UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2020~~March 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number: 001-32240

(Exact name of registrant as specified in its charter)



~~Delaware~~

	~~20-1308307~~
Delaware		20-1308307
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3460 Preston Ridge Road

Alpharetta

Georgia

30005

(Address of principal executive offices, including zip code)

(~~678~~) (678) 566-6500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	NP	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

(Do not check if a smaller reporting company)

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~August~~May 3, ~~2020,~~2021, there were ~~16,802,188~~16,842,893 shares of the Company’s Common Stock outstanding.

Table of Contents

TABLE OF CONTENTS



Part I — Financial Information

Item 1. Financial Statements			F-~~F-1~~1

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			F-~~F-20~~17

Item 3. Quantitative and Qualitative Disclosure About Market Risk			F-~~F-31~~25

Item 4. Controls and Procedures			F-~~F-31~~25


Part II — Other Information

Item 1. Legal Proceedings			F-~~F-32~~26

Item 1A. Risk Factors			F-~~F-32~~26

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			F-~~F-36~~26

Item 6. Exhibits			F-~~F-37~~27

Table of Contents

Part I—FINANCIAL INFORMATION

Item 1. Financial Statements

NEENAH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share and per share data)

(Unaudited)


	Three Months Ended June 30,					Six Months Ended June 30,						Three Months Ended March 31,
	2020			2019		2020			2019			2021		2020
Net sales	$	161.4		$	253.4	$	395.0		$	493.1	Net sales	$	227.0	$	233.6
Cost of products sold	140.0			202.7		319.6			398.7		Cost of products sold	177.4		179.6
Gross profit	21.4			50.7		75.4			94.4		Gross profit	49.6		54.0
Selling, general and administrative expenses	20.8			26.9		47.4			52.2		Selling, general and administrative expenses	24.3		26.6
Asset restructuring and impairment costs (Note 10)	55.3			2.0		55.3			2.0
Acquisition costs											Acquisition costs	12.0		1.0

COVID-19 costs											COVID-19 costs	0.5		1.1
Other restructuring and non-routine costs	1.3			1.5		2.7			1.5		Other restructuring and non-routine costs	0		1.4
Loss on debt extinguishment (Note 5)	1.9			—		1.9			—
COVID-19 costs	0.4			—		1.5			—
Acquisition and due diligence costs	0.1			—		1.1			—
Other expense - net	0.1			0.5		0.4			1.5
Operating income (loss)	(58.5		)	19.8		(34.9		)	37.2

Other (income) expense - net											Other (income) expense - net	(0.8)		0.3
Operating income											Operating income	13.6		23.6
Interest expense - net	3.0			3.0		5.9			6.2		Interest expense - net	3.1		2.9
Income (loss) from continuing operations before income taxes	(61.5		)	16.8		(40.8		)	31.0
Provision (benefit) for income taxes	(11.4		)	3.2		(7.1		)	5.6
Net income (loss)	$	(50.1	)	$	13.6	$	(33.7	)	$	25.4
Income before income taxes											Income before income taxes	10.5		20.7
Provision for income taxes											Provision for income taxes	2.2		4.3

Earnings (Loss) Per Common Share

Net income											Net income	$	8.3	$	16.4

Earnings Per Common Share											Earnings Per Common Share

Basic	$	(2.98	)	$	0.80	$	(2.01	)	$	1.50	Basic	$	0.49	$	0.97

Diluted	$	(2.98	)	$	0.80	$	(2.01	)	$	1.49	Diluted	$	0.49	$	0.97

Weighted Average Common Shares Outstanding (in thousands)											Weighted Average Common Shares Outstanding (in thousands)
Basic	16,797			16,863		16,812			16,861		Basic	16,835		16,817
Diluted	16,797			16,910		16,812			16,914		Diluted	16,873		16,850

Cash Dividends Declared Per Share of Common Stock	$	0.47		$	0.45	$	0.94		$	0.90	Cash Dividends Declared Per Share of Common Stock	$	0.47	$	0.47

See Notes to Condensed Consolidated Financial Statements

F-1

Table of Contents

NEENAH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ~~(LOSS)~~

(In millions)

(Unaudited)

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Net income (loss) $ (50.1 ) $ 13.6
$ (33.7 ) $ 25.4
Reclassification of amounts recognized in the condensed consolidated statements of operations:
Amortization of adjustments to pension and other postretirement benefit liabilities (Note 6) 1.5
1.4
3.1
3.1
Unrealized foreign currency translation gain (loss) 3.6
1.5
(0.4 ) (1.7 )
Net gain from pension and other postretirement benefit plans —
4.9
—
4.9
Income from other comprehensive income items 5.1
7.8
2.7
6.3
Provision for income taxes 0.4
1.6
0.6
1.8
Other comprehensive income 4.7
6.2
2.1
4.5
Comprehensive income (loss) $ (45.4 ) $ 19.8
$ (31.6 ) $ 29.9


	Three Months Ended March 31,
	2021		2020
Net income	$	8.3	$	16.4
Reclassification of amounts recognized in the condensed consolidated statements of operations:
Amortization of adjustments to pension and other postretirement benefit liabilities (Note 5)	1.7		1.6


Unrealized foreign currency loss	(9.1)		(4.0)

Loss from other comprehensive income items	(7.4)		(2.4)
Provision for income taxes	0		0.2
Other comprehensive loss	(7.4)		(2.6)
Comprehensive income	$	0.9	$	13.8

See Notes to Condensed Consolidated Financial Statements

F-2

Table of Contents

NEENAH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)


	June 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
ASSETS					ASSETS
Current Assets					Current Assets
Cash and cash equivalents	$	26.2	$	9.0	Cash and cash equivalents	$	41.0	$	37.1
Restricted cash (Note 5)	176.5		—
Accounts receivable (less allowances of $1.9 million and $1.5 million)	91.8		102.6

Accounts receivable (less allowances of $1.5 million and $1.5 million)					Accounts receivable (less allowances of $1.5 million and $1.5 million)	117.9		100.2
Inventories	115.0		122.8		Inventories	115.1		108.9

Prepaid and other current assets	16.1		18.3		Prepaid and other current assets	25.0		25.1
Total Current Assets	425.6		252.7		Total Current Assets	299.0		271.3
Property, Plant and Equipment					Property, Plant and Equipment
Property, plant and equipment, at cost	782.1		850.6		Property, plant and equipment, at cost	805.7		812.8
Less accumulated depreciation	462.6		470.0		Less accumulated depreciation	485.4		483.4
Property, Plant and Equipment—net	319.5		380.6		Property, Plant and Equipment—net	320.3		329.4
Lease Right-of-Use Assets (Note 1)	21.0		13.9
Lease Right-of-Use Assets					Lease Right-of-Use Assets	19.9		20.2
Deferred Income Taxes	22.3		13.4		Deferred Income Taxes	20.6		18.3
Goodwill	83.1		83.1		Goodwill	85.3		87.4
Intangible Assets—net	63.3		66.7		Intangible Assets—net	61.3		62.6
Other Noncurrent Assets	17.6		17.4		Other Noncurrent Assets	16.8		17.4
TOTAL ASSETS	$	952.4	$	827.8	TOTAL ASSETS	$	823.2	$	806.6

LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities					Current Liabilities
Debt payable within one year (Note 5)	$	179.7	$	2.6
Lease liabilities payable within one year (Note 1)	2.8		1.9
Debt payable within one year (Note 4)					Debt payable within one year (Note 4)	$	4.8	$	4.9
Lease liabilities payable within one year					Lease liabilities payable within one year	3.3		3.2
Accounts payable	37.0		48.9		Accounts payable	72.4		46.0
Accrued expenses	47.0		47.0		Accrued expenses	65.8		61.9
Total Current Liabilities	266.5		100.4		Total Current Liabilities	146.3		116.0
Long-term Debt	201.7		198.2
Noncurrent Lease Liabilities (Note 1)	19.3		13.0
Long-term Debt (Note 4)					Long-term Debt (Note 4)	187.2		189.5
Noncurrent Lease Liabilities					Noncurrent Lease Liabilities	18.0		18.4
Noncurrent Employee Benefits	89.3		93.1		Noncurrent Employee Benefits	92.5		96.8
Deferred Income Taxes	12.1		12.9		Deferred Income Taxes	11.8		12.3
Other Noncurrent Obligations	5.5		3.9		Other Noncurrent Obligations	5.8		6.0
TOTAL LIABILITIES	594.4		421.5		TOTAL LIABILITIES	461.6		439.0
Contingencies and Legal Matters (Note 9)	—		—
Contingencies and Legal Matters (Note 8)					Contingencies and Legal Matters (Note 8)	0		0
TOTAL STOCKHOLDERS’ EQUITY	358.0		406.3		TOTAL STOCKHOLDERS’ EQUITY	361.6		367.6
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	952.4	$	827.8	TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	823.2	$	806.6

See Notes to Condensed Consolidated Financial Statements

F-3

Table of Contents

NEENAH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(In millions, shares in thousands)

(Unaudited)


	2021 Activity
	Common Stock
	Shares	Amount		Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Balance, December 31, 2020	18,746	$	0.2	$	(87.6)	$	338.3	$	220.4	$	(103.7)	$	367.6
Net income	—	—		—		—		8.3		—		8.3
Other comprehensive loss, including income taxes	—	—		—		—		—		(7.4)		(7.4)
Dividends declared	—	—		—		—		(8.0)		—		(8.0)

Stock options exercised	3	—		—		—		—		—		—
Restricted stock vesting (Note 7)	16	—		(0.4)		—		—		—		(0.4)
Stock-based compensation	—	—		—		1.5		—		—		1.5

Balance, March 31, 2021	18,765	$	0.2	$	(88.0)	$	339.8	$	220.7	$	(111.1)	$	361.6

2020 Activity
Common Stock
Shares Amount Treasury
Stock Additional
Paid-In
Capital Retained
Earnings Accumulated
Other
Comprehensive
Loss Total
Balance, December 31, 2019 18,678
$ 0.2
$ (82.8 ) $ 334.1
$ 268.1
$ (113.3 ) $ 406.3
Net income —
—
—
—
16.4
—
16.4
Other comprehensive loss, including income taxes —
—
—
—
—
(2.6 ) (2.6 )
Dividends declared —
—
—
—
(8.0 ) —
(8.0 )
Shares purchased (Note 8) —
—
(3.6 ) —
—
—
(3.6 )
Stock options exercised 3
—
—
—
—
—
—
Restricted stock vesting (Note 8) 8
—
(0.2 ) —
—
—
(0.2 )
Stock-based compensation —
—
—
1.5
—
—
1.5
Balance, March 31, 2020 18,689
$ 0.2
$ (86.6 ) $ 335.6
$ 276.5
$ (115.9 ) $ 409.8
Net loss —
—
—
—
(50.1 ) —
(50.1 )
Other comprehensive income, net of income taxes —
—
—
—
—
4.7
4.7
Dividends declared —
—
—
—
(8.0 ) —
(8.0 )
Shares purchased (Note 8) —
—
—
—
—
—
—
Stock options exercised 2
—
—
—
—
—
—
Restricted stock vesting (Note 8) 9
—
—
—
—
—
—
Stock-based compensation —
—
—
1.6
—
—
1.6
Balance, June 30, 2020 18,700
0.2
(86.6 ) 337.2
218.4
(111.2 ) 358.0


	2020 Activity
	Common Stock
	Shares	Amount		Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Balance, December 31, 2019	18,678	$	0.2	$	(82.8)	$	334.1	$	268.1	$	(113.3)	$	406.3
Net income	—	—		—		—		16.4		—		16.4
Other comprehensive loss, including income taxes	—	—		—		—		—		(2.6)		(2.6)
Dividends declared	—	—		—		—		(8.0)		—		(8.0)
Shares purchased (Note 7)	—	��		(3.6)		—		—		—		(3.6)
Stock options exercised	3	—		—		—		—		—		—
Restricted stock vesting (Note 7)	8	—		(0.2)		—		—		—		(0.2)
Stock-based compensation	—	—		—		1.5		—		—		1.5

Balance, March 31, 2020	18,689	$	0.2	$	(86.6)	$	335.6	$	276.5	$	(115.9)	$	409.8

2019 Activity
Common Stock
Shares Amount Treasury Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total
Balance, December 31, 2018 18,597
$ 0.2
$ (76.6 ) $ 328.5
$ 243.2
$ (105.1 ) $ 390.2
Net income —
—
—
—
11.8
—
11.8
Other comprehensive loss, including income taxes —
—
—
—
—
(1.7 ) (1.7 )
Dividends declared —
—
—
—
(7.6 ) —
(7.6 )
Shares purchased (Note 8) —
—
(0.3 ) —
—
—
(0.3 )
Stock options exercised 9
—
—
—
—
—
—
Restricted stock vesting (Note 8) 3
—
(0.1 ) —
—
—
(0.1 )
Stock-based compensation —
—
—
1.9
—
—
1.9
Balance, March 31, 2019 18,609
$ 0.2
$ (77.0 ) $ 330.4
$ 247.4
$ (106.8 ) $ 394.2
Net income —
—
—
—
13.6
—
13.6
Other comprehensive income, net of income taxes —
—
—
—
—
6.2
6.2
Dividends declared —
—
—
—
(7.6 ) —
(7.6 )
Shares purchased (Note 8) —
—
(1.6 ) —
—
—
(1.6 )
Stock options exercised 1
—
—
—
—
—
—
Restricted stock vesting (Note 8) 21
—
—
—
—
—
—
Stock-based compensation —
—
—
1.7
—
—
1.7
Other/currency —
—
—
—
—
—
—
Balance, June 30, 2019 18,631
0.2
(78.6 ) 332.1
253.4
(100.6 ) 406.5

See Notes to Condensed Consolidated Financial Statements

F-4

Table of Contents

NEENAH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


	Three Months Ended March 31,
	2021		2020
OPERATING ACTIVITIES
Net income	$	8.3	$	16.4
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	8.6		8.6

Stock-based compensation	1.5		1.5
Deferred income tax provision (benefit)	(2.4)		1.1

Unrealized loss on foreign currency forward contract (Note 1)	6.2		0


Provision for uncollectible accounts receivable	0		1.0

Decrease (Increase) in working capital	0.5		(13.7)
Pension and other postretirement benefits	(2.0)		(0.4)

Other	0		(0.3)
NET CASH PROVIDED BY OPERATING ACTIVITIES	20.7		14.2

INVESTING ACTIVITIES
Capital expenditures	(4.8)		(4.8)


Other	(0.2)		(0.1)
NET CASH USED IN INVESTING ACTIVITIES	(5.0)		(4.9)

FINANCING ACTIVITIES
Long-term borrowings (Note 4)	0.2		88.7
Repayments of long-term debt (Note 4)	(1.4)		(17.0)
Debt issuance costs	(1.4)		(0.5)
Cash dividends paid	(8.0)		(8.0)
Shares purchased (Note 7)	(0.4)		(3.8)


NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	(11.0)		59.4

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	(0.8)		(0.2)
NET INCREASE IN CASH AND CASH EQUIVALENTS	3.9		68.5
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	37.1		9.0
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	41.0	$	77.5





SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during period for interest, net of interest costs capitalized	$	2.6	$	0.2
Cash paid during period for income taxes	$	1.5	$	2.0
Non-cash investing activities:
Liability for equipment acquired	$	2.5	$	2.4

Six Months Ended June 30,
2020 2019
OPERATING ACTIVITIES

Net income (loss) $ (33.7 ) $ 25.4
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 19.7
19.0
Stock-based compensation 3.1
3.6
Deferred income tax provision (benefit) (10.3 ) 1.9
Asset impairment costs (Note 10) 52.3
—
Loss on debt extinguishment (Note 5) 1.9
—
Loss on asset dispositions 0.1
0.1
Provision for uncollectible accounts receivable 1.1
—
Non-cash effects of changes in liabilities for uncertain income tax positions —
(0.4 )
Decrease (increase) in working capital 7.9
(7.3 )
Pension and other postretirement benefits (0.1 ) (0.9 )
Long-term payroll taxes 1.7
—
Other (0.1 ) (0.4 )
NET CASH PROVIDED BY OPERATING ACTIVITIES 43.6
41.0

INVESTING ACTIVITIES

Capital expenditures (8.0 ) (9.0 )
Purchase of marketable securities (0.1 ) (0.3 )
Other (0.2 ) (0.3 )
NET CASH USED IN INVESTING ACTIVITIES (8.3 ) (9.6 )

FINANCING ACTIVITIES

Long-term borrowings (Note 5) 291.0
124.3
Repayments of long-term debt (Note 5) (107.5 ) (139.9 )
Debt issuance costs (5.2 ) (0.4 )
Cash dividends paid (16.0 ) (15.2 )
Shares purchased (Note 8) (3.8 ) (2.0 )
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 158.5
(33.2 )

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (0.1 ) —
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH 193.7
(1.8 )
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 9.0
9.9
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD $ 202.7
$ 8.1

RECONCILIATION TO THE CONDENSED CONSOLIDATED BALANCE SHEET:
Cash and cash equivalents $ 26.2
$ 8.1
Restricted cash (Note 5) 176.5
—
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD $ 202.7
$ 8.1
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during period for interest, net of interest costs capitalized $ 5.4
$ 5.7
Cash paid during period for income taxes $ 3.0
$ 9.3
Non-cash investing activities:

Liability for equipment acquired $ 2.1
$ 1.7

See Notes to Condensed Consolidated Financial Statements

F-5

Table of Contents

NEENAH, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, except as noted)

Note 1. Background and Basis of Presentation

Background

Neenah, Inc. ("Neenah" or the "Company"), is a Delaware corporation incorporated in April 2004. The Company has 2 primary operations: its technical products business and its fine paper and packaging business. See Note ~~11,~~9, "Business Segment Information."

Basis of Consolidation and Presentation

These statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") and, in accordance with those rules and regulations, do not include all information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Management believes that the disclosures made are adequate for a fair presentation of the Company’s results of operations, financial position and cash flows. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the results of operations, financial position and cash flows for the interim periods presented herein. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make extensive use of estimates and assumptions that affect the reported amounts and disclosures. Actual results may vary from these estimates.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year.

The condensed consolidated financial statements of Neenah and its subsidiaries included herein are unaudited. The condensed consolidated financial statements include the financial statements of the Company and its wholly owned and majority owned subsidiaries. Intercompany balances and transactions have been eliminated.

Impacts of COVID-19

The Company ~~assessed~~continues to assess the impacts of the novel coronavirus pandemic (“COVID-19” or the "pandemic") on its various accounting estimates and significant judgments, including those that require consideration of forecasted financial information in the context of the unknown future impacts of COVID-19, using information that is reasonably available at this time. The accounting estimates and other matters assessed included, but were not limited to, goodwill, indefinite-lived intangibles and other long-lived assets, allowance for uncollectible accounts receivable, valuation allowances for tax assets and ~~revenue recognition. Based on the Company’s current assessment of these estimates~~allowances for sales discounts and ~~due to the adverse impacts of COVID-19, the Company recorded a non-cash impairment loss of $52.3 million to write-down certain long-lived assets for~~returns. During the three months ended ~~June 30, 2020. The~~March 31, 2021, the Company ~~also recorded $2.6 million of restructuring charges due to the idling of a fine paper machine and other smaller~~qualitatively reviewed its fixed assets and ~~$0.4 million of related severance costs. See Note 10, "Asset Restructuring~~intangibles including goodwill and ~~Impairment Costs" for further discussion.~~indefinite-lived intangibles and noted no impairment indicators were triggered.

The Company ~~also~~ recorded incremental and direct costs of responding to COVID-19 ~~including purchases~~ of ~~personal protective equipment and additional cleaning and sanitation costs of $1.5~~$0.5 million for the ~~six~~three months ended ~~June 30, 2020. This included~~March 31, 2021. For the three months ended March 31, 2020, the Company accrued for a one-time special payment to its mill operators of $1.1 million related to ~~COVID-19 during the three months ended March 31, 2020.~~COVID-19.

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Table of Contents

Earnings per Share ("EPS")

The following table presents the computation of basic and diluted EPS (dollars in millions except per share amounts, shares in thousands):

Earnings ~~(Loss)~~ Per Basic Common Share

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Income (loss) from continuing operations $ (50.1 ) $ 13.6
$ (33.7 ) $ 25.4
Amounts attributable to participating securities —
(0.1 ) (0.1 ) (0.2 )
Net income (loss) available to common stockholders $ (50.1 ) $ 13.5
$ (33.8 ) $ 25.2

Weighted-average basic shares outstanding 16,797
16,863
16,812
16,861

Basic earnings (loss) per share $ (2.98 ) $ 0.80
$ (2.01 ) $ 1.50


	Three Months Ended March 31,
	2021		2020
Income from continuing operations	$	8.3	$	16.4
Amounts attributable to participating securities	0		(0.1)


Net income available to common stockholders	$	8.3	$	16.3

Weighted-average basic shares outstanding	16,835		16,817



Basic earnings per share	$	0.49	$	0.97

Earnings ~~(Loss)~~ Per Diluted Common Share


														Three Months Ended March 31,
	Three Months Ended June 30,						Six Months Ended June 30,							2021		2020
Income from continuing operations													Income from continuing operations	$	8.3	$	16.4
Amounts attributable to participating securities													Amounts attributable to participating securities	(0.1)		(0.1)
	2020			2019			2020			2019
Income (loss) from continuing operations	$	(50.1	)	$	13.6		$	(33.7	)	$	25.4
Amounts attributable to participating securities	—			(0.1		)	(0.1		)	(0.2		)
Net income (loss) available to common stockholders	$	(50.1	)	$	13.5		$	(33.8	)	$	25.2

Net income available to common stockholders													Net income available to common stockholders	$	8.2	$	16.3

Weighted-average basic shares outstanding	16,797			16,863			16,812			16,861			Weighted-average basic shares outstanding	16,835		16,817
Add: Assumed incremental shares under stock compensation plans (a)	—			47			—			53			Add: Assumed incremental shares under stock compensation plans (a)	38		33
Weighted-average diluted shares	16,797			16,910			16,812			16,914			Weighted-average diluted shares	16,873		16,850

Diluted earnings (loss) per share	$	(2.98	)	$	0.80		$	(2.01	)	$	1.49

Diluted earnings per share													Diluted earnings per share	$	0.49	$	0.97

(a)For the three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ there were ~~338,690~~324,197 and ~~230,928~~267,152 potentially dilutive options, respectively, excluded from the computation of dilutive common shares because the exercise price of such options exceeded the average market price of the Company’s Common Stock. For the six months ended June 30, 2020 and 2019, there were 340,886 and 231,129 potentially dilutive options, respectively, similarly excluded from the computation of dilutive common shares. In addition, as a result of the loss from continuing operations for the three and six months ended June 30, 2020, incremental shares of 23,000 and 28,000, respectively, resulting from the dilutive options and performance share units, were excluded from the diluted earnings per share calculation as the effect would have been anti-dilutive.

Fair Value of Financial Instruments

The Company measures the fair value of financial instruments in accordance with Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ("ASC Topic 820") which establishes a framework for measuring fair value. ASC Topic 820 provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

~~The following table presents~~As of March 31, 2021, the carrying ~~value and the fair value~~values of the Company’s ~~debt:~~

June 30, 2020 December 31, 2019

Carrying
Value
Fair Value (a)
Carrying
Value
Fair Value (a)
Term Loan B (variable rates) $ 200.0
$ 200.0
$ —
$ —
2021 Senior Notes (5.25% fixed rate) 175.0
175.0
175.0
174.3
Global Revolving Credit Facility (variable rates) 10.1
10.1
21.6
21.6
German loan agreement (2.45% fixed rate) 2.9
3.0
3.5
3.6
German loan agreement (1.45% fixed rate) 3.0
3.0
3.7
3.7
Total debt $ 391.0
$ 391.1
$ 203.8
$ 203.2

~~(a)~~debt approximated fair value. The fair value for all debt instruments was estimated from Level 2 measurements using rates currently available to the Company for debt of the same remaining maturities.

During the three months ended March 31, 2021, in anticipation of the ITASA acquisition (as further defined and discussed in Note 10, "Subsequent Events"), the Company entered into foreign currency forward contracts to purchase €205.9 million at a weighted average exchange rate of $1.203 per euro on April 6, 2021. These contracts were designed to act as economic hedges for the pending ITASA acquisition and were marked to market at an unrealized loss of $6.2 million, which was recorded in the "Acquisition costs" on the Condensed Consolidated Statement of Operations and reflected in "Accrued expenses" on the Condensed Consolidated Balance Sheet as of March 31, 2021. The Company settled these contracts on April 6, 2021 for a realized loss of $5.1 million.

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Table of Contents

As of ~~June 30, 2020,~~March 31, 2021, the Company had ~~$4.1~~$4.3 million in marketable securities in the U.S. classified as "Other Noncurrent Assets" on the Condensed Consolidated Balance Sheet. The cost of such marketable securities was ~~$4.5~~$4.6 million. Fair value for the Company’s marketable securities was estimated from Level 1 inputs. The Company’s U.S. marketable securities are designated for the payment of benefits under its supplemental employee retirement plan ("SERP"). As of ~~June 30, 2020,~~March 31, 2021, Neenah Germany had investments of ~~$2.1~~$2.5 million that were restricted to the payment of certain post-retirement employee benefits of which ~~$0.6~~$0.8 million and ~~$1.5~~$1.7 million are classified as "Prepaid and other current assets" and "Other Noncurrent Assets", respectively, on the Condensed Consolidated Balance Sheet. The cost of these investments ~~approximate~~approximated market.

Revenue from Contracts with Customers

The Company recognizes sales revenue at a point in time following the transfer of control of the product to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts. Sales are reported net of allowable discounts and estimated returns. Reserves for cash discounts, trade allowances and sales returns are estimated using historical experience. The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill our promise to transfer the associated products. Accordingly, the Company records customer payments of shipping and handling costs as a component of net sales and classifies such costs as a component of cost of sales. The Company excludes tax amounts assessed by governmental authorities that are both (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers from our measurement of transaction prices. Accordingly, such tax amounts are not included as a component of net sales or cost of sales.

The Company considers each transaction/shipment as a separate performance obligation. Neenah recognizes revenue when the title transfers to the customer. As such, the remaining performance obligations at period end are not considered significant.

Sales terms in the technical products business vary depending on the type of product sold and customer category. In general, sales are collected in 45 to 55 days. Extended credit terms of up to 120 days are offered to customers located in certain international markets. Fine paper and packaging sales terms range between 20 and 30 days with discounts of 0 to 2% for customer payments, with discounts of 1% and 20-day terms used most often. Extended credit terms are offered to customers located in certain international markets.

Refer to Note ~~11,~~9, "Business Segment Information" for disaggregation of segment revenue from contracts with customers for the three ~~and six~~ months ended ~~June 30, 2020~~March 31, 2021 and ~~2019.~~2020.

Allowance for Uncollectible Accounts Receivable

~~In January 2020, the Company adopted Accounting Standards Update ("ASU") No. 2016-13,~~ ~~Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~ which amends the FASB's guidance on the impairment of financial instruments. The ASU adds to U.S. GAAP an impairment model (known as the "current expected credit loss model" or "CECL") that is based on expected losses rather than incurred losses. The adoption of this standard did not have a material impact on the Company's financial position, results of operations and cash flows. Losses on receivables are estimated based on known troubled accounts and historical experience of losses incurred. Receivables are considered impaired and written-off when it is ~~probable~~expected that contractual payments due will not be collected in accordance with the terms of the agreement. The allowance for uncollectible accounts receivable was ~~$1.9~~$1.5 million and $1.5 million as of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020, respectively. The Company recorded a $1.0 million provision for uncollectible accounts receivable from the impacts of

COVID-19 for the three months ended March 31, 2020. There were 0no significant ~~new provisions recorded~~adjustments for the three months ended ~~June 30, 2020.~~March 31, 2021.

Leases

The Company has operating leases for corporate offices, warehouses, converting operations, and certain equipment, with remaining lease terms of up to 1110 years, some of which include options to extend the leases for up to five years. The Company determines if an arrangement is a lease at inception. Operating leases with terms greater than 12 months are included in "Lease Right-of-Use Assets", "Lease liabilities payable within one year" and "Noncurrent Lease Liabilities" on the Condensed Consolidated Balance Sheets. As of ~~June 30, 2020,~~March 31, 2021, the Company did not have any material ~~finance~~financing leases.

In March 2020, the Company entered into operating leases for 2 warehouse buildings, and recognized a right-of-use ("ROU") asset and a corresponding lease liability of $6.6 million with a term of 10 years, and an ROU asset and corresponding lease liability of $1.8 million with a term of 5 years. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.

Note 2. Accounting Standards Changes

As of ~~June 30, 2020,~~March 31, 2021, no amendments to the ASC ~~have been issued~~ that will have or are reasonably likely to have a material effect on the Company’s financial position, results of operations or cash ~~flows.~~flows upon adoption.

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Table of Contents

Note 3. Supplemental Balance Sheet Data

The following table presents inventories by major class:


	March 31, 2021		December 31, 2020
Raw materials	$	30.2	$	28.9
Work in progress	24.6		20.1
Finished goods	63.3		61.0
Supplies and other	4.5		5.3
	122.6		115.3
Adjust FIFO inventories to LIFO cost	(7.5)		(6.4)
Total	$	115.1	$	108.9

June 30, 2020 December 31, 2019
Raw materials $ 31.5
$ 32.8
Work in progress 20.0
26.4
Finished goods 67.0
67.3
Supplies and other 5.5
5.2
124.0
131.7
Adjust FIFO inventories to LIFO cost (9.0 ) (8.9 )
Total $ 115.0
$ 122.8

The FIFO values of inventories valued on the LIFO method were ~~$99.3~~$96.2 million and ~~$102.2~~$88.5 million as of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. For the three ~~and six~~ months ended ~~June 30, 2020,~~March 31, 2021, income from continuing operations before income taxes was reduced by less than $0.1 million due to a decrease in certain LIFO inventory quantities.

The following table presents changes in accumulated other comprehensive income (loss) ("AOCI") for the ~~six~~three months ended ~~June 30, 2020:~~March 31, 2021:


	Net Unrealized Foreign Currency Translation Loss		Net Loss from Pension and Other Postretirement Liabilities		Accumulated Other Comprehensive Loss
AOCI — December 31, 2020	$	(1.7)	$	(102.0)	$	(103.7)
Other comprehensive loss before reclassifications	(9.1)		0		(9.1)
Amounts reclassified from AOCI	0		1.7		1.7
Income (loss) from other comprehensive income items	(9.1)		1.7		(7.4)
Provision (benefit) for income taxes	(0.4)		0.4		0
Other comprehensive income (loss)	(8.7)		1.3		(7.4)
AOCI — March 31, 2021	$	(10.4)	$	(100.7)	$	(111.1)

Net Unrealized Foreign
Currency Translation
Loss

Net Loss from
Pension and Other
Postretirement
Liabilities

Accumulated Other
Comprehensive Loss
AOCI — December 31, 2019 $ (19.0 ) $ (94.3 ) $ (113.3 )
Other comprehensive loss before reclassifications (0.4 ) —
(0.4 )
Amounts reclassified from AOCI —
3.1
3.1
Income (loss) from other comprehensive income items (0.4 ) 3.1
2.7
Provision (benefit) for income taxes (0.2 ) 0.8
0.6
Other comprehensive income (loss) (0.2 ) 2.3
2.1
AOCI — June 30, 2020 $ (19.2 ) $ (92.0 ) $ (111.2 )

For ~~each of~~ the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ the Company reclassified ~~$3.1~~$1.7 million and $1.6 million of costs, respectively, from AOCI to "Other expense - net" on the Condensed Consolidated Statements of Operations. For ~~each of~~ the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and~~

~~2019,~~ the Company recognized an income tax benefit of ~~$0.8~~$0.4 million and $0.5 million, respectively, related to such reclassifications classified as "Provision for income taxes" on the Condensed Consolidated Statements of Operations.

Note 4. ~~Income Taxes~~

~~The Company accounts for income taxes in accordance with ASC Topic 740,~~ ~~Income Taxes.~~ Income tax expense (benefit) represented (19)% and 19% of pre-tax book income (loss) for the three months ended June 30, 2020 and 2019, respectively, and (17)% and 18% of pre-tax book income (loss) for the six months ended June 30, 2020 and 2019, respectively. The effective income tax (benefit) rates for the three and six months ended June 30, 2020 were significantly impacted by the effects of the $52.3 million asset impairment loss of the U.S. transportation filtration asset (see Note 10, "Asset Restructuring and Impairment Costs"). As of June 30, 2020, the Company evaluated its ability to utilize its deferred tax assets, including research and development and other tax credits and net operating losses ("NOLs"), before they expire. As a result of the impacts of COVID-19 and other factors, a $4.0 million tax expense was recorded to increase the valuation allowance against certain state tax credits and NOLs. In determining the need for a valuation allowance, the Company considered many factors, including specific taxing jurisdictions, sources of taxable income and income tax strategies. A valuation allowance is recognized if, based on the weight of available evidence, the Company concludes that it is more likely than not that some portion or all of the deferred income tax asset will not be realized.

~~The following table presents the principal reasons for the difference between the Company's effective income tax (benefit) rate and the U.S. federal statutory income tax (benefit) rate:~~

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
U.S. federal statutory income tax (benefit) rate (21 )% 21 % (21 )% 21 %
U.S. state income taxes (benefit), net of federal income tax effect (4 )% 2 % (5 )% 1 %
Foreign tax rate differences and financing structure — % — % — % 1 %
U.S. taxes on foreign earnings — % — % 1 % 1 %
Research and development and other tax credits 2 % (7 )% (3 )% (6 )%
Excess tax benefits from stock compensation — % — % — % — %
Uncertain income tax positions — % 1 % 1 % (1 )%
Valuation allowances 6 % — % 10 % — %
Other differences - net (2 )% 2 % — % 1 %
Effective income tax (benefit) rate (19 )% 19 % (17 )% 18 %

~~Note 5.~~ Debt

Long-term debt consisted of the following:


	March 31, 2021		December 31, 2020
2020 Term Loan B (variable rates) due June 2027	$	198.5	$	199.0
Global Revolving Credit Facility (variable rates) due December 2023	0		0
German loan agreement (2.45% fixed rate) due in quarterly installments ending September 2022	2.0		2.4
German loan agreement (1.45% fixed rate) due in quarterly installments ending September 2022	2.1		2.6
Debt discounts and deferred financing costs	(10.6)		(9.6)
Total debt	192.0		194.4
Less: Debt payable within one year	4.8		4.9
Long-term debt	$	187.2	$	189.5

June 30, 2020 December 31, 2019
Term Loan B (variable rates) due June 2027 $ 200.0
$ —
2021 Senior Notes (5.25% fixed rate) due May 2021 175.0
175.0
Global Revolving Credit Facility (variable rates) due December 2023 10.1
21.6
German loan agreement (2.45% fixed rate) due in quarterly installments ending September 2022 2.9
3.5
German loan agreement (1.45% fixed rate) due in quarterly installments ending March 2023 3.0
3.7
Debt discounts and deferred financing costs (9.6 ) (3.0 )
Total debt 381.4
200.8
Less: Debt payable within one year 179.7
2.6
Long-term debt $ 201.7
$ 198.2

F-9

~~2021 Senior Notes~~

~~In May 2013, the Company completed an underwritten offering~~Table of eight-year senior unsecured notes (the "2021 Senior Notes") at a face amount of $175 million. The 2021 Senior Notes contained terms, covenants and events of default with which the Company must comply, which the Company believed were ordinary and standard for notes of this nature. As of June 30, 2020, the Company was in compliance with all terms of the indenture for the 2021 Senior Notes (the "2021 Note Indenture"). As noted below under "Subsequent Event", on June 30, 2020, the Company initiated the calling of the 2021 Senior Notes for redemption in full on July 16, 2020 and recorded a debt extinguishment charge of $1.9 million related to the write-off of the remaining deferred financing costs associated with the 2021 Senior Notes.Contents

Term Loan B Credit Facility

On June 30, 2020, the Company entered into a Term Loan Credit Agreement (the ~~“Term~~“2020 Term Loan Credit Agreement”) by and among the Company, as borrower, certain of its domestic subsidiaries, as guarantors (the “Guarantors”, and together with the Company, the “Term Loan Parties”), a syndicate of banks, financial institutions and other entities as lenders (the “TLB Lenders”), and JPMorgan Chase Bank, N.A., as administrative agent for the Lenders (the “TLB Administrative Agent”). The Term Loan Credit Agreementwhich provides a seven-year Term Loan B credit facility (the "Term B Facility") in the initial principal amount of $200 million (the ~~"Term~~"2020 Term Loan B".) The 2020 Term Loan B was executed in a single $200 million draw on the closing date. Proceeds under the Term B Facility were used to redeem in full ~~the~~$175 million of senior unsecured notes due May 2021, ~~Senior Notes,~~ repay borrowings under the Company’s senior secured revolving credit facility, pay fees and expenses of the transaction and for general corporate purposes. ~~Under~~As of March 31, 2021, the terms of the Term Loan Credit Agreement, and subject to certain conditions and adjustments, the Company may from time to time solicit the TLB Lenders or new lenders to provide incremental term loan financings under the Term B Facility up to $125 million in the aggregate (each an "Incremental Term Facility"). The proceeds of an Incremental Term Facility may be used for general corporate purposes of the Company and its subsidiaries, including permitted acquisitions, investments and other uses not prohibited by the Term Loan Credit Agreement.

The obligations under the Term Loan Credit Agreement are jointly and severally guaranteed by the Guarantors and are secured by all or substantially all of the assets of the Term Loan Parties, including (i) a first- priority securityweighted-average interest in all of the tangible and intangible non-current assets of the Term Loan (collectively, the “TLB Priority Collateral”), and (ii) a second-priority security interest in all of the current assets of the Term Loan Parties comprising priority collateral of the lenders under the Company’s secured revolving credit facility (together with the TLB Priority Collateral, the “Collateral”). Under the terms of the Term Loan Credit Agreement, borrowings under the Term B Facility will bear interest at a per annum rate equal to either (a) the reserve-adjusted LIBOR rate for interest periods of one, two or three months, plus an applicable rate of 4.00% per annum, or (b) the Alternate Base Rate, plus an applicable rate of 2.00% per annum. “Alternate Base Rate” will be equal to the greatest of (1) the prime rate as quoted from time to time in The Wall Street Journal or published by the Federal Reserve Board, (2) the overnight bank funding rate established by the Federal Reserve Bank of New York, plus 50 basis points, and (3) one-month reserve-adjusted LIBOR plus 100 basis points. The Alternate Base Rate is subject to a “floor” of 2.0%, and the adjusted LIBOR rate is subject to a “floor” of 1.0%. Theon outstanding 2020 Term Loan B isborrowings was 5.0% per annum. The 2020 Term Loan B was repayable in equal quarterly installments ~~commencing on September 30, 2020~~ in an aggregate annual amount equal to 1% of the original principal amount of the Term B Facility (subject to certain reductions in connection with debt prepayments and debt buybacks). ~~The entire unpaid principal balance~~As of March 31, 2021, the Company was in compliance with all terms of the ~~Term Loan B, together with all accrued and unpaid interest thereon, will be due and payable at maturity on June 30, 2027.~~

The Company is required to make mandatory prepayments of the Term Loan B, commencing with the fiscal year ending December 31, 2021, based on certain secured leverage ratios levels, among other requirements, as per below:



~~Secured leverage ratio levels~~		~~Mandatory prepayments~~
~~< 1.50~~		~~No prepayments required~~
~~1.50 - 2.50~~		~~25% of Excess Cash Flow~~
~~> 2.50~~		~~50% of Excess Cash Flow~~

“Secured Leverage Ratio” means the ratio, for the four most recent fiscal quarters, of the net secured indebtedness of the Company as of the last day of such period to EBITDA for such period. “Excess Cash Flow” means consolidated net income, plus or minus adjustments for specified items including, among others:(i) increases or decreases in working capital, (ii) certain capital expenditures, (iii) scheduled principal payments and voluntary prepayments of certain funded indebtedness, (iv) interest expense and any premium, make-whole or penalty payments in respect of indebtedness, (v) taxes, (vi) permitted acquisitions and certain other permitted investments, and (vii) up to $8.75 million per fiscal quarter of regularly scheduled quarterly cash dividends paid by the Company. The2020 Term Loan Credit ~~Agreement contains covenants and events~~Agreement.

On April 6, 2021, in connection with the acquisition of ~~default which~~ITASA, the Company ~~believes are customary for agreements~~entered into an Amendment and Restatement Agreement (the "Term Loan Credit Agreement"), which provides a seven-year term loan B facility in the initial principal amount of ~~this nature.~~

~~Subsequent Event~~

~~On June 30,~~$450 million (the “Term Loan B”), which replaces the 2020 the Company irrevocably instructed the trustee under the 2021 Note Indenture (the “2021 Note Trustee”) to issue a notice calling all of the Company’s outstanding 2021 Notes for redemption. Also on June 30, 2020, the Company deposited in trust with the 2021 Note Trustee funds from the Term Loan ~~B proceeds equal to the sum of the redemption price (equal to 100% of the principal amount thereof) of the 2021 Notes, plus accrued and unpaid interest thereon, and the 2021~~B. See Note Indenture was satisfied and discharged. The funds held by the 2021 Note Trustee were shown as “Restricted Cash” and the 2021 Senior Notes were shown in “Debt payable within one year” on the condensed consolidated balance sheet as of June 30, 2020. The redemption of the 2021 Senior Notes and distribution from the 2021 Note Trustee account were completed on July 16, 2020.10, "Subsequent Events", for further discussion.

Secured Revolving Credit Facility

In December 2018, the Company amended its existing global secured revolving credit facility (the “Global Revolving Credit Facility”) by entering into a Fourth Amended and Restated Credit Agreement, dated December 10, 2018 (the “ABL Credit Agreement”). The Global Revolving Credit Facility will mature on December 10, 2023.

On June 30, 2020, the Company amended ~~its existing~~the ABL Credit Agreement ~~(the "Third Amendment")~~ to among other things, (a) remove the applicable components of the TLB Priority Collateral from the borrowing base calculation under the Global Revolving Credit Facility, (b) permit the pledging of the Collateral under the Term B Facility and subordinate liens of the ~~Fourth Amended and Restated~~ABL Credit Agreement lenders on TLB Priority Collateral to the first position liens on TLB Priority Collateral under the Term B Facility, (c) reduce the U.S. revolving credit facility amount from $150 million to $125 million, (d) reduce the German revolving credit facility amount from $75 million to $50 million, and (e) adjust certain reporting and financial covenant activation and deactivation thresholds.

On April 6, 2021, in connection with the acquisition of ITASA, the Company amended the ABL Credit Agreement as further discussed in Note 10, "Subsequent Events".

Availability under the Global Revolving Credit Facility varies over time depending on the value of the Company’s inventory, receivables and various capital assets. As of ~~June 30, 2020,~~March 31, 2021, the Company had ~~$10.1 million of~~0 borrowings and ~~$0.5~~$0.3 million in letters of credit outstanding under the Global Revolving Credit Facility and ~~$132.8~~$155.7 million of available credit (based on exchange rates at ~~June 30, 2020)~~March 31, 2021). ~~As of June 30, 2020, the weighted-average interest rate on outstanding Global Revolving Credit Facility borrowings was 1.3 percent per annum.~~ As of December 31, ~~2019,~~2020, the weighted-average interest rate under the Global Revolving Credit Facility was 1.3 percent per annum.

The ABL Credit Agreement contains covenants with which the Company and its subsidiaries must comply during the term of the agreement, which the Company believes are ordinary and standard for agreements of this nature. As of ~~June 30, 2020,~~March 31, 2021, the Company was in compliance with all terms of the ABL Credit Agreement.

Under the terms of the Term Loan Credit Agreement and the ABL Credit Agreement, the Company has limitations on its ability to repurchase shares of and pay dividends on its Common Stock. These limitations are triggered depending on the Company’s credit availability under the ABL Credit Agreement and leverage levels under the Term Loan Credit Agreement. As of ~~June 30, 2020,~~March 31, 2021, none of these covenants were restrictive to the Company’s ability to repurchase shares of and pay dividends on its Common Stock.

For additional information about the Company's debt agreements, see Note 7,6, "Debt" of the Notes to Consolidated Financial Statements in the ~~2019~~2020 Form ~~10-K and the agreements attached to this Quarterly Report on Form 10-Q as Exhibit 10.1 and 10.2.~~10-K.

~~Borrowings and Repayments~~

F-10

Table of ~~Long-Term Debt~~Contents

The Condensed Consolidated Statements of Cash Flows present borrowings and repayments under the Global Revolving Credit Facility using a gross approach. This approach presents not only discrete borrowings for transactions such as a business acquisition, but also reflects all borrowings and repayments that occur as part of daily management of cash receipts and disbursements. For the six months ended June 30, 2020, the Company made net long-term debt borrowings of $183.5 million which related to the $200.0 million draw down on the Term Loan B offset by net repayments of $11.2 million on the Global Revolving Credit Facility related to daily cash management activities and $1.3 million of scheduled debt repayments. For the six months ended June 30, 2019, the Company made scheduled debt repayments of $1.0 million and net long-term debt repayments of $14.6 million related to daily cash management activities.

Note 6.5. Pension and Other Postretirement Benefits

Pension Plans

Substantially all active employees of the Company’s U.S. operations participate in defined benefit pension plans and/or defined contribution retirement plans. The Company has defined benefit plans for substantially all its employees in Germany and the United Kingdom. In addition, the Company maintains a SERP, which is a non-qualified defined benefit plan, and a supplemental retirement contribution plan (the "SRCP"), which is a non-qualified, unfunded defined contribution plan. The Company provides benefits under the non-qualified SERP and SRCP plans to the extent necessary to fulfill the intent of its retirement plans without regard to the limitations set by the Internal Revenue Code on qualified retirement benefit plans.

The following table presents the components of net periodic benefit cost for the Company’s defined benefit plans and postretirement plans other than pensions:

Components of Net Periodic Benefit Cost for Defined Benefit Plans


	Pension Benefits				Postretirement Benefits Other than Pensions
	Three Months Ended March 31,
	2021		2020		2021		2020
Service cost	$	1.1	$	1.2	$	0.3	$	0.3
Interest cost	3.0		3.5		0.1		0.2
Expected return on plan assets (a)	(4.9)		(5.2)		0		0
Recognized net actuarial loss	1.4		1.3		0.2		0.2
Amortization of prior service benefit	0.1		0.1		0		0

Net periodic benefit cost	$	0.7	$	0.9	$	0.6	$	0.7

Pension Benefits
Postretirement Benefits
Other than Pensions
Three Months Ended June 30,
2020 2019 2020 2019
Service cost $ 1.2
$ 1.3
$ 0.3
$ 0.3
Interest cost 3.5
4.1
0.2
0.4
Expected return on plan assets (a) (5.2 ) (5.3 ) —
—
Recognized net actuarial loss 1.3
1.1
0.1
0.2
Amortization of prior service benefit 0.1
0.1
—
—
Net periodic benefit cost $ 0.9
$ 1.3
$ 0.6
$ 0.9

Pension Benefits
Postretirement Benefits
Other than Pensions
Six Months Ended June 30,
2020 2019 2020 2019
Service cost $ 2.4
$ 2.6
$ 0.6
$ 0.6
Interest cost 7.0
8.2
0.4
0.8
Expected return on plan assets (a) (10.4 ) (10.3 ) —
—
Recognized net actuarial loss 2.6
2.6
0.3
0.4
Amortization of prior service benefit 0.2
0.1
—
—
Net periodic benefit cost $ 1.8
$ 3.2
$ 1.3
$ 1.8

~~(a)~~

The expected return on plan assets is determined by multiplying the fair value of plan assets at the prior year-end (adjusted for estimated current year cash benefit payments and contributions) by the expected long-term rate of return. The Dutch pension plan is funded through an insurance contract, and the expected return on plan assets is calculated based on the discount rate of the insured obligations.

(a) The expected return on plan assets is determined by multiplying the fair value of plan assets at the prior year-end (adjusted for estimated current year cash benefit payments and contributions) by the expected long-term rate of return. The Dutch pension plan is funded through an insurance contract, and the expected return on plan assets is calculated based on the discount rate of the insured obligations.

The Company records the service cost component of net periodic benefit cost as part of cost of sales and selling, general and administrative ("SG&A") expenses; and the non-service cost components of net periodic benefit cost (i.e., interest cost, expected return on plan assets, net actuarial gains or losses, and amortization of prior service cost or credits) as part of "Other expense - net" on the Condensed Consolidated Statements of Operations.

~~The Company continues to monitor the impact of COVID-19 and related global economic conditions and uncertainty on the pension and other postretirement benefit plans.~~ For the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, the Company made ~~$3.5~~$2.7 million of aggregate contributions to qualified and nonqualified defined benefit pension trusts and payments to pension benefits for unfunded pension and other postretirement benefit plans. The Company expects to make ~~$7.2~~$11.8 million of such payments in calendar ~~2020.~~2021. The Company made similar payments of ~~$6.3~~$1.8 million and ~~$13.1~~$11.5 million for the ~~six~~three months ended ~~June 30, 2019~~March 31, 2020 and for the year ended December 31, ~~2019,~~2020, respectively.

~~Multi-Employer Plan~~

Historically, the Company has contributed to the PACE Industry Union-Management Pension Fund (the “PIUMPF"), a multiemployer pension plan. The amount of our annual contributions to the PIUMPF was negotiated with the plan and the bargaining unit representing our employees covered by the plan. The PIUMPF was certified to be in "critical status" for the plan year beginning January 1, 2010, and continued to be in critical status for the plan year beginning January 1, 2018.

Effective July 1, 2018, the Company and representatives of the United Steelworkers Union (the "USW") of the Lowville mill withdrew from the PIUMPF and recorded an estimated withdrawal liability of $1.0 million, which assumed payment of $0.1 million per year over 20 years, discounted at a credit adjusted risk-free rate of 5.7%. In October 2019, the Company received a billing from PIUMPF for the withdrawal liability, which confirmed the $1.0 million liability, and the Company began making monthly payments. In addition to the withdrawal liability, in October 2019, PIUMPF also demanded immediate payment of $1.3 million for the Company's pro-rata share of the fund's accumulated funding deficiency, which the Company is challenging. As such, the Company has not recorded a liability for this amount (which accrues interest at an annual rate of 12%) as of June 30, 2020.

Note 7.6. Stock Compensation Plan

Stock Options and Stock Appreciation Rights ("Options")

There were 0 Options awarded during the ~~six~~three months ended ~~June 30, 2020.~~March 31, 2021.

The following table presents information regarding Options that vested during the ~~six~~three months ended ~~June 30, 2020:~~March 31, 2021:

Options vested 67,054
Aggregate grant date fair value of Options vested (in millions) $ 1.0


Options vested	15,869
Aggregate grant date fair value of Options vested (in millions)	$	0.2

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Table of Contents

The following table presents information regarding outstanding Options:

June 30, 2020 December 31, 2019
Options outstanding 387,530
416,548
Aggregate intrinsic value (in millions) $ 0.9
$ 3.9
Per share weighted average exercise price $ 70.71
$ 70.08
Exercisable Options 358,617
318,029
Aggregate intrinsic value (in millions) $ 0.9
$ 3.9
Unvested Options 28,913
98,519
Per share weighted average grant date fair value $ 14.73
$ 14.41


	March 31, 2021		December 31, 2020
Options outstanding	376,354		380,844
Aggregate intrinsic value (in millions)	$	0.8	$	1.2
Per share weighted average exercise price	$	71.47	$	70.99
Exercisable Options	375,339		362,651
Aggregate intrinsic value (in millions)	$	0.8	$	1.2
Unvested Options	1,015		18,193
Per share weighted average grant date fair value	$	10.32	$	14.48

Performance Share Units ("PSUs") and Restricted Share Units ("RSUs")

For the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, the Company granted target awards of ~~43,935~~86,020 PSUs. The measurement period for the PSUs is January 1, ~~2020~~2021 through December 31, ~~2022.~~2023. The PSUs vest on ~~December 31, 2022.~~the third anniversary from the date of grant. Common Stock of an amount between 0 and 200 percent of the PSUs target will be awarded based on the Company’s return on invested capital, consolidated revenue growth, free cash flow as a percentage of net sales, and total return to shareholders relative to the companies in the Russell 2000® Value small cap index. The Company’s return on invested capital, consolidated revenue growth, and free cash flow as a percentage of net sales are adjusted for certain items as further described in the Performance Share Award Agreement. The ~~market~~average price on the ~~date~~dates of grant for the PSUs was ~~$63.16~~$54.34 per share.

For the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, the Company awarded ~~78,957~~39,521 RSUs to certain employees. The weighted average grant date fair value of such awards was ~~$62.22~~$53.06 per share and ~~the~~ one third of the shares will vest on each of the first three anniversaries of the grant date, with certain exceptions for retiring employees. For the six months ended June 30, 2020, the Company also awarded 14,112 RSUs to non-employee members of the Board of Directors. The weighted average grant date fair value of such awards was $49.60 per share and the awards vest one year from the date of grant. During the vesting period, the holders of the RSUs are entitled to dividends, but the RSUs do not have voting rights.

Generally, the RSUs and PSUs are forfeited in the event the holder is no longer working for the Company on the vesting date. However, under specific circumstances, vesting may be accelerated or reflect pro-rata vesting.

Note 8.7. Stockholders' Equity

Common Stock

As of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the Company had ~~16,802,000~~16,841,000 shares and ~~16,843,000~~16,829,000 shares of Common Stock outstanding, respectively.

In November ~~2019,~~2020, the Company's Board of Directors authorized aan evergreen program for the purchase of up to $25 million of outstanding Common Stock effective January 1, ~~2020~~2021 (the ~~"2020 Stock~~"Stock Purchase Plan"). The program does not require the Company to purchase any specific number of shares and may be suspended or discontinued at any time. Purchases under the ~~2020~~ Stock Purchase Plan will be made from time to time in the open market or in privately negotiated transactions in accordance with the requirements of applicable law. The timing and amount of any purchases will depend on share price, market conditions and other factors. ~~Among the measures taken to manage the Company's cash flow and preserve its liquidity, purchases under the 2020 Stock Purchase Plan were curtailed in March 2020 and remain suspended.~~ The Company also had $25 million repurchase programs in place during the preceding two years that expired in December 2020 (the “2020 Stock Purchase Plan”) and December 2019 (the “2019 Stock Purchase Plan”) ~~and December 2018 (the “2018 Stock Purchase Plan”)~~, respectively.

The following table shows shares purchased and value ($ in millions) under the respective stock purchase plans:

Six Months Ended June 30,
2020 2019
Shares Amount Shares Amount
2020 Stock Purchase Plan 59,577
$ 3.6
—
$ —
2019 Stock Purchase Plan —
—
31,268
1.9


	Three Months Ended March 31,
	2021			2020
	Shares	Amount		Shares	Amount
Stock Purchase Plan	0	$	0	0	$	0
2020 Stock Purchase Plan	0	0		59,577	3.6

For the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ the Company acquired ~~3,612~~6,881 and ~~1,851~~3,476 shares of Common Stock, respectively, at a cost of ~~$0.2~~$0.4 million and ~~$0.1~~$0.2 million, respectively for shares surrendered by employees to pay taxes due on vested restricted stock awards.

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Note 9.8. Contingencies and Legal Matters

Litigation

The Company is involved in certain legal actions and claims arising in the ordinary course of business. While the outcome of these legal actions and claims cannot be predicted with certainty, it is the opinion of management that the outcome of any such claim which is pending or threatened, either individually or on a combined basis, will not have a material effect on the consolidated financial condition, results of operations or cash flows of the Company.

Income Taxes

The Company periodically undergoes examination by the IRS, as well as various state and foreign jurisdictions. These tax authorities routinely challenge certain deductions and credits reported by the Company on its income tax returns. No significant tax audit findings are being contested at this time with either the IRS or any state or foreign tax authority.

Employees and Labor Relations

The Company’s U.S. union employees are represented by the USW. Approximately 50 percent of salaried employees and 80 percent of hourly employees of Neenah Germany are eligible to be represented by the Mining, Chemicals and Energy Trade Union, Industriegewerkschaft Bergbau, Chemie and Energie (the "IG BCE"). In the Netherlands, most of our employees are eligible to be represented by the ~~CNV~~Christelijke Nationale Vakbond ("CNV") and the ~~FNV.~~Federatie Nederlandse Vakvereniging ("FNV"). As of ~~June 30, 2020,~~March 31, 2021, the Company had ~~384~~275 U.S. employees covered under collective bargaining agreements that ~~have or~~ will expire in the next 12 months.

The following table shows the expiration dates of the Company’s various bargaining agreements and the number of employees covered under each of these agreements:

Contract Expiration Date

Location

Union

Number of

Employees

April ~~2020~~2021

Eerbeek, Netherlands

CNV, FNV

(a) ~~(b)~~

~~August 2020~~

~~Neenah Germany~~

~~IG BCE~~

~~(a)~~

~~January 2021~~

~~Whiting, WI~~

~~USW~~

~~201~~

~~June 2021~~

~~Neenah, WI~~

~~USW~~

~~183~~

~~July 2021~~

~~Munising, MI~~

~~USW~~

~~180~~

November 2021

Lowville, NY

USW

~~May 2022~~

~~Appleton, WI~~

~~USW~~

88
~~(a)~~January 2022			Under German and Dutch laws, union membership is voluntary and does not need to be disclosed to the Company. As a result, the number of employees covered by the collective bargaining agreement with the IG BCE, and the CNV and FNV cannot be determined.Whiting, WI

USW	187
~~(b)~~May 2022	~~The Company is currently in negotiations with the CNV and the FNV. Until a new contract is signed, the terms of the previous contract still apply.~~Appleton, WI	USW	85
June 2022	Neenah, WI	USW	179
July 2022	Munising, MI	USW	178
September 2022	Neenah Germany	IG BCE	(a)

(a) Under German and Dutch laws, union membership is voluntary and does not need to be disclosed to the Company. As a result, the number of employees covered by the collective bargaining agreement with the IG BCE, and the CNV and FNV cannot be determined. The Company is currently in negotiations with the CNV and FNV. Until new contracts are signed, the terms of the previous contracts still apply.

The Company’s United Kingdom salaried and hourly employees are eligible to participate in Unite the Union ("UNITE") on an individual basis, but not under a collective bargaining agreement.

~~Note 10. Asset Restructuring and Impairment Costs~~

During the three months ended June 30, 2020, due to the adverse impacts of COVID-19, the Company recorded non-cash asset restructuring and impairment costs of $55.3 million, of which $52.3 million related to a non-cash impairment loss for long-lived assets used primarily in the Technical Products segment. The other charge of $3.0 million arose from accelerated depreciation due to the idling of assets and related employee termination benefits for a workforce reduction in the Fine Paper and Packaging segment.

The pandemic triggered the evaluation of the carrying values of long-lived assets in the Technical Products segment, with the largest impact resulting from changes in the duration of the ramp-up of net sales of the Company's U.S. transportation filtration asset. As a result of the change in forecast of net sales and profitability, the Company determined that indicators of impairment in the carrying value of the property, plant and equipment were present at June 30, 2020. Accordingly, based on the applicable accounting guidance, the Company tested the recoverability of those long-lived assets using undiscounted estimates of the future cash flows from the use of those assets. The recoverability tests indicated that the long-lived assets were impaired at June 30, 2020. As a result, the Company determined the fair value of the long-lived assets principally on a probability-weighting of the discounted cash flows expected under multiple operating scenarios, based in part on the Company's current and future evaluation of economic conditions, as well as current and future plans. The Company used a credit-adjusted risk-free rate of 9.5% based on the expected rate of return from the highest and best use of similar assets by a market participant. An impairment charge of $51.0 million was recorded in the Technical Products segment to reduce the carrying value of the assets to their indicated fair values. These fair value calculations are highly subjective and require management to make assumptions and apply judgments to estimates regarding the timing and amount of future cash flows, probabilities related to various cash flow scenarios, and appropriate discount rates based on the perceived risks, among others. While the Company believes its assumptions and judgments about future cash flows are reasonable, future impairment charges may be required if the expected cash flow estimates do not occur or if events change requiring the Company to significantly revise its estimates. Long-lived assets are measured at fair value on a nonrecurring basis using Level 3 inputs.

The Company also tested its indefinite-lived intangible assets (brand names) for impairment using the applicable accounting guidance and as a result recorded an impairment loss of $0.9 million and $0.4 million in the Fine Paper and Packaging and Technical Products segments, respectively. The Company updated the qualitative review of goodwill and other indefinite-lived intangibles, noting that there were 0 impairment indicators triggered as of June 30, 2020.

During the three months ended June 30, 2020, the adverse impacts of COVID-19 led to additional actions taken to consolidate the Company's operational footprint with the idling of a fine paper machine and other smaller assets and reallocating their volume, optimizing and eliminating certain product brands and SKUs and restructuring parts of its workforce. During the three months ended June 30, 2020, the Company recorded accelerated depreciation of $2.6 million related to the idling of the manufacturing assets and $0.4 million of employee termination benefit costs.

For the three and six months ended June 30, 2019, the Company recorded $2.0 million of accelerated depreciation and spare parts inventory reserves related to an idled paper machine in the Fine Paper and Packaging segment.

~~A summary of the asset restructuring and impairment costs incurred during the three and six months ended June 30, 2020 and 2019, is as follows:~~

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Impairment losses $ 52.3
$ —
$ 52.3
$ —
Restructuring charges from idled assets 2.6
2.0
2.6
2.0
Severance costs 0.4
—
0.4
—
Total $ 55.3
$ 2.0
$ 55.3
$ 2.0

Note ~~11.~~9. Business Segment Information

The Company’s reportable operating segments consist of Technical Products and Fine Paper and Packaging.

In January 2021, the Company realigned management of the publishing products component of the Technical Products segment to be part of the Fine Paper and Packaging segment. As a result, the Company recast the comparable 2020 information and presented the $9.9 million of net sales and $1.0 million of operating income for the three months ended March 31, 2020 formerly in the Technical Products segment as part of the Fine Paper and Packaging segment. The Company also recast the total assets by segment and presented the $21.0 million of total assets as of December 31, 2020 related to publishing products within the Fine Paper and Packaging segment.

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Table of Contents

The Technical Products segment is an aggregation of the Company’s fiber-formed, coated and/or saturated specialized media that deliver high performance ~~materials and filtration businesses~~benefits to customers, which are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods. The segment is an international producer of fiber-formed, coated and/or saturated specialized media that deliver high performance benefits to customers. Included in this segment are tape and abrasives backings products, digital image transfer, durable label and other specialty substrate products ("Performance Materials"), and filtration media for transportation, water and other end ~~use applications ("Filtration").~~ uses; tape and abrasives backings products, durable label and other specialty substrates used for industrial solutions; and specialty coatings media used for digital image transfer, release liners and other applications.

During the three months ended March 31, ~~2020,~~2021, the Company ~~aggregated~~further disaggregated the ~~backings~~former performance materials business into industrial solutions and ~~specialties revenues into Performance Materials~~specialty coatings components, and recast the prior year period ~~disclosure based on the economic similarity of the products per ASC Topic 280,~~ ~~Segment Reporting, and changes in the internal management of these products.~~disclosure. The following table presents sales by product category for the ~~technical products business:~~Technical Products businesses:


	Three Months Ended March 31,
	2021		2020
Filtration	52	%	45	%
Industrial solutions	38	%	42	%
Specialty coatings	10	%	13	%
Total	100	%	100	%

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Performance Materials 57 % 58 % 58 % 58 %
Filtration 43 % 42 % 42 % 42 %
Total 100 % 100 % 100 % 100 %

The Fine Paper and Packaging segment is a leading supplier of premium printing and other high-end specialty papers ~~("Graphic Imaging"),~~ and premium packaging, ~~("Packaging"),~~ primarily in North America. During the three months ended March 31, 2021, the Company further disaggregated the former graphic imaging business into commercial and consumer components and recast the prior year disclosure to combine the consumer and packaging businesses based on the similarity of final customers and end markets they serve. The following table presents sales by product category for the ~~fine paper~~Fine Paper and ~~packaging business:~~Packaging businesses:


	Three Months Ended March 31,
	2021		2020
Commercial	55	%	58	%
Consumer and packaging	45	%	42	%

Total	100	%	100	%

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Graphic Imaging 69 % 78 % 74 % 79 %
Packaging 31 % 22 % 26 % 21 %
Total 100 % 100 % 100 % 100 %

Each segment employs different technologies and marketing strategies. Disclosure of segment information is on the same basis that management uses internally for evaluating segment performance and allocating resources. Transactions between segments are eliminated in consolidation. The costs of shared services, and other administrative functions managed on a common basis, are allocated to the segments based on usage, where possible, or other factors based on the nature of the activity. General corporate expenses that do not directly support the operations of the business segments are shown as Unallocated corporate costs.

The following tables summarize the net sales, ~~and~~ operating income, ~~(loss)~~and total assets for each of the Company’s business segments:


	Three Months Ended March 31,
	2021		2020
Net sales
Technical Products	$	145.2	$	132.3
Fine Paper and Packaging	81.8		101.3
Consolidated	$	227.0	$	233.6

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Net sales

Technical Products $ 106.1
$ 146.4
$ 248.3
$ 286.4
Fine Paper and Packaging 55.3
107.0
146.7
206.7
Consolidated $ 161.4
$ 253.4
$ 395.0
$ 493.1


	Three Months Ended March 31,
	2021 (a)		2020 (b)
Operating income
Technical Products	$	19.2	$	15.2
Fine Paper and Packaging	12.7		15.8
Unallocated corporate costs	(18.3)		(7.4)
Consolidated	$	13.6	$	23.6

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Table of Contents

Three Months Ended June 30, Six Months Ended June 30,
2020 (a) 2019 (c) 2020 (b) 2019 (c)
Operating income (loss)

Technical Products $ (47.3 ) $ 12.5
$ (31.1 ) $ 23.8
Fine Paper and Packaging (4.1 ) 12.9
10.7
24.8
Unallocated corporate costs (7.1 ) (5.6 ) (14.5 ) (11.4 )
Consolidated $ (58.5 ) $ 19.8
$ (34.9 ) $ 37.2

~~(a)~~

Operating income (loss) for the three months ended June 30, 2020 included (1) $55.3 million of asset restructuring and impairment costs ($51.6 million within Technical Products and $3.7 million within Fine Paper and Packaging) related to the impairment of certain long-lived assets, as well as the idling of a paper machine and other smaller assets and related severance costs; (2) $1.9 million of loss on debt extinguishment ($0.1 million within Technical Products and $1.8 million within Unallocated corporate costs) related to the redemption of the 2021 Senior Notes and resizing of the Global Revolving Credit Facility; (3) $0.4 million of incremental and direct costs of responding to COVID-19 ($0.1 million within Technical Products, $0.1 million within Fine Paper and Packaging and $0.2 million within Unallocated corporate costs); (4) $1.3 million of other restructuring and non-routine costs ($0.2 million within Technical Products, $0.8 million within Fine Paper and Packaging, and $0.3 million within Unallocated corporate costs); and (5) $0.1 million of due diligence and transaction costs of a terminated acquisition attempt within Unallocated corporate costs.(a) Operating income (loss) for the three months ended March 31, 2021 included (1) $12.0 million of acquisition costs for ITASA (see Note 10) within Unallocated corporate costs; (2) $0.5 million of incremental and direct costs of responding to COVID-19 ($0.1 million within Technical Products, $0.3 million within Fine Paper and Packaging, and $0.1 million within Unallocated corporate costs); and (3) $0.0 million of other restructuring and non-routine costs ($0.2 million within Technical Products and $(0.2) million within Fine Paper and Packaging). Refer to ~~Note 10, "Asset Restructuring and Impairment Costs", Note 5, "Debt", and~~ Note 1, "Background and Basis of Presentation" for further discussion.

~~(b)~~

Operating income for the six months ended June 30, 2020 included (1) $55.3 million of asset restructuring and impairment costs ($51.6 million within Technical Products and $3.7 million within Fine Paper and Packaging) related to the impairment of certain long-lived assets, as well as the idling of a paper machine and other smaller assets and related severance costs; (2) $1.9 million of loss on debt extinguishment ($0.1 million within Technical Products and $1.8 million within Unallocated corporate costs) related to the redemption of the 2021 Senior Notes and resizing of the Global Revolving Credit Facility; (3) $1.5 million of incremental and direct costs of responding to COVID-19 ($0.7 million within Technical Products and $0.6 million within Fine Paper and Packaging and $0.2 million within Unallocated corporate costs); (4) $2.7 million of other restructuring and non-routine costs ($0.4 million within Technical Products, $1.7 million within Fine Paper and Packaging, and $0.6 million within Unallocated corporate costs); and (5) $1.1 million of due diligence and transaction costs of a terminated acquisition attempt within Unallocated corporate costs. Refer to Note 10, "Asset Restructuring and Impairment Costs", Note 5, "Debt", and Note 1, "Background and Basis of Presentation" for further discussion.

~~(c)~~

Operating income (loss) for the three and six months ended June 30, 2019 included (1) $3.0 million of non-routine costs within Fine Paper and Packaging, including $2.0 million of accelerated depreciation and spare parts inventory reserves related to an idled paper machine, a $0.6 million accrual for a 2012-15 indirect tax audit and a $0.4 million inventory reserve related to termination of a royalty arrangement; (2) a $0.4 million expense within Technical Products, primarily related to a 2016 electricity grid charge; and (3) $0.1 million of restructuring expenses within unallocated corporate costs.

(b) Operating income for the three months ended March 31, 2020 included (1) $1.1 million of costs ($0.6 million within Technical Products and $0.5 million within Fine Paper and Packaging) related to a one-time special payment to its mill operators related to the COVID-19 pandemic; (2) $1.4 million of restructuring and other non-routine costs ($0.2 million within Technical Products, $0.9 million within Fine Paper and Packaging, and $0.3 million within Unallocated corporate costs); and (3) $1.0 million of transaction costs of a terminated acquisition attempt within Unallocated corporate costs.


	March 31, 2021		December 31, 2020
Total Assets (a)
Technical Products	$	533.4	$	531.0
Fine Paper and Packaging	227.0		213.4
Corporate and other (b)	62.8		62.2
Consolidated	$	823.2	$	806.6

(a) Segment identifiable assets are those that are directly used in the segments operations.

(b) Corporate assets are primarily deferred income taxes, lease ROU assets, and cash.

The following ~~tables represent~~table represents a disaggregation of revenue from contracts with customers by location of the selling entities for the three ~~and six~~ months ended ~~June 30, 2020~~March 31, 2021 and ~~2019:~~2020:


	Three Months Ended March 31,
	2021		2020
United States	64	%	70	%
Germany	30	%	23	%
Rest of Europe	6	%	7	%
Total	100	%	100	%

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
United States 70 % 73 % 70 % 72 %
Germany 24 % 20 % 23 % 21 %
Rest of Europe 6 % 7 % 7 % 7 %
Total 100 % 100 % 100 % 100 %

Note 10. Subsequent Event

On April 6, 2021, the Company completed its previously announced acquisition (the “Acquisition”) of all of the outstanding capital stock of Global Release Liners, S.L., a Spanish limited company (“ITASA”), from Magnum Capital and other minority shareholders for approximately €205 million ($243 million) in cash, inclusive of debt extinguishment and subject to customary closing adjustments. ITASA, through its subsidiaries, is a leading global coater and converter of release liners used in hygiene, tapes, industrial, labels, composites and various other end markets. The Acquisition was funded with available cash-on-hand and the net proceeds of the Term Loan B discussed below. As of March 31, 2021, the Company incurred $12.0 million of costs related to the Acquisition, including an unrealized loss of $6.2 million related to the foreign currency forward contracts negotiated to fund the purchase price in euros. See Note 1, "Background and Basis of Presentation", for further discussion on these contracts.

The Company will account for the Acquisition in accordance with ASC 805, Business Combinations, which requires the assets acquired and the liabilities assumed to be measured at fair value at the date of the Acquisition. The Company has not included the unaudited pro forma information in this filing, as the Company is in process of finalizing the acquisition accounting. The ITASA business will be part of the Company's Technical Products segment.

In connection with the Acquisition, on April 6, 2021, the Company entered into the Term Loan Credit Agreement, which provides a seven-year term loan B facility in the initial principal amount of $450 million, which replaces the 2020 Term Loan B. The Term Loan B is repayable in equal quarterly installments commencing on September 30, 2021 in an aggregate annual

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Table of Contents

amount equal to 1% of the original principal amount of the Term Loan B (subject to certain reductions in connection with debt prepayments and debt buybacks). Cash proceeds of borrowings on the closing date under the Term Loan B were used by the Company to pay the cash consideration for the Acquisition, including the repayment of certain existing debt of ITASA, and to pay fees and expenses in connection with the Acquisition, the Term Loan B and the amendment of the ABL Credit Agreement. The Company will use any remaining proceeds of the Term Loan B for general corporate purposes of the Company and its subsidiaries.

Under the terms of the Term Loan Credit Agreement, borrowings under the Term Loan B will bear interest at a per annum rate equal to either (a) the reserve-adjusted LIBOR rate for interest periods of one, two or three months, plus an applicable rate of 3.00% per annum, or (b) the Alternate Base Rate, plus an applicable rate of 2.00% per annum. “Alternate Base Rate” will be equal to the greatest of (1) the prime rate as quoted from time to time in The Wall Street Journal or published by the Federal Reserve Board, (2) the overnight bank funding rate established by the Federal Reserve Bank of New York, plus 50 basis points, and (3) one-month reserve-adjusted LIBOR plus 100 basis points. The Alternate Base Rate is subject to a “floor” of 1.5%, and the adjusted LIBOR rate is subject to a “floor” of 0.5%. The applicable interest rate under the Term Loan B was 3.50% as of April 6, 2021, which represented a 150 basis point reduction in the interest rate compared to the 2020 Term Loan B.

Also on April 6, 2021, the Company amended the ABL Credit Agreement by entering into a Fourth Amendment to Fourth Amended and Restated Credit Agreement (the "Fourth Amendment"). The Fourth Amendment, among other things, adds provisions (a) specifically permitting the consummation of the Acquisition, (b) permitting the incurrence of the Term Loan B, and (c) permitting certain indebtedness, liens and other transactions to facilitate consummation of the Acquisition and the financing of working capital for ITASA.

F-16

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis presents the factors that had a material effect on our financial position as of ~~June 30, 2020~~March 31, 2021 and our results of operations for the three ~~and six~~ months ended ~~June 30, 2020~~March 31, 2021 and ~~2019.~~2020. You should read this discussion in conjunction with our consolidated financial statements and the notes to those consolidated financial statements included in our most recent Annual Report on Form 10-K. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See "Forward-Looking Statements" for a discussion of the uncertainties, risks and assumptions associated with these statements.

Executive Summary

InOn April 6, 2021, we completed the ~~second quarter~~acquisition of ~~2020, we were faced~~ITASA for approximately €205 million ($243 million) with ~~significant adverse impacts~~available cash-on-hand and the net proceeds of the ~~outbreak~~Term Loan B. ITASA is a leading global coater and converter of ~~COVID-19 as a result of a steep drop~~release liners used in ~~global economic activity which resulted in significantly reduced demand for our products~~hygiene, tapes, industrial, labels, composites and our customers’ products. The pandemic had a material negative impact on our business operations and financial results, including net sales and earnings. In response, management has taken a number of actions to preserve the safety of our employees, carefully control and reduce spending, and preserve liquidity by actively managing working capital and capital expenditures. In addition, we consolidated our footprint with the idling of a fine paper machine andvarious other smaller assets, optimized certain product brands and SKUs, and restructured parts of its workforce. These actions, along with expected impacts from COVID-19 that triggered the recoverability test of long-lived assets, led to non-cash asset restructuring and impairment costs of $55.3 million in the quarter.

end markets.

For the three months ended ~~June 30, 2020,~~March 31, 2021, consolidated net sales of ~~$161.4~~$227.0 million decreased ~~$92.0~~$6.6 million ~~(36%~~(3%) from the prior year period. The ~~decline in revenues resulted primarily from lower volumes caused by major adverse impacts of COVID-19. Net sales declined 28%~~10% increase in Technical Products ~~and 48%~~revenue was more than offset by lower sales in our Fine Paper and Packaging ~~with a more pronounced decline in the Fine Paper and Packaging segment~~business (down 19%) primarily due to ~~its shorter supply chain and reductions in end use demand for commercial print papers used primarily in advertising and marketing campaigns. Impacts~~ongoing effects of COVID-19. The impact from lower net selling prices ~~and unfavorable~~was partially offset by favorable currency ~~translation effects were minimal in the quarter.~~effects.

Consolidated operating income decreased ~~$78.3~~$10.0 million (42%) from the prior year period to ~~a loss of $58.5~~$13.6 million for the three months ended ~~June 30, 2020. The primary reason for the decline was $59.0~~March 31, 2021. Lower income in 2021 resulted primarily from $12.0 million of ~~mostly non-cash~~ costs ~~for impairments and write-offs as noted earlier and presented in~~related to the ~~GAAP reconciliation table.~~acquisition of ITASA. Excluding adjusting items of $12.5 million and $3.5 million in ~~both years,~~2021 and 2020, respectively, adjusted operating income of ~~$0.5~~$26.1 million decreased ~~$22.8~~$1.0 million from ~~$23.3~~$27.1 million in the prior year. The ~~decline in operating income~~decrease was due to lower ~~sales volumes~~operating income in Fine Paper and ~~related fixed manufacturing cost inefficiencies in both segments~~Packaging that ~~were partly~~was not fully offset by ~~spending reductions~~higher operating income in ~~manufacturing and SG&A, as well as benefits from lower input prices net of selling price changes.~~Technical Products. See the reconciliation table on F-20 for further detail.

Cash provided by operating activities of ~~$43.6~~$20.7 million for the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 was ~~$2.6~~$6.5 million higher than cash generated of ~~$41.0~~$14.2 million in the prior year period. ~~Actions to improve~~The increase resulted from lower working capital ~~by managing inventory and to reduce other discretionary spending~~requirements that more than offset ~~the impact from~~ lower earnings. Cash used for investing activities of ~~$8.3~~$5.0 million was ~~$1.3~~slightly higher than the $4.9 million ~~lower than~~in the prior year ~~period due to reduced capital spending.~~period.

We successfully closed a new $200 million Term Loan B Facility on June 30, 2020 with an initial variable interest rate of approximately 5%. Subsequent to quarter-end, proceeds under the Facility were used to redeem in full the 2021 Senior Notes, repay borrowings under our senior secured revolving credit facility, pay fees and expenses of the transaction and for general corporate purposes.

~~Impact of COVID-19 on Our Business~~

Both of our business segments ~~have continued~~continue to operate ~~during the pandemic~~ as vital suppliers of goods and services and we continue to take steps to ensure the safety of our employees, including ~~frequent cleaning and disinfection of workspaces, property and equipment, instituting~~maintaining social distancing measures and ~~mandating~~providing remote working environments for ~~certain~~administrative employees. ~~Disruptions~~During the first quarter 2021, we experienced a limited number of confirmed COVID-19 cases in our U.S. operations and quarantined those individuals and first level exposed employees in accordance with the U.S. Centers for Disease Control and Prevention (the "CDC") guidelines. However, such cases did not cause any significant disruption to operations, nor disruptions to our supply ~~chain and workforce have been minor and limited.~~chain.

~~Additionally, we have taken numerous actions to improve our cash flow and preserve liquidity. These actions include the following:~~

~~reducing discretionary spending;~~

~~minimizing capital expenditures and discretionary contributions to pension plans;~~

~~suspending purchases under our 2020 Stock Purchase Plan;~~

~~utilizing government initiatives and subsidies such as deferring payroll taxes under the CARES Act, government subsidies in Europe and the U.K., and net operating loss carrybacks;~~

~~consolidating our manufacturing footprint; and~~

~~reducing payroll costs through a wage increase and hiring freeze, furloughs for all U.S. employees, and reductions in our salaried and hourly headcount.~~

The adverse impacts of COVID-19 led to additional actions taken to consolidate the Fine Paper and Packaging operational footprint with the idling of a paper machine and other smaller assets and reallocating their volume, optimizing and eliminating certain product brands and SKUs, and restructuring parts of its workforce. In addition, the pandemic triggered an evaluation of the carrying values of long-lived assets during the second quarter of 2020, with the largest impact resulting from changes in the duration of the ramp-up of demand on our U.S. transportation filtration asset. As a result, we recorded non-cash asset restructuring and impairment costs of $55.3 million for the three months ended June 30, 2020. See Note 10, "Asset Restructuring and Impairment Costs" of Notes to Condensed Consolidated Financial Statements for further discussion. As of June 30, 2020, we evaluated our ability to utilize our deferred tax assets, including research and development and other tax credits and NOLs, before they expire. As a result of the impacts of COVID-19 and other factors, a $4.0 million tax expense was recorded to increase the valuation allowance against state tax credits and NOLs. See Note 5, "Income Taxes" of Notes to Condensed Consolidated Financial Statements where discussed further.

~~Refer to Part II, Item 1A,"Risk Factors," for the risk factor related to COVID-19.~~

Results of Operations and Related Information

In this section, we discuss and analyze our net sales, earnings before interest and taxes (which we refer to as "operating income") and other information relevant to an understanding of our results of operations for the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 2020.

In January 2021, the Company realigned management of the publishing products component of the Technical Products segment to be part of the Fine Paper and Packaging segment. As a result, the Company recast the comparable 2020 information and ~~2019.~~presented the $9.9 million of net sales and $1.0 million of operating income for the three months ended March 31, 2020 formerly in the Technical Products segment as part of the Fine Paper and Packaging segment.

F-17

Table of Contents

Analysis of Net Sales — Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~

The following table presents net sales by segment, expressed as a percentage of total net sales:


	Three Months Ended March 31,
	2021				2020
Net sales
Technical Products	$	145.2	64	%	$	132.3	57	%
Fine Paper and Packaging	81.8		36	%	101.3		43	%
Consolidated	$	227.0	100	%	$	233.6	100	%

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Net sales

Technical Products $ 106.1
66 % $ 146.4
58 % $ 248.3
63 % $ 286.4
58 %
Fine Paper and Packaging 55.3
34 % 107.0
42 % 146.7
37 % 206.7
42 %
Consolidated $ 161.4
100 % $ 253.4
100 % $ 395.0
100 % $ 493.1
100 %

~~Commentary:~~

The following table presents our net sales by segment for the three months ended ~~June 30, 2020~~March 31, 2021 and ~~2019:~~2020:


	Three Months Ended June 30,				Change in Net Sales Compared to Prior Period														Three Months Ended March 31,						Change in Net Sales Compared to Prior Period
								Change Due To																				Change Due To
		2020		2019		Total Change				Volume			Net Price (a)			Currency					2021			2020			Total Change				Volume			Net Price (a)			Currency
Technical Products	$	106.1	$	146.4	$	(40.3	)		$	(35.4	)	$	(3.9	)	$	(1.0	)	Technical Products		$	145.2		$	132.3		$	12.9			$	10.3		$	(4.3)		$	6.9
Fine Paper and Packaging	55.3		107.0		(51.7		)		(50.3		)	(1.4		)	—			Fine Paper and Packaging	81.8			101.3			(19.5)				(16.0)			(3.5)			—
Consolidated	$	161.4	$	253.4	$	(92.0	)		$	(85.7	)	$	(5.3	)	$	(1.0	)	Consolidated	$	227.0		$	233.6		$	(6.6)			$	(5.7)		$	(7.8)		$	6.9

(a)Includes changes in selling price and product mix.

Consolidated net sales of ~~$161.4~~$227.0 million for the three months ended ~~June 30, 2020~~March 31, 2021 decreased ~~$92.0~~$6.6 million ~~(36%~~(3%) from the prior year period. The ~~decline in revenues resulted primarily from lower volumes caused by major adverse impacts of COVID-19. Net sales declined 28%~~10% increase in Technical Products ~~and 48%~~revenue was more than offset by lower sales in our Fine Paper and Packaging ~~with a more pronounced decline in the Fine Paper and Packaging segment~~business (down 19%) primarily due to ~~its shorter supply chain and reductions in end use demand for commercial print papers used primarily in advertising and marketing campaigns. Impacts~~ongoing effects of COVID-19. The impact from lower net selling prices ~~and unfavorable~~was partially offset by favorable currency ~~translation effects were minimal in~~effects.While down versus prior year, first quarter consolidated net sales increased 10% from the ~~quarter.~~fourth quarter of 2020.

•Net sales in our technical products business ~~decreased $40.3~~increased $12.9 million ~~(28%~~(10%) from the prior year period. The revenue ~~decline~~increase was primarily ~~due to~~driven by growth in transportation and industrial filtration sales, as well as media for face masks in Europe. The favorable currency effects from a stronger euro were partly offset by lower ~~sales volumes resulting from the COVID-19 pandemic. Modestly lower~~net selling prices in 2021. Net sales ~~mix,~~also continued to grow sequentially since the second quarter of 2020 and ~~currency translation effects in 2020 also contributed to~~were 11% higher than the ~~decline in revenue.~~fourth quarter of 2020.

•Net sales in our fine paper and packaging business decreased ~~$51.7~~$19.5 million ~~(48%~~(19%) from the prior year period. The decline was primarily due to lower volumes resulting from COVID-19, with the ~~COVID-19 pandemic, with more pronounced declines~~largest impact in commercial print ~~compared with premium packaging~~products used for advertising and ~~consumer channel sales.~~marketing. In addition, net selling prices were ~~modestly~~ lower in ~~2020.~~

~~The following table presents our~~2021 due to a lower priced mix. Although down from prior year, net sales ~~by segment for~~continued to grow sequentially since the ~~six months ended June 30,~~second quarter of 2020 and ~~2019:~~were 8% higher than the fourth quarter of 2020.

F-18

Table of Contents

Six Months Ended June 30, Change in Net Sales Compared to Prior Period
Change Due To
2020 2019 Total Change Volume Net Price (a) Currency
Technical Products $ 248.3
$ 286.4
$ (38.1 ) $ (25.3 ) $ (9.7 ) $ (3.1 )
Fine Paper and Packaging 146.7
206.7
(60.0 ) (56.1 ) (3.9 ) —
Consolidated $ 395.0
$ 493.1
$ (98.1 ) $ (81.4 ) $ (13.6 ) $ (3.1 )

~~(a)Includes changes in selling price and product mix.~~

~~Consolidated net sales of $395.0 million for the six months ended June 30, 2020 decreased $98.1 million (~~20%) from the prior year period. The decline in revenues resulted primarily from major adverse volume impacts because of COVID-19; with net sales declining 13% in Technical Products and 29% in Fine Paper and Packaging. Other smaller negative impacts on net sales resulted from lower selling prices, a lower value mix of products sold, and unfavorable currency translation effects. The decline in net sales was more pronounced in the Fine Paper and Packaging segment due to its shorter supply chain and reductions in end use demand for commercial print papers used in advertising and marketing.

Net sales in our technical products business decreased $38.1 million (13%) from the prior period. The revenue decrease resulted primarily from lower volumes, reflecting adverse impacts of COVID-19. Net selling prices were lower partly as a result of declines in input costs as well as a lower value mix of products sold.

Net sales in our fine paper and packaging business decreased $60.0 million (29%) from the prior year period. The decline was primarily due to lower volumes, reflecting adverse impacts of COVID-19. Volume declines were more pronounced in commercial print as compared to premium packaging and consumer channel sales. Net selling prices were lower partly as a result of declines in input costs as well as a lower value mix of products sold.

Analysis of Operating Income — Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~

The following table sets forth line items from our Condensed Consolidated Statements of Operations as a percentage of net sales for the periods indicated and is intended to provide a perspective of trends in our historical results:

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Net sales 100.0 % 100.0 % 100.0 % 100.0 %
Cost of products sold 86.7
80.0
80.9
80.9
Gross profit 13.3
20.0
19.1
19.1
Selling, general and administrative expenses 12.9
10.6
12.0
10.6
Asset restructuring and impairment costs (Note 10) 34.3
0.8
14.0
0.4
Other restructuring and non-routine costs 0.8
0.6
0.7
0.3
Loss on debt extinguishment (Note 5) 1.2
—
0.5
—
COVID-19 costs 0.2
—
0.4
—
Acquisition and due diligence costs 0.1
—
0.3
—
Other expense - net 0.1
0.2
0.1
0.3
Operating income (loss) (36.2 ) 7.8
(8.8 ) 7.5
Interest expense - net 1.9
1.2
1.5
1.2
Income (loss) from continuing operations before income taxes (38.1 ) 6.6
(10.3 ) 6.3
Provision (benefit) for income taxes (7.1 ) 1.2
(1.8 ) 1.1
Income (loss) from continuing operations (31.0 )% 5.4 % (8.5 )% 5.2 %


	Three Months Ended March 31,
	2021		2020
Net sales	100.0	%	100.0	%
Cost of products sold	78.1		76.9
Gross profit	21.9		23.1
Selling, general and administrative expenses	10.7		11.4

Acquisition costs	5.3		0.5
COVID-19 costs	0.2		0.4

Other restructuring and non-routine costs	—		0.6

Other (income) expense - net	(0.4)		0.1
Operating income	6.0		10.1
Interest expense - net	1.4		1.2
Income before income taxes	4.6		8.9
Provision for income taxes	0.9		1.9
Net income	3.7	%	7.0	%

~~Commentary:~~

The following table presents our operating income ~~(loss)~~ by segment for the three months ended ~~June 30, 2020~~March 31, 2021 and ~~2019:~~2020:


								Change in Operating Income Compared to Prior Period																											Change in Operating Income Compared to Prior Period
	Three Months Ended June 30,										Change Due To																	Three Months Ended March 31,										Change Due To
							Total							Net				Input																Total							Net				Input
		2020			2019				Change			Volume				Price (a)				Costs (b)		Currency			Other (c)					2021			2020				Change			Volume				Price (a)				Costs (b)			Currency			Other (c)
Technical Products	$	(47.3	)	$	12.5			$	(59.8	)	$	(8.6	)		$	(0.8	)		$	3.9	$	(0.1	)	$	(54.3	)	Technical Products		$	19.2		$	15.2			$	4.0		$	2.2			$	(4.4)			$	(0.5)		$	1.3		$	5.4
Fine Paper and Packaging	(4.1		)	12.9				(17.0		)	(13.0		)		(1.0		)		2.6		—			(5.5		)	Fine Paper and Packaging	12.7			15.8				(3.1)			(5.1)				(2.0)				0.8			—			3.2
Unallocated corporate costs	(7.1		)	(5.6		)		(1.5		)	—				—				—		—			(1.5		)	Unallocated corporate costs	(18.3)			(7.4)				(10.9)			—				—				—			—			(10.9)
Consolidated	$	(58.5	)	$	19.8			$	(78.3	)	$	(21.6	)		$	(1.8	)		$	6.5	$	(0.1	)	$	(61.3	)	Consolidated	$	13.6		$	23.6			$	(10.0)		$	(2.9)			$	(6.4)			$	0.3		$	1.3		$	(2.3)

(a)Includes changes in selling price and product mix.

(b)Includes price changes for raw materials and energy.

(c)Includes the net favorable effects of other manufacturing costs, over (under) absorption of fixed costs, distribution and SG&A expenses. In addition, these amounts include the net change in ~~2020 it included $52.0~~non-GAAP adjustments of $0.5 million, ~~$4.6~~$1.3 million, and ~~$2.4~~$(10.8) million of unfavorable adjustments in Technical Products, Fine Paper and Packaging, and Unallocated corporate costs, respectively. In 2019 it included $0.4 million, $3.0 million, and $0.1 million of unfavorable adjustments in Technical Products, Fine Paper and Packaging, and Unallocated corporate costs, respectively. See the ~~breakdown~~reconciliation table on F-20 for further detail by segment and ~~the reconciliation table on F-26 for further detail.~~type of cost.

Consolidated operating income decreased ~~$78.3~~$10.0 million from the prior year period to ~~a loss of $58.5~~$13.6 million for the three months ended ~~June 30, 2020.The primary reason for the decline was $59.0~~March 31, 2021. Lower income in 2021 resulted primarily from $12.0 million of ~~mostly non-cash~~ costs ~~for impairments~~related to the acquisition of ITASA, including third-party transaction fees and ~~write-offs as noted earlier and presented in~~an unrealized loss on the ~~GAAP reconciliation table.~~foreign currency forward contracts negotiated to fund the purchase price. Excluding adjusting items of $12.5 million and $3.5 million in ~~both years,~~2021 and 2020, respectively, adjusted operating income of ~~$0.5~~$26.1 million decreased ~~$22.8~~$1.0 million from ~~$23.3~~$27.1 million in the prior year. The ~~decline in operating income~~decrease was due to lower ~~sales volumes~~operating income in Fine Paper and ~~related fixed~~Packaging that was not fully offset by higher operating income in Technical Products.

•Operating income for our technical products business increased $4.0 million from the prior year period to $19.2 million, primarily as a result of lower manufacturing ~~cost inefficiencies in both segments that were~~costs, increased volume, lower SG&A spending, favorable foreign currency, partly offset by ~~spending reductions in manufacturing and SG&A, as well as benefits from lower input prices~~ net of lower selling ~~price changes.~~prices. Excluding unfavorable adjusting items of $0.3 million in 2021 and $0.8 million in 2020 shown on the reconciliation table on F-20, adjusted operating income increased $3.5 million (22%) from $16.0 million to $19.5 million.

•

Operating income for our technical products business decreased $59.8 million from the prior year period to a loss of $47.3 million. Excluding unfavorable adjusting items discussed above and shown on the reconciliation table on F-26, adjusted operating income decreased ~~$8.2 million~~ (64%) from $12.9 million to $4.7 million, primarily as a result of lower sales and production volumes and related fixed manufacturing cost inefficiencies. The impact of lower volumes was partly offset by spending reductions and benefits of lower input costs net of selling price changes.

Operating income for our fine paper and packaging business decreased ~~$17.0~~$3.1 million from the prior year period to a loss of $4.1 million. Excluding unfavorable adjusting items discussed above and shown on the reconciliation table on F-26, adjusted operating income of $0.5 million in 2020 decreased $15.4 million (97%) from $15.9 million in the prior year primarily as a result of lower sales and production volumes and related manufacturing cost inefficiencies. The impact of lower volumes was partly offset by spending reductions and benefits of lower input costs net of selling price changes.


•	Unallocated corporate expenses for the three months ended June 30, 2020 of $7.1 million increased $1.5 million from the prior year. Excluding adjustments of $2.3 million in 2020 related to loss on debt extinguishment, COVID-19 costs and restructuring and other non-routine costs, adjusted unallocated corporate expenses decreased $0.8 million due to reduced SG&A spending.

~~The following table presents our operating income (loss) by segment for the six months ended June 30, 2020 and 2019:~~

Change in Operating Income Compared to Prior Period
Six Months Ended June 30, Change Due To
Total Net Input
2020 2019 Change Volume Price (a) Costs (b) Currency Other (c)
Technical Products $ (31.1 ) $ 23.8
$ (54.9 ) $ (5.5 ) $ (6.2 ) $ 11.3
$ (0.4 ) $ (54.2 )
Fine Paper and Packaging 10.7
24.8
(14.1 ) (13.1 ) (2.2 ) 8.6
—
(7.3 )
Unallocated corporate costs (14.5 ) (11.4 ) (3.1 ) —
—
—
—
(3.1 )
Consolidated $ (34.9 ) $ 37.2
$ (72.1 ) $ (18.6 ) $ (8.4 ) $ 19.9
$ (0.4 ) $ (64.6 )

~~(a)Includes changes in selling price and product mix.~~

~~(b)Includes price changes for raw materials and energy.~~

~~(c)~~Includes other manufacturing costs, over (under) absorption of fixed costs, distribution and SG&A expenses. In addition, in 2020 it included $52.8 million, $6.0 million, and $3.7 million of unfavorable adjustments in Technical Products, Fine Paper and Packaging, and Unallocated corporate costs, respectively. In 2019 it included $0.4 million, $3.0 million, and $0.1 million of unfavorable adjustments in Technical Products, Fine Paper and Packaging, and Unallocated corporate costs, respectively. See the breakdown by segment and the reconciliation table on ~~F-26~~ ~~for further detail.~~

Consolidated operating income decreased $72.1 million from the prior year period to a loss of $34.9 million for the six months ended June 30, 2020. Excluding adjusting items noted below, operating income decreased $13.1 million due primarily to lower sales and production volumes and related manufacturing cost inefficiencies related to COVID-19. The impact of lower volumes was only partly offset by spending reductions and lower input costs net of selling price reductions. In addition, as presented on the reconciliation table on F-26, we recorded $62.5 million of non-cash asset restructuring and impairment costs for long-lived assets, loss on extinguishment of debt, incremental costs of responding to COVID-19, other restructuring and non-routine costs, and acquisition and due diligence costs. Adjusting items of $3.5 million in 2019 included accelerated depreciation due to idling of a paper machine, restructuring and other non-routine costs, and indirect tax costs. Excluding these items, adjusted operating income in 2020 decreased $13.1 million to $27.6 million from $40.7 million.

Operating income for our technical products business decreased $54.9 million from the prior year period to a loss of $31.1 million. Excluding unfavorable adjusting items discussed above and shown on the reconciliation table on F-26, adjusted operating income decreased $2.5 million (10%) from $24.2 million to $21.7$12.7 million, primarily as a result of lower sales and production ~~volumes~~volume and ~~related manufacturing cost inefficiencies.~~less favorable sales mix. The impact of lower volumes was ~~only~~ partly offset by SG&A spending reductions and modest benefits from lower input ~~costs net~~costs. Excluding

F-19

Table of ~~selling price reductions.~~Contents

~~Operating income for our fine paper and packaging business decreased $14.1 million from the prior year period. Excluding~~ unfavorable adjusting items ~~discussed above~~of $0.1 million in 2021 and $1.4 million in 2020 shown on the reconciliation table on ~~F-26,~~F-20, adjusted operating income of ~~$16.7~~$12.8 million in ~~2020~~2021 decreased ~~$11.1~~$4.4 million ~~(40%~~(26%) from ~~$27.8~~$17.2 million in the prior year primarily as a result of lower sales and production volumes and related manufacturing cost inefficiencies. The impact of lower volumes was only partly offset by spending reductions and lower input costs net of selling price reductions.year.

•Unallocated corporate expenses ~~for the six months ended June 30, 2020~~ of ~~$14.5~~$18.3 million ~~were $3.1~~increased $10.9 million ~~higher than~~from the prior year ~~period~~primarily due to costs of $12.0 million related to the ITASA acquisition, including a $6.2 million unrealized loss on ~~debt extinguishment, acquisition~~the foreign currency forward contracts negotiated to fund the purchase price in euros. Excluding unfavorable adjustments in 2021 and ~~due diligence costs, restructuring~~2020 of $12.1 million and ~~other non-routine costs, and COVID-19 costs. These costs compared to $0.1~~$1.3 million, ~~of restructuring and other non-routine costs in 2019. Excluding these items,~~respectively, shown on the reconciliation table on F-20, adjusted unallocated corporate expenses ~~were $0.5~~of $6.2 million ~~lower than the~~increased $0.1 million from prior ~~year period due to lower SG&A spending.~~year.

F-20

Table of Contents

The following table sets forth our operating income (loss) by segment, adjusted for the effects of certain costs, for the periods indicated:


	Three Months Ended March 31,
	2021		2020
Technical Products
GAAP Operating Income	$	19.2	$	15.2

COVID-19 costs	0.1		0.6
Other restructuring and non-routine costs	0.2		0.2



Adjusted Operating Income	19.5		16.0

Fine Paper and Packaging
GAAP Operating Income	12.7		15.8

COVID-19 costs	0.3		0.5
Other restructuring and non-routine costs	(0.2)		0.9



Adjusted Operating Income	12.8		17.2

Unallocated Corporate Costs
GAAP Operating Loss	(18.3)		(7.4)
Acquisition costs	12.0		1.0
COVID-19 costs	0.1		—
Other restructuring and non-routine costs	—		0.3



Adjusted Operating Loss	(6.2)		(6.1)

Consolidated
GAAP Operating Income	13.6		23.6

Acquisition costs	12.0		1.0
COVID-19 costs	0.5		1.1
Other restructuring and non-routine costs	—		1.4



Adjusted Operating Income	$	26.1	$	27.1

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Technical Products

GAAP Operating Income (Loss) $ (47.3 ) $ 12.5
$ (31.1 ) $ 23.8
Asset restructuring and impairment costs 51.6
—
51.6
—
Other restructuring and non-routine costs 0.2
0.4
0.4
0.4
Loss on debt extinguishment 0.1
—
0.1
—
COVID-19 costs 0.1
—
0.7
—
Adjusted Operating Income 4.7
12.9
21.7
24.2

Fine Paper and Packaging

GAAP Operating Income (Loss) (4.1 ) 12.9
10.7
24.8
Asset restructuring and impairment costs 3.7
2.0
3.7
2.0
Other restructuring and non-routine costs 0.8
1.0
1.7
1.0
COVID-19 costs 0.1
—
0.6
—
Adjusted Operating Income 0.5
15.9
16.7
27.8

Unallocated Corporate Costs

GAAP Operating Loss (7.1 ) (5.6 ) (14.5 ) (11.4 )
Other restructuring and non-routine costs 0.3
0.1
0.6
0.1
Loss on debt extinguishment 1.8
—
1.8
—
COVID-19 costs 0.2
—
0.2
—
Acquisition and due diligence costs 0.1
—
1.1
—
Adjusted Operating Loss (4.7 ) (5.5 ) (10.8 ) (11.3 )

Consolidated

GAAP Operating Income (Loss) (58.5 ) 19.8
(34.9 ) 37.2
Asset restructuring and impairment costs 55.3
2.0
55.3
2.0
Other restructuring and non-routine costs 1.3
1.5
2.7
1.5
Loss on debt extinguishment 1.9
—
1.9
—
COVID-19 costs 0.4
—
1.5
—
Acquisition and due diligence costs 0.1
—
1.1
—
Adjusted Operating Income $ 0.5
$ 23.3
$ 27.6
$ 40.7

In accordance with generally accepted accounting principles in the United States ("GAAP"), consolidated operating income (loss) includes the pre-tax effects of ~~asset restructuring and impairment~~acquisition costs, ~~loss on debt extinguishment,~~ COVID-19 costs, and other restructuring and non-routine ~~costs, and acquisition and due diligence~~ costs. We believe that by adjusting reported operating income to exclude the effects of such items, the resulting adjusted operating income is on a basis that reflects the results of our ongoing operations. In assessing COVID-19 impacts, we excluded only costs which were unusual, incremental and directly attributable to mitigating the effects COVID-19 on our operations. We believe that providing adjusted operating results will help investors gain an additional perspective of underlying business trends and results. Adjusted operating income is not a recognized term under GAAP and should not be considered in isolation or as a substitute for operating income derived in accordance with GAAP. Other companies may use different methodologies for calculating their non-GAAP financial measures and, accordingly, our non-GAAP financial measures may not be comparable to their measures.

Additional Statement of Operations Commentary:

•SG&A expense of ~~$20.8~~$24.3 million for the three months ended ~~June 30, 2020~~March 31, 2021 was ~~$6.1~~$2.3 million lower than SG&A expense of ~~$26.9~~$26.6 million in the prior year period. Costs in ~~2020~~the first quarter of 2021 were lower due to the significant actions taken to manage spending and reduce ~~advertising,~~costs during 2020 in areas such as marketing, travel and ~~payroll costs, including impacts of furloughs, salary and headcount reductions, and wage and hiring freezes.~~

~~SG&A expense of $47.4 million for the six months ended June 30, 2020 was $4.8 million lower than SG&A expense of $52.2 million~~payroll. Costs in the ~~prior year period. Costs in~~first quarter of 2020 ~~were lower due to reduced advertising, travel, and payroll related spending, including impacts of furloughs, headcount reductions and wage and hiring freezes. These were only partly offset by~~also included a higher provision for uncollectible accounts receivable and legal expenses.

•For the three months ended ~~June 30, 2020,~~March 31, 2021, net interest expense of ~~$3.0~~$3.1 million ~~remained consistent with~~was higher than the ~~prior year period.~~

~~For~~$2.9 million in the ~~six months ended June 30,~~first quarter of 2020, ~~net interest expense of $5.9 million decreased slightly compared to $6.2 million for prior year period,~~ due to ~~lower average debt levels in 2020.~~higher amortization expense for deferred financing costs on the Term Loan B.

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•Historically, our effective tax rate has differed from the U.S. statutory tax rate primarily due to the proportion of pre-tax income in jurisdictions with marginal tax rates that differ from the U.S. statutory tax rate, research and development and other tax credits and excess tax benefits from stock compensation. For the three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ we recorded an income tax ~~(benefit)~~ expense of ~~$(11.4)~~$2.2 million and ~~$3.2~~$4.3 million, respectively. The effective income tax ~~(benefit)~~ rate was ~~(19)%~~21% for both the three months ended June 30, 2020 and 19% for the three months ended June 30, 2019. For the six months ended June 30, 2020 and 2019, we recorded an income tax (benefit) expense of $(7.1) million and $5.6 million, respectively. The effective income tax (benefit) rate was (17)% for the six months ended June 30, 2020 and 18% for the six months ended June 30, 2019. See Note 4, "Income Taxes" of Notes to Condensed Consolidated Financial Statements for a reconciliation of the effective income tax (benefit) rate to the U.S. federal statutory income tax (benefit) rate.

The effective income tax (benefit) rates for the three and six months ended June 30, 2020 were significantly impacted by the effects of the $52.3 million asset impairment loss of the U.S. transportation filtration asset (see Note 10, "Asset Restructuring and Impairment Costs" of Notes to Condensed Consolidated Financial Statements). As of June 30, 2020, we evaluated our ability to utilize our deferred tax assets, including research and development and other tax credits and NOLs, before they expire. As a result of the impacts of COVID-19 and other factors, a $4.0 million tax expense was recorded to increase the valuation allowance against our state tax credits and NOLs.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") was signed into law in the U.S. The CARES Act includes various income and payroll tax provisions that we are in the process of analyzing to determine the financial impact on our financial statements. The most significant impact is expected to result from the ability to delay payment of certain 2020 payroll taxes until31, 2021 and ~~2022. Similar COVID-19 relief legislation has also been enacted in Germany, the Netherlands and the U.K. aimed at providing subsidies for employee retention and deferral of tax payments.~~March 31, 2020.

Liquidity and Capital Resources

~~COVID-19 has resulted in significant uncertainty in the macroeconomic environment and disruptions in global financial markets.~~ We believe that ~~we have a strong~~our financial position and ~~the~~ liquidity ~~to withstand economic uncertainty during this volatile period, in consideration~~remain strong, considering as of ~~the following:~~March 31, 2021, we had:

~~we completed a $200 million, 7-year Term B Facility in June 2020; with an option to solicit an additional Incremental Term Facility of $125 million;~~

~~we have~~ •no near-term debt maturities, as the Global Revolving Credit Facility matures in December 2023 and the 2020 Term Loan B matures in June 2027;

•significant remaining availability of ~~$133~~$155.7 million ~~exists~~ on our Global Revolving Credit Facility, ~~as of June 30, 2020;~~with no outstanding borrowings;

•$~~26.2~~41.0 million of cash and cash equivalents is on ~~hand at June 30, 2020;~~hand;

•and, on April 6, 2021, in connection with the acquisition of ITASA, we ~~have numerous focused cost and spending reductions underway, as discussed~~successfully completed the upsizing of our Term Loan B facility from $200 million to $450 million, maturing in ~~the "Executive Summary";~~April 2028. See Note 10, "Subsequent Events" of Notes to Condensed Consolidated Financial Statements, for further discussion.

robust working capital management initiatives are contributing to increased cash from operations, as evidenced by higher cash from operations during the six months ended June 30, 2020 compared to the same six months of last year; and

~~our recent Term B Facility received an investment grade credit rating of BBB- from S&P Global Ratings and a slightly lower rating of Ba3 from Moody’s Investors Service.~~


	Six Months Ended June 30,							Three Months Ended March 31,
	2020			2019				2021		2020
Net cash flow provided by (used in):							Net cash flow provided by (used in):
Operating activities	$	43.6		$	41.0		Operating activities	$	20.7	$	14.2

Investing activities:							Investing activities:
Capital expenditures	(8.0		)	(9.0		)	Capital expenditures	(4.8)		(4.8)

Other investing activities	(0.3		)	(0.6		)	Other investing activities	(0.2)		(0.1)
Total	(8.3		)	(9.6		)	Total	(5.0)		(4.9)

Financing activities:							Financing activities:
Net borrowings (repayments) of long-term debt	183.5			(15.6		)	Net borrowings (repayments) of long-term debt	(1.2)		71.7
Cash dividends paid	(16.0		)	(15.2		)	Cash dividends paid	(8.0)		(8.0)
Shares purchased	(3.8		)	(2.0		)	Shares purchased	(0.4)		(3.8)
Other financing activities	(5.2		)	(0.4		)	Other financing activities	(1.4)		(0.5)
Total	158.5			(33.2		)	Total	(11.0)		59.4
Effect of exchange rate changes on cash and cash equivalents	(0.1		)	—			Effect of exchange rate changes on cash and cash equivalents	(0.8)		(0.2)
Net increase (decrease) in cash and cash equivalents and restricted cash	$	193.7		$	(1.8	)
Net increase in cash and cash equivalents and restricted cash							Net increase in cash and cash equivalents and restricted cash	$	3.9	$	68.5

Operating Cash Flow Commentary

•Cash provided by operating activities of ~~$43.6~~$20.7 million for the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 was ~~$2.6~~$6.5 million higher than cash provided by operating activities of ~~$41.0~~$14.2 million in the prior year period. ~~Actions to improve~~The increase resulted from lower working capital ~~by managing inventory and to reduce other discretionary spending~~requirements that more than offset ~~the impact from~~ lower earnings. The significant increases in accounts receivable, accounts payable and accrued expenses during the three months ended March 31, 2021 resulted from the sequential growth in business activity and unpaid ITASA acquisition costs.

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Investing Commentary:

•For the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ cash used by investing activities was ~~$8.3~~$5.0 million and ~~$9.6~~$4.9 million, respectively. ~~Decreased capital spending in 2020 of $1.0 million was due to reduction in capital spending to preserve liquidity. For the full year 2020,~~We expect aggregate annual capital expenditures ~~are expected~~ to return to a range of approximately 2 to 4 percent of net sales. We believe that this level of capital spending can be ~~$15 million, or half~~funded from cash provided from operating activities and allows us to maintain the efficiency and cost effectiveness of ~~typical annual spending.~~our assets while also investing in expanded capabilities to successfully pursue strategic initiatives and deliver attractive returns.

Financing Commentary:

~~On June 30, 2020, we initiated~~•For the process to redeem in full the $175 million of 2021 Senior Notes and entered into a Term Loan Credit Agreement for a Term Loan B of $200 million. Using the proceeds from the Term Loan B, we deposited $176.5 million of principal and accrued interest on the 2021 Senior Notes in trust with the 2021 Note Trustee on June 30, 2020. As a result, the $176.5 million of funds held by the 2021 Note Trustee were shown as “Restricted cash” and the 2021 Senior Notes were shown in “Debt payable within one year” on the condensed consolidated balance sheet as of June 30, 2020. The redemption of the 2021 Senior Notes and distribution from the 2021 Note Trustee account were completed on July 16, 2020.

~~Based on the transactions above, for the six~~three months ended ~~June 30, 2020,~~March 31, 2021, cash and cash equivalents ~~and restricted cash~~ increased ~~$193.7~~$3.9 million to ~~$202.7~~$41.0 million at ~~June 30, 2020~~March 31, 2021 from ~~$9.0~~$37.1 million at December 31, 2019. The Term Loan B proceeds of $200 million, offset by transaction costs and net repayments under the Global Revolving Credit Facility led to increase in total debt by $180.6 million to $381.4 million at June 30, 2020 from $200.8 million at December 31, 2019.

2020. As of ~~June 30, 2020,~~March 31, 2021, our cash balance ~~of $26.2 million~~ consisted of ~~$16.0~~$14.7 million in the U.S. and ~~$10.2~~$26.3 million held at entities outside of the U.S. As of ~~June 30, 2020,~~March 31, 2021, there were no restrictions regarding the repatriation of our non-U.S. cash.

•For the ~~six~~three months ended ~~June 30, 2019,~~March 31, 2021, cash used in financing activities was ~~$33.2~~$11.0 million. Cash related to financing activities consists primarily of net borrowings/repayments of long-term debt, dividends paid and share repurchases. During the ~~six~~three months ended ~~June 30, 2019,~~March 31, 2021, we made net repayments of ~~$15.6~~$1.2 million ~~due~~as compared to net borrowings of $71.7 million during the ~~activity~~prior year period, when we increased cash on hand through borrowings against our Global Revolving Credit ~~Facility.~~Facilities near quarter-end as a precautionary measure to protect against any potential disruption in the banking system that would adversely impact our short-term ability to access cash as a result of COVID-19 effects.

•Availability under our Global Revolving Credit Facility varies over time depending on the value of our inventory, receivables and various capital assets. As of ~~June 30, 2020,~~March 31, 2021, we had ~~$10.1 million~~no outstanding borrowings under our Global Revolving Credit Facility and ~~$132.8~~$155.7 million of available credit (based on exchange rates at ~~June 30, 2020)~~March 31, 2021).

~~Excluding the $175 million~~•As of ~~short-term debt related to the redemption of the~~March 31, 2021, ~~Senior Notes,~~ we ~~have~~had required debt principal payments through ~~June 30, 2021~~March 31, 2022 of ~~$2.7~~$2.8 million for principal payments on the two German loan agreements and $2.0 million for the 2020 Term Loan B payable in equal quarterly installments.

•On April 6, 2021, in connection with the acquisition of ITASA, we completed the upsizing of our Term Loan facility from $200 million to $450 million, maturing in April 2028. See Note 10, "Subsequent Events" of Notes to Condensed Consolidated Financial Statements, for further discussion.

Transactions With Shareholders

~~In November 2019, our Board~~•For each of ~~Directors approved a 4% increase in~~ the ~~quarterly dividend on our Common Stock, to $0.47 per share, effective with the March 2020 dividend payment. For the six~~three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ we paid cash dividends of ~~$16.0~~$8.0 million ~~(0.94~~($0.47 per common share) ~~and $15.2~~.

•In November 2020, the Board of Directors authorized an evergreen program for the repurchase of up to $25 million ~~(0.90 per common share), respectively.~~

Among the measures taken to manage our cash flow and preserve our liquidity, purchases under the 2020 Stock Purchase Plan were curtailed in March 2020 and remain suspended. The 2020 Stock Purchase Planof outstanding Common Stock. This plan does not require us to purchase any specific number of shares and may be suspended or discontinued at any time. We did not purchase any shares during the first quarter of 2021. For the ~~six~~three months ended ~~June 30,~~March 31, 2020, ~~and 2019,~~ we repurchased 59,577 shares of Common Stock at a cost of $3.6 ~~million and 31,268 shares of Common Stock at a cost of $1.9 million, respectively.~~million. For further details on our Stock Purchase Plans, refer to Note 8,7, "Stockholders' Equity" of Notes to Condensed Consolidated Financial Statements.

Other Items:

•As of ~~June 30, 2020,~~March 31, 2021, we had ~~$44.6~~$69.4 million of state NOLs. Our state NOLs may be used to offset ~~$2.8~~$4.3 million in state income taxes. If not used, substantially all of the state NOLs will expire in various amounts between 2021 and 2040. In addition, as of ~~June 30, 2020,~~March 31, 2021, we had ~~$21.9~~$27.6 million of U.S. federal and ~~$7.6~~$7.3 million of U.S. state research and development tax credits ("R&D Credits") which, if not used, will expire between ~~2031~~2029 and ~~2040~~2041 for the U.S. federal R&D Credits and between ~~2020~~2021 and ~~2035~~2036 for the state R&D Credits.

Management believes that our ability to generate cash from operations and our borrowing capacity are adequate to fund working capital, capital spending and other cash needs for the next 12 months. Our ability to generate adequate cash from operations beyond ~~2020~~2021 will depend on, among other things, our ability to successfully implement our business strategies, control costs in line with market conditions, and manage the impact of changes in input prices and the impact and duration of COVID-19. We can give no assurance we will be able to successfully implement these items.

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Critical Accounting Policies and Use of Estimates

The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. We believe that the estimates, assumptions and judgments described in "Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Use of Estimates" of our most recent Annual Report on Form 10-K have the greatest potential impact on our financial statements, so we consider these to be our critical accounting policies. The critical accounting policies used in the preparation of the consolidated financial statements are those that are important both to the presentation of financial condition and results of operations and require significant judgments with regard to estimates used. These critical judgments relate to the timing of recognizing sales revenue, the recoverability of deferred income tax assets, pension benefits and future cash flows associated with impairment testing of long-lived assets. Actual results could differ from these fair value measurements and estimates and changes in these estimates are recorded when known. We believe that the consistent application of these policies enables us to provide readers of our financial statements with useful and reliable information about our operating results and financial condition. There have been no significant changes in these policies, or the estimates used in the application of the policies since December 31, 2019, except for updated estimates used to measure impairment of the U.S. Filtration Asset as discussed in Note 10, "Asset Restructuring and Impairment Costs" and the change in the valuation allowance against certain state income tax credits and NOLs as discussed in Note 4, "Income Taxes" of Notes to Condensed Consolidated Financial Statements.2020.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q may constitute "forward-looking" statements as defined in Section 27A of the Securities Act of 1933 (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), or in releases made by the SEC, all as may be amended from time to time.under federal securities laws. Statements contained in this quarterly report that are not historical facts may be forward-looking statements within the meaning ~~of the PSLRA~~under federal securities laws and we caution investors that any forward-looking statements we make are not guarantees or indicative of future performance. These forward-looking statements rely on a number of assumptions concerning future events and are subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to materially differ from such statements. Such risks, uncertainties and other factors include, but are not necessarily limited to, those set forth under the captions "Cautionary Note Regarding Forward-Looking Statements" and/or "Risk Factors" of our latest Form 10-K filed with the SEC as periodically updated by subsequently filed Form 10-Qs (these securities filings can be located on our website at www.neenah.com). Unless specifically required by law, we assume no obligation to update or revise these forward-looking statements to reflect new events or circumstances. These cautionary statements are being made pursuant to ~~the Securities Act, the Exchange Act and the PSLRA~~federal securities laws with the intention of obtaining the benefits of the "safe harbor" provisions of such laws.

You can identify forward-looking statements as those that are not historical in nature, particularly those that use terminology such as "may," "will," "should," "expect," "anticipate," "contemplate," "estimate," "believe," "plan," "project," "predict," "potential" or "continue," or the negative of these, or similar terms. In evaluating these forward-looking statements, you should consider the following factors, as well as others contained in our public filings from time to time, which may cause our actual results to differ materially from any forward-looking statement:

• changes in market demand for our products due to global economic and political conditions;

the potential impact of COVID-19 on our projected customer demand, mill operations and supply chain, as well as our consolidated financial position, consolidated results of operations and consolidated cash flows in 2020;

•the impact of competition, both domestic and international, changes in industry production capacity, including the construction of new mills or new machines, the closing of mills and incremental changes due to capital expenditures or productivity increases;

•the loss of current customers or the inability to obtain new customers;

•increases in commodity prices (particularly for pulp, energy and latex);

•our ability to control costs, including transportation, and implement measures designed to enhance operating efficiencies;

•the availability of raw materials and energy;

•the enactment of adverse federal, state or foreign tax or other legislation or changes in government policy or regulation;

•the impact of increased trade protectionism and tariffs on our business, results of operations and financial condition;

•unanticipated expenditures related to the cost of compliance with environmental and other governmental regulations;

•fluctuations in ~~(i)~~foreign currency exchange rates (in particular, changes in the U.S. dollar/Euro currency exchange rates) and ~~(ii)~~ interest ~~rates;~~rates on long-term debt;

•increases in the funding requirements for our pension and postretirement liabilities;

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Table of Contents

•our ability to identify attractive acquisition targets and to successfully integrate acquired businesses into our existing operations;

•changes in asset valuations, including write-downs of assets including property, plant and equipment; inventory, accounts receivable, deferred tax assets or other assets for impairment or other reasons;

•loss of key personnel;

•strikes, labor stoppages and changes in our collective bargaining agreements and relations with our employees and unions;

•capital and credit market volatility and fluctuations in global equity and fixed-income markets;

•our existing and future indebtedness;

•our NOLs may not be available to offset our tax ~~liability~~liabilities and other tax planning strategies may not be effective; and

•other risks that are detailed from time to time in reports we file with the SEC.

Any subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth or referred to above, as well as the risk factors contained in our most recent Annual Report on Form 10-K. Except as required by law, we disclaim any obligation to update such statements or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the disclosure on this matter made in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management in a timely manner.

As of ~~June 30, 2020,~~March 31, 2021, an evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of ~~June 30, 2020.~~March 31, 2021.

Internal Control over Financial Reporting

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated whether any change in our internal control over financial reporting occurred during the ~~six~~three months ended ~~June 30, 2020.~~March 31, 2021. Based on that evaluation, we have concluded that there has been no change in our internal control over financial reporting during the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

F-25

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

See Note 9,8, "Contingencies and Legal Matters" of Notes to Condensed Consolidated Financial Statements.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed ~~below and~~ in Part I, "Item 1A, "Risk Factors" of our most recent Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. The risks described ~~below and~~ in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

~~The following supplements the risk factors disclosed in Part I, Item 1A, "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.~~

~~Our financial condition and results of operations have been and are expected to continue to be adversely affected by the recent coronavirus pandemic.~~

A novel strain of coronavirus, COVID-19, was first identified in Wuhan, China in December 2019, and subsequently declared a pandemic by the World Health Organization. The pandemic and measures taken to contain or mitigate the pandemic have caused, and are continuing to cause, business slowdown or shutdown in affected areas and significant disruption in the financial markets both globally and in the U.S., which has led to a decline in discretionary spending by consumers, which in turn has adversely impacted our business, sales, financial condition and results of operations in the second quarter of 2020. We cannot predict the degree to, or the time period over, which our sales and operations will continue to be affected by this pandemic and preventive measures.

COVID-19 and measures to prevent its spread, including imposition of quarantines and prolonged closures of manufacturing facilities and retail stores, may impact our business in a number of ways. These impacts are expected to include an adverse effect from significantly reduced global economic activity and resulting demand for our products and our customers’ products and, therefore, the products we manufacture. They could also adversely affect our ability to operate our business, including potential disruptions to our supply chain and workforce.

We expect COVID-19 to continue to have a material adverse impact on our business operations and our financial results, including our net sales, earnings and cash flows in the upcoming quarters. We expect the ultimate significance of the impact of these disruptions, including the extent of their adverse impact on our financial results, will be determined by the length of time that such disruptions continue, which will, in turn, depend on the duration of COVID-19 and the impact of governmental regulations or guidelines in response to the pandemic. Although all of our global manufacturing facilities are currently operational and have been designated by governmental authorities as an "essential business", in the future they may be required to curtail or cease production in response to the spread of COVID-19, either in response to changing governmental orders or labor availability. In addition, our customers, distribution partners, service providers or suppliers may experience operational challenges, financial distress, file for bankruptcy protection, go out of business or suffer disruptions in their business due to COVID-19 which would have a material negative impact on our business.

The spread of COVID-19 and the requirements to take action to help limit the spread of the illness, have impacted our ability to carry out our business as usual and materially adversely impacted global economic conditions, our business, results of operations, cash flows and financial condition. Even in those regions where we are beginning to experience business recovery, should those regions fail to fully contain COVID-19 or suffer a COVID-19 relapse, those markets may not recover as quickly or at all, which could have a material adverse effect on our business and results of operations.

To the extent COVID-19 adversely affects our business, results of operations and financial condition, it may also have the effect of heightening many of the other risks described in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2019.

~~The following are the updated risk factors impacted by the Term Loan Credit Agreement.~~

~~Future dividends on our common stock may be restricted or eliminated.~~

Dividends are declared at the discretion of our Board of Directors, and future dividends will depend on our future earnings, cash flow, financial requirements and other factors. Our ability to pay cash dividends on our common stock is limited under the terms of both our Fourth Amended and Restated Credit Agreement and Term Loan Credit Agreement (collectively, the “Credit Agreements”). Under the most restrictive terms of our Credit Agreements, our ability to pay cash dividends on our common stock is limited, as described under "Risks Relating to Our Indebtedness." There can be no assurance that we will continue to pay dividends in the future.

~~Risks Relating to Our Indebtedness~~

~~We may not be able to fund our future capital requirements internally or obtain third-party financing.~~

We may be required or choose to obtain additional debt or equity financing to meet our future working capital requirements, as well as to fund capital expenditures and acquisitions. To the extent we must obtain financing from external sources to fund our capital requirements, we cannot guarantee financing will be available on favorable terms, if at all. For example, during periods of volatile credit markets, there is a risk that lenders, even those with strong balance sheets and sound lending practices, could fail or refuse to honor their credit commitments and obligations, including, but not limited to, extending credit up to the maximum permitted by a credit facility and otherwise accessing capital and/or honoring loan commitments. If our lenders are unable to fund borrowings under their loan commitments or we are unable to borrow, it could be difficult to replace such loan commitments on similar terms or at all. If adequate funds are not available on acceptable terms, we may be unable to meet our future working capital requirements or fund capital expenditures and acquisitions, any of which could negatively affect our business. As of June 30, 2020, we have required debt principal payments of $4.7 million during the period ending June 30, 2021.

~~We may not be able to generate sufficient cash flow to meet our debt obligations.~~

Our ability to make scheduled payments or to refinance our debt and other liabilities will depend on our financial and operating performance, which, in turn, is subject to prevailing economic conditions and to certain financial, business and other factors beyond our control. If our cash flow and capital resources are insufficient to fund our debt obligations and other liabilities, we could face substantial liquidity problems and may be forced to reduce or delay scheduled expansions and capital expenditures, sell material assets or operations, obtain additional capital or restructure our debt. We cannot assure that our operating performance, cash flow and capital resources will be sufficient to repay our debt in the future. In the event that we are required to dispose of material assets or operations or restructure our debt to meet our debt and other obligations, we can make no assurances as to the terms of any such transaction or how quickly any such transaction could be completed.

~~If we cannot make scheduled payments on our debt, we will be in default and, as a result:~~

~~our debt holders could declare all outstanding principal and interest to be due and payable;~~

~~our senior secured lenders could terminate their commitments and commence foreclosure proceedings against our assets; and~~

~~we could be forced into bankruptcy or liquidation.~~

If our operating performance declines in the future or we breach our covenants under our Credit Agreements, we may need to obtain waivers from the lenders to avoid being in default. We may not be able to obtain these waivers. If this occurs, we would be in default under our Credit Agreements.

~~We have significant indebtedness which subjects us to restrictive covenants relating to the operation of our business.~~

As of June 30, 2020 and excluding the $175.0 million of senior notes due May 2021 redeemed in full on July 16, 2020, we had $200 million of debt under our Term B Facility, $10.1 million in revolving credit borrowings and $5.9 million of project financing outstanding. In addition, availability under our bank credit agreement was $133 million. Our leverage could have important consequences. For example, it could:

~~make it difficult for us to satisfy our financial obligations, including making scheduled principal and interest payments on our indebtedness;~~

~~place us at a disadvantage to our competitors;~~

~~require us to dedicate a substantial portion of our cash flow from operations to service payments on our indebtedness, thereby reducing funds available for other purposes;~~

~~increase our vulnerability to a downturn in general economic conditions or the industry in which we operate;~~

~~limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions and general corporate and other purposes; and~~

~~limit our ability to plan for and react to changes in our business and the industry in which we operate.~~

The terms of our indebtedness, including our Credit Agreements, contain covenants restricting our ability to, among other things, incur certain additional debt, incur or create certain liens, make specified restricted payments, pay dividends, authorize or issue capital stock, enter into transactions with our affiliates, consolidate or merge with or acquire another business, sell certain of our assets or liquidate, dissolve or wind-up our Company. Under the terms of our Fourth Amended and Restated Credit Agreement, we are permitted to pay cash dividends on or repurchase shares of our common stock, and to make voluntary prepayments or redemptions of certain indebtedness, without limitation, as long as the sum of the aggregate revolving credit availability under our Fourth Amended and Restated Credit Agreement as then in effect, plus (subject to certain limitations) any excess of our aggregate borrowing base over our aggregate revolving credit facility commitment, or our “specified excess availability” (on a pro forma basis after giving effect to such dividend, repurchase or voluntary prepayment/redemption), equals or exceeds the greater of (i) $20 million and (ii) 12.5 percent of the maximum aggregate commitments under our Global Revolving Credit Facility as then in effect, on a pro forma basis after giving effect to such dividend or stock repurchase (as the case may be). If our specified excess availability, on a pro forma basis, is less than the applicable threshold, then such cash dividends are limited to no more than $45 million in any 12 consecutive months, such share repurchases are limited to no more than $25 million in any fiscal year, and voluntary prepayments or redemptions of such indebtedness are prohibited. Refer to Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" for the current limitations on our ability to pay dividends on or repurchase shares of our common stock.

In addition, if the specified excess availability under our Global Revolving Credit Facility is less than the greater of (i) $20 million and (ii) 12.5 percent of the maximum aggregate commitments under our Global Revolving Credit Facility as then in effect, we will be subject to increased reporting obligations and controls until such time as availability is more than the greater of (a) $25 million and (b) 17.5 percent of the maximum aggregate commitments under our Global Revolving Credit Facility as then in effect for at least 60 consecutive days and no default or event of default has occurred or is continuing during such 60-day period.

If specified excess availability under our Global Revolving Credit Facility is less than the greater of (i) $15 million and (ii) 10 percent of the maximum aggregate commitments under our Global Revolving Credit Facility as then in effect, we are required to comply with a fixed charge coverage ratio (as defined in our bank credit agreement) of not less than 1.1 to 1.0 for the preceding four-quarter period, tested as of the end of each quarter. Such compliance, once required, would no longer be necessary once (x) specified excess availability under our Global Revolving Credit Facility exceeds the greater of (i) 17.5 percent of the aggregate commitment for our Global Revolving Credit Facility as then in effect and (ii) $25 million for 60 consecutive days and (y) no default or event of default has occurred and is continuing during such 60-day period. As of June 30, 2020, specified excess availability under our Global Revolving Credit Facility exceeded the minimum required amount, and we are not required to comply with such fixed charge coverage ratio.

Subject to certain exceptions, our Term Loan Credit Agreement contains provisions requiring mandatory prepayment of the term loan obligations from (a) net cash proceeds from non-ordinary course sales or other dispositions of assets, (b) net cash proceeds from the issuances of debt by the Company and its subsidiaries, and (c) the Excess Cash Flow of the Company and its subsidiaries. Under the terms of the Term Loan Credit Agreement, mandatory prepayments of the Term B Facility may not be reborrowed, thereby reducing funds available for other purposes.

Our Global Revolving Credit Facility and Term B Facility accrue interest at variable rates. As of June 30, 2020, we had $10.1 million of revolving credit borrowings outstanding which mature on December 10, 2023 and $200.0 million of term loan borrowings which mature on June 30, 2027. We may reduce our exposure to rising interest rates by entering into interest rate hedging arrangements, although those arrangements may result in us incurring higher interest expenses than we would incur without the arrangements. If interest rates increase in the absence of such arrangements, we will need to dedicate more of our cash flow from operations to make payments on our debt. In addition, the variable interest rates on our Global Revolving Credit Facility and Term B Facility are based on LIBOR as a benchmark, exposing us to possible changes in interest in the event that the method for determining LIBOR changes, LIBOR is replaced by an alternative reference rate or LIBOR is phased out altogether.

~~For more information on our liquidity, see Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources."~~

~~Our failure to comply with the covenants contained in our Credit Agreements could result in an event of default that could cause acceleration of our indebtedness.~~

Our failure to comply with the covenants and other requirements contained in the Credit Agreements or our other debt instruments could cause an event of default under the relevant debt instrument. The occurrence of an event of default could trigger a default under our other debt instruments, prohibit us from accessing additional borrowings and permit the holders of the defaulted debt to declare amounts outstanding with respect to that debt to be immediately due and payable. Our assets or cash flows may not be sufficient to fully repay borrowings under our outstanding debt instruments, and we may be unable to refinance or restructure the payments on indebtedness on favorable terms, or at all.

~~Despite our indebtedness levels, we and our subsidiaries may be able to incur substantially more indebtedness, which may increase the risks created by our substantial indebtedness.~~

Because the terms of our Credit Agreements do not fully prohibit us or our subsidiaries from incurring additional indebtedness, we and our subsidiaries may be able to incur substantial additional indebtedness in the future, some of which may be secured. If we or any of our subsidiaries incur additional indebtedness, the related risks that we and they face may intensify.

~~Our Credit Agreements are secured by a majority of our assets.~~

Our Credit Agreements are secured by a majority of our assets. Availability under our Global Revolving Credit Facility will fluctuate over time depending on the value of our inventory, receivables and various capital assets. An extended work stoppage or decline in sales volumes would result in a decrease in the value of the assets securing the Global Revolving Credit Facility. A reduction in availability under the Global Revolving Credit Facility could have a material effect on our liquidity.

Changes in credit ratings issued by nationally recognized statistical rating organizations could adversely affect our cost of financing and have an adverse effect on the market price of our securities.

There can be no assurance that any rating assigned by the rating agencies will remain for any given period of time or that a rating will not be lowered or withdrawn entirely by a rating agency if, in that rating agency's judgment, future circumstances relating to the basis of the rating, such as adverse changes, so warrant. A lowering or withdrawal of the ratings assigned to our debt securities by rating agencies may increase our future borrowing costs and reduce our access to capital, which could have a material adverse impact on our financial condition and results of operations.

~~We depend on our subsidiaries to generate cash flow to meet our debt service obligations.~~

We conduct a substantial portion of our business through our subsidiaries. Consequently, our cash flow and ability to service our debt obligations depend upon the earnings of our subsidiaries and the distribution of those earnings to us, or upon loans, advances or other payments made by these entities to us. The ability of these entities to pay dividends or make other payments or advances to us will be subject to applicable laws and contractual restrictions contained in the instruments governing their debt, including our Credit Agreements. These limitations are also subject to important exceptions and qualifications.

The ability of our subsidiaries to generate sufficient cash flow from operations to allow us to make scheduled payments on our debt will depend upon their future financial performance, which will be affected by a range of economic, competitive and business factors, many of which are outside of our control as well as their ability to repatriate cash to us. If our subsidiaries do not generate sufficient cash flow from operations to help us satisfy our debt obligations, or if they are unable to distribute sufficient cash flow to us, we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets, reducing or delaying capital expenditures or seeking to raise additional capital. Refinancing may not be possible, and any assets may not be saleable, or, if sold, we may not realize sufficient amounts from those sales. Additional financing may not be available on acceptable terms, if at all, or we may be prohibited from incurring it, if available, under the terms of our various debt instruments then in effect. Our inability to generate sufficient cash flow to satisfy our debt obligations or to refinance our obligations on commercially reasonable terms would have an adverse effect on our business, financial condition and results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities:

The following table contains information about our purchases of our equity securities for the three months ended ~~June 30, 2020:~~March 31, 2021:

Month
Total Number of
Shares Purchased

Average Price Paid
Per Share

Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs (a)

Approximate Dollar
Value of Shares that May
Yet Be Purchased Under
Publicly Announced
Plans or Programs (a)
April 124 $43.23 — $21,400,573
May — $— — $21,400,573
June 12 $54.43 — $21,400,573


		Shares Purchased as Part of Publicly Announced Plans or Programs in 2021 (b)
Month	Total Number of Shares Purchased (a)	Average Price Paid Per Share	Total Number of Shares Purchased	Approximate Dollar Value of Shares that May Yet Be Purchased
January	5,213	$—	—	$25,000,000
February	1,668	$—	—	$25,000,000
March	—	$—	—	$25,000,000

(a)As Transactions include the purchase of ~~June 30, 2020, we have purchased 59,577~~vested restricted shares from employees to satisfy minimum tax withholding requirements upon vesting of ~~Common Stock at an aggregate cost of $3.6 million under the 2020 Stock Purchase Plan. For further discussion on the share repurchase plans refer to~~stock-based awards. See Note ~~8, "Stockholders' Equity"~~7 of Notes to Condensed Consolidated Financial ~~Statements.~~Statements, "Stockholders' Equity."

(b) In November 2020, our Board of Directors authorized a program for the purchase of up to $25 million of outstanding common stock effective January 1, 2021. The program does not require the Company to purchase any specific number of shares and may be suspended or discontinued at any time. For the three months ended March 31, 2021, there were no purchases under this program.

F-26

Item 6. Exhibits



Exhibit Number	Exhibit
10.1	Term Loan Credit Agreement, dated ~~June 30, 2020,~~April 6, 2021, by and among Neenah, Inc., certain of its subsidiaries, the lenders listed therein and JPMorgan Chase Bank, N.A., as agent for the Lenders (filed herewith).

10.2	~~Third~~Fourth Amendment, dated ~~June 30, 2020,~~April 6, 2021, to the Fourth Amended and Restated Credit Agreement dated December 10, 2018 by and among Neenah, Inc., certain of its subsidiaries, the lenders listed therein and JPMorgan Chase Bank, N.A., as agent for the Lenders (filed herewith).

31.1	Certification of the CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	Certification of the CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2	Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document (filed herewith).

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith).

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).

F-27

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		NEENAH, INC.

	By:	/s/ Julie A. Schertell
		Julie A. Schertell
		President, Chief Executive Officer and Director (Principal Executive Officer)

		/s/ Paul F. DeSantis
		Paul F. DeSantis
		~~Senior~~Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)

		/s/ Larry N. Brownlee
		Larry N. Brownlee
		Vice President, Controller ~~(Principal~~ (Principal Accounting Officer)


~~August 5, 2020~~May 6, 2021



	2019 Activity
	Common Stock
	Shares	Amount		Treasury Stock			Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total
Balance, December 31, 2018	18,597	$	0.2	$	(76.6	)	$	328.5	$	243.2		$	(105.1	)	$	390.2
Net income	—	—		—			—		11.8			—			11.8
Other comprehensive loss, including income taxes	—	—		—			—		—			(1.7		)	(1.7		)
Dividends declared	—	—		—			—		(7.6		)	—			(7.6		)
Shares purchased (Note 8)	—	—		(0.3		)	—		—			—			(0.3		)
Stock options exercised	9	—		—			—		—			—			—
Restricted stock vesting (Note 8)	3	—		(0.1		)	—		—			—			(0.1		)
Stock-based compensation	—	—		—			1.9		—			—			1.9
Balance, March 31, 2019	18,609	$	0.2	$	(77.0	)	$	330.4	$	247.4		$	(106.8	)	$	394.2
Net income	—	—		—			—		13.6			—			13.6
Other comprehensive income, net of income taxes	—	—		—			—		—			6.2			6.2
Dividends declared	—	—		—			—		(7.6		)	—			(7.6		)
Shares purchased (Note 8)	—	—		(1.6		)	—		—			—			(1.6		)
Stock options exercised	1	—		—			—		—			—			—
Restricted stock vesting (Note 8)	21	—		—			—		—			—			—
Stock-based compensation	—	—		—			1.7		—			—			1.7
Other/currency	—	—		—			—		—			—			—
Balance, June 30, 2019	18,631	0.2		(78.6		)	332.1		253.4			(100.6		)	406.5



	June 30, 2020				December 31, 2019
	Carrying Value		Fair Value (a)		Carrying Value		Fair Value (a)
Term Loan B (variable rates)	$	200.0	$	200.0	$	—	$	—
2021 Senior Notes (5.25% fixed rate)	175.0		175.0		175.0		174.3
Global Revolving Credit Facility (variable rates)	10.1		10.1		21.6		21.6
German loan agreement (2.45% fixed rate)	2.9		3.0		3.5		3.6
German loan agreement (1.45% fixed rate)	3.0		3.0		3.7		3.7
Total debt	$	391.0	$	391.1	$	203.8	$	203.2



	June 30, 2020			December 31, 2019
Term Loan B (variable rates) due June 2027	$	200.0		$	—
2021 Senior Notes (5.25% fixed rate) due May 2021	175.0			175.0
Global Revolving Credit Facility (variable rates) due December 2023	10.1			21.6
German loan agreement (2.45% fixed rate) due in quarterly installments ending September 2022	2.9			3.5
German loan agreement (1.45% fixed rate) due in quarterly installments ending March 2023	3.0			3.7
Debt discounts and deferred financing costs	(9.6		)	(3.0		)
Total debt	381.4			200.8
Less: Debt payable within one year	179.7			2.6
Long-term debt	$	201.7		$	198.2



Options vested	67,054
Aggregate grant date fair value of Options vested (in millions)	$	1.0



	Three Months Ended June 30,						Six Months Ended June 30,
	2020 (a)			2019 (c)			2020 (b)			2019 (c)
Operating income (loss)
Technical Products	$	(47.3	)	$	12.5		$	(31.1	)	$	23.8
Fine Paper and Packaging	(4.1		)	12.9			10.7			24.8
Unallocated corporate costs	(7.1		)	(5.6		)	(14.5		)	(11.4		)
Consolidated	$	(58.5	)	$	19.8		$	(34.9	)	$	37.2



Month	Total Number of Shares Purchased	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a)	Approximate Dollar Value of Shares that May Yet Be Purchased Under Publicly Announced Plans or Programs (a)
April	124	$43.23	—	$21,400,573
May	—	$—	—	$21,400,573
June	12	$54.43	—	$21,400,573