Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 26, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | AdvanSix Inc. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 28,363,471 | |
Amendment Flag | false | |
Entity Central Index Key | 0001673985 | |
Entity Filer Category | Large Accelerated Filer | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Sales | $ 314,895 | $ 359,238 |
Costs, expenses and other: | ||
Costs of goods sold | 266,880 | 321,320 |
Selling, general and administrative expenses | 19,413 | 19,213 |
Other non-operating expense (income), net | 1,604 | 3,546 |
Total costs, expenses and other | 287,897 | 344,079 |
Income before taxes | 26,998 | 15,159 |
Income tax expense | 6,824 | 3,566 |
Net income | $ 20,174 | $ 11,593 |
Earnings per common share | ||
Basic (in dollars per share) | $ 0.70 | $ 0.38 |
Diluted (in dollars per share) | $ 0.68 | $ 0.37 |
Weighted average common shares outstanding | ||
Basic (in shares) | 28,820,603 | 30,488,601 |
Diluted (in shares) | 29,786,957 | 31,285,365 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 20,174 | $ 11,593 |
Foreign exchange translation adjustment | (1) | (1) |
Cash-flow hedges | (192) | 0 |
Pension obligation adjustments | 0 | 410 |
Other comprehensive income (loss), net of tax | (193) | 409 |
Comprehensive income | $ 19,981 | $ 12,002 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 7,803 | $ 9,808 |
Accounts and other receivables – net | 117,247 | 160,266 |
Inventories – net | 140,598 | 137,182 |
Other current assets | 3,237 | 3,807 |
Total current assets | 268,885 | 311,063 |
Property, plant and equipment – net | 685,366 | 672,210 |
Operating lease right-of-use assets | 116,614 | 0 |
Goodwill | 15,005 | 15,005 |
Other assets | 37,902 | 36,348 |
Total assets | 1,123,772 | 1,034,626 |
Current liabilities: | ||
Accounts payable | 188,169 | 231,720 |
Accrued liabilities | 22,910 | 30,448 |
Operating lease liabilities – short-term | 24,929 | 0 |
Deferred income and customer advances | 20,694 | 22,556 |
Total current liabilities | 256,702 | 284,724 |
Deferred income taxes | 107,466 | 103,783 |
Operating lease liabilities – long-term | 91,802 | 0 |
Line of credit – long-term | 220,000 | 200,000 |
Postretirement benefit obligations | 22,980 | 21,080 |
Other liabilities | 5,578 | 4,701 |
Total liabilities | 704,528 | 614,288 |
COMMITMENTS AND CONTINGENCIES (Note 9) | ||
STOCKHOLDERS' EQUITY | ||
Common stock, par value $0.01; 200,000,000 shares authorized; 30,578,212 shares issued and 28,573,744 outstanding at March 31, 2019; 30,555,715 shares issued and 29,345,001 outstanding at December 31, 2018 | 306 | 306 |
Preferred stock, par value $0.01; 50,000,000 shares authorized and 0 shares issued and outstanding at March 31, 2019 and December 31, 2018 | 0 | 0 |
Treasury stock at par (2,004,468 shares at March 31, 2019; 1,210,714 shares at December 31, 2018) | (20) | (12) |
Additional paid-in capital | 213,632 | 234,699 |
Retained earnings | 207,993 | 187,819 |
Accumulated other comprehensive loss | (2,667) | (2,474) |
Total stockholders' equity | 419,244 | 420,338 |
Total liabilities and stockholders' equity | $ 1,123,772 | $ 1,034,626 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 30,578,212 | 30,555,715 |
Common stock, shares outstanding (in shares) | 28,573,744 | 29,345,001 |
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Treasury stock (in shares) | 2,004,468 | 1,210,714 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 20,174 | $ 11,593 |
Adjustments to reconcile net income to net cash (used for) provided by operating activities: | ||
Depreciation and amortization | 13,915 | 12,542 |
Loss on disposal of assets | 415 | 311 |
Deferred income taxes | 3,747 | 1,741 |
Stock based compensation | 2,762 | 2,281 |
Accretion of deferred financing fees | 107 | 1,480 |
Changes in assets and liabilities: | ||
Accounts and other receivables | 43,018 | 33,092 |
Inventories | (3,416) | 4,573 |
Accounts payable | (30,674) | (15,652) |
Accrued liabilities | (7,232) | (9,631) |
Deferred income and customer advances | (1,862) | (68) |
Other assets and liabilities | 1,122 | 1,805 |
Net cash provided by operating activities | 42,076 | 44,067 |
Cash flows from investing activities: | ||
Expenditures for property, plant and equipment | (39,512) | (30,713) |
Other investing activities | (587) | (1,002) |
Net cash used for investing activities | (40,099) | (31,715) |
Cash flows from financing activities: | ||
Payments of long-term debt | 0 | (266,625) |
Borrowings from line of credit | 85,500 | 246,000 |
Payments of line of credit | (65,500) | (16,000) |
Payment of line of credit facility fees | 0 | (1,362) |
Principal payments of finance leases | (145) | (75) |
Purchase of treasury stock | (23,853) | (370) |
Issuance of common stock | 16 | 0 |
Net cash used for financing activities | (3,982) | (38,432) |
Net change in cash and cash equivalents | (2,005) | (26,080) |
Cash and cash equivalents at beginning of period | 9,808 | 55,432 |
Cash and cash equivalents at the end of period | 7,803 | 29,352 |
Supplemental non-cash investing activities: | ||
Capital expenditures included in accounts payable | 14,039 | 9,753 |
Supplemental cash investing activities: | ||
Cash paid for interest | 1,040 | 1,777 |
Cash paid for income taxes | $ 21 | $ 179 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Treasury Stock | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (in shares) at Dec. 31, 2017 | 30,482,966 | |||||
Beginning balance at Dec. 31, 2017 | $ 376,325 | $ 305 | $ 263,081 | $ 121,985 | $ 0 | $ (9,046) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 11,593 | 11,593 | ||||
Comprehensive income | ||||||
Foreign exchange translation adjustments | (1) | (1) | ||||
Commodity hedges and Cash-flow Hedges | 0 | |||||
Pension obligation adjustments | 0 | (410) | 410 | |||
Other comprehensive income (loss), net of tax | (1) | (410) | 409 | |||
Issuance of common stock (in shares) | 25,356 | |||||
Issuance of common stock | 0 | |||||
Acquisition of treasury shares | (370) | (370) | ||||
Stock-based compensation | 2,281 | 2,281 | ||||
Ending balance (in shares) at Mar. 31, 2018 | 30,508,322 | |||||
Ending balance at Mar. 31, 2018 | $ 389,828 | $ 305 | 264,992 | 133,168 | 0 | (8,637) |
Beginning balance (in shares) at Dec. 31, 2018 | 29,345,001 | 30,555,715 | ||||
Beginning balance at Dec. 31, 2018 | $ 420,338 | $ 306 | 234,699 | 187,819 | (12) | (2,474) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 20,174 | 20,174 | ||||
Comprehensive income | ||||||
Foreign exchange translation adjustments | (1) | (1) | ||||
Commodity hedges and Cash-flow Hedges | (192) | (192) | ||||
Pension obligation adjustments | 0 | |||||
Other comprehensive income (loss), net of tax | (193) | (193) | ||||
Issuance of common stock (in shares) | 22,497 | |||||
Issuance of common stock | 16 | 16 | ||||
Acquisition of treasury shares | (23,853) | (23,845) | (8) | |||
Stock-based compensation | $ 2,762 | 2,762 | ||||
Ending balance (in shares) at Mar. 31, 2019 | 28,573,744 | 30,578,212 | ||||
Ending balance at Mar. 31, 2019 | $ 419,244 | $ 306 | $ 213,632 | $ 207,993 | $ (20) | $ (2,667) |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Treasury Stock | ||
Stock repurchased during period (in shares) | 793,754 | 8,995 |
Organization, Operations and Ba
Organization, Operations and Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Organization, Operations and Basis of Presentation | Organization, Operations and Basis of Presentation Description of Business AdvanSix Inc. (“AdvanSix”, the “Company”, "we" or "our") is an integrated manufacturer of Nylon 6, a polymer resin which is a synthetic material used by our customers to produce engineered plastics, fibers, filaments and films that, in turn, are used in such end-products as automotive and electronic components, carpets, sports apparel, fishing nets and food and industrial packaging. As a result of our backward integration and the configuration of our manufacturing facilities, we also sell a variety of other products, all of which are produced as part of our integrated Nylon 6 resin manufacturing process including caprolactam, ammonium sulfate fertilizers, acetone and other chemical intermediates. Basis of Presentation The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the Company's financial position as of March 31, 2019, and its results of operations and cash flows for the three months ended March 31, 2019 and 2018. The Condensed Consolidated Balance Sheet at December 31, 2018 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the "2018 Form 10-K"). All intercompany transactions have been eliminated. Certain prior period amounts have been reclassified for consistency with the current period presentation. It is our practice to establish actual quarterly closing dates using a predetermined fiscal calendar, which requires our businesses to close their books on a Saturday in order to minimize the potentially disruptive effects of quarterly closing on our business processes. Historically, the effects of this practice were generally not significant to reported results for any quarter and only existed within a reporting year. In the event that differences in actual closing dates are material to year-over-year comparisons of quarterly or year-to-date results, we will provide the appropriate disclosures. Our actual closing dates for the three months ended March 31, 2019 and 2018 wer e March 30, 2019 and March 31, 2018, respe ctively. Liabilities to creditors to whom we have issued checks that remained outstanding at March 31, 2019 and December 31, 2018 aggregated $5.7 million and $7.7 million, respectively, and were included in Cash and cash equivalents and Accounts payable in the Condensed Consolidated Balance Sheets. The Company submitted a business interruption insurance claim related to the 2018 weather event and recorded a benefit of $6.6 million to Cost of goods sold in the first quarter of 2019. On May 4, 2018, the Company announced that its Board of Directors authorized a share repurchase program of up to $75 million of the Company’s common stock. Repurchases may be made from time to time on the open market, including through the use of trading plans intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The size and timing of these repurchases will depend on pricing, market and economic conditions, legal and contractual requirements and other factors. The share repurchase program has no expiration date and may be modified, suspended or discontinued at any time. The par value of the shares repurchased is applied to Treasury stock and the excess of the purchase price over par value is applied to Additional paid-in capital. On February 22, 2019, the Company announced that its Board of Directors authorized a share repurchase program of up to an additional $75 million of the Company's common stock. This authorization is in addition to the remaining capacity available under the $75 million share repurchase program previously announced in May 2018 as described above. Repurchases may be made from time to time on the open market, including through the use of trading plans intended to qualify under Rule 10b5-1 of the Exchange Act. The size and timing of these repurchases will depend on pricing, market and economic conditions, legal and contractual requirements and other factors. The share repurchase program has no expiration date and may be modified, suspended or discontinued at any time. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”). ASUs not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations. In October 2018, the FASB issued ASU No. 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate ("SOFR") Overnight Index Swap ("OIS") Rate as a Benchmark Interest Rate for Hedge Accounting Purposes, which permits use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the UST, the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate and the SIFMA Municipal Swap Rate. Pursuant to the amendments, SOFR will be an option to replace LIBOR as it is phased out. The amendments of ASU No. 2018-16 are effective for companies that have adopted ASU 2017-12 for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year or at such time a company adopts ASU 2017-12. Early adoption of ASU 2018-16 is not permitted without previous adoption of ASU 2017-12. As the Company elected to early adopt ASU 2017-12 during the fourth quarter of 2018, the Company adopted ASU 2018-16 effective January 1, 2019, which did not have a material impact on the Company's consolidated financial position or results of operations upon adoption. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which requires lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. The new standard also requires disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases and will be effective for interim and annual periods beginning after December 15, 2018 (early adoption is permitted). Initial guidance stated that the new standard be applied under a modified retrospective approach with periods prior to the adoption date being adjusted. During July 2018, however, the FASB issued ASU 2018-11, Leases (Topic 842) , providing another transition method allowing a company to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without adjusting prior periods. The Company adopted the standard effective January 1, 2019 electing the cumulative-effect adjustment approach made available in ASU 2018-11, allowing a company to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company has also elected the following practical expedients: • the package of three expedients which allows the Company not to re-assess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases, and (iii) initial direct costs for any expired or existing leases; • the short-term lease practical expedient, which allows the Company to exclude leases with an initial term of 12 months or less (“short-term leases”) from recognition in the unaudited Condensed Consolidated Balance Sheet; • the b ifurcation of lease and non-lease components practical expedients, which did not require the Company to bifurcate lease and non-lease components for our real estate leases; and • the land easements practical expe dient, which allows the Company to carry forward the accounting treatment for land easements on existing agreements. |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | RevenuesRevenue Recognition We serve approximately 500 customers annually in more than 40 countries and across a wide variety of industries. For the three months ended March 31, 2019 and 2018, the Company's ten largest customers accounted for approximately 48% a nd 47% of total sales, respectively. We typically sell to customers under master service agreements, with one- to two-year terms on average, or by purchase orders. We have historically experienced low customer turnover and have an average customer relationship of approximately 20 years. Our largest customer is Shaw Industries Group Inc. ("Shaw"), one of the world's largest consumers of caprolactam and Nylon 6 resin. We sell Nylon 6 resin and caprolactam to Shaw under a long-term agreement. For the three months ended March 31, 2019 and 2018, our sales to Shaw were 22% and 21%, respectively, of our total sales. Each of the Company’s product lines represented the following approximate percentage of total sales for the three months ended March 31, 2019 and 2018: Three Months Ended 2019 2018 Nylon 31% 28% Caprolactam 20% 18% Ammonium Sulfate Fertilizers 21% 19% Chemical Intermediates 28% 35% 100% 100% The Company's revenues by geographic area for the three months ended March 31, 2019 and 2018 were as follows: Three Months Ended 2019 2018 United States $ 257,642 $ 297,648 International 57,253 61,590 Total $ 314,895 $ 359,238 Deferred Income and Customer Advances The Company defers revenues when cash payments are received in advance of our performance. Customer advances relate primarily to sales from the ammonium sulfate business. Below is a roll-forward of Deferred Income and Customer Advances for the three months ended March 31, 2019: Opening balance January 1, 2019 $ 22,556 Additional cash advances 1,083 Less amounts recognized in revenues (2,945) Ending balance March 31, 2019 $ 20,694 The Company expects to recognize as revenue the March 31, 2019 ending balance of Deferred Income and Customer Advances within one year or less. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The computation of basic and diluted earnings per share ("EPS") is based on net income divided by the basic weighted average number of common shares and diluted weighted average number of common shares, respectively. The details of the basic and diluted EPS calculations for the three months ended March 31, 2019 and 2018 were a s follows: Three Months Ended 2019 2018 Basic Net Income $ 20,174 $ 11,593 Weighted average common shares outstanding 28,820,603 30,488,601 EPS – Basic $ 0.70 $ 0.38 Diluted Dilutive effect of equity awards and other stock-based holdings 966,354 796,764 Weighted average common shares outstanding 29,786,957 31,285,365 EPS – Diluted $ 0.68 $ 0.37 Diluted EPS is computed based upon the weighted average number of common shares outstanding for the period plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the year. The diluted EPS calculations exclude the effect of stock options when the options’ assumed proceeds exceed the average market price of the common shares during the period. For the three months ended March 31, 2019 and 2018, stock options of 330,823 and 53,117, respectively, were anti-dilutive and excluded from the computations of dilutive EPS. |
Accounts and Other Receivables
Accounts and Other Receivables - Net | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Accounts and Other Receivables - Net | Accounts and Other Receivables – Net March 31, December 31, Accounts receivables $ 122,769 $ 166,017 Other 1,798 1,716 Total accounts and other receivables 124,567 167,733 Less – allowance for doubtful accounts (7,320) (7,467) Total accounts and other receivables – net $ 117,247 $ 160,266 The decrease in Total accounts and other receivables – net at March 31, 2019 versus December 31, 2018 was due primarily to lower raw material pass-through pricing, lower sales volumes, and increased collections during the three months ended March 31, 2019 related to a trade receivables discount arrangement with a third-party financial institution. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories March 31, December 31, Raw materials $ 62,469 $ 55,002 Work in progress 42,502 46,728 Finished goods 41,234 39,368 Spares and other 25,222 24,555 171,427 165,653 Reduction to LIFO cost basis (30,829) (28,471) Total inventories – net $ 140,598 $ 137,182 |
Postretirement Benefit Obligati
Postretirement Benefit Obligations | 3 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
Postretirement Benefit Cost | Postretirement Benefit Cost The components of net periodic benefit cost of the Company’s pension plan are as follows: Three Months Ended 2019 2018 Service cost $ 1,714 $ 2,001 Interest cost 521 469 Expected return on plan assets (334) (287) Net periodic benefit cost $ 1,901 $ 2,183 The Company made no pension plan contributions during the three months ended March 31, 2019. However, the Company will make contributions during 2019 sufficient to satisfy pension funding requirements in an aggregate amount of approximately $3 to $8 million and will make additional contributions in future years sufficient to satisfy pension funding requirements in those periods. The pension plan assets are invested through a master trust fund. The strategic asset allocation for the trust fund is selected by the Company's Investment Committee reflecting the results of comprehensive asset and liability modeling. The Investment Committee establishes strategic asset allocation percentage targets and appropriate benchmarks for significant asset classes with the aim of achieving a prudent balance between return and risk. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets, Operating lease liabilities – short-term, and Operating lease liabilities – long-term in our Condensed Consolidated Balance Sheet. Finance leases are included in Property, plant and equipment – net, Accounts payable, and Other liabilities in our Condensed Consolidated Balance Sheet. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease and, when it is reasonably certain that such an option will be exercised, it is included in the determination of the corresponding assets and liabilities. Short-term leases are not recognized on our unaudited Condensed Consolidated Balance Sheets. Lease expense for all lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for separately. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. The Company has entered into agreements to lease transportation equipment, storage facilities, office space, dock access and other equipment. The leases have initial terms of up to 20 years with some containing renewal options subject to customary conditions. The components of lease expense were as follows: Three Months Ended March 31, 2019 Finance lease cost: Amortization of right-of-use asset $ 148 Interest on lease liabilities 18 Total finance lease cost 166 Operating lease cost 7,570 Short-term lease cost 4,282 Total lease cost $ 12,018 Supplemental cash flow information related to leases was as follows: Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 7,457 Operating cash flows from finance leases 13 Financing cash flows from finance leases 145 Non-cash information: Right-of-use assets obtained in exchange for lease obligations: Operating leases 4,569 Finance leases 406 Supplemental balance sheet information related to leases was as follows: March 31, Operating Leases Operating lease right-of-use assets $ 116,614 Operating lease liabilities – short term 24,929 Operating lease liabilities – long term 91,802 Total operating lease liabilities $ 116,731 Finance Leases Property, plant and equipment – gross $ 2,168 Accumulated depreciation (878) Property, plant and equipment – net $ 1,290 Accounts payable 540 Other liabilities 753 Total finance lease liabilities $ 1,293 Weighted Average Remaining Lease Term Operating leases 10.75 years Finance leases 2.53 years Weighted Average Discount Rate Operating leases 6.10 % Finance leases 5.39 % The cumulative effect of the changes made to the Condensed Consolidated Balance Sheets for the adoption of the new leasing standard on January 1, 2019 was as follows: Balance Sheet accounts prior to new leasing standard adoption adjustments Adjustments due to the adoption of the new leasing standard Balance Sheet accounts after the new leasing standard adoption adjustments ASSETS Property, plant and equipment – net $ 1,032 $ — $ 1,032 Operating lease right-of-use assets — 117,921 117,921 Total assets 1,034,626 $ 117,921 1,152,547 LIABILITIES AND EQUITY Current Liabilities: Accounts payable $ 318 $ — $ 318 Operating lease liabilities – short term — 24,794 24,794 Total current liabilities 284,724 24,794 309,518 Operating lease liabilities – long term — 93,127 93,127 Other liabilities 762 — 762 Total liabilities 614,288 117,921 732,209 Total equity 420,338 — 420,338 Total liabilities and equity 1,034,626 $ 117,921 1,152,547 Maturities of lease liabilities were as follows: Year Ending December 31, Operating Leases Finance Leases 2019 (remainder) $ 23,435 $ 452 2020 30,466 543 2021 18,683 307 2022 13,798 83 2023 11,200 — Thereafter 69,473 — Total lease payments 167,055 1,385 Less imputed interest (50,324) (92) Total $ 116,731 $ 1,293 As previously disclosed in our 2018 Form 10-K and under the previous lease accounting standard, future minimum lease payments for leases having initial or remaining non-cancellable lease terms in excess of one year would have been as follows: Year Ending December 31, Operating Leases Capital Leases 2019 $ 36,110 $ 239 2020 29,318 212 2021 16,111 131 2022 11,571 89 2023 9,104 — Thereafter 26,627 — Total lease payments $ 128,841 671 |
Leases | Leases We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets, Operating lease liabilities – short-term, and Operating lease liabilities – long-term in our Condensed Consolidated Balance Sheet. Finance leases are included in Property, plant and equipment – net, Accounts payable, and Other liabilities in our Condensed Consolidated Balance Sheet. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease and, when it is reasonably certain that such an option will be exercised, it is included in the determination of the corresponding assets and liabilities. Short-term leases are not recognized on our unaudited Condensed Consolidated Balance Sheets. Lease expense for all lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for separately. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. The Company has entered into agreements to lease transportation equipment, storage facilities, office space, dock access and other equipment. The leases have initial terms of up to 20 years with some containing renewal options subject to customary conditions. The components of lease expense were as follows: Three Months Ended March 31, 2019 Finance lease cost: Amortization of right-of-use asset $ 148 Interest on lease liabilities 18 Total finance lease cost 166 Operating lease cost 7,570 Short-term lease cost 4,282 Total lease cost $ 12,018 Supplemental cash flow information related to leases was as follows: Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 7,457 Operating cash flows from finance leases 13 Financing cash flows from finance leases 145 Non-cash information: Right-of-use assets obtained in exchange for lease obligations: Operating leases 4,569 Finance leases 406 Supplemental balance sheet information related to leases was as follows: March 31, Operating Leases Operating lease right-of-use assets $ 116,614 Operating lease liabilities – short term 24,929 Operating lease liabilities – long term 91,802 Total operating lease liabilities $ 116,731 Finance Leases Property, plant and equipment – gross $ 2,168 Accumulated depreciation (878) Property, plant and equipment – net $ 1,290 Accounts payable 540 Other liabilities 753 Total finance lease liabilities $ 1,293 Weighted Average Remaining Lease Term Operating leases 10.75 years Finance leases 2.53 years Weighted Average Discount Rate Operating leases 6.10 % Finance leases 5.39 % The cumulative effect of the changes made to the Condensed Consolidated Balance Sheets for the adoption of the new leasing standard on January 1, 2019 was as follows: Balance Sheet accounts prior to new leasing standard adoption adjustments Adjustments due to the adoption of the new leasing standard Balance Sheet accounts after the new leasing standard adoption adjustments ASSETS Property, plant and equipment – net $ 1,032 $ — $ 1,032 Operating lease right-of-use assets — 117,921 117,921 Total assets 1,034,626 $ 117,921 1,152,547 LIABILITIES AND EQUITY Current Liabilities: Accounts payable $ 318 $ — $ 318 Operating lease liabilities – short term — 24,794 24,794 Total current liabilities 284,724 24,794 309,518 Operating lease liabilities – long term — 93,127 93,127 Other liabilities 762 — 762 Total liabilities 614,288 117,921 732,209 Total equity 420,338 — 420,338 Total liabilities and equity 1,034,626 $ 117,921 1,152,547 Maturities of lease liabilities were as follows: Year Ending December 31, Operating Leases Finance Leases 2019 (remainder) $ 23,435 $ 452 2020 30,466 543 2021 18,683 307 2022 13,798 83 2023 11,200 — Thereafter 69,473 — Total lease payments 167,055 1,385 Less imputed interest (50,324) (92) Total $ 116,731 $ 1,293 As previously disclosed in our 2018 Form 10-K and under the previous lease accounting standard, future minimum lease payments for leases having initial or remaining non-cancellable lease terms in excess of one year would have been as follows: Year Ending December 31, Operating Leases Capital Leases 2019 $ 36,110 $ 239 2020 29,318 212 2021 16,111 131 2022 11,571 89 2023 9,104 — Thereafter 26,627 — Total lease payments $ 128,841 671 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is subject to a number of lawsuits, investigations and disputes, some of which involve substantial amounts claimed, arising out of the conduct of the Company or other third-parties in the normal and ordinary course of business. A liability is recognized for any contingency that is probable of occurrence and reasonably estimable. The Company continually assesses the likelihood of adverse judgments or outcomes in these matters, as well as potential ranges of possible losses (taking into consideration any insurance recoveries), based on an analysis of each matter with the assistance of legal counsel and, if applicable, other experts. Given the uncertainty inherent in such lawsuits, investigations and disputes, the Company does not believe it is possible to develop estimates of reasonably possible loss in excess of current accruals for these matters. Considering the Company’s past experience and existing accruals, the Company does not expect the outcome of these matters, either individually or in the aggregate, to have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. Potential liabilities are subject to change due to new developments, changes in settlement strategy or the impact of evidentiary requirements, which could cause the Company to pay damage awards or settlements (or become subject to equitable remedies) that could have a material adverse effect on the Company’s consolidated results of operations, balance sheet and/or operating cash flows in the periods recognized or paid. On March 13, 2018, a federal search warrant was executed at the Company’s Hopewell, Virginia manufacturing facility. On the same date, the Company was separately served with a grand jury subpoena issued by the U.S. District Court for the Eastern District of Virginia, which requested documents related to the Hopewell facility’s air emissions and its compliance with the terms of a previously disclosed 2013 consent decree with the federal government and the Commonwealth of Virginia. The Company was notified during the first quarter of 2019 that the U.S. Attorney’s Office for the Eastern District of Virginia has closed its investigation and no further action by the Company is required. The Company continues to cooperate fully with the remaining narrowed inquiry by the U.S. Environmental Protection Agency and the Department of Justice criminal divisions. The Company’s production across its sites remains unaffected by these events and the Company expects to continue operating safely at plan moving forward. While the Company may incur penalties or fines in connection with the remaining federal inquiry, the amount of such penalties or fines, if any, cannot be reasonably estimated at this time. We assumed from Honeywell all health, safety and environmental (“HSE”) liabilities and compliance obligations related to the past and future operations of our current business, as well as all HSE liabilities associated with our three current manufacturing locations and the other locations used in our current operations, including any cleanup or other liabilities related to any contamination that may have occurred at such locations in the past. Honeywell retained all HSE liabilities related to former business locations or the operation of our former businesses. Although we have ongoing environmental remedial obligations at certain of our facilities, in the past three years, the associated remediation costs have not been material, and we do not expect our known remediation costs to be material for 2019. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s provision for income taxes in interim periods is computed by applying an estimated annual effective tax rate against Income before taxes for the period in addition to recording any tax effects of discrete items for the quarter. The provision for income taxes was $6.8 million and $3.6 million for the three months ended March 31, 2019 and 2018, respectively. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures Measurements | Fair Value Measurements Financial and non-financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. During the fourth quarter of 2018, the Company acquired a royalty stream which has been treated as an asset acquisition and entered into an interest rate swap transaction related to its credit agreement. The purchase price of the royalty stream for $1.0 million approximates its fair value at December 31, 2018 and is considered a Level 3 asset. The fair value measurement is based on the expected future cash flows and, as there is no reason to believe that the asset is impaired, it is assumed that the valuation remains unchanged at March 31, 2019. The fair value of the interest rate swap loss at March 31, 2019 is approximately $1.1 million and is considered a Level 2 liability. The pension plan assets are invested in collective investment trust funds. These investments are measured at fair value using the net asset value per share as a practical expedient. Investments valued using the net asset value method (NAV) (or its equivalent) practical expedient are excluded from the fair value hierarchy disclosure. The Company’s Condensed Consolidated Balance Sheets also include cash and cash equivalents, accounts receivable and accounts payable all of which are recorded at amounts which approximate fair value. The Company also has assets that are required to be recorded at fair value on a non-recurring basis. These assets are evaluated when certain triggering events occur (including a decrease in estimated future cash flows) that indicate the asset should be evaluated for impairment. Goodwill and indefinite lived intangible assets must be evaluated at least annually. |
Derivative and Hedging Instrume
Derivative and Hedging Instruments | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative and Hedging Instruments | Derivative and Hedging Instruments The specific risks to which the Company is exposed in connection with its ongoing business operations are described below. This discussion includes an explanation of the hedging instrument, a rate swap agreement, used to manage the Company’s interest rate risk associated with a fixed and floating-rate borrowing. For cash flow hedges, the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is recorded in Other comprehensive income. Those amounts are reclassified to earnings in the same income statement line item that is used to present the earnings effect of the hedged item when the hedged item affects earnings. Credit and Market Risk – Financial instruments, including derivatives, expose the Company to counterparty credit risk for non-performance and to market risk related to changes in commodity prices, interest rates and foreign currency exchange rates. The Company manages its exposure to counterparty credit risk through specific minimum credit standards, diversification of counterparties, and procedures to monitor concentrations of credit risk. The Company’s counterparties in derivative transactions are substantial investment and commercial banks with significant experience using such derivative instruments. The Company monitors the impact of market risk on the fair value and cash flows of its derivative and other financial instruments considering reasonably possible changes in commodity prices, interest rates and foreign currency exchange rates and restricts the use of derivative financial instruments to hedging activities. The Company continually monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business. The terms and conditions of credit sales are designed to mitigate or eliminate concentrations of credit risk with any single customer. The Company has one customer that accounted for approximately 12% and 20% of trade accounts receivable – net at March 31, 2019 and 2018, respectively. Commodity Price Risk Management – The Company's exposure to market risk for commodity prices can result in changes in the cost of production. We primarily mitigate our exposure to commodity price risk by using long-term, formula-based price contracts with our suppliers and formula-based price agreements with customers. Our customer agreements provide for price adjustments based on relevant market indices and raw material prices and generally do not include take-or-pay terms. We may also enter into forward commodity contracts with third-parties designated as hedges of anticipated purchases of several commodities. Forward commodity contracts are marked-to-market, with the resulting gains and losses recognized in earnings, in the same category as the items being hedged, when the hedged transaction is recognized. At March 31, 2019 and 2018, we had no contracts with notional amounts related to forward commodity agreements. Interest Rate Risk Management – On November 6, 2018, the Company entered into an interest rate swap agreement, with a maturity date of November 30, 2021, to hedge the variability in expected future 1 Month LIBOR-based interest payment cash flows. In accordance with ASC 815, the Company designated the interest rate swap as a cash flow hedge of floating-rate borrowings. This interest rate swap agreement locks in the Company’s interest rate payments on the first $50 million of variable-rate, 1-month LIBOR-based debt, thus reducing the impact of interest-rate changes on future interest expense. This agreement involves the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the agreement without an exchange of the underlying principal amount. Liability Derivatives March 31, 2019 December 31, 2018 Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Derivatives designated as hedging instruments under ASC 815: Interest Rate Contracts Accrued liabilities and Other liabilities (1,089) Accrued liabilities and Other liabilities (833) Total Derivatives $ (1,089) $ (833) The following table summarizes adjustments related to cash flow hedge included in Cash-flow hedges, in the Condensed Consolidated Statements of Comprehensive Income: March 31, Loss on derivative instruments included in Accumulated other comprehensive income at December 31, 2018 $ (833) Fair value adjustment (256) Loss on derivative instruments included in Accumulated other comprehensive income at March 31, 2019 $ (1,089) At March 31, 2019, the Company expects to reclassify approximately $0.4 million of net losses on derivative instruments from Accumulated other comprehensive income to earnings during the next 12 months due to the payment of variable interest associated with the floating rate debt. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn May 2, 2019, the Company approved the closure of its Pottsville, Pennsylvania films plant as part of its broader strategic efforts associated with the films product line in North America to improve the Company’s competitive position in providing quality products and services for its customers. The Company has also announced a strategic alliance with a third-party producer of films for the flexible packaging industry combining the Company's channel to North America with their new state-of-the-art manufacturing facility. The Company expects the closure to be completed during the third quarter of 2019. Subject to the finalization of certain estimates, the Company expects to take a pre-tax repositioning charge associated with the closure of approximately $10 to 12 million in the second quarter of 2019. The expected charge consists of approximately $6 million associated with a non-cash impairment of plant and business related assets. Future cash expenses associated with the charge are anticipated to be approximately $2 million for employee separation benefits and $3 million of other exit and removal costs. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the Company's financial position as of March 31, 2019, and its results of operations and cash flows for the three months ended March 31, 2019 and 2018. The Condensed Consolidated Balance Sheet at December 31, 2018 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the "2018 Form 10-K"). All intercompany transactions have been eliminated. Certain prior period amounts have been reclassified for consistency with the current period presentation. It is our practice to establish actual quarterly closing dates using a predetermined fiscal calendar, which requires our businesses to close their books on a Saturday in order to minimize the potentially disruptive effects of quarterly closing on our business processes. Historically, the effects of this practice were generally not significant to reported results for any quarter and only existed within a reporting year. In the event that differences in actual closing dates are material to year-over-year comparisons of quarterly or year-to-date results, we will provide the appropriate disclosures. Our actual closing dates for the three months ended March 31, 2019 and 2018 wer e March 30, 2019 and March 31, 2018, respe ctively. |
New Accounting Pronouncements | In October 2018, the FASB issued ASU No. 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate ("SOFR") Overnight Index Swap ("OIS") Rate as a Benchmark Interest Rate for Hedge Accounting Purposes, which permits use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the UST, the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate and the SIFMA Municipal Swap Rate. Pursuant to the amendments, SOFR will be an option to replace LIBOR as it is phased out. The amendments of ASU No. 2018-16 are effective for companies that have adopted ASU 2017-12 for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year or at such time a company adopts ASU 2017-12. Early adoption of ASU 2018-16 is not permitted without previous adoption of ASU 2017-12. As the Company elected to early adopt ASU 2017-12 during the fourth quarter of 2018, the Company adopted ASU 2018-16 effective January 1, 2019, which did not have a material impact on the Company's consolidated financial position or results of operations upon adoption. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which requires lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. The new standard also requires disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases and will be effective for interim and annual periods beginning after December 15, 2018 (early adoption is permitted). Initial guidance stated that the new standard be applied under a modified retrospective approach with periods prior to the adoption date being adjusted. During July 2018, however, the FASB issued ASU 2018-11, Leases (Topic 842) , providing another transition method allowing a company to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without adjusting prior periods. The Company adopted the standard effective January 1, 2019 electing the cumulative-effect adjustment approach made available in ASU 2018-11, allowing a company to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company has also elected the following practical expedients: • the package of three expedients which allows the Company not to re-assess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases, and (iii) initial direct costs for any expired or existing leases; • the short-term lease practical expedient, which allows the Company to exclude leases with an initial term of 12 months or less (“short-term leases”) from recognition in the unaudited Condensed Consolidated Balance Sheet; • the b ifurcation of lease and non-lease components practical expedients, which did not require the Company to bifurcate lease and non-lease components for our real estate leases; and • the land easements practical expe dient, which allows the Company to carry forward the accounting treatment for land easements on existing agreements. |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Each of the Company’s product lines represented the following approximate percentage of total sales for the three months ended March 31, 2019 and 2018: Three Months Ended 2019 2018 Nylon 31% 28% Caprolactam 20% 18% Ammonium Sulfate Fertilizers 21% 19% Chemical Intermediates 28% 35% 100% 100% The Company's revenues by geographic area for the three months ended March 31, 2019 and 2018 were as follows: Three Months Ended 2019 2018 United States $ 257,642 $ 297,648 International 57,253 61,590 Total $ 314,895 $ 359,238 |
Summary of Deferred Income and Customer Advances | Below is a roll-forward of Deferred Income and Customer Advances for the three months ended March 31, 2019: Opening balance January 1, 2019 $ 22,556 Additional cash advances 1,083 Less amounts recognized in revenues (2,945) Ending balance March 31, 2019 $ 20,694 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The details of the basic and diluted EPS calculations for the three months ended March 31, 2019 and 2018 were a s follows: Three Months Ended 2019 2018 Basic Net Income $ 20,174 $ 11,593 Weighted average common shares outstanding 28,820,603 30,488,601 EPS – Basic $ 0.70 $ 0.38 Diluted Dilutive effect of equity awards and other stock-based holdings 966,354 796,764 Weighted average common shares outstanding 29,786,957 31,285,365 EPS – Diluted $ 0.68 $ 0.37 |
Accounts and Other Receivable_2
Accounts and Other Receivables - Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Accounts and Other Receivables Net | March 31, December 31, Accounts receivables $ 122,769 $ 166,017 Other 1,798 1,716 Total accounts and other receivables 124,567 167,733 Less – allowance for doubtful accounts (7,320) (7,467) Total accounts and other receivables – net $ 117,247 $ 160,266 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | March 31, December 31, Raw materials $ 62,469 $ 55,002 Work in progress 42,502 46,728 Finished goods 41,234 39,368 Spares and other 25,222 24,555 171,427 165,653 Reduction to LIFO cost basis (30,829) (28,471) Total inventories – net $ 140,598 $ 137,182 |
Postretirement Benefit Obliga_2
Postretirement Benefit Obligations (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Costs | The components of net periodic benefit cost of the Company’s pension plan are as follows: Three Months Ended 2019 2018 Service cost $ 1,714 $ 2,001 Interest cost 521 469 Expected return on plan assets (334) (287) Net periodic benefit cost $ 1,901 $ 2,183 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Components of Lease Expense | The components of lease expense were as follows: Three Months Ended March 31, 2019 Finance lease cost: Amortization of right-of-use asset $ 148 Interest on lease liabilities 18 Total finance lease cost 166 Operating lease cost 7,570 Short-term lease cost 4,282 Total lease cost $ 12,018 Supplemental cash flow information related to leases was as follows: Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 7,457 Operating cash flows from finance leases 13 Financing cash flows from finance leases 145 Non-cash information: Right-of-use assets obtained in exchange for lease obligations: Operating leases 4,569 Finance leases 406 |
Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases was as follows: March 31, Operating Leases Operating lease right-of-use assets $ 116,614 Operating lease liabilities – short term 24,929 Operating lease liabilities – long term 91,802 Total operating lease liabilities $ 116,731 Finance Leases Property, plant and equipment – gross $ 2,168 Accumulated depreciation (878) Property, plant and equipment – net $ 1,290 Accounts payable 540 Other liabilities 753 Total finance lease liabilities $ 1,293 Weighted Average Remaining Lease Term Operating leases 10.75 years Finance leases 2.53 years Weighted Average Discount Rate Operating leases 6.10 % Finance leases 5.39 % |
Schedule of New Accounting Pronouncements | The cumulative effect of the changes made to the Condensed Consolidated Balance Sheets for the adoption of the new leasing standard on January 1, 2019 was as follows: Balance Sheet accounts prior to new leasing standard adoption adjustments Adjustments due to the adoption of the new leasing standard Balance Sheet accounts after the new leasing standard adoption adjustments ASSETS Property, plant and equipment – net $ 1,032 $ — $ 1,032 Operating lease right-of-use assets — 117,921 117,921 Total assets 1,034,626 $ 117,921 1,152,547 LIABILITIES AND EQUITY Current Liabilities: Accounts payable $ 318 $ — $ 318 Operating lease liabilities – short term — 24,794 24,794 Total current liabilities 284,724 24,794 309,518 Operating lease liabilities – long term — 93,127 93,127 Other liabilities 762 — 762 Total liabilities 614,288 117,921 732,209 Total equity 420,338 — 420,338 Total liabilities and equity 1,034,626 $ 117,921 1,152,547 |
Maturities of Finance Lease Liabilities | Maturities of lease liabilities were as follows: Year Ending December 31, Operating Leases Finance Leases 2019 (remainder) $ 23,435 $ 452 2020 30,466 543 2021 18,683 307 2022 13,798 83 2023 11,200 — Thereafter 69,473 — Total lease payments 167,055 1,385 Less imputed interest (50,324) (92) Total $ 116,731 $ 1,293 |
Maturities of Operating Lease Liabilities | Maturities of lease liabilities were as follows: Year Ending December 31, Operating Leases Finance Leases 2019 (remainder) $ 23,435 $ 452 2020 30,466 543 2021 18,683 307 2022 13,798 83 2023 11,200 — Thereafter 69,473 — Total lease payments 167,055 1,385 Less imputed interest (50,324) (92) Total $ 116,731 $ 1,293 |
Schedule of Future Minimum Rental Payments for Operating Leases | As previously disclosed in our 2018 Form 10-K and under the previous lease accounting standard, future minimum lease payments for leases having initial or remaining non-cancellable lease terms in excess of one year would have been as follows: Year Ending December 31, Operating Leases Capital Leases 2019 $ 36,110 $ 239 2020 29,318 212 2021 16,111 131 2022 11,571 89 2023 9,104 — Thereafter 26,627 — Total lease payments $ 128,841 671 |
Schedule of Future Minimum Lease Payments for Capital Leases | As previously disclosed in our 2018 Form 10-K and under the previous lease accounting standard, future minimum lease payments for leases having initial or remaining non-cancellable lease terms in excess of one year would have been as follows: Year Ending December 31, Operating Leases Capital Leases 2019 $ 36,110 $ 239 2020 29,318 212 2021 16,111 131 2022 11,571 89 2023 9,104 — Thereafter 26,627 — Total lease payments $ 128,841 671 |
Derivative and Hedging Instru_2
Derivative and Hedging Instruments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | Liability Derivatives March 31, 2019 December 31, 2018 Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Derivatives designated as hedging instruments under ASC 815: Interest Rate Contracts Accrued liabilities and Other liabilities (1,089) Accrued liabilities and Other liabilities (833) Total Derivatives $ (1,089) $ (833) |
Derivative Instruments, Gain (Loss) | The following table summarizes adjustments related to cash flow hedge included in Cash-flow hedges, in the Condensed Consolidated Statements of Comprehensive Income: March 31, Loss on derivative instruments included in Accumulated other comprehensive income at December 31, 2018 $ (833) Fair value adjustment (256) Loss on derivative instruments included in Accumulated other comprehensive income at March 31, 2019 $ (1,089) |
Organization, Operations and _2
Organization, Operations and Basis of Presentation (Details) - USD ($) | 3 Months Ended | 11 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Feb. 22, 2019 | May 04, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Liabilities to creditors, payments issued but outstanding | $ 5,700,000 | $ 7,700,000 | |||
Share repurchase program, maximum amount of shares authorized to be repurchased | $ 75,000,000 | $ 75,000,000 | |||
Stock repurchased during period (in shares) | 1,977,668 | ||||
Stock repurchased during period, value | $ 61,300,000 | ||||
Treasury stock acquired, weighted average cost per share (in dollars per share) | $ 31 | ||||
Stock repurchase program, remaining authorized repurchase amount | 88,700,000 | $ 88,700,000 | |||
Cost of Sales | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Insurance recoveries | $ 6,600,000 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2019countrycustomer | Mar. 31, 2018 | |
Concentration Risk [Line Items] | ||
Number of customers | customer | 500 | |
Number of countries in which customers are located (more than) | country | 40 | |
Length of contract terms | We typically sell to customers under master service agreements, with one- to two-year terms on average, or by purchase orders. | |
Duration of customer relationship | 20 years | |
10 Largest Customers | Customer Concentration Risk | Revenue from Contract with Customer | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 48.00% | 47.00% |
Shaw Industries Group Inc | Customer Concentration Risk | Revenue from Contract with Customer | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 22.00% | 21.00% |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Percentage of sales | 100.00% | 100.00% |
Sales | $ 314,895 | $ 359,238 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Sales | 257,642 | 297,648 |
International | ||
Disaggregation of Revenue [Line Items] | ||
Sales | $ 57,253 | $ 61,590 |
Nylon | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of sales | 31.00% | 28.00% |
Caprolactam | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of sales | 20.00% | 18.00% |
Ammonium Sulfate Fertilizers | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of sales | 21.00% | 19.00% |
Chemical Intermediates | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of sales | 28.00% | 35.00% |
Revenues - Summary of Deferred
Revenues - Summary of Deferred Revenue and Customer Advances (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Change in Contract with Customer, Liability [Roll Forward] | |
Opening balance | $ 22,556 |
Additional cash advances | 1,083 |
Less amounts recognized in revenues | (2,945) |
Ending balance | $ 20,694 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Basic | ||
Net Income | $ 20,174 | $ 11,593 |
Weighted average common shares outstanding (in shares) | 28,820,603 | 30,488,601 |
EPS – Basic (in dollars per share) | $ 0.70 | $ 0.38 |
Diluted | ||
Dilutive effect of equity awards and other stock-based holdings (in shares) | 966,354 | 796,764 |
Weighted average common shares outstanding (in shares) | 29,786,957 | 31,285,365 |
EPS – Diluted (in dollars per share) | $ 0.68 | $ 0.37 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares | 1 Months Ended | 3 Months Ended | |
Sep. 30, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Line Items] | |||
Number of shares of common stock equal to one unit (in shares) | 1 | ||
Employee Stock Option | |||
Earnings Per Share [Line Items] | |||
Weighted average number of stock options excluded form computation of diluted earnings per share (in shares) | 330,823,000 | 53,117,000 | |
Deferred Compensation, Share-based Payments | |||
Earnings Per Share [Line Items] | |||
Number of units allocated to deferred compensation plan (in shares) | 17,011 |
Accounts and Other Receivable_3
Accounts and Other Receivables - Net (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Accounts receivables | $ 122,769 | $ 166,017 |
Other | 1,798 | 1,716 |
Total accounts and other receivables | 124,567 | 167,733 |
Less – allowance for doubtful accounts | (7,320) | (7,467) |
Total accounts and other receivables – net | $ 117,247 | $ 160,266 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 62,469 | $ 55,002 |
Work in progress | 42,502 | 46,728 |
Finished goods | 41,234 | 39,368 |
Spares and other | 25,222 | 24,555 |
Inventory gross | 171,427 | 165,653 |
Reduction to LIFO cost basis | (30,829) | (28,471) |
Total inventories – net | $ 140,598 | $ 137,182 |
Postretirement Benefit Obliga_3
Postretirement Benefit Obligations - Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Retirement Benefits [Abstract] | ||
Service costs | $ 1,714 | $ 2,001 |
Interest costs | 521 | 469 |
Expected return on plan assets | (334) | (287) |
Net periodic benefit cost | $ 1,901 | $ 2,183 |
Postretirement Benefit Obliga_4
Postretirement Benefit Obligations - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2019 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Pension contributions | $ 0 | |
Scenario, Forecast | Minimum | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Pension contributions | $ 3,000,000 | |
Scenario, Forecast | Maximum | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Pension contributions | $ 8,000,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Mar. 31, 2019 |
Leases [Abstract] | |
Leases, term of contract | 20 years |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Finance lease cost: | |
Amortization of right-of-use asset | $ 148 |
Interest on lease liabilities | 18 |
Total finance lease cost | 166 |
Operating lease cost | 7,570 |
Short-term lease cost | 4,282 |
Total lease cost | $ 12,018 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 7,457 |
Operating cash flows from finance leases | 13 |
Financing cash flows from finance leases | 145 |
Right-of-use assets obtained in exchange for lease obligations: | |
Operating leases | 4,569 |
Finance leases | $ 406 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Operating Leases | |||
Operating lease right-of-use assets | $ 116,614 | $ 117,921 | $ 0 |
Operating lease liabilities – short-term | 24,929 | 24,794 | 0 |
Operating lease liabilities – long-term | 91,802 | 93,127 | $ 0 |
Total operating lease liabilities | 116,731 | ||
Finance Leases | |||
Property, plant and equipment – gross | 2,168 | ||
Accumulated depreciation | (878) | ||
Property, plant and equipment – net | 1,290 | $ 1,032 | |
Accounts payable | 540 | ||
Other liabilities | 753 | ||
Total finance lease liabilities | $ 1,293 | ||
Weighted Average Remaining Lease Term | |||
Operating leases | 10 years 9 months | ||
Finance leases | 2 years 6 months 10 days | ||
Weighted Average Discount Rate | |||
Operating leases | 6.10% | ||
Finance leases | 5.39% |
Leases - Cumulative Effect of A
Leases - Cumulative Effect of Adoption of New Leasing Standard (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
ASSETS | |||
Property, plant and equipment - net | $ 1,032 | ||
Property, plant and equipment – net | $ 1,290 | $ 1,032 | |
Operating lease right-of-use assets | 116,614 | 117,921 | 0 |
Total assets | 1,123,772 | 1,152,547 | 1,034,626 |
Current liabilities: | |||
Accounts Payable | 318 | 318 | |
Operating lease liabilities – short-term | 24,929 | 24,794 | 0 |
Total current liabilities | 256,702 | 309,518 | 284,724 |
Operating lease liabilities – long-term | 91,802 | 93,127 | 0 |
Other liabilities | 762 | 762 | |
Total liabilities | 704,528 | 732,209 | 614,288 |
Total equity | 420,338 | 420,338 | |
Total liabilities and equity | $ 1,123,772 | 1,152,547 | $ 1,034,626 |
Accounting Standards Update 2016-02 | |||
ASSETS | |||
Property, plant and equipment – net | 0 | ||
Operating lease right-of-use assets | 117,921 | ||
Total assets | 117,921 | ||
Current liabilities: | |||
Accounts Payable | 0 | ||
Operating lease liabilities – short-term | 24,794 | ||
Total current liabilities | 24,794 | ||
Operating lease liabilities – long-term | 93,127 | ||
Other liabilities | 0 | ||
Total liabilities | 117,921 | ||
Total equity | 0 | ||
Total liabilities and equity | $ 117,921 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities After Adoption (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Operating Leases | |
2019 (remainder) | $ 23,435 |
2020 | 30,466 |
2021 | 18,683 |
2022 | 13,798 |
2023 | 11,200 |
Thereafter | 69,473 |
Total lease payments | 167,055 |
Less imputed interest | (50,324) |
Total | 116,731 |
Finance Leases | |
2019 (remainder) | 452 |
2020 | 543 |
2021 | 307 |
2022 | 83 |
2023 | 0 |
Thereafter | 0 |
Total lease payments | 1,385 |
Less imputed interest | (92) |
Total | $ 1,293 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments Before Adoption (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Leases | |
2019 | $ 36,110 |
2020 | 29,318 |
2021 | 16,111 |
2022 | 11,571 |
2023 | 9,104 |
Thereafter | 26,627 |
Total lease payments | 128,841 |
Capital Leases | |
2019 | 239 |
2020 | 212 |
2021 | 131 |
2022 | 89 |
2023 | 0 |
Thereafter | 0 |
Total lease payments | $ 671 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 3 Months Ended |
Mar. 31, 2019customer | |
Commitments and Contingencies Disclosure [Abstract] | |
Number of manufacturing locations | 3 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Income taxes | $ 6,824 | $ 3,566 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Millions | Mar. 31, 2019USD ($) |
Fair Value, Inputs, Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Royalty agreement, asset, fair value | $ 1 |
Fair Value, Inputs, Level 2 | Interest Rate Contracts | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative liability, fair value | $ (1.1) |
Derivative and Hedging Instru_3
Derivative and Hedging Instruments - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative loss reclassification from AOCI to income | $ 400,000 | |
Customer Concentration Risk | Accounts Receivable | One Customer | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Concentration risk percentage | 12.00% | 20.00% |
Interest Rate Contract, Fixed Rate | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, amount of hedged item | $ 50,000,000 |
Derivative and Hedging Instru_4
Derivative and Hedging Instruments - Balance Sheet Classification (Details) - Designated as Hedging Instrument - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Derivative [Line Items] | ||
Derivative liability, fair value | $ (1,089) | $ (833) |
Interest Rate Contracts | ||
Derivative [Line Items] | ||
Derivative liability, fair value | $ (1,089) | $ (833) |
Derivative and Hedging Instru_5
Derivative and Hedging Instruments - Adjustments Related to Cash Flow Hedges on the Comprehensive Income Statement (Details) - Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
AOCI Attributable To Parent, Before Tax [Roll Forward] | |
Loss on derivative instruments included in Accumulated other comprehensive income at December 31, 2018 | $ (833) |
Fair value adjustment | (256) |
Loss on derivative instruments included in Accumulated other comprehensive income at March 31, 2019 | $ (1,089) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ in Millions | May 02, 2019USD ($) |
Employee Separation Costs | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring costs, expected cost | $ 2 |
Non-Cash Impairment of Plant Assets | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring costs, expected cost | 6 |
Other Restructuring | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring costs, expected cost | 3 |
Minimum | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring costs, expected cost | 10 |
Maximum | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring costs, expected cost | $ 12 |