which are assembled to high temperature components like catalytic converters, turbochargers or exhaust manifolds using aluminized and stainless steel and high performance and high temperature heat insulating materials; Powertrain heat shields that absorb noise at the source and do not contribute to the engine's noise budget; and durable, thermally robust solutions for temperature sensitive plastic components such as fuel tanks that are in proximity to high temperature heat sources. The tables below present net sales and operating income by segment for the three-month and nine-month periods ended September 30, 2020 and 2019, and also a reconciliation of total segment net sales and operating income to total consolidated net sales and operating income. Consolidated net sales by segment: For the Three Months Ended For the Nine Months Ended In thousands 2020 2019 2020 2019 Performance Materials Segment: Filtration $ 30,899 $ 22,427 $ 86,422 $ 71,093 Sealing and Advanced Solutions 36,918 37,573 105,088 118,589 Performance Materials Segment net sales 67,817 60,000 191,510 189,682 Technical Nonwovens Segment (1): Industrial Filtration 29,643 32,935 90,425 114,005 Advanced Materials (2) 28,866 30,977 77,494 84,591 Technical Nonwovens Segment net sales 58,509 63,912 167,919 198,596 Thermal Acoustical Solutions Segment: Parts 79,687 80,309 189,456 250,591 Tooling 5,836 7,617 17,276 24,920 Thermal Acoustical Solutions Segment net sales 85,523 87,926 206,732 275,511 Eliminations and Other (2) (4,764) (6,564) (12,389) (19,679) Consolidated Net Sales $ 207,085 $ 205,274 $ 553,772 $ 644,110 Operating income (loss) by segment: For the Three Months Ended For the Nine Months Ended In thousands 2020 2019 2020 2019 Performance Materials (3) $ (6,759) $ 712 $ (58,257) $ 5,474 Technical Nonwovens (1),(2),(4) 5,061 7,165 15,558 19,743 Thermal Acoustical Solutions 1,174 5,022 517 21,870 Corporate Office Expenses (8,757) (5,452) (24,413) (17,411) Consolidated Operating Income $ (9,281) $ 7,447 $ (66,595) $ 29,676 (1) The Technical Nonwovens segment includes the results of Geosol through the date of disposition of May 9, 2019. (2) Included in the Technical Nonwovens segment and Eliminations and Other is the following: • $3.9 million and $4.3 million of intercompany sales to the Thermal Acoustical Solutions segment for the three-month periods ended September 30, 2020 and 2019, respectively. • $10.2 million and $13.6 million of intercompany sales to the Thermal Acoustical Solutions segment for the nine-month periods ended September 30, 2020 and 2019, respectively. (3) Included in the Performance Materials segment is the following: • $61.1 million of impairment charges related to goodwill and other long-lived assets for the nine-month period ended September 30, 2020. • $14.8 million restructuring charges for the three and nine-month periods ending September 30, 2020. • $4.0 million and $4.1 million of intangible assets amortization for the three-month periods ended September 30, 2020 and 2019, respectively. • $11.9 million and $12.2 million of intangible assets amortization for the nine-month periods ended September 30, 2020 and 2019, respectively. (4) Included in the Technical Nonwovens segment is the following: • $1.2 million and $1.3 million of intangible assets amortization for the three-month periods ended September 30, 2020 and 2019, respectively. • $3.5 million and $3.8 million of intangible assets amortization for the nine-month periods ended September 30, 2020 and 2019, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Environmental Remediation In the fourth quarter of 2016, as part of a groundwater discharging permitting process, water samples collected from wells and process water basins at the Company’s Rochester New Hampshire manufacturing facility, within the Performance Materials segment, showed concentrations of Per and Polyfluorinated Substances (“PFAS”) in excess of state ambient groundwater quality standards. In January 2017, the Company received a notification from the State of New Hampshire Department of Environmental Services (“NHDES”) naming Lydall Performance Materials, Inc. a responsible party with respect to the discharge of regulated contaminants and, as such, is required to take action to investigate and remediate the impacts in accordance with standards established by the NHDES. The Company conducted a site investigation, the scope of which was reviewed by the NHDES, in order to assess the extent of potential soil and groundwater contamination and develop a remedial action. Based on input received from NHDES in March 2017 with regard to the scope of the site investigation, the Company recorded $0.2 million of expense. In 2018, the Company received a response from the NHDES to the site investigation report outlining proposed remedial actions. The Company recorded an additional $0.1 million of expense in 2018 associated with the expected costs to remediate the impacts of the discharge of regulated contaminants in accordance with standards established by the NHDES. During 2018 the environmental liability was fully reduced reflecting payments made to vendors, resulting in no balance at December 31, 2018. Additionally, the Company incurred $0.2 million of capital expenditures in 2018, in relation to the lining of the Company's fresh water lagoons. The site investigation and remedial action plan are ongoing. The Company cannot be sure that costs will not exceed the current estimates until this matter is closed with the NHDES, nor that any future corrective action at this location would not have a material effect on the Company’s financial condition, results of operations or cash flows. In December 2018, the New York State Department of Environmental Conservation (“NYDEC”) informed the Company that the newly acquired Interface site located at Hoosick Falls, NY will be the subject of an investigation in to the possibility of it being an inactive hazardous disposable waste site. The letter specifically references PFAS that have been detected in a nearby water supply, soil and/or surface water. Notably, the PFAS contamination has been identified in the Hoosick Falls area for some time and other large manufacturers in the area have previously been identified as a source. The NYDEC approved a site characterization plan in December 2019. The Company recorded expense of $0.3 million in the fourth quarter of 2019 as a result of the site characterization plan preparation and site characterization activities. Additional site characterization activities are planned for the fourth quarter of 2020. The Company does not know the scope or extent of its future obligations, if any, that may arise from the site investigation and therefore is unable to estimate the cost of any corrective action. Accordingly, the Company cannot assure that the costs of any future corrective at this location would not have a material effect on the Company's financial condition, results of operations or cash flows. Provisions for such matters are charged to expense when it is probable that a liability has been incurred and reasonable estimates of the liability can be made. Estimates of environmental liabilities are based on a variety of matters, including, but not limited to, the stage of investigation, the stage of the remedial design, evaluation of existing remediation technologies, and presently enacted laws and regulations. In future periods, a number of factors could significantly impact any estimates of environmental remediation costs. |
Stockholders' Equity and Accumu
Stockholders' Equity and Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity and Accumulated Other Comprehensive Income | Stockholders' Equity and Accumulated Other Comprehensive Income Changes in stockholders' equity for the three and nine-month periods ended September 30, 2020 were as follows: For the Three Months Ended September 30, For the Nine Months Ended In thousands 2020 2019 2020 2019 Beginning Balance $ 253,262 $ 387,105 $ 318,420 $ 369,275 Comprehensive (loss) income, net of tax (5,477) (5,849) (72,474) 10,773 Stock repurchased (23) (7) (31) (62) Stock issued under employee plans — 5 4 5 Stock-based compensation expense 551 417 2,006 1,611 Stock issued to directors — — 388 252 Adoption of ASC 606 — — — (183) Ending Balance $ 248,313 $ 381,671 $ 248,313 $ 381,671 The components of accumulated other comprehensive (loss) income are shown below: For the Three Months Ended For the Nine Months Ended In Thousands 2020 2019 2020 2019 Foreign currency translation: Beginning balance $ (22,833) $ (16,128) $ (18,022) $ (18,458) Net gain (loss) on foreign currency translation 8,245 (8,726) 3,434 (6,396) Other comprehensive income (loss), net of tax 8,245 (8,726) 3,434 (6,396) Ending balance (14,588) (24,854) (14,588) (24,854) Pension and other postretirement benefit plans: Beginning balance (2,749) (2,879) (3,080) (22,253) Amounts reclassified from accumulated other comprehensive (loss) income (2) (49) 21 282 19,395 Other comprehensive (loss) income, net of tax (49) 21 282 19,395 Ending balance (2,798) (2,858) (2,798) (2,858) Unrealized gain/(loss) on derivative instruments: Beginning balance (5,116) (4,000) (4,877) (1,974) Net loss on derivative instruments (3) (2,669) (148) (3,306) (2,174) Amounts reclassified from accumulated other comprehensive income (4) 706 — 1,104 — Other comprehensive loss, net of tax (1,963) (148) (2,202) (2,174) Ending balance (7,079) (4,148) (7,079) (4,148) Total accumulated other comprehensive loss $ (24,465) $ (31,860) $ (24,465) $ (31,860) (1) During the three-month period ended March 31, 2019, the Company recorded an adjustment reducing retained earnings and contract assets by $0.2 million to correct an error in the adoption of ASC 606. (2) For the three-months ended September 30, 2020 and 2019, amount represents routine amortization of actuarial gains and losses in net periodic benefit cost and other activity of less than $0.1 million, net of less than $0.1 million tax benefit. For the nine-months ended September 30, 2020, amount represents the settlement of the ISS Pension Plan in the first quarter of 2020 of $0.4 million, net of $0.1 million tax benefit, and routine amortization of actuarial gains and losses in net periodic benefit cost and other activity of less than $0.1 million, net of less than $0.1 million tax benefit. For the nine-months ended September 30, 2019, amount represents the settlement of the Lydall Pension Plan in the second quarter of 2019 of $19.0 million, net of $11.5 million tax benefit, and routine amortization of actuarial losses in net periodic benefit cost during the first five months of fiscal year 2019 prior to the plan termination of $0.4 million, net of $0.1 million tax benefit. (3) Amount represents unrealized losses on the fair value of hedging activities, net of tax benefits of $0.8 million and less than $0.1 million for the three-month periods ended September 30, 2020 and 2019, respectively, and $1.0 million and $0.7 million for the nine-month periods ended September 30, 2020 and 2019, respectively. (4) Amounts represents the impact of de-designation of the interest rate swap agreement, net of tax expenses of $0.2 million and $0.3 million, for the three-month and nine-month periods ended September 30, 2020, respectively. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn October 14, 2020, the Company amended its 2018 Credit Agreement to allow certain restructuring and other charges, as defined by the amendment, to be excluded from EBITDA in the calculation of the Company's modified financial covenants. |
Basis of Financial Statement _2
Basis of Financial Statement Presentation (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying Condensed Consolidated Financial Statements include the accounts of Lydall, Inc. and its subsidiaries. All financial information is unaudited for the interim periods reported. All significant intercompany transactions have been eliminated in the Condensed Consolidated Financial Statements. The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The year-end Condensed Consolidated Balance Sheet was derived from the audited financial statements for the year ended December 31, 2019, but does not include all disclosures required by U.S. GAAP. In the opinion of management, the condensed consolidated financial information reflects all adjustments necessary for a fair statement of the Company’s consolidated financial position, results of operations, and cash flows for the interim periods reported, but do not include all the disclosures required by U.S. GAAP. All such adjustments are of a normal recurring nature, unless otherwise disclosed in this report. Certain amounts in prior year financial statements and notes thereto have been reclassified to conform to current year presentation. The statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations, and financial condition, including sales, expenses, reserves and allowances, manufacturing, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including the result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it. The Company has made estimates of the impact of COVID-19 within its financial statements and there may be changes to those estimates in future periods. Actual results could differ from those estimates. |
Recent Accounting Pronouncements Adopted & Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Adopted Effective January 1, 2020, the Company adopted the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2016-13, "Financial Instruments - Credit Losses (Topic 326)." The new standard amends guidance on reporting credit losses for assets held at amortized cost basis. The Company has determined the only financial assets subject to the new standard are its trade receivables and contract assets. The adoption of this ASU did not have any impact on the Company’s consolidated financial statements and disclosures. Effective January 1, 2020, the Company adopted the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement," which adds, amends, and removes certain disclosure requirements related to fair value measurements. Among other changes, this standard requires certain additional disclosure surrounding Level 3 assets, including changes in unrealized gains or losses in other comprehensive income and certain inputs in those measurements. Please refer to Note 5, “Impairments of Goodwill and Other Long-Lived Assets”, for discussion of the inputs used in the quantitative impairment assessments for the three-month period ended March 31, 2020. Effective January 1, 2020, the Company adopted FASB issued ASU 2018 - 15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40); Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." The amendments in this update require implementation costs incurred by customers in cloud computing arrangements (i.e., hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software, and deferred over the noncancellable term of the cloud computing arrangement plus any option renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements and disclosures. In March 2020, the FASB issued ASU 2020-04, " Reference Rate Reform (Topic 848); Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The amendments in this update are elective, and provide optional expedients and exceptions in accounting for contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The guidance in this update is effective for transactions entered into between March 12, 2020 and December 31, 2022. The Company adopted this ASU upon issuance and notes no impact to the Company's consolidated financial statements and disclosures as of September 30, 2020. Recent Accounting Pronouncements Not Yet Adopted In August 2020, the FASB issued ASU 2020-06, "Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)." The amendments in this update are intended to simplify the accounting for convertible debt instruments and convertible preferred stock. This ASU is effective for fiscal years and interim periods beginning after December 15, 2021 with early adoption permitted. The Company does not expect the adoption of this update to have a material impact on its consolidated financial statements and related disclosures. In January 2020, the FASB issued ASU 2020-01, "Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)." The amendments in this update are intended to reduce diversity in practice and increase comparability of the accounting for interaction of equity securities, investments accounted for under the equity method of accounting, and the accounting for certain forward contracts and purchased options accounted for under Topic 815. This ASU is effective for fiscal years and interim periods beginning after December 15, 2020 with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes". The new standard is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in Topic 740, and by clarifying and amending existing guidance in other areas of the same topic. This ASU is effective for fiscal years and interim periods beginning after December 15, 2020 with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." This ASU requires entities to disclose the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates. This ASU also requires entities to disclose an explanation for significant gains and losses related to changes in the benefit obligation for the period. This ASU is effective for fiscal years beginning after December 15, 2020 |
Risks and Uncertainties | Risks and Uncertainties Worldwide economic cycles, political changes, and the COVID-19 pandemic affect the markets that the Company’s businesses serve and affect demand for the Company's products and could impact profitability. Among other factors, disruptions in the global credit and financial markets, including diminished liquidity and credit availability, changes in international trade agreements, swings in consumer confidence and spending, and unstable economic growth and fluctuations in unemployment rates has caused economic instability and can have a negative impact on the Company’s results of operations, financial condition, and liquidity. |
Basis of Financial Statement _3
Basis of Financial Statement Presentation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | In connection with the filing of this Quarterly Report on Form 10-Q, the Company has revised the Condensed Consolidated Statements of Comprehensive Income for the nine-month period ended September 30, 2019 as follows: Nine Months Ended September 30, 2019 In thousands As reported As revised Pension liability adjustment, net of tax $ 379 $ 19,395 Comprehensive (loss) income $ (8,243) $ 10,773 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Assets and Liabilities | Contract assets and liabilities consisted of the following: In thousands September 30, 2020 December 31, 2019 Dollar Change Contract assets $ 27,186 $ 28,245 $ (1,059) Contract liabilities $ 3,414 $ 1,441 $ 1,973 |
Schedule of Disaggregation of Revenue by Geographical Region | Disaggregated revenue by geographical region for the three-month and nine-month periods ended September 30, 2020 and 2019 were as follows: For the Three Months Ended September 30, 2020 For the Three Months Ended September 30, 2019 In thousands North America Europe Asia Total Net Sales North America Europe Asia Total Net Sales Performance Materials $ 45,759 $ 18,776 $ 3,282 $ 67,817 $ 42,693 $ 15,203 $ 2,104 $ 60,000 Technical Nonwovens 34,727 17,318 6,464 58,509 42,128 16,544 5,240 63,912 Thermal Acoustical Solutions 57,841 22,861 4,821 85,523 61,315 22,208 4,403 87,926 Eliminations and Other (4,569) (195) — (4,764) (6,405) (159) — (6,564) Total Net Sales $ 133,758 $ 58,760 $ 14,567 $ 207,085 $ 139,731 $ 53,796 $ 11,747 $ 205,274 For the Nine Months Ended September 30, 2020 For the Nine Months Ended September 30, 2019 In thousands North America Europe Asia Total Net Sales North America Europe Asia Total Net Sales Performance Materials $ 131,866 $ 52,552 $ 7,092 $ 191,510 $ 136,892 $ 47,589 $ 5,201 $ 189,682 Technical Nonwovens 101,694 49,674 16,551 167,919 121,984 53,384 23,228 198,596 Thermal Acoustical Solutions 137,517 57,825 11,390 206,732 189,152 73,853 12,506 275,511 Eliminations and Other (11,914) (475) — (12,389) (19,139) (540) — (19,679) Total Net Sales $ 359,163 $ 159,576 $ 35,033 $ 553,772 $ 428,889 $ 174,286 $ 40,935 $ 644,110 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories as of September 30, 2020 and December 31, 2019 were as follows: In thousands September 30, December 31, Raw materials $ 31,442 $ 36,322 Work in process 14,228 14,873 Finished goods 25,497 29,349 Total inventories $ 71,167 $ 80,544 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill by Segment | The changes in the carrying amount of goodwill by segment as of and for the nine-month period ended September 30, 2020 were as follows: In thousands December 31, Currency translation adjustments Impairment September 30, Performance Materials $ 80,658 $ (22) $ (48,671) $ 31,965 Technical Nonwovens 53,254 166 — 53,420 Total goodwill $ 133,912 $ 144 $ (48,671) $ 85,385 |
Schedule of Impaired Intangible Assets | The table below presents the gross carrying amount and, as applicable, the accumulated amortization of the Company’s acquired intangible assets other than goodwill included in “Other intangible assets, net” in the Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 In thousands Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Amortized intangible assets Customer Relationships $ 141,784 $ (44,636) $ 142,400 $ (30,648) Patents 791 (670) 759 (607) Technology 2,500 (1,102) 2,500 (977) Trade Names 7,322 (6,544) 7,293 (5,143) License Agreements 629 (629) 610 (610) Other 570 (570) 551 (551) Total other intangible assets $ 153,596 $ (54,151) $ 154,113 $ (38,536) As a result of these impairment tests, the Company recorded the following impairment charges during the three-month period ended March 31, 2020: In thousands Performance Materials Technical Nonwovens Thermal Acoustical Solutions Totals Impairment of goodwill $ 48,671 $ — $ — $ 48,671 Impairment of other long-lived assets 12,438 — — 12,438 Total impairments $ 61,109 $ — $ — $ 61,109 |
Impairments of Goodwill and O_2
Impairments of Goodwill and Other Long-Lived Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Impairment Charges | The table below presents the gross carrying amount and, as applicable, the accumulated amortization of the Company’s acquired intangible assets other than goodwill included in “Other intangible assets, net” in the Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 In thousands Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Amortized intangible assets Customer Relationships $ 141,784 $ (44,636) $ 142,400 $ (30,648) Patents 791 (670) 759 (607) Technology 2,500 (1,102) 2,500 (977) Trade Names 7,322 (6,544) 7,293 (5,143) License Agreements 629 (629) 610 (610) Other 570 (570) 551 (551) Total other intangible assets $ 153,596 $ (54,151) $ 154,113 $ (38,536) As a result of these impairment tests, the Company recorded the following impairment charges during the three-month period ended March 31, 2020: In thousands Performance Materials Technical Nonwovens Thermal Acoustical Solutions Totals Impairment of goodwill $ 48,671 $ — $ — $ 48,671 Impairment of other long-lived assets 12,438 — — 12,438 Total impairments $ 61,109 $ — $ — $ 61,109 |
Long-term Debt and Financing _2
Long-term Debt and Financing Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | Total outstanding debt consists of: In thousands Effective Rate Maturity September 30, 2020 December 31, 2019 Revolver loan 5.25 % 8/31/2023 $ 144,500 $ 126,500 Term loan, net of debt issuance costs 5.25 % 8/31/2023 138,536 146,106 Finance leases 1.60 % 10/31/2020 3 35 283,039 272,641 Less portion due within one year (9,844) (9,928) Total long-term debt, net of debt issuance costs $ 273,195 $ 262,713 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Assets at Fair Value | The following table sets forth the fair value amounts of derivative instruments held by the Company presented in the Condensed Consolidated Balance Sheets as Other current assets and Other accrued liabilities: September 30, 2020 December 31, 2019 In thousands Asset Derivatives Liability Derivatives Asset Derivatives Liability Derivatives Interest rate contracts $ — $ 5,967 $ 2 $ 4,538 Cross-currency swaps — 3,310 — 1,817 Total derivatives $ — $ 9,277 $ 2 $ 6,355 |
Schedule of Derivative Liabilities at Fair Value | The following table sets forth the fair value amounts of derivative instruments held by the Company presented in the Condensed Consolidated Balance Sheets as Other current assets and Other accrued liabilities: September 30, 2020 December 31, 2019 In thousands Asset Derivatives Liability Derivatives Asset Derivatives Liability Derivatives Interest rate contracts $ — $ 5,967 $ 2 $ 4,538 Cross-currency swaps — 3,310 — 1,817 Total derivatives $ — $ 9,277 $ 2 $ 6,355 |
Schedule of Cash Flow Hedges included in Accumulated Other Comprehensive Income (Loss) | The following table sets forth the (loss) income recorded in accumulated other comprehensive (loss) income, net of tax, for the three and nine-month periods ended September 30, 2020 and 2019 for derivatives held by the Company and designated as hedging instruments: For the Three Months Ended For the Nine Months Ended In thousands 2020 2019 2020 2019 Cash flow hedges: Interest rate contracts $ 706 $ (148) $ (1,059) $ (2,174) Cross-currency swaps (2,669) — (1,143) — Total derivatives $ (1,963) $ (148) $ (2,202) $ (2,174) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Fair Values of Financial Instruments | The following table presents the carrying value and fair value of financial instruments that are not carried at fair value: September 30, 2020 December 31, 2019 In thousands Carrying Value Fair Value Carrying Value Fair Value Debt $ 283,500 $ 288,891 $ 273,000 $ 269,434 |
Equity Compensation Plans (Tabl
Equity Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Outstanding and Exercisable Options | The following table is a summary of outstanding and exercisable options for the three and nine-month periods ended September 30, 2020: For the Three Months Ended September 30, 2020 For the Nine Months Ended September 30, 2020 In thousands except per share Shares Weighted- Shares Weighted- Stock Options outstanding at the beginning of the period 748 $ 25.36 683 $ 27.15 Granted 11 $ 16.27 180 $ 17.37 Exercised — $ — (4) $ 8.67 Forfeited or Expired (71) $ 26.25 (171) $ 25.46 Stock Options outstanding at September 30, 2020 688 $ 25.11 688 $ 25.11 Exercisable at September 30, 2020 305 $ 32.54 305 $ 32.54 Unvested at September 30, 2020 383 $ 19.20 383 $ 19.20 |
Schedule of Restricted Shares Activity | The following is a summary of the Company's unvested time-based restricted shares for the three and nine-month periods ended September 30, 2020: For the Three Months Ended September 30, 2020 For the Nine Months Ended September 30, 2020 In thousands Shares Shares Unvested at the beginning of the period 220 159 Granted — 77 Vested (5) (8) Forfeited or Expired (12) (25) Unvested at September 30, 2020 203 203 The following is a summary of the Company's unvested performance-based restricted shares for the three and nine-month periods ended September 30, 2020: For the Three Months Ended September 30, 2020 For the Nine Months Ended September 30, 2020 In thousands Shares Shares Unvested at the beginning of the period 161 129 Granted 5 71 Vested — — Forfeited or Expired (18) (52) Unvested at September 30, 2020 148 148 |
Employer Sponsored Benefit Pl_2
Employer Sponsored Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Periodic Benefit Cost | The following is a summary of the components of net periodic benefit cost for the domestic defined benefit pension plans for the three-month and nine-month periods ended September 30, 2020 and 2019: For the Three Months Ended For the Nine Months Ended In thousands 2020 2019 2020 2019 Components of employer benefit cost Service cost $ 40 $ 30 $ 120 $ 90 Interest cost 428 530 1,285 2,356 Expected return on assets (532) (488) (1,597) (2,105) Amortization of actuarial loss — — 2 464 Net periodic benefit cost $ (64) $ 72 $ (190) $ 805 Settlement loss — 186 385 25,701 Total employer benefit plan cost $ (64) $ 258 $ 195 $ 26,506 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Charges by Cost Type | The following table summarizes the total restructuring charges by cost type: In Thousands Severance and Related Expenses Facility Exit and Asset Write-Off Expenses Total Expense incurred during quarter ended: September 30, 2020 $ 9,484 $ 5,500 $ 14,984 Total pre-tax expense incurred $ 9,484 $ 5,500 $ 14,984 |
Schedule of Accrued Restructuring Liability by Cost Type | The following table summarizes the accrued liability balance by cost type for the restructuring actions: In Thousands Total Balance as of December 31, 2019 $ — Pre-tax restructuring expenses, excluding asset write-off expenses 9,485 Cash paid (203) Currency translation adjustments (119) Balance as of September 30, 2020 $ 9,163 |
(Loss) Earnings Per Share (Tabl
(Loss) Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Weighted Average Shares Used to Determine Basic and Diluted Earnings Per Share | The following table provides a reconciliation of weighted-average shares used to determine basic and diluted earnings per share: For the Three Months Ended For the Nine Months Ended In thousands 2020 2019 2020 2019 Basic weighted-average common shares outstanding 17,384 17,270 17,364 17,264 Effect of dilutive options and restricted stock awards — 60 — — Diluted weighted-average common shares outstanding 17,384 17,330 17,364 17,264 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Consolidated Net Sales and Operating Income by Segment | Consolidated net sales by segment: For the Three Months Ended For the Nine Months Ended In thousands 2020 2019 2020 2019 Performance Materials Segment: Filtration $ 30,899 $ 22,427 $ 86,422 $ 71,093 Sealing and Advanced Solutions 36,918 37,573 105,088 118,589 Performance Materials Segment net sales 67,817 60,000 191,510 189,682 Technical Nonwovens Segment (1): Industrial Filtration 29,643 32,935 90,425 114,005 Advanced Materials (2) 28,866 30,977 77,494 84,591 Technical Nonwovens Segment net sales 58,509 63,912 167,919 198,596 Thermal Acoustical Solutions Segment: Parts 79,687 80,309 189,456 250,591 Tooling 5,836 7,617 17,276 24,920 Thermal Acoustical Solutions Segment net sales 85,523 87,926 206,732 275,511 Eliminations and Other (2) (4,764) (6,564) (12,389) (19,679) Consolidated Net Sales $ 207,085 $ 205,274 $ 553,772 $ 644,110 Operating income (loss) by segment: For the Three Months Ended For the Nine Months Ended In thousands 2020 2019 2020 2019 Performance Materials (3) $ (6,759) $ 712 $ (58,257) $ 5,474 Technical Nonwovens (1),(2),(4) 5,061 7,165 15,558 19,743 Thermal Acoustical Solutions 1,174 5,022 517 21,870 Corporate Office Expenses (8,757) (5,452) (24,413) (17,411) Consolidated Operating Income $ (9,281) $ 7,447 $ (66,595) $ 29,676 (1) The Technical Nonwovens segment includes the results of Geosol through the date of disposition of May 9, 2019. (2) Included in the Technical Nonwovens segment and Eliminations and Other is the following: • $3.9 million and $4.3 million of intercompany sales to the Thermal Acoustical Solutions segment for the three-month periods ended September 30, 2020 and 2019, respectively. • $10.2 million and $13.6 million of intercompany sales to the Thermal Acoustical Solutions segment for the nine-month periods ended September 30, 2020 and 2019, respectively. (3) Included in the Performance Materials segment is the following: • $61.1 million of impairment charges related to goodwill and other long-lived assets for the nine-month period ended September 30, 2020. • $14.8 million restructuring charges for the three and nine-month periods ending September 30, 2020. • $4.0 million and $4.1 million of intangible assets amortization for the three-month periods ended September 30, 2020 and 2019, respectively. • $11.9 million and $12.2 million of intangible assets amortization for the nine-month periods ended September 30, 2020 and 2019, respectively. (4) Included in the Technical Nonwovens segment is the following: • $1.2 million and $1.3 million of intangible assets amortization for the three-month periods ended September 30, 2020 and 2019, respectively. • $3.5 million and $3.8 million of intangible assets amortization for the nine-month periods ended September 30, 2020 and 2019, respectively. |
Stockholders' Equity and Accu_2
Stockholders' Equity and Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of Stockholders' Equity and Accumulated Other Comprehensive Income | Changes in stockholders' equity for the three and nine-month periods ended September 30, 2020 were as follows: For the Three Months Ended September 30, For the Nine Months Ended In thousands 2020 2019 2020 2019 Beginning Balance $ 253,262 $ 387,105 $ 318,420 $ 369,275 Comprehensive (loss) income, net of tax (5,477) (5,849) (72,474) 10,773 Stock repurchased (23) (7) (31) (62) Stock issued under employee plans — 5 4 5 Stock-based compensation expense 551 417 2,006 1,611 Stock issued to directors — — 388 252 Adoption of ASC 606 — — — (183) Ending Balance $ 248,313 $ 381,671 $ 248,313 $ 381,671 The components of accumulated other comprehensive (loss) income are shown below: For the Three Months Ended For the Nine Months Ended In Thousands 2020 2019 2020 2019 Foreign currency translation: Beginning balance $ (22,833) $ (16,128) $ (18,022) $ (18,458) Net gain (loss) on foreign currency translation 8,245 (8,726) 3,434 (6,396) Other comprehensive income (loss), net of tax 8,245 (8,726) 3,434 (6,396) Ending balance (14,588) (24,854) (14,588) (24,854) Pension and other postretirement benefit plans: Beginning balance (2,749) (2,879) (3,080) (22,253) Amounts reclassified from accumulated other comprehensive (loss) income (2) (49) 21 282 19,395 Other comprehensive (loss) income, net of tax (49) 21 282 19,395 Ending balance (2,798) (2,858) (2,798) (2,858) Unrealized gain/(loss) on derivative instruments: Beginning balance (5,116) (4,000) (4,877) (1,974) Net loss on derivative instruments (3) (2,669) (148) (3,306) (2,174) Amounts reclassified from accumulated other comprehensive income (4) 706 — 1,104 — Other comprehensive loss, net of tax (1,963) (148) (2,202) (2,174) Ending balance (7,079) (4,148) (7,079) (4,148) Total accumulated other comprehensive loss $ (24,465) $ (31,860) $ (24,465) $ (31,860) (1) During the three-month period ended March 31, 2019, the Company recorded an adjustment reducing retained earnings and contract assets by $0.2 million to correct an error in the adoption of ASC 606. (2) For the three-months ended September 30, 2020 and 2019, amount represents routine amortization of actuarial gains and losses in net periodic benefit cost and other activity of less than $0.1 million, net of less than $0.1 million tax benefit. For the nine-months ended September 30, 2020, amount represents the settlement of the ISS Pension Plan in the first quarter of 2020 of $0.4 million, net of $0.1 million tax benefit, and routine amortization of actuarial gains and losses in net periodic benefit cost and other activity of less than $0.1 million, net of less than $0.1 million tax benefit. For the nine-months ended September 30, 2019, amount represents the settlement of the Lydall Pension Plan in the second quarter of 2019 of $19.0 million, net of $11.5 million tax benefit, and routine amortization of actuarial losses in net periodic benefit cost during the first five months of fiscal year 2019 prior to the plan termination of $0.4 million, net of $0.1 million tax benefit. (3) Amount represents unrealized losses on the fair value of hedging activities, net of tax benefits of $0.8 million and less than $0.1 million for the three-month periods ended September 30, 2020 and 2019, respectively, and $1.0 million and $0.7 million for the nine-month periods ended September 30, 2020 and 2019, respectively. (4) Amounts represents the impact of de-designation of the interest rate swap agreement, net of tax expenses of $0.2 million and $0.3 million, for the three-month and nine-month periods ended September 30, 2020, respectively. |
Basis of Financial Statement _4
Basis of Financial Statement Presentation - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2019USD ($)arrangement | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2020production_line | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | |||||||
Number of new production lines | production_line | 2 | ||||||
Net cash provided by operating activities | $ 74,613 | $ 62,964 | |||||
Social cost reimbursements related to COVID-19 | 2,000 | ||||||
Limit on monthly payments for production of medical supplies, COVID-19 | 13,500 | ||||||
Cash on hand | $ 51,331 | $ 122,043 | 122,043 | $ 51,331 | |||
Number of arrangements to sell accounts receivable | arrangement | 2 | ||||||
Proportion of trade receivables in cash at time of sale (as a percent) | 90.00% | ||||||
Proportion of trade receivables in cash when customer pays (as a percent) | 10.00% | ||||||
Trade receivables sold during period | 21,300 | 64,300 | |||||
Cash received for trade receivables sold | 59,100 | 59,100 | |||||
Fees related to trade receivables sold | 200 | ||||||
Comprehensive (loss) income | $ (5,477) | $ (5,849) | $ (72,474) | 10,773 | |||
Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Proportion of investment in facility funded by French government (as a percent) | 30.00% | 30.00% | |||||
Revision of Prior Period, Adjustment | |||||||
Debt Instrument [Line Items] | |||||||
Comprehensive (loss) income | $ 19,000 | $ 19,000 | $ 19,000 | ||||
Performance Materials | |||||||
Debt Instrument [Line Items] | |||||||
Increase (decrease) in revenue (as a percent) | (4.60%) | ||||||
Performance Materials | Filtration | |||||||
Debt Instrument [Line Items] | |||||||
Increase (decrease) in revenue (as a percent) | 37.80% | ||||||
Performance Materials | Sealing and Advanced Solutions | |||||||
Debt Instrument [Line Items] | |||||||
Increase (decrease) in revenue (as a percent) | (1.70%) | ||||||
Technical Nonwovens | |||||||
Debt Instrument [Line Items] | |||||||
Increase (decrease) in revenue (as a percent) | 12.50% | (18.80%) | (8.50%) | ||||
Technical Nonwovens | Industrial Filtration | |||||||
Debt Instrument [Line Items] | |||||||
Increase (decrease) in revenue (as a percent) | (10.00%) | ||||||
Technical Nonwovens | Advanced Materials | |||||||
Debt Instrument [Line Items] | |||||||
Increase (decrease) in revenue (as a percent) | (6.80%) | ||||||
Thermal Acoustical Solutions | |||||||
Debt Instrument [Line Items] | |||||||
Increase (decrease) in revenue (as a percent) | (0.80%) | (35.40%) | |||||
Revolving Credit Facility | Amended Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Draw on credit facility | $ 20,000 |
Basis of Financial Statement _5
Basis of Financial Statement Presentation - Revisions for Errors (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Reclassification [Line Items] | ||||
Pension liability adjustment, net of tax | $ (49) | $ 21 | $ 282 | $ 19,395 |
Comprehensive (loss) income | $ (5,477) | $ (5,849) | $ (72,474) | 10,773 |
As reported | ||||
Reclassification [Line Items] | ||||
Pension liability adjustment, net of tax | 379 | |||
Comprehensive (loss) income | $ (8,243) |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 27,186 | $ 28,245 |
Contract liabilities | 3,414 | $ 1,441 |
Increase (decrease) in contract assets | (1,059) | |
Increase (decrease) in contract liabilities | $ 1,973 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Narrative (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Increase (decrease) in contract assets | $ (1,059) |
Increase (decrease) in contract liabilities | 1,973 |
Revenue recognized from contracts with customers | $ 1,100 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Disaggregation of Revenue by Geographical Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 207,085 | $ 205,274 | $ 553,772 | $ 644,110 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 133,758 | 139,731 | 359,163 | 428,889 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 58,760 | 53,796 | 159,576 | 174,286 |
Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 14,567 | 11,747 | 35,033 | 40,935 |
Operating Segments | Performance Materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 67,817 | 60,000 | 191,510 | 189,682 |
Operating Segments | Performance Materials | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 45,759 | 42,693 | 131,866 | 136,892 |
Operating Segments | Performance Materials | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 18,776 | 15,203 | 52,552 | 47,589 |
Operating Segments | Performance Materials | Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 3,282 | 2,104 | 7,092 | 5,201 |
Operating Segments | Technical Nonwovens | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 58,509 | 63,912 | 167,919 | 198,596 |
Operating Segments | Technical Nonwovens | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 34,727 | 42,128 | 101,694 | 121,984 |
Operating Segments | Technical Nonwovens | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 17,318 | 16,544 | 49,674 | 53,384 |
Operating Segments | Technical Nonwovens | Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 6,464 | 5,240 | 16,551 | 23,228 |
Operating Segments | Thermal Acoustical Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 85,523 | 87,926 | 206,732 | 275,511 |
Operating Segments | Thermal Acoustical Solutions | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 57,841 | 61,315 | 137,517 | 189,152 |
Operating Segments | Thermal Acoustical Solutions | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 22,861 | 22,208 | 57,825 | 73,853 |
Operating Segments | Thermal Acoustical Solutions | Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 4,821 | 4,403 | 11,390 | 12,506 |
Eliminations and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | (4,764) | (6,564) | (12,389) | (19,679) |
Eliminations and Other | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | (4,569) | (6,405) | (11,914) | (19,139) |
Eliminations and Other | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | (195) | (159) | (475) | (540) |
Eliminations and Other | Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 0 | $ 0 | $ 0 | $ 0 |
Inventories - Summary (Details)
Inventories - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory, Net [Abstract] | ||
Raw materials | $ 31,442 | $ 36,322 |
Work in process | 14,228 | 14,873 |
Finished goods | 25,497 | 29,349 |
Total inventories | $ 71,167 | $ 80,544 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Net tooling inventory | $ 2 | $ 1.8 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Changes in Carrying Amount of Goodwill by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | |
Goodwill [Roll Forward] | |||
Balance at beginning of period | $ 133,912 | $ 133,912 | |
Currency translation adjustments | 144 | ||
Impairment | (48,671) | (48,671) | |
Balance at end of period | $ 133,912 | 85,385 | |
Performance Materials | |||
Goodwill [Roll Forward] | |||
Balance at beginning of period | 80,658 | 80,658 | |
Currency translation adjustments | (22) | ||
Impairment | (48,671) | (63,000) | (48,671) |
Balance at end of period | 31,900 | 80,658 | 31,965 |
Technical Nonwovens | |||
Goodwill [Roll Forward] | |||
Balance at beginning of period | 53,254 | 53,254 | |
Currency translation adjustments | 166 | ||
Impairment | $ 0 | 0 | |
Balance at end of period | $ 53,254 | $ 53,420 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | |
Goodwill [Line Items] | |||
Goodwill impairment | $ 48,671 | $ 48,671 | |
Performance Materials | |||
Goodwill [Line Items] | |||
Goodwill impairment | $ 48,671 | $ 63,000 | $ 48,671 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Amortization of the Acquired Intangible Assets Other than Goodwill (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Amortized intangible assets | ||
Gross Carrying Amount | $ 153,596 | $ 154,113 |
Accumulated Amortization | (54,151) | (38,536) |
Customer Relationships | ||
Amortized intangible assets | ||
Gross Carrying Amount | 141,784 | 142,400 |
Accumulated Amortization | (44,636) | (30,648) |
Patents | ||
Amortized intangible assets | ||
Gross Carrying Amount | 791 | 759 |
Accumulated Amortization | (670) | (607) |
Technology | ||
Amortized intangible assets | ||
Gross Carrying Amount | 2,500 | 2,500 |
Accumulated Amortization | (1,102) | (977) |
Trade Names | ||
Amortized intangible assets | ||
Gross Carrying Amount | 7,322 | 7,293 |
Accumulated Amortization | (6,544) | (5,143) |
License Agreements | ||
Amortized intangible assets | ||
Gross Carrying Amount | 629 | 610 |
Accumulated Amortization | (629) | (610) |
Other | ||
Amortized intangible assets | ||
Gross Carrying Amount | 570 | 551 |
Accumulated Amortization | $ (570) | $ (551) |
Impairments of Goodwill and O_3
Impairments of Goodwill and Other Long-Lived Assets - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||||
Impairment of goodwill | $ 48,671 | $ 48,671 | ||||
Impairment of other long-lived assets | 12,438 | |||||
Total impairments | $ 0 | 61,109 | $ 0 | 61,109 | $ 0 | |
Performance Materials | ||||||
Segment Reporting Information [Line Items] | ||||||
Impairment of goodwill | 48,671 | $ 63,000 | 48,671 | |||
Impairment of other long-lived assets | 12,438 | $ 1,200 | ||||
Total impairments | 61,109 | |||||
Technical Nonwovens | ||||||
Segment Reporting Information [Line Items] | ||||||
Impairment of goodwill | 0 | $ 0 | ||||
Impairment of other long-lived assets | 0 | |||||
Total impairments | 0 | |||||
Thermal Acoustical Solutions | ||||||
Segment Reporting Information [Line Items] | ||||||
Impairment of goodwill | 0 | |||||
Impairment of other long-lived assets | 0 | |||||
Total impairments | $ 0 |
Impairments of Goodwill and O_4
Impairments of Goodwill and Other Long-Lived Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | |||
Impairment of goodwill | $ 48,671 | $ 48,671 | |
Goodwill | $ 133,912 | 85,385 | |
Impairment of other long-lived assets | $ 12,438 | ||
Performance Materials | |||
Segment Reporting Information [Line Items] | |||
Weighted-average cost of capital (as a percent) | 11.50% | 9.20% | |
Impairment of goodwill | $ 48,671 | $ 63,000 | 48,671 |
Goodwill | 31,900 | 80,658 | $ 31,965 |
Impairment of other long-lived assets | $ 12,438 | $ 1,200 | |
Thermal Acoustical Solutions | |||
Segment Reporting Information [Line Items] | |||
Weighted-average cost of capital (as a percent) | 10.80% | 9.20% | |
Impairment of goodwill | $ 0 | ||
Impairment of other long-lived assets | $ 0 |
Long-term Debt and Financing _3
Long-term Debt and Financing Arrangements - Narrative (Details) | May 11, 2020USD ($) | Aug. 31, 2018USD ($)lender | Sep. 30, 2020USD ($) | Sep. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2022 | May 10, 2020USD ($) | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | |||||||||
Weighted-average interest rate (as a percent) | 5.20% | 4.30% | |||||||
Amended Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Borrowings outstanding under term loan | $ 250,000,000 | ||||||||
Term Loan Due August 31, 2023 | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 144,000,000 | $ 200,000,000 | |||||||
Borrowings outstanding under term loan | 200,000,000 | $ 138,500,000 | |||||||
Amount of quarterly repayments of term commitment | 2,500,000 | ||||||||
Debt issuance costs | 500,000 | ||||||||
Amended Credit Facility - 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding standby letters of credit | $ 1,800,000 | ||||||||
Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | 314,000,000 | $ 175,000,000 | |||||||
Number of additional lenders | lender | 3 | ||||||||
Revolving Credit Facility | Amended Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | 314,000,000 | $ 450,000,000 | |||||||
Credit facility fixed charge coverage ratio (not less than) | 1.25 | ||||||||
Required consolidated leverage ratio as of end of each fiscal quarter (no greater than) | 3.5 | ||||||||
Revolving Credit Facility | Amended Credit Facility | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Quarterly unused line commitment fee (as a percent) | 0.15% | ||||||||
Revolving Credit Facility | Amended Credit Facility | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Quarterly unused line commitment fee (as a percent) | 0.275% | ||||||||
Revolving Credit Facility | Amended Credit Facility | Federal Funds Effective Swap Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 0.50% | ||||||||
Revolving Credit Facility | Amended Credit Facility | Eurocurrency Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 1.00% | ||||||||
Revolving Credit Facility | Amended Credit Facility | Eurocurrency Rate | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 0.75% | ||||||||
Revolving Credit Facility | Amended Credit Facility | Eurocurrency Rate | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 2.00% | ||||||||
Revolving Credit Facility | Amended Credit Facility | Base Rate | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 0.00% | ||||||||
Revolving Credit Facility | Amended Credit Facility | Base Rate | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 1.25% | ||||||||
Revolving Credit Facility | Amended Credit Facility - 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | 170,000,000 | $ 450,000,000 | $ 250,000,000 | ||||||
Credit facility fixed charge coverage ratio (not less than) | 1.10 | ||||||||
Minimum cash and cash equivalents balances | $ 40,000,000 | ||||||||
Outstanding borrowings | $ 283,500,000 | ||||||||
Remaining borrowing capacity | 23,700,000 | $ 121,600,000 | |||||||
Revolving Credit Facility | Amended Credit Facility - 2020 | Forecast | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility fixed charge coverage ratio (not less than) | 1.25 | 1.25 | |||||||
Required consolidated leverage ratio as of end of each fiscal quarter (no greater than) | 4.50 | 6.5 | 3.50 | ||||||
Revolving Credit Facility | Amended Credit Facility - 2020 | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Quarterly unused line commitment fee (as a percent) | 0.375% | ||||||||
Revolving Credit Facility | Amended Credit Facility - 2020 | Eurocurrency Rate | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 3.00% | ||||||||
Revolving Credit Facility | Amended Credit Facility - 2020 | Eurocurrency Rate | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 4.25% | ||||||||
Revolving Credit Facility | Amended Credit Facility - 2020 | Base Rate | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 2.00% | ||||||||
Revolving Credit Facility | Amended Credit Facility - 2020 | Base Rate | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 3.25% | ||||||||
Revolving Credit Facility | Amended Credit Facility - 2020 | Base and Eurocurrency Rate | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 1.00% | ||||||||
Foreign Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding borrowings | 200,000 | ||||||||
Outstanding standby letters of credit | 1,300,000 | ||||||||
Remaining borrowing capacity | $ 9,400,000 |
Long-term Debt and Financing _4
Long-term Debt and Financing Arrangements - Maturities of Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 283,039 | $ 272,641 |
Less portion due within one year | (9,844) | (9,928) |
Total long-term debt, net of debt issuance costs | $ 273,195 | 262,713 |
Term loan, net of debt issuance costs | ||
Debt Instrument [Line Items] | ||
Debt instrument, effective interest rate (as a percent) | 5.25% | |
Long-term debt | $ 138,536 | 146,106 |
Finance leases | ||
Debt Instrument [Line Items] | ||
Debt instrument, effective interest rate (as a percent) | 1.60% | |
Long-term debt | $ 3 | 35 |
Revolving Credit Facility | Revolver loan | ||
Debt Instrument [Line Items] | ||
Debt instrument, effective interest rate (as a percent) | 5.25% | |
Long-term debt | $ 144,500 | $ 126,500 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) € in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Nov. 30, 2018USD ($) | Apr. 30, 2017USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | May 11, 2020 | Nov. 30, 2019USD ($)derivative_contract | Nov. 30, 2019EUR (€)derivative_contract | |
Derivative [Line Items] | ||||||||
Number of derivative instruments held | derivative_contract | 3 | 3 | ||||||
Eurocurrency Rate | ||||||||
Derivative [Line Items] | ||||||||
Derivative floor interest rate (as a percent) | 1.00% | |||||||
Total accumulated other comprehensive loss | ||||||||
Derivative [Line Items] | ||||||||
Net income (loss) | $ 4,500,000 | |||||||
Reclassification out of Accumulated Other Comprehensive Income | ||||||||
Derivative [Line Items] | ||||||||
Net income (loss) | $ 900,000 | $ 1,400,000 | ||||||
Reclassification out of Accumulated Other Comprehensive Income | Forecast | ||||||||
Derivative [Line Items] | ||||||||
Net income (loss) | $ 3,100,000 | |||||||
Interest rate contracts | ||||||||
Derivative [Line Items] | ||||||||
Derivative agreement term | 5 years | 3 years | ||||||
Derivative notional amount | $ 139,000,000 | $ 60,000,000 | ||||||
Fixed rate of derivatives (as a percent) | 3.09% | 1.58% | ||||||
Quarterly reduction to notional amount | $ 5,000,000 | |||||||
Cross-currency swaps | ||||||||
Derivative [Line Items] | ||||||||
Derivative notional amount | $ 25,000,000 | € 22.6 | ||||||
Aggregate derivative notional amount | $ 75,000,000 | € 67.8 |
Derivatives - Fair Value Amount
Derivatives - Fair Value Amounts of Derivative Instruments (Details) - Derivatives designated as hedging instruments - USD ($) $ in Thousands | Sep. 30, 2020 | Sep. 30, 2019 |
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | $ 0 | $ 2 |
Liability Derivatives | 9,277 | 6,355 |
Interest rate contracts | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 0 | 2 |
Liability Derivatives | 5,967 | 4,538 |
Cross-currency swaps | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 0 | 0 |
Liability Derivatives | $ 3,310 | $ 1,817 |
Derivatives - Income (Loss) Rec
Derivatives - Income (Loss) Recorded in Accumulated Other Comprehensive (Loss) Income (Details) - Derivatives designated as hedging instruments - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in other comprehensive income | $ (1,963) | $ (148) | $ (2,202) | $ (2,174) |
Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in other comprehensive income | 706 | (148) | (1,059) | (2,174) |
Cross-currency swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in other comprehensive income | $ (2,669) | $ 0 | $ (1,143) | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Goodwill impairment | $ 48,671 | $ 48,671 | |
Performance Materials | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Goodwill impairment | 48,671 | $ 63,000 | $ 48,671 |
Fair Value, Nonrecurring | Performance Materials | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Goodwill impairment | 48,700 | ||
Asset impairment charge | $ 12,400 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Value and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Debt | $ 283,500 | $ 273,000 |
Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Debt | $ 288,891 | $ 269,434 |
Equity Compensation Plans - Nar
Equity Compensation Plans - Narrative (Details) | Apr. 24, 2020shares | Sep. 30, 2020USD ($)shares | Dec. 31, 2019individualshares | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)shares | Sep. 30, 2019USD ($) | Jun. 30, 2020shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock based compensation expense | $ 700,000 | $ 600,000 | $ 2,500,000 | $ 2,100,000 | |||
Directors | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock based compensation expense | 200,000 | $ 200,000 | $ 500,000 | $ 500,000 | |||
Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award, term | 10 years | ||||||
Cash received from exercise of stock option (less than) | 0 | $ 100,000 | |||||
Intrinsic value of options exercised (less than) | 100,000 | ||||||
Intrinsic value of stock options exercised, tax benefit (less than) | 100,000 | ||||||
Total unrecognized compensation cost | 2,100,000 | $ 2,100,000 | |||||
Weighted average expected amortization period | 2 years 8 months 12 days | ||||||
Stock Options | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 3 years | ||||||
Stock Options | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 4 years | ||||||
Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total unrecognized compensation cost | $ 4,400,000 | $ 4,400,000 | |||||
Weighted average expected amortization period | 2 years 1 month 6 days | ||||||
Unvested restricted stock awards (shares) | shares | 350,348 | 350,348 | |||||
Time-Based Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unvested restricted stock awards (shares) | shares | 203,000 | 159,000 | 203,000 | 220,000 | |||
Time-Based Restricted Stock | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 2 years | ||||||
Time-Based Restricted Stock | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 4 years | ||||||
Performance-Based Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award performance period | 3 years | ||||||
Unvested restricted stock awards (shares) | shares | 148,000 | 129,000 | 148,000 | 161,000 | |||
Stock Option Plan 2012 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share options and restricted shares authorized (shares) | shares | 3,000,000 | ||||||
Additional shares authorized under the plan (shares) | shares | 19,720 | ||||||
Inducement Grants | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of grantees | individual | 2 |
Equity Compensation Plans - Out
Equity Compensation Plans - Outstanding and Exercisable Options and Restricted Stock (Details) shares in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | Sep. 30, 2020$ / sharesshares | |
Stock Options | ||
Shares | ||
Outstanding at beginning of period (shares) | 748 | 683 |
Granted (shares) | 11 | 180 |
Exercised (shares) | 0 | (4) |
Forfeited or Expired (shares) | (71) | (171) |
Outstanding at end of period (shares) | 688 | 688 |
Exercisable (shares) | 305 | 305 |
Unvested (shares) | 383 | 383 |
Weighted- Average Exercise Price | ||
Outstanding at beginning of period (USD per share) | $ / shares | $ 25.36 | $ 27.15 |
Granted (USD per share) | $ / shares | 16.27 | 17.37 |
Exercised (USD per share) | $ / shares | 0 | 8.67 |
Forfeited or Expired (USD per share) | $ / shares | 26.25 | 25.46 |
Outstanding at end of period (USD per share) | $ / shares | 25.11 | 25.11 |
Exercisable (USD per share) | $ / shares | 32.54 | 32.54 |
Unvested (USD per share) | $ / shares | $ 19.20 | $ 19.20 |
Time-Based Restricted Stock | ||
Restricted Stock | ||
Unvested at beginning of period (shares) | 220 | 159 |
Granted (shares) | 0 | 77 |
Vested (shares) | (5) | (8) |
Forfeited or Expired (shares) | (12) | (25) |
Unvested at end of period (shares) | 203 | 203 |
Performance-Based Restricted Stock | ||
Restricted Stock | ||
Unvested at beginning of period (shares) | 161 | 129 |
Granted (shares) | 5 | 71 |
Vested (shares) | 0 | 0 |
Forfeited or Expired (shares) | (18) | (52) |
Unvested at end of period (shares) | 148 | 148 |
Stock Repurchases - Narrative (
Stock Repurchases - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($)shares | |
Equity [Abstract] | |
Stock repurchased during period (shares) | shares | 2,340 |
Aggregate purchase price of shares repurchased (less than) | $ | $ 0.1 |
Employer Sponsored Benefit Pl_3
Employer Sponsored Benefit Plans - Narrative (Details) - United States - Pension plan - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jul. 31, 2020 | Apr. 30, 2020 | Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
IPM Pension Plan | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Expected employer contributions during remainder of fiscal year | $ 1,200,000 | $ 1,200,000 | |||||
Contributions made by company to domestic pension plan | $ 0 | $ 300,000 | $ 400,000 | $ 1,100,000 | |||
Delayed contributions to plan | $ 300,000 | $ 300,000 | |||||
ISS Pension Plan | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Pre-tax settlement loss | $ 400,000 |
Employer Sponsored Benefit Pl_4
Employer Sponsored Benefit Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Components of employer benefit cost | ||||
Service cost | $ 40 | $ 30 | $ 120 | $ 90 |
Interest cost | 428 | 530 | 1,285 | 2,356 |
Expected return on assets | (532) | (488) | (1,597) | (2,105) |
Amortization of actuarial loss | 0 | 0 | 2 | 464 |
Net periodic benefit cost | (64) | 72 | (190) | 805 |
Settlement loss | 0 | 186 | 385 | 25,701 |
Total employer benefit plan cost | $ (64) | $ 258 | $ 195 | $ 26,506 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020USD ($)production_linefacility | Mar. 31, 2020USD ($)facility | Dec. 31, 2019USD ($)facility | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)production_linefacility | Sep. 30, 2019USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring expenses | $ 14,984 | $ 0 | $ 14,984 | $ 0 | ||
Impairment of other long-lived assets | $ 12,438 | |||||
Cash outflows for restructuring program | 200 | 203 | ||||
Corporate Office Expenses | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring expenses | 200 | 200 | ||||
Performance Materials | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Non-cash restructuring expenditures | 5,500 | |||||
Impairment of other long-lived assets | $ 12,438 | $ 1,200 | ||||
Performance Materials | Operating Segments | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring expenses | $ 14,800 | $ 14,800 | ||||
Performance Materials | Sealing and Advanced Solutions | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of facilities operating | facility | 4 | 5 | ||||
Impairment of other long-lived assets | $ 12,400 | $ 1,200 | ||||
Performance Materials | North America | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of production lines closed | production_line | 2 | 2 | ||||
Restructuring expenses | $ 5,400 | |||||
Performance Materials | Europe | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring expenses | $ 9,600 | |||||
Number of facilities closed | facility | 2 | 2 | ||||
Performance Materials | Minimum | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Estimated pre-tax restructuring expense | $ 17,000 | $ 17,000 | ||||
Restructuring, expected costs resulting in future cash expenditures | 11,500 | 11,500 | ||||
Performance Materials | Minimum | Europe | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Estimated pre-tax restructuring expense | 2,000 | 2,000 | ||||
Performance Materials | Maximum | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Estimated pre-tax restructuring expense | 20,000 | 20,000 | ||||
Restructuring, expected costs resulting in future cash expenditures | 14,500 | 14,500 | ||||
Performance Materials | Maximum | Europe | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Estimated pre-tax restructuring expense | $ 5,000 | $ 5,000 |
Restructuring - Charges by Cost
Restructuring - Charges by Cost (Details) $ in Thousands | 3 Months Ended |
Sep. 30, 2020USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Total pre-tax expense incurred | $ 14,984 |
Severance and Related Expenses | |
Restructuring Cost and Reserve [Line Items] | |
Total pre-tax expense incurred | 9,484 |
Facility Exit and Asset Write-Off Expenses | |
Restructuring Cost and Reserve [Line Items] | |
Total pre-tax expense incurred | $ 5,500 |
Restructuring - Accrued Liabili
Restructuring - Accrued Liability Balance by Cost Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | $ 0 | |
Pre-tax restructuring expenses, excluding asset write-off expenses | 9,485 | |
Cash paid | $ (200) | (203) |
Currency translation adjustments | (119) | |
Balance at end of period | $ 9,163 | $ 9,163 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Contingency [Line Items] | |||||
Effective tax rate (as a percent) | 16.60% | 35.10% | 6.30% | 97.00% | |
Valuation allowance activity | $ 2,000 | $ 2,700 | $ 1,800 | ||
Income tax benefit | 2,334 | $ (1,574) | 4,944 | 5,519 | |
Tax benefit related to employee benefit plan settlement expenses | $ 10,500 | ||||
Effective tax rate excluding pension plan settlement (as a percent) | 25.20% | ||||
Impairment charges | 0 | $ 61,109 | $ 0 | 61,109 | $ 0 |
Goodwill impairment | $ 48,671 | $ 48,671 | |||
Foreign Tax Authority | |||||
Income Tax Contingency [Line Items] | |||||
Withholding tax liability benefit | $ 800 |
(Loss) Earnings Per Share - Sum
(Loss) Earnings Per Share - Summary (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Basic weighted-average common shares outstanding (shares) | 17,384 | 17,270 | 17,364 | 17,264 |
Effect of dilutive options and restricted stock awards (shares) | 0 | 60 | 0 | 0 |
Diluted weighted-average common shares outstanding (shares) | 17,384 | 17,330 | 17,364 | 17,264 |
(Loss) Earnings Per Share - Nar
(Loss) Earnings Per Share - Narrative (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Dilutive stock options excluded from computation of diluted earnings per share (shares) | 77,707 | 28,085 | 53,892 | |
Stock excluded from computation of diluted earnings per share (shares) | 658,654 | 584,725 | 722,006 | 542,669 |
Segment Information - Summary (
Segment Information - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net sales | $ 207,085 | $ 205,274 | $ 553,772 | $ 644,110 | |
Operating income | (9,281) | 7,447 | (66,595) | 29,676 | |
Impairment of goodwill and other long-lived assets | 0 | $ 61,109 | 0 | 61,109 | 0 |
Restructuring expenses | 14,984 | 0 | 14,984 | 0 | |
Performance Materials | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Impairment of goodwill and other long-lived assets | 61,109 | ||||
Technical Nonwovens | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Impairment of goodwill and other long-lived assets | 0 | ||||
Thermal Acoustical Solutions | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Impairment of goodwill and other long-lived assets | $ 0 | ||||
Operating Segments | Performance Materials | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net sales | 67,817 | 60,000 | 191,510 | 189,682 | |
Operating income | (6,759) | 712 | (58,257) | 5,474 | |
Impairment of goodwill and other long-lived assets | 61,100 | ||||
Restructuring expenses | 14,800 | 14,800 | |||
Amortization of intangible assets | 4,000 | 4,100 | 11,900 | 12,200 | |
Operating Segments | Performance Materials | Filtration | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net sales | 30,899 | 22,427 | 86,422 | 71,093 | |
Operating Segments | Performance Materials | Sealing and Advanced Solutions | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net sales | 36,918 | 37,573 | 105,088 | 118,589 | |
Operating Segments | Technical Nonwovens | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net sales | 58,509 | 63,912 | 167,919 | 198,596 | |
Operating income | 5,061 | 7,165 | 15,558 | 19,743 | |
Amortization of intangible assets | 1,200 | 1,300 | 3,500 | 3,800 | |
Operating Segments | Technical Nonwovens | Industrial Filtration | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net sales | 29,643 | 32,935 | 90,425 | 114,005 | |
Operating Segments | Technical Nonwovens | Advanced Materials | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net sales | 28,866 | 30,977 | 77,494 | 84,591 | |
Intercompany sales | 3,900 | 4,300 | 10,200 | 13,600 | |
Operating Segments | Thermal Acoustical Solutions | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net sales | 85,523 | 87,926 | 206,732 | 275,511 | |
Operating income | 1,174 | 5,022 | 517 | 21,870 | |
Operating Segments | Thermal Acoustical Solutions | Parts | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net sales | 79,687 | 80,309 | 189,456 | 250,591 | |
Operating Segments | Thermal Acoustical Solutions | Tooling | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net sales | 5,836 | 7,617 | 17,276 | 24,920 | |
Eliminations and Other | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net sales | (4,764) | (6,564) | (12,389) | (19,679) | |
Corporate Office Expenses | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Operating income | (8,757) | $ (5,452) | (24,413) | $ (17,411) | |
Restructuring expenses | $ 200 | $ 200 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - Rochester, New Hampshire - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Mar. 31, 2017 | Dec. 31, 2018 | |
Loss Contingencies [Line Items] | |||
Expense associated with expected costs of site investigation | $ 300,000 | $ 200,000 | $ 100,000 |
Capital expenditures | 200,000 | ||
Environmental Contamination | |||
Loss Contingencies [Line Items] | |||
Accrual for environmental liability, including revision (fully offset) | $ 0 |
Stockholders' Equity and Accu_3
Stockholders' Equity and Accumulated Other Comprehensive Income - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 5 Months Ended | 9 Months Ended | |||||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | May 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Balance at beginning of period | $ 253,262 | $ 318,420 | $ 387,105 | $ 369,275 | $ 369,275 | $ 318,420 | $ 369,275 | |
Comprehensive (loss) income, net of tax | (5,477) | (5,849) | (72,474) | 10,773 | ||||
Stock repurchased | (23) | (7) | (31) | (62) | ||||
Stock issued under employee plans | 0 | 5 | 4 | 5 | ||||
Stock-based compensation expense | 551 | 417 | 2,006 | 1,611 | ||||
Stock issued to directors | 0 | 0 | 388 | 252 | ||||
Balance at end of period | 248,313 | 381,671 | $ 387,105 | 248,313 | $ 381,671 | |||
Accounting Standards Update | us-gaap:AccountingStandardsUpdate201409Member | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||
Balance at beginning of period | 253,262 | 318,420 | 387,105 | 369,275 | 369,275 | 318,420 | $ 369,275 | |
Net gain (loss) on foreign currency translation | 8,245 | (8,726) | 3,434 | (6,396) | ||||
Balance at end of period | 248,313 | 381,671 | 387,105 | 248,313 | 381,671 | |||
Decrease in contract assets | 1,059 | |||||||
Taxes on unrealized losses on the fair value of hedging activities | 800 | 100 | 1,000 | 700 | ||||
Impact of de-designation of interest rate swap agreement | 200 | 300 | ||||||
Cumulative Effect, Period of Adoption, Adjustment | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Balance at beginning of period | 0 | 0 | 0 | (183) | (183) | 0 | (183) | |
Balance at end of period | 0 | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||
Balance at beginning of period | 0 | 0 | 0 | (183) | (183) | 0 | (183) | |
Balance at end of period | 0 | |||||||
Cumulative Effect, Period of Adoption, Adjustment | Revision of Prior Period, Error Correction, Adjustment | Accounting Standards Update 2014-09 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Balance at beginning of period | (200) | (200) | (200) | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||
Balance at beginning of period | (200) | (200) | (200) | |||||
Decrease in contract assets | 200 | |||||||
Total accumulated other comprehensive loss | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Balance at end of period | (24,465) | (31,860) | (24,465) | (31,860) | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||
Balance at end of period | (24,465) | (31,860) | (24,465) | (31,860) | ||||
Foreign currency translation | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Balance at beginning of period | (22,833) | (18,022) | (16,128) | (18,458) | (18,458) | (18,022) | (18,458) | |
Balance at end of period | (14,588) | (24,854) | (16,128) | (14,588) | (24,854) | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||
Balance at beginning of period | (22,833) | (18,022) | (16,128) | (18,458) | (18,458) | (18,022) | (18,458) | |
Net gain (loss) on foreign currency translation | 8,245 | (8,726) | 3,434 | (6,396) | ||||
Other comprehensive income (loss), net of tax | 8,245 | (8,726) | 3,434 | (6,396) | ||||
Balance at end of period | (14,588) | (24,854) | (16,128) | (14,588) | (24,854) | |||
Pension and other postretirement benefit plans | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Balance at beginning of period | (2,749) | (3,080) | (2,879) | (22,253) | (22,253) | (3,080) | (22,253) | |
Balance at end of period | (2,798) | (2,858) | (2,879) | (2,798) | (2,858) | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||
Balance at beginning of period | (2,749) | (3,080) | (2,879) | (22,253) | (22,253) | (3,080) | (22,253) | |
Amounts reclassified from accumulated other comprehensive income | (49) | 21 | 282 | 19,395 | ||||
Other comprehensive income (loss), net of tax | (49) | 21 | 282 | 19,395 | ||||
Balance at end of period | (2,798) | (2,858) | (2,879) | (2,798) | (2,858) | |||
Loss reclassified from AOCI for defined benefit pension plans | 100 | 100 | 400 | 100 | 100 | |||
Tax benefit reclassified from AOCI for defined benefit pension plans | 100 | 100 | 100 | 100 | 100 | |||
Settlement reclassified from AOCI before tax | 400 | 19,000 | ||||||
Tax benefit from settlement reclassified from AOCI | 100 | 11,500 | ||||||
Unrealized gain/(loss) on derivative instruments | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Balance at beginning of period | (5,116) | (4,877) | (4,000) | (1,974) | (1,974) | (4,877) | (1,974) | |
Balance at end of period | (7,079) | (4,148) | (4,000) | (7,079) | (4,148) | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||||
Balance at beginning of period | (5,116) | $ (4,877) | (4,000) | $ (1,974) | $ (1,974) | (4,877) | (1,974) | |
Net loss on derivative instruments | (2,669) | (148) | (3,306) | (2,174) | ||||
Amounts reclassified from accumulated other comprehensive income | 706 | 0 | 1,104 | 0 | ||||
Other comprehensive income (loss), net of tax | (1,963) | (148) | (2,202) | (2,174) | ||||
Balance at end of period | $ (7,079) | $ (4,148) | $ (4,000) | $ (7,079) | $ (4,148) |