Current report filing

Performance Chemicals Divestiture (Tables)

v3.21.2
Performance Chemicals Divestiture (Tables)
 12 Months Ended
Dec. 31, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]  
Discontinued Operations The following is a reconciliation of the loss recorded on the sale:
Net proceeds received from the sale of Performance Materials
    $ 624,256  
Transaction costs
      (13,161 ) 
Net assets derecognized
      (681,973 ) 
    
 
 
  
Loss on sale of Performance Materials
    $ (70,878 ) 
    
 
 
  
The following table summarizes the results of discontinued operations for the periods presented:
 
    
Years ended

December 31,
  
    
2020
     
2019
     
2018
  
Sales
    $ 342,738      $ 373,686      $ 386,921  
Cost of goods sold
      251,917        281,566        308,679  
Selling, general and administrative expenses
      33,195        37,364        37,226  
Other operating expense, net
      18,289        14,462        13,023  
    
 
 
     
 
 
     
 
 
  
Operating income
      39,337        40,294        27,993  
Equity in net income from affiliated companies
      (37)        (12)        (42)  
Interest expense, net
(1)
     16,210        24,453        22,965  
Other (income) expense, net
      (3,481)        274        474  
Loss on sale of Performance Materials
      70,878        —          —    
    
 
 
     
 
 
     
 
 
  
(Loss) income from discontinued operations before income tax
      (44,233)        15,579        4,596  
Provision (benefit) for income taxes
      58,008        1,022        (4,646)  
    
 
 
     
 
 
     
 
 
  
(Loss) income from discontinued operations, net of tax
    $ (102,241)      $ 14,557      $ 9,242  
    
 
 
     
 
 
     
 
 
  
The following table summarizes the assets and liabilities of discontinued operations at December 31, 2019:
 
    
 
December 31,
2019
 
 
    
 
 
  
ASSETS
         
Cash and cash equivalents
    $ 18,423  
Accounts receivables, net
      40,484  
Inventories, net
      143,323  
Prepaid and other current assets
      4,139  
    
 
 
  
Current assets held for sale
    $ 206,369  
    
 
 
  
Investments in affiliated companies
    $ 115  
Property, plant and equipment, net
      175,614  
Goodwill
      286,227  
Other intangible assets, net
      121,113  
Right-of-use
lease assets
      8,878  
Other long-term assets
      71,697  
    
 
 
  
Long-term assets held for sale
  
$
 663,644
 
    
 
 
  
LIABILITIES
         
Notes payable and current maturities of long-term debt
    $ 7,766  
Accounts payable
      30,267  
Operating lease liabilities—current
      3,326  
Accrued liabilities
      16,744  
    
 
 
  
Current liabilities held for sale
    $ 58,103  
    
 
 
  
Long-term debt, excluding current portion
    $ 55,972  
Deferred income taxes
      8,612  
Operating lease liabilities—noncurrent
      5,248  
Other long-term liabilities
      17,366  
    
 
 
  
Long-term liabilities held for sale
    $ 87,198  
    
 
 
  
Performance Chemicals [Member]  
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]  
Discontinued Operations
The following table summarizes the results of discontinued operations related to Performance Chemicals for the periods presented:
 
    
Years ended

December 31,
  
    
2020
     
2019
     
2018
  
Sales
    $ 614,704      $ 670,563      $ 704,503  
Cost of goods sold
      492,302        539,371        559,123  
Selling, general and administrative expenses
      43,749        46,007        46,421  
Goodwill impairment charge
      260,000        —          —    
Other operating expense, net
      33,144        3,644        13,203  
    
 
 
     
 
 
     
 
 
  
Operating (loss) income
      (214,491 )       81,541        85,756  
Equity in net income from affiliated companies
      (172 )       (213 )       (251 ) 
Interest expense, net
(1)
     16,570        20,199        18,414  
Other income, net
      (1,089 )       (455 )       (3,198 ) 
    
 
 
     
 
 
     
 
 
  
(Loss) income from discontinued operations before income tax
      (229,800 )       62,010        70,791  
Provision for income taxes
      3,943        27,379        25,664  
    
 
 
     
 
 
     
 
 
  
(Loss) income from discontinued operations, net of tax
    $ (233,743 )     $ 34,631      $ 45,127  
    
 
 
     
 
 
     
 
 
  
 
(1)
 
At December 31, 2020, the Company’s outstanding term loans had mandatory repayment provisions, and as a result, interest expense was allocated to discontinued operations for all periods presented on the basis of the Company’s estimated debt reduction of
$500,000
. See Note 29 to these consolidated financial statements for additional information regarding the Company’s sale of the Performance Chemicals business. 
The following table summarizes the assets and liabilities of discontinued operations at December 31, 2020 and 2019, respectively:
 
    
December 31,

2020
     
December 31,

2019
  
ASSETS
                  
Cash and cash equivalents
    $ 22,153      $ 17,736  
Accounts receivables, net
      87,202        86,627  
Inventories, net
      74,647        86,732  
Prepaid and other current assets
      21,088        24,131  
    
 
 
     
 
 
  
Current assets held for sale
  
$
 205,090
 
  
$
 215,226
 
    
 
 
     
 
 
  
Investments in affiliated companies
    $ 324      $ 1,476  
Property, plant and equipment, net
      391,524        401,595  
Goodwill
(1)
      326,173        583,075  
Other intangible assets, net
      388,857        406,656  
Right-of-use
lease assets
      19,296        24,093  
Other long-term assets
      23,269        17,688  
    
 
 
     
 
 
  
Long-term assets held for sale
  
$
 1,149,443
 
  
$
 1,434,583
 
    
 
 
     
 
 
  
LIABILITIES
                  
Notes payable and current maturities of long-term debt
    $ —        $ —    
Accounts payable
      74,728        76,482  
Operating lease liabilities—current
      8,479        6,341  
Accrued liabilities
      25,330        26,182  
    
 
 
     
 
 
  
Current liabilities held for sale
    $ 108,537      $ 109,005  
    
 
 
     
 
 
  
Deferred income taxes
    $ 49,690      $ 47,848  
Operating lease liabilities—noncurrent
      10,047        16,182  
Other long-term liabilities
      95,617        72,538  
    
 
 
     
 
 
  
Long-term liabilities held for sale
  
$
 155,354
 
  
$
 136,568
 
    
 
 
     
 
 
  
(1)
 
The Company applied the market approach to estimate the fair value of the Performance Chemicals business, which is consistent with the accounting policies described in Note 2 and the valuation techniques described in Note 15. In applying the market approach, the Company estimated the fair value using publicly traded comparable company values and applied the selected market multiples to a trailing twelve months adjusted EBITDA. As a result, the Company recorded a goodwill impairment charge of $260,000 in the fourth quarter of 2020 related to the Performance Chemicals business.