Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 13, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-38221 | |
Entity Registrant Name | PQ Group Holdings Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-3406833 | |
Entity Address, Address Line One | 300 Lindenwood Drive | |
Entity Address, City or Town | Malvern | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19355 | |
City Area Code | (610) | |
Local Phone Number | 651-4400 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | PQG | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 136,924,458 | |
Entity Central Index Key | 0001708035 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Sales | $ 126,624 | $ 125,554 |
Cost of goods sold | 96,505 | 87,850 |
Gross profit | 30,119 | 37,704 |
Selling, general and administrative expenses | 22,130 | 22,280 |
Other operating expense, net | 5,507 | 3,450 |
Operating income | 2,482 | 11,974 |
Equity in net (income) from affiliated companies | (5,210) | (8,295) |
Interest expense, net | 10,456 | 15,298 |
Debt extinguishment costs | 0 | 2,513 |
Other expense, net | 5,174 | 7,470 |
Loss from continuing operations before income taxes and noncontrolling interest | (7,938) | (5,012) |
Benefit for income taxes | (5,190) | (1,665) |
Net loss from continuing operations | (2,748) | (3,347) |
Loss from discontinued operations, net of tax | (89,770) | 3,856 |
Net (loss) income | (92,518) | 509 |
Less: Net income attributable to the noncontrolling interest - discontinued operations | 117 | 285 |
Net (loss) income attributable to PQ Group Holdings Inc. | (92,635) | 224 |
Loss from continuing operations attributable to PQ Group Holdings Inc. | (2,748) | (3,347) |
(Loss) income from discontinued operations attributable to PQ Group Holdings Inc. | $ (89,887) | $ 3,571 |
Net (loss) income per share: | ||
Basic loss per share - continuing operations | $ (0.02) | $ (0.02) |
Diluted loss per share - continuing operations | (0.02) | (0.02) |
Basic (loss) income per share - discontinued operations | (0.66) | 0.02 |
Diluted (loss) income per share - discontinued operations | (0.66) | 0.02 |
Basic loss per share | (0.68) | 0 |
Diluted loss per share | $ (0.68) | $ 0 |
Weighted average shares outstanding: | ||
Basic (shares) | 136,006,082 | 135,240,897 |
Diluted (shares) | 136,006,082 | 136,086,082 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net (loss) income | $ (92,518) | $ 509 |
Other comprehensive loss, net of tax: | ||
Pension and postretirement benefits | (43) | (15) |
Net gain (loss) from hedging activities | 765 | (529) |
Foreign currency translation | (3,861) | (46,355) |
Total other comprehensive loss | (3,139) | (46,899) |
Comprehensive loss | (95,657) | (46,390) |
Less: Comprehensive loss attributable to noncontrolling interests | (277) | (3,203) |
Comprehensive loss attributable to PQ Group Holdings Inc. | $ (95,380) | $ (43,187) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Cash and cash equivalents | $ 55,171 | $ 114,011 |
Accounts receivable, net | 56,987 | 46,183 |
Inventories, net | 48,934 | 52,789 |
Prepaid and other current assets | 16,767 | 11,677 |
Current assets held for sale | 191,380 | 204,007 |
Total current assets | 369,239 | 428,667 |
Investments in affiliated companies | 455,285 | 458,128 |
Property, plant and equipment, net | 593,016 | 591,710 |
Goodwill | 429,505 | 391,565 |
Other intangible assets, net | 134,661 | 137,446 |
Right-of-use lease assets | 31,711 | 28,943 |
Other long-term assets | 15,142 | 12,445 |
Long-term assets held for sale | 1,035,418 | 1,149,443 |
Total assets | 3,063,977 | 3,198,347 |
LIABILITIES | ||
Current maturities of long-term debt | 0 | 0 |
Accounts payable | 42,012 | 38,106 |
Operating lease liabilities—current | 7,458 | 6,715 |
Accrued liabilities | 47,065 | 45,475 |
Current liabilities held for sale | 96,087 | 111,569 |
Total current liabilities | 192,622 | 201,865 |
Long-term debt, excluding current portion | 1,401,573 | 1,400,369 |
Deferred income taxes | 120,928 | 125,668 |
Operating lease liabilities—noncurrent | 24,079 | 21,972 |
Other long-term liabilities | 15,247 | 15,744 |
Long-term liabilities held for sale | 123,045 | 155,550 |
Total liabilities | 1,877,494 | 1,921,168 |
Commitments and contingencies (Note 17) | ||
EQUITY | ||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 450,000,000 | 450,000,000 |
Common stock, shares issued (shares) | 137,815,163 | 137,102,143 |
Common stock, shares outstanding (shares) | 136,932,950 | 136,318,557 |
Common Stock, Value, Issued | $ 1,378 | $ 1,371 |
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Preferred Stock, Value, Issued | $ 0 | $ 0 |
Additional paid-in capital | 1,484,799 | 1,477,859 |
Accumulated deficit | $ (268,393) | $ (175,758) |
Treasury stock (shares) | 882,213 | 783,586 |
Treasury Stock, Value | $ (12,551) | $ (11,081) |
Accumulated other comprehensive loss | (18,010) | (15,265) |
Total PQ Group Holdings Inc. equity | 1,187,223 | 1,277,126 |
Noncontrolling interest | (740) | 53 |
Total equity | 1,186,483 | 1,277,179 |
Total liabilities and equity | $ 3,063,977 | $ 3,198,347 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | (Accumulated deficit) | Treasury stock, at cost | Accumulated other comprehensive income (loss) | Non- controlling interest |
Beginning balance at Dec. 31, 2019 | $ 1,785,318 | $ 1,369 | $ 1,696,899 | $ 103,013 | $ (6,483) | $ (15,348) | $ 5,868 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net (loss) income | 509 | 224 | 285 | ||||
Other comprehensive loss | (46,899) | (43,411) | (3,488) | ||||
Repurchases of common shares | (3,889) | (3,889) | |||||
Stock compensation expense | 5,920 | 5,920 | |||||
Shares issued under equity incentive plan, net of forfeitures | 181 | 4 | 177 | ||||
Ending balance at Mar. 31, 2020 | 1,741,140 | 1,373 | 1,702,996 | 103,237 | (10,372) | (58,759) | 2,665 |
Beginning balance at Dec. 31, 2020 | 1,277,179 | 1,371 | 1,477,859 | (175,758) | (11,081) | (15,265) | 53 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net (loss) income | (92,518) | (92,635) | 117 | ||||
Other comprehensive loss | (3,139) | (2,745) | (394) | ||||
Repurchases of common shares | (1,470) | (1,470) | |||||
Distributions to noncontrolling interests | (516) | (516) | |||||
Stock compensation expense | 6,877 | 6,877 | |||||
Shares issued under equity incentive plan, net of forfeitures | 70 | 7 | 63 | ||||
Ending balance at Mar. 31, 2021 | $ 1,186,483 | $ 1,378 | $ 1,484,799 | $ (268,393) | $ (12,551) | $ (18,010) | $ (740) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (92,518) | $ 509 |
Net loss (income) from discontinued operations | 89,770 | (3,856) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 16,526 | 15,777 |
Amortization | 2,974 | 2,898 |
Amortization of deferred financing costs and original issue discount | 532 | 724 |
Foreign currency exchange loss | 5,101 | 7,070 |
Pension and postretirement healthcare (benefit) expense | (595) | 131 |
Pension and postretirement healthcare funding | 0 | (891) |
Deferred income tax benefit | (4,344) | (699) |
Net loss on asset disposals | 778 | 163 |
Stock compensation | 6,305 | 4,294 |
Equity in net income from affiliated companies | (5,210) | (8,295) |
Dividends received from affiliated companies | 5,000 | 0 |
Other, net | (3,395) | (267) |
Working capital changes that provided (used) cash, excluding the effect of acquisitions and dispositions: | ||
Receivables | (9,404) | (1,219) |
Inventories | 4,564 | 3,495 |
Prepaids and other current assets | (2,232) | (291) |
Accounts payable | 4,652 | (3,111) |
Accrued liabilities | (1,958) | (5,352) |
Net cash provided by operating activities, continuing operations | 16,546 | 11,080 |
Net cash provided by (used in) operating activities, discontinued operations | 877 | (6,549) |
Net cash provided by operating activities | 17,423 | 4,531 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (12,563) | (10,005) |
Business combinations, net of cash acquired | (41,994) | 0 |
Proceeds from sale of assets | 0 | 2,375 |
Net cash used in investing activities, continuing operations | (54,557) | (7,630) |
Net cash used in investing activities, discontinued operations | (22,012) | (14,568) |
Net cash used in investing activities | (76,569) | (22,198) |
Cash flows from financing activities: | ||
Draw down of revolving credit facilities | 0 | 104,029 |
Repayments of revolving credit facilities | 0 | (44,983) |
Debt issuance costs | 0 | (3,023) |
Stock repurchases | (1,470) | (3,889) |
Other, net | 12 | 447 |
Net cash (used in) provided by financing activities, continuing operations | (1,458) | 52,581 |
Net cash (used in) provided by financing activities, discontinued operations | (520) | 5,720 |
Net cash (used in) provided by financing activities | (1,978) | 58,301 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (2,708) | (4,263) |
Net change in cash, cash equivalents and restricted cash | (63,832) | 36,371 |
Cash, cash equivalents and restricted cash at beginning of period | 137,219 | 73,917 |
Cash, cash equivalents and restricted cash at end of period | 73,387 | 110,288 |
Less: cash, cash equivalents, and restricted cash of discontinued operations | (16,625) | (53,356) |
Cash, cash equivalents and restricted cash at end of period of continuing operations | $ 56,762 | $ 56,932 |
Background and Basis of Present
Background and Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | 1. Background and Basis of Presentation: Description of Business PQ Group Holdings Inc. and subsidiaries (the “Company” or “PQ Group Holdings”) is a leading integrated and innovative global provider of specialty catalysts and services. The Company supports customers globally through its strategically located network of manufacturing facilities. The Company believes that its products, which are predominantly inorganic, and services contribute to improving the sustainability of the environment. The Company has two uniquely positioned specialty businesses: Refining Services provides sulfuric acid recycling to the North American refining industry for the production of alkylate and provides on-purpose virgin sulfuric acid for water treatment, mining, and industrial applications; and Catalysts provides finished silica catalysts and catalyst supports necessary to produce high strength and high stiffness plastics and, through its Zeolyst joint venture, supplies zeolites used for catalysts that remove nitric oxide from diesel engine emissions as well as sulfur from fuels during the refining process. The Company’s Refining Services segment typically experiences seasonal fluctuations as a result of higher demand for gasoline products in the summer months and lower demand in the winter months. These demand fluctuations result in higher sales and working capital requirements in the second and third quarters. Effective December 14, 2020, the Company completed the sale of its Performance Materials business and the results of operations of this business have been presented as discontinued operations in the condensed consolidated financial statements for the three months ended March 31, 2020. See Note 3 for more information on the transaction. On February 28, 2021, the Company entered into a definitive agreement to sell its Performance Chemicals business for $1,100,000, subject to certain purchase price adjustments as set forth in the agreement. Upon entering into the definitive agreement, the transaction met the held for sale criteria and consequently the financial results of the Performance Chemicals business are reported in discontinued operations in the condensed consolidated financial statements for all periods presented. See Note 3 for more information on the transaction. The notes to the condensed consolidated financial statements, unless otherwise indicated, are on a continuing operations basis. Basis of Presentation |
New Accounting Standards
New Accounting Standards | 3 Months Ended |
Mar. 31, 2021 | |
New Accounting Standards [Abstract] | |
Recently Adopted Accounting Standards | 2. New Accounting Standards: Recently Adopted Accounting Standards In December 2019, the FASB issued new guidance to simplify the accounting for income taxes by removing certain exceptions to the general principles and also simplification of areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes. The new guidance is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years, with early adoption permitted. The Company adopted the new guidance effective January 1, 2021, with no material impact to the Company’s condensed consolidated financial position, results of operations or cash flows. Accounting Standards Not Yet Adopted In March 2020, the FASB issued guidance to address certain accounting consequences from the anticipated transition from the use of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The new guidance contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance is optional and may be elected over time as reference rate reform activities occur. The Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based on matches the index of the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. |
Divestitures
Divestitures | 3 Months Ended |
Mar. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Segment divestitures | 3. Divestitures: Performance Materials Divestiture On December 14, 2020, the Company completed the sale of its Performance Materials business. In the fourth quarter of 2020, the Performance Materials business met the criteria set forth in Accounting Standards Codification 205-20, Presentation of Financial Statements - Discontinued Operations (“ASC 205-20”), as the sale represented a strategic shift that had a major effect on the Company’s operations and financial results. As a result, the Company’s condensed consolidated financial statements for the three months ended March 31, 2020 reflect the Performance Materials business as a discontinued operation. The divested business historically represented a reportable segment of the Company, including certain Australian operations that were historically reported in the Performance Chemicals reportable segment. The following table summarizes the results of discontinued operations related to the Performance Materials divestiture: Three months ended 2020 Sales $ 67,891 Cost of goods sold 51,587 Selling, general and administrative expenses 9,285 Other operating expense, net 12,874 Operating loss (5,855) Interest expense, net (1) 5,132 Other income, net (912) Loss from discontinued operations before income tax (10,075) Benefit for income taxes (4,285) Loss from discontinued operations, net of tax $ (5,790) (1) The closing of the transaction triggered the Company’s obligation to provide partial repayment under its Amended and Restated Term Loan Credit Agreement, dated May 4, 2016 and its New Term Loan Credit Agreement, dated as of July 22, 2020. As such, interest expense has been allocated to discontinued operations on the basis of the Company’s mandatory repayment of $275,787 of the Senior Secured Term Loan Facility due February 2027 and its mandatory repayment of $188,722 of the New Senior Secured Term Loan Facility due February 2027. During the three months ended March 31, 2021, the Company incurred transaction costs of $1,446 and stock-based compensation expense of $653, and an associated tax benefit of $514 related to the Performance Materials divestiture which is included in loss from discontinued operations, net of tax. Net income attributable to the noncontrolling interest related to the Performance Materials business, net of tax was $51 for the three months ended March 31, 2020. Net loss attributable to PQ Group Holdings Inc., related to the Performance Materials business, net of tax was $5,841 for the three months ended March 31, 2020. Upon the close of the transaction, the Company entered into a Transition Services Agreement with the buyer pursuant to which the buyer is receiving certain services to provide for the orderly transition of various functions and processes after the closing of the transaction. The services under the Transition Services Agreement include information technology, accounting, tax, financial services, human resources, facilities, and other administrative support services. These services are provided for a period of nine months, with three 30-day extensions available. The Company billed $1,571 under the Transition Services Agreement to the buyer during the three months ended March 31, 2021. Those billings are included in selling, general and administrative expenses on the condensed consolidated financial statements for the three months ended March 31, 2021. Performance Chemicals Divestiture On February 28, 2021, the Company entered into a definitive agreement to sell its Performance Chemicals business to Sparta Aggregator L.P., a partnership established by Koch Minerals & Trading, LLC and Cerberus Capital Management, L.P. for a purchase price of $1,100,000 which is subject to certain adjustments including indebtedness, cash, working capital and transaction expenses. The transaction is expected to close by the end of 2021, subject to regulatory approvals and customary closing conditions. In the first quarter of 2021, the Performance Chemicals business met the criteria set forth in ASC 205-20, as the sale represents a strategic shift that will have a major effect on the Company’s operations and financial results. As a result, the Company’s condensed consolidated financial statements for all periods presented reflect the Performance Chemicals business as a discontinued operation. The Performance Chemicals business historically represented a reportable segment of the Company. The disposal group was tested for recoverability as of the balance sheet date, and the Company recognized an expected disposal loss of approximately $95,594 during the three months ended March 31, 2021. The expected disposal loss is included in net loss from discontinued operations, net of tax on the condensed consolidated statement of income. In the condensed consolidated balance sheet as of March 31, 2021, the Company recorded the disposal loss to goodwill and a valuation allowance of approximately $75,084 and $20,514, respectively, included in long-term assets held for sale. Completion of the sale may be for amounts that could vary from the current fair value estimate. The Company’s estimate of fair value will be evaluated and recognized each reporting period until the divestiture is complete. The following table summarizes the results of discontinued operations related to Performance Chemicals for the periods presented: Three months ended 2021 2020 Sales $ 164,523 $ 171,184 Cost of goods sold 125,853 136,593 Selling, general and administrative expenses 11,716 11,733 Other operating expense, net 17,480 5,617 Impairment of assets held for sale 95,594 — Operating (loss) income (86,120) 17,241 Equity in net income from affiliated companies (38) (55) Interest expense, net (1) 3,215 4,026 Other income, net (5,523) (3,753) (Loss) income from discontinued operations before income tax (83,774) 17,023 Provision for income taxes 4,411 7,377 (Loss) income from discontinued operations, net of tax $ (88,185) $ 9,646 (1) Upon the close of the transaction and finalization of net cash proceeds, the Company is required to use a portion of the proceeds to repay outstanding debt and is expected to restructure its debt, which is estimated to result in a debt reduction of $450,000 to $550,000. Certain debt requirements will be triggered that will result in the Company’s obligation to provide partial repayment under its Amended and Restated Term Loan Credit Agreement, dated May 4, 2016 and its New Term Loan Credit Agreement, dated as of July 22, 2020. As such, interest expense has been allocated to discontinued operations on the basis of the Company’s estimated mandatory repayment of $296,859 of the Senior Secured Term Loan Facility due February 2027 and its estimated mandatory repayment of $203,141 of the New Senior Secured Term Loan Facility due February 2027. Net income attributable to the noncontrolling interest related to the Performance Chemicals business, net of tax was $117 and $234 for the three months ended March 31, 2021 and 2020, respectively. Net (loss) income attributable to PQ Group Holdings Inc., related to the Performance Chemicals business, net of tax was $(88,302) and $9,412 for the three months ended March 31, 2021 and 2020, respectively. The following table summarizes the assets and liabilities of discontinued operations related to the Performance Chemicals divestiture as of March 31, 2021 and December 31, 2020. March 31, December 31, ASSETS Cash and cash equivalents $ 16,579 $ 21,520 Accounts receivables, net 91,265 86,961 Inventories, net 68,907 74,647 Prepaid and other current assets 14,629 20,879 Current assets held for sale $ 191,380 $ 204,007 Investments in affiliated companies $ 362 $ 324 Property, plant and equipment, net 382,699 391,524 Goodwill 248,736 326,173 Other intangible assets, net 381,001 388,857 Right-of-use lease assets 19,610 19,296 Other long-term assets 23,524 23,269 Valuation allowance (20,514) — Long-term assets held for sale $ 1,035,418 $ 1,149,443 LIABILITIES Accounts payable $ 63,918 $ 74,754 Operating lease liabilities—current 8,105 8,479 Accrued liabilities 24,064 28,336 Current liabilities held for sale $ 96,087 $ 111,569 Deferred income taxes $ 53,572 $ 50,232 Operating lease liabilities—noncurrent 10,256 10,047 Other long-term liabilities 59,217 95,271 Long-term liabilities held for sale $ 123,045 $ 155,550 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | 4. Revenue from Contracts with Customers: Disaggregated Revenue The Company’s primary means of disaggregating revenues is by reportable segments, which can be found in Note 18 to these condensed consolidated financial statements. The Company’s portfolio of products is integrated into a variety of end uses, which are described in the table below. Key End Uses Key Products Industrial & process chemicals • Sulfur derivatives for industrial production • Treatment services Fuels & emission control • Refining catalysts • Emission control catalysts • Catalyst recycling services Packaging & engineered plastics • Catalysts for high-density polyethlene and chemicals syntheses • Antiblock for film packaging • Sulfur derivatives for nylon production Natural resources • Sulfur derivatives for mining The following tables disaggregate the Company’s sales, by segment and end use, for the three months ended March 31, 2021 and 2020: Three months ended March 31, 2021 Refining Catalysts Total Industrial & process chemicals $ 16,947 $ — $ 16,947 Fuels & emission control (1) 55,192 — 55,192 Packaging & engineered plastics 10,622 26,402 37,024 Natural resources 17,461 — 17,461 Total segment sales 100,222 26,402 126,624 Three months ended March 31, 2020 Refining Catalysts Total Industrial & process chemicals $ 19,359 $ 47 $ 19,406 Fuels & emission control (1) 55,710 — 55,710 Packaging & engineered plastics 10,734 24,817 35,551 Natural resources 14,887 — 14,887 Total segment sales 100,690 24,864 125,554 (1) As described in Note 1, the Company experiences seasonal s ales fluctuations to customers in the fuels & emission control end use. Contract Assets and Liabilities |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 5. Fair Value Measurements: Fair values are based on quoted market prices when available. When market prices are not available, fair values are generally estimated using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality. In instances where there is little or no market activity for the same or similar instruments, the Company estimates fair values using methods, models and assumptions that management believes a hypothetical market participant would use to determine a current transaction price. These valuation techniques involve some level of management estimation and judgment that becomes significant with increasingly complex instruments or pricing models. Where appropriate, adjustments are included to reflect the risk inherent in a particular methodology, model or input used. The Company’s financial assets and liabilities carried at fair value have been classified based upon a fair value hierarchy. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). The classification of an asset or a liability is based on the lowest level input that is significant to its measurement. For example, a Level 3 fair value measurement may include inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The levels of the fair value hierarchy are as follows: • Level 1—Values are unadjusted quoted prices for identical assets and liabilities in active markets accessible at the measurement date. Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets. • Level 2—Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are observable or can be corroborated by market data for the term of the instrument. Such inputs include market interest rates and volatilities, spreads and yield curves. • Level 3—Certain inputs are unobservable (supported by little or no market activity) and significant to the fair value measurement. Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date. The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. March 31, Quoted Prices in Significant Other Significant Assets: Derivative contracts (Note 14) $ 285 $ — $ 285 $ — Liabilities: Derivative contracts (Note 14) $ 3,023 $ — $ 3,023 $ — December 31, Quoted Prices in Significant Other Significant Liabilities: Derivative contracts (Note 14) $ 3,704 $ — $ 3,704 $ — Derivative contracts Derivative assets and liabilities can be exchange-traded or traded over-the-counter (“OTC”). The Company generally values exchange-traded derivatives using models that calibrate to market transactions and eliminate timing differences between the closing price of the exchange-traded derivatives and their underlying instruments. OTC derivatives are valued using market transactions and other market evidence whenever possible, including market-based inputs to models, model calibration to market transactions, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. When models are used, the selection of a particular model to value an OTC derivative depends on the contractual terms of, and specific risks inherent in, the instrument as well as the availability of pricing information in the market. The Company generally uses similar models to value similar instruments. Valuation models require a variety of inputs, including contractual terms, market prices and rates, forward curves, measures of volatility, and correlations of such inputs. For OTC derivatives that trade in liquid markets, such as forward contracts, swaps and options, model inputs can generally be corroborated by observable market data by correlation or other means, and model selection does not involve significant management judgment. During the quarter ended March 31, 2021, the Company had interest rate c aps and cross-currency swaps th at were fair valued using Level 2 inputs. In March 2021, the Company settled its cross-currency swaps, which were used as a hedging instrument of its net investment in foreign assets in its Performance Chemicals segment. Refer to Note 14 of these condensed consolidated financial statements for additional information. In addition, the Company applies a credit valuation adjustment to reflect credit risk which is calculated based on credit default swaps. To the extent that the Company’s net exposure under a specific master agreement is an asset, the Company utilizes the counterparty’s default swap rate. If the net exposure under a specific master agreement is a liability, the Company utilizes a default swap rate comparable to PQ Group Holdings. The credit valuation adjustment is added to the discounted fair value to reflect the exit price that a market participant would be willing to receive to assume the Company’s liabilities or that a market participant would be willing to pay for the Company’s assets. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | 6. Stockholders' Equity: Accumulated Other Comprehensive Income (Loss) The following tables present the tax effects of each component of other comprehensive income (loss) for the three months ended March 31, 2021 and 2020: Three months ended March 31, 2021 2020 Pre-tax Tax benefit/ After-tax amount Pre-tax Tax benefit/ After-tax amount Defined benefit and other postretirement plans: Amortization of net gains $ 1 $ — $ 1 $ 44 $ (8) $ 36 Amortization of prior service cost (58) 14 (44) (64) 13 (51) Benefit plans, net (57) 14 (43) (20) 5 (15) Net gain (loss) from hedging activities 1,020 (255) 765 (705) 176 (529) Foreign currency translation (1) (6,308) 2,447 (3,861) (50,057) 3,702 (46,355) Other comprehensive loss $ (5,345) $ 2,206 $ (3,139) $ (50,782) $ 3,883 $ (46,899) (1) The income tax benefit or expense included in other comprehensive income is attributed to the portion of foreign currency translation associated with the Company’s cross-currency interest rate swaps, for which the tax effect is based on the applicable U.S. deferred income tax rate. See Note 14 to these condensed consolidated financial statements for information regarding the Company’s cross-currency interest rate swaps. The following table presents the changes in accumulated other comprehensive income (loss), net of tax, by component for the three months ended March 31, 2021 and 2020: Defined benefit Net gain (loss) Foreign Total December 31, 2020 $ 5,278 $ (660) $ (19,883) $ (15,265) Other comprehensive income (loss) before reclassifications (86) 683 (3,467) (2,870) Amounts reclassified from accumulated other comprehensive income (1) 43 82 — 125 March 31, 2021 $ 5,235 $ 105 $ (23,350) $ (18,010) December 31, 2019 $ 3,568 $ (1,838) $ (17,078) $ (15,348) Other comprehensive loss before reclassifications (2) (984) (42,867) (43,853) Amounts reclassified from accumulated other comprehensive income (1) (13) 455 — 442 March 31, 2020 $ 3,553 $ (2,367) $ (59,945) $ (58,759) (1) See the following table for details about these reclassifications. Amounts in parentheses indicate debits. The following table presents the reclassifications out of accumulated other comprehensive income for the three months ended March 31, 2021 and 2020: Details about Accumulated Other Comprehensive Amounts Reclassified from Accumulated Other Comprehensive Income (1) Affected Line Item where Three months ended 2021 2020 Amortization of defined benefit and other postretirement items: Prior service (cost) credit $ (58) $ 52 Other income (expense) (2) Actuarial gains (losses) 1 (34) Other income (expense) (2) (57) 18 Total before tax 14 (5) Tax benefit (expense) $ (43) $ 13 Net of tax Gains and losses on cash flow hedges: Interest rate caps $ (109) $ (231) Interest expense Natural gas swaps — (373) Cost of goods sold (109) (604) Total before tax 27 149 Tax benefit $ (82) $ (455) Net of tax Total reclassifications for the period $ (125) $ (442) Net of tax (1) Amounts in parentheses indicate debits to profit/loss. (2) These accumulated other comprehensive income (loss) components are components of net periodic pension and other postretirement cost (see Note 16 to these condensed consolidated financial statements for additional details). Stock Repurchase Program The Company records repurchases of its common stock for treasury at cost. Upon the reissuance of the Company’s common stock from treasury, differences between the proceeds from reissuance and the average cost of the treasury stock are credited or charged to capital in excess of par value to the extent of prior credits related to the reissuance of treasury stock. If no such credits exist, the differences are charged to retained earnings. On March 12, 2020, the Company’s Board approved a plan to purchase up to $50,000 of PQ Group Holdings Inc. common stock under a stock repurchase program approved by the Company’s Board of Directors. The Company may repurchase shares from time to time for cash in open market transactions or in privately negotiated transactions in accordance with applicable federal securities laws. The Company will determine the timing and the amount of any repurchases based on its evaluation of market conditions, share price and other factors. The stock repurchase program is valid until March 2022. During the three months ended March 31, 2020, the Company repurchased 211,700 shares on the open market at an average price of $9.73, for a total of $2,059. The Company has not made any additional repurchases under the program through March 31, 2021. As of March 31, 2021, $47,941 was available for additional share repurchases under the program. |
Acquisition
Acquisition | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Chem32 Acquisition | 7. Acquisition: On March 1, 2021 (the “Closing Date”), the Company completed the acquisition of Chem32, LLC (“Chem32”) as part of a stock transaction (the “Acquisition”) for $44,000 in cash. The net cash paid on the closing date by the Company was $41,994, after certain customary adjustments for indebtedness, working capital, cash and a holdback amount pursuant to the agreement. Based in Orange, Texas, Chem32 is a leader in ex situ pre-sulfiding and pre-activation for hydro-processing catalysts. The Acquisition was accounted for using the acquisition method of accounting. Under the acquisition method, the purchase price was allocated to the identifiable net assets acquired based on the fair values of the identifiable assets acquired and liabilities assumed as of the Closing Date. The excess of the purchase price over fair values of the identifiable net assets acquired was recorded to goodwill. The following table sets forth the calculation and preliminary allocation of the purchase price to the identifiable net assets acquired with respect to the Acquisition: Provisional Purchase Cash paid, net of cash acquired $ 41,994 Holdback 2,000 Total consideration, net of cash acquired $ 43,994 Recognized amounts of identifiable assets acquired and liabilities assumed: Receivables $ 1,368 Inventories 204 Prepaid and other current assets 351 Property, plant and equipment 5,046 Other long-term assets 38 Fair value of assets acquired 7,007 Accounts payable 207 Accrued liabilities 452 Fair value of net identifiable assets acquired 6,348 Goodwill 37,646 $ 43,994 The valuation of the identifiable assets and liabilities included in the table above is preliminary and is subject to change, as the Company is in the process of evaluating the information required to determine the fair values of certain identifiable assets and liabilities acquired, including inventory, property, plant and equipment and intangible assets. An increased portion of the purchase price allocated to the identifiable net assets acquired will reduce the amount recognized for goodwill and may result in increased cost of goods sold, depreciation and/or amortization expense. Adjustments to the provisional amounts during the measurement period that result in changes to depreciation, amortization or other income effects will be recognized in the reporting period(s) in which the adjustments are determined. The Company’s condensed consolidated financial statements include Chem32’s results of operations from the Closing Date through March 31, 2021. Net sales and net income attributable to Chem32 during this period are included in the Company’s condensed consolidated statement of in come and are immaterial for the period presented. Pro forma financial information has not been presented as it is immaterial for the three months ended March 31, 2021 and 2020 . The Company believes that the Acquisition will enable it to offer a more robust portfolio of services within the refining industry leveraging our existing relationships, which contributed to a total purchase price that resulted in the recognition of goodwill. All of the goodwill was assigned to the Company’s Refining Services segment. The goodwill associated with the Acquisition is deductible for tax purposes. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 8. Goodwill: The change in the carrying amount of goodwill for the three months ended March 31, 2021 is summarized as follows: Refining Services Catalysts Total Balance as of December 31, 2020 $ 311,892 $ 79,673 $ 391,565 Goodwill recognized (Note 7) 37,646 — 37,646 Foreign exchange impact — 294 294 Balance as of March 31, 2021 $ 349,538 $ 79,967 $ 429,505 |
Other Operating Expense, Net
Other Operating Expense, Net | 3 Months Ended |
Mar. 31, 2021 | |
Other Income and Expenses [Abstract] | |
Other Operating Expense, Net | 9. Other Operating Expense, Net: A summary of other operating expense, net is as follows: Three months ended 2021 2020 Amortization expense $ 2,186 $ 2,172 Transaction and other related costs 472 800 Restructuring, integration and business optimization costs (1) 2,259 348 Net loss on asset disposals 778 163 Other, net (188) (33) $ 5,507 $ 3,450 (1) During the three months ended March 31, 2021, the Company’s results were impacted by costs associated with severance charges for certain executives and employees. |
Inventories, Net
Inventories, Net | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | 10. Inventories, Net: Inventories, net, are classified and valued as follows: March 31, December 31, Finished products and work in process $ 44,171 $ 48,500 Raw materials 4,763 4,289 $ 48,934 $ 52,789 Valued at lower of cost or market: LIFO basis $ 32,074 $ 31,072 Valued at lower of cost and net realizable value: FIFO or average cost basis 16,860 21,717 $ 48,934 $ 52,789 |
Investments in Affiliated Compa
Investments in Affiliated Companies | 3 Months Ended |
Mar. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Affiliated Companies | 11. Investments in Affiliated Companies: The Company accounts for investments in affiliated companies under the equity method. Affiliated companies accounted for on the equity basis as of March 31, 2021 are as follows: Company Country Percent Zeolyst International USA 50% Zeolyst C.V. Netherlands 50% Following is summarized information of the combined investments (1) : Three months ended 2021 2020 Sales $ 66,205 $ 70,300 Gross profit 21,946 30,864 Operating income 14,174 20,861 Net income 13,737 19,924 (1) Summarized information of the combined investments is presented at 100%; the Company’s share of the net assets and net income of affiliates is calculated based on the percent ownership specified in the table above. The Company’s investments in affiliated companies balance as of March 31, 2021 and December 31, 2020 includes net purchase accounting fair value adjustments of $242,240 and $243,899, respectively, related to the series of transactions consummated on May 4, 2016 to reorganize and combine the businesses of PQ Holdings Inc. and Eco Services Operations LLC, consisting primarily of goodwill and intangible assets such as customer relationships, technical know-how and trade names. Consolidated equity in net income from affiliates is net of $1,658 and $1,658 of amortization expense related to purchase accounting fair value adjustments for the three months ended March 31, 2021 and 2020, respectively. |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 12. Property, Plant and Equipment: A summary of property, plant and equipment, at cost, and related accumulated depreciation is as follows: March 31, December 31, Land $ 93,912 $ 93,650 Buildings 79,181 76,010 Machinery and equipment 669,655 656,502 Construction in progress 43,777 42,446 886,525 868,608 Less: accumulated depreciation (293,509) (276,898) $ 593,016 $ 591,710 Depreciation expense was $16,526 and $15,777 for the three months ended March 31, 2021 and 2020, respectively. |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Long-term Debt | 13. Long-term Debt: The summary of long-term debt is as follows: March 31, December 31, Senior Secured Term Loan Facility due February 2027 $ 671,710 $ 671,710 New Senior Secured Term Loan Facility due February 2027 459,653 459,653 5.75% Senior Unsecured Notes due 2025 295,000 295,000 ABL Facility — — Total debt 1,426,363 1,426,363 Original issue discount (15,072) (15,641) Deferred financing costs (9,718) (10,353) Total debt, net of original issue discount and deferred financing costs 1,401,573 1,400,369 Less: current portion — — Total long-term debt, excluding current portion $ 1,401,573 $ 1,400,369 The fair value of a financial instrument is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. As of March 31, 2021 and December 31, 2020, the fair value of the term loan facilities, senior secured and unsecured notes was $1,428,967 and $1,427,123, respectively. The fair value is classified as Level 2 based upon the fair value hierarchy (see Note 5 to these condensed consolidated financial statements for further information on fair value measurements). |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | 14. Financial Instruments: The Company uses interest rate related derivative instruments to manage its exposure to changes in interest rates on its variable-rate debt instruments. The Company does not speculate using derivative instruments. By using derivative financial instruments to hedge exposures to changes in interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is an asset, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is a liability, the Company owes the counterparty and therefore, the Company is not exposed to the counterparty’s credit risk in those circumstances. The Company minimizes counterparty credit risk in derivative instruments by entering into transactions with high quality counterparties. The derivative instruments entered into by the Company do not contain credit-risk-related contingent features. Market risk is the adverse effect on the value of a derivative instrument that results from a change in interest rates. The market risk associated with the Company’s derivative instruments is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. Use of Derivative Financial Instruments to Manage Interest Rate Risk. The Company is exposed to fluctuations in interest rates on its senior secured credit facilities. Changes in interest rates will not affect the market value of such debt but will affect the Company’s interest payments over the term of the loans. Likewise, an increase in interest rates could have a material impact on the Company’s cash flow. The Company hedges the interest rate fluctuations on debt obligations through interest rate cap agreements. The Company records these agreements at fair value as assets or liabilities in its consolidated balance sheet. As the derivatives are designated and qualify as cash flow hedges, the gains or losses on the interest rate cap agreements are recorded in stockholders’ equity as a component of OCI, net of tax. Reclassifications of the gains and losses on the interest rate cap agreements into earnings are recorded as part of interest expense in the condensed consolidated statements of income as the Company makes its interest payments on the hedged portion of its senior secured credit facilities. Fair value is determined based on estimated amounts that would be received or paid to terminate the contracts at the reporting date based on quoted market prices. In November 2018, the Company entered into interest rate cap agreements to mitigate interest volatility from July 2020 through July 2022, with a cap rate of 3.50% on $500,000 of notional variable-rate debt and a $3,380 premium annuitized during the effective period. In February 2020, the Company restructured its $500,000 of notional variable-rate debt interest rate cap agreements from July 2020 through July 2022, to lower the interest cap rate to 2.50% with an incremental $130 premium annuitized during the effective period. In March 2020, the Company again amended such interest rate cap agreements to lower the cap rate to 0.84% from 2.50% on $500,000 of notional variable-rate debt and paid an additional incremental $900 premium annuitized during the effective period. The term remains unchanged from July 2020 through July 2022. The total cumulative annuitized premium on the $500,000 of notional variable-rate debt is $4,410. The cap rate in effect at March 31, 2021 was 0.84% associated with the $500,000 of notional variable-rate debt. In July 2020, the Company entered into additional interest rate cap agreements to mitigate interest rate volatility from August 2020 to August 2023, with a cap rate of 1.00% on $400,000 of notional variable-rate debt. The cap rate in effect at March 31, 2021 was 1.00% associated with the $400,000 of notional variable-rate debt. Use of Derivative Financial Instruments to Manage Foreign Currency Risk. The Company is exposed to risks related to its net investments in foreign operations due to fluctuations in foreign currency exchange rates, particularly between the United States dollar and the Euro. In February 2018, the Company entered into multiple cross-currency interest rate swap arrangements with an aggregate notional amount of €280,000 ($328,098 as of March 31, 2021) to hedge this exposure on the net investments of certain of its Euro-denominated subsidiaries in its Performance Materials and Performance Chemicals businesses. The Company recorded these swap agreements at fair value as assets or liabilities in its consolidated balance sheet. As the derivatives are designated and qualify as net investment hedges, changes in the fair value of the swaps attributable to changes in the spot exchange rates are recognized in cumulative translation adjustment (“CTA”) within OCI and are held there until the hedged net investments are sold or substantially liquidated. Upon such sale or liquidation, the amount recognized in CTA is reclassified to earnings and reported in the same line item as the gain or loss on the liquidation of the net investments. Changes in the fair value of the swaps attributable to the cross-currency basis spread are excluded from the assessment of hedge effectiveness and are recorded in current period earnings. In March 2021, as a result of the Performance Materials and Performance Chemicals divestitures, the Company settled its cross-currency swaps. At the date of settlement, the total notional value of the cross-currency swaps was $311,380. The Company paid $13,170 in cash to settle the swaps, which is included in n et cash used in investing activities, discontinued operations in the Company’s condensed consolidated statement of cash flows for the three months ended March 31, 2021, as the underlying subsidiary subject to the net investment hedging relationship is part of the Performance Chemicals business. As of March 31, 2021, an unrealized pre-tax gain of $16,708 is recorded in accumulated other comprehensive income in the Company’s condensed consolidated balance sheet. This gain will be reclassified into earnings as part of the gain (loss) on sale upon completion of the Performance Chemicals divestiture. The fair values of derivative instruments held as of March 31, 2021 and December 31, 2020 are shown below: Balance sheet location March 31, December 31, Derivative assets: Derivatives designated as cash flow hedges: Interest rate caps Other long-term assets $ 285 $ — Total derivative assets $ 285 $ — Derivative liabilities: Derivatives designated as cash flow hedges: Interest rate caps Accrued liabilities $ 1,974 $ 1,954 Interest rate caps Other long-term liabilities 1,049 1,750 Total derivative liabilities $ 3,023 $ 3,704 The following tables show the effect of the Company’s derivative instruments designated as cash flow hedges on AOCI for the three months ended March 31, 2021 and 2020: Three months ended March 31, 2021 2020 Location of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized in OCI on derivatives Amount of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized in OCI on derivatives Amount of gain (loss) reclassified from AOCI into income Interest rate caps Interest (expense) income $ 912 $ (109) $ (595) $ (231) The following tables show the effect of the Company’s cash flow hedge accounting on the condensed consolidated statements of income for the three months ended March 31, 2021 and 2020: Location and amount of gain (loss) recognized in income on cash flow hedging relationships Three months ended March 31, 2021 2020 Cost of goods sold Interest (expense) Cost of goods sold Interest (expense) Total amounts of income and expense line items presented in the statement of income in which the effects of cash flow hedges are recorded (96,505) (10,456) (87,850) (15,298) The effects of cash flow hedging: Gain (loss) on cash flow hedging relationships: Interest contracts: Amount of gain (loss) reclassified from AOCI into income — (109) — (231) The amount of unrealized losses in AOCI related to the Company’s cash flow hedges that is expected to be reclassified to the condensed consolidated statement of income over the next twelve months is $574 as of March 31, 2021. The following tables show the effect of the Company’s net investment hedges on AOCI and the condensed consolidated statements of income for the three months ended March 31, 2021 and 2020: Amount of pre-tax gain (loss) recognized in OCI on derivative Location of gain (loss) reclassified from AOCI into income Amount of gain (loss) reclassified from AOCI into income Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) Three months ended Three months ended Three months ended 2021 2020 2021 2020 2021 2020 Cross-currency interest rate swaps $ 9,787 $ 14,809 Net income from discontinued operations (1) $ — $ — Interest (expense) income $ 545 $ 1,692 (1) Includes the gain (loss) on the sale of the underlying subsidiary. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 15. Income Taxes: The effective income tax rate for the three months ended March 31, 2021 was 65.4% compared to 33.2% for the three months ended March 31, 2020. The Company’s effective income tax rate has fluctuated primarily due to changes in income mix, the impacts of the Global Intangible Low Taxed Income (“GILTI”) tax rules, discrete impacts related to intraperiod allocation revaluation of deferred tax assets and liabilities as a result of the Performance Chemicals divestiture and changes in foreign exchange gains and losses, which create permanent differences in certain jurisdictions. The difference between the U.S. federal statutory income tax rate and the Company’s effective income tax rate for the three months ended March 31, 2021 was mainly due to state and local taxes, discrete tax impacts related to intraperiod allocation revaluation of deferred tax assets and liabilities as a result of the Performance Chemicals divestiture, and the tax effect of permanent differences related to foreign currency exchange gain or loss. The difference between the U.S. federal statutory income tax rate and the Company’s effective income tax rate for the three months ended March 31, 2020 was mainly due to the impacts of GILTI, state and local taxes, and the tax effect of permanent differences related to foreign currency exchange gain or loss. |
Benefit Plans
Benefit Plans | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Benefit Plans | 16. Benefit Plans: The following information is provided for (1) the Company-sponsored defined benefit pension plans covering employees in the U.S. and certain employees at its foreign subsidiaries and (2) the Company-sponsored unfunded plans to provide certain health care benefits to retired employees in the U.S. Components of net periodic expense (benefit) are as follows: Defined Benefit Pension Plans U.S. Foreign Three months ended Three months ended 2021 2020 2021 2020 Service cost $ — $ 192 $ — $ 261 Interest cost 551 675 65 72 Expected return on plan assets (1,094) (970) (65) (69) Amortization of net loss — — — 23 Net periodic (benefit) expense $ (543) $ (103) $ — $ 287 Other Postretirement Benefit Plans Three months ended 2021 2020 Interest cost 4 5 Amortization of prior service credit (58) (58) Amortization of net loss 1 — Net periodic benefit $ (53) $ (53) |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | 17. Commitments and Contingent Liabilities: There is a risk of environmental impact in chemical manufacturing operations. The Company’s environmental policies and practices are designed to comply with existing laws and regulations and to minimize the possibility of significant environmental impact. The Company is also subject to various other lawsuits and claims with respect to matters such as governmental regulations, labor and other actions arising out of the normal course of business. While management believes that the liabilities resulting from such lawsuits and claims are not probable or reasonably estimable, certain accruals have been reflected in the Company’s condensed consolidated financial statements. When these matters are ultimately concluded and determined, the Company believes that there will be no material adverse effect on its consolidated financial position, results of operations or liquidity. |
Reportable Segments
Reportable Segments | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Reportable Segments | 18. Reportable Segments: Summarized financial information for the Company’s reportable segments is shown in the following table: Three months ended 2021 2020 Sales: Refining Services $ 100,222 $ 100,690 Catalysts (1) 26,402 24,864 Total $ 126,624 $ 125,554 Segment Adjusted EBITDA: (2) Refining Services $ 33,002 $ 37,183 Catalysts (3) 18,469 22,667 Total Segment Adjusted EBITDA (4) $ 51,471 $ 59,850 (1) Excludes the Company’s proportionate share of sales from the Zeolyst International and Zeolyst C.V. joint ventures (collectively, the “Zeolyst Joint Venture”) accounted for using the equity method (see Note 11 to these condensed consolidated financial statements for further information). The proportionate share of sales is $28,978 and $32,291 for the three months ended March 31, 2021 and 2020, respectively. (2) The Company defines Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation below. Management evaluates the performance of its segments and allocates resources based on several factors, of which the primary measure is Adjusted EBITDA. Adjusted EBITDA should not be considered as an alternative to net income as an indicator of the Company’s operating performance. Adjusted EBITDA as defined by the Company may not be comparable with EBITDA or Adjusted EBITDA as defined by other companies. (3) The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $10,537 for the three months ended March 31, 2021, which includes $5,237 of equity in net income plus $1,658 of amortization of investment in affiliate step-up and $3,645 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $13,725 for the three months ended March 31, 2020, which includes $8,317 of equity in net income plus $1,658 of amortization of investment in affiliate step-up and $3,750 of joint venture depreciation, amortization and interest. (4) Total Segment Adjusted EBITDA differs from the Company’s consolidated Adjusted EBITDA due to unallocated corporate expenses. A reconciliation of net loss from continuing operations to Segment Adjusted EBITDA is as follows: Three months ended 2021 2020 Reconciliation of net loss from continuing operations to Segment Adjusted EBITDA Net loss from continuing operations $ (2,748) $ (3,347) Benefit for income taxes (5,190) (1,665) Interest expense, net 10,456 15,298 Depreciation and amortization 19,500 18,675 Segment EBITDA 22,018 28,961 Joint venture depreciation, amortization and interest 3,645 3,750 Amortization of investment in affiliate step-up 1,658 1,658 Debt extinguishment costs — 2,513 Net loss on asset disposals 778 163 Foreign currency exchange loss 5,101 7,070 LIFO benefit (253) (1,681) Transaction and other related costs 472 800 Equity-based compensation 6,305 4,294 Restructuring, integration and business optimization expenses 2,259 348 Defined benefit pension plan benefit (595) (131) Other 916 896 Adjusted EBITDA 42,304 48,641 Unallocated corporate expenses 9,167 11,209 Segment Adjusted EBITDA $ 51,471 $ 59,850 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | 19. Stock-Based Compensation: The Company is authorized to issue shares for common stock awards to employees, directors and affiliates of the Company in connection with the PQ Group Holdings Inc. 2017 Omnibus Incentive Plan, as Amended and Restated (the “2017 Plan”). During the three months ended March 31, 2021, the Company granted 1,697,623 restricted stock units and 211,985 performance stock units (at target) under the 2017 Plan as part of its equity incentive compensation program. Each restricted stock unit provides the recipient with the right to receive a share of common stock subject to graded vesting terms based on service, which for the awards granted during the three months ended March 31, 2021, generally requires approximately one year of service for members of the Company’s board of directors and approximately three years of service for employees. The performance stock units granted during the three months ended March 31, 2021 provide the recipients with the right to receive shares of common stock dependent on the achievement of a total shareholder return (“TSR”) goal, and are generally subject to the provision of service through the vesting date of the award. The performance period for the TSR goal is measured based on a three-year performance period from January 1, 2021 through December 31, 2023. The TSR goal is based on the Company’s actual TSR percentage increase over the performance period. Depending on the Company’s performance relative to the TSR goal, each performance stock unit award recipient is eligible to earn a percentage of the target number of shares granted to the recipient, ranging from zero to 200%. The performance stock units, to the extent earned, will vest on the date the Company’s compensation and governance committee certifies the achievement of the performance metric for the three-year period ending December 31, 2023, which will occur subsequent to the end of the performance period but before the Company files its annual consolidated financial statements for the year ending December 31, 2023. The value of the restricted stock units granted during the three months ended March 31, 2021 was based on the average of the high and low trading prices of the Company’s common stock on the NYSE on the preceding trading day, in accordance with the Company’s policy for valuing such awards. Compensation expense related to the restricted stock units is recognized on a straight-line basis over the respective vesting period. The TSR goal of the performance stock units granted during the three months ended March 31, 2021 is considered a market condition as opposed to a vesting condition. Because a market condition is not considered a vesting condition, it is reflected in the grant date fair value of the award, and the associated compensation cost based on the fair value of the award is recognized over the performance period, regardless of whether the Company actually achieves the market condition or the level of achievement, as long as service is provided by the recipient. The Company used a Monte Carlo simulation to estimate the fair value of the portion of the awards subject to the TSR goal. The following table provides the assumptions used to determine the grant date fair value of the market condition-dependent / TSR goal-based portion of the Company’s performance stock units granted during the three months ended March 31, 2021 using a Monte Carlo simulation: Expected dividend yield — % Risk-free interest rate 0.20 % Expected volatility 41.70 % Expected term (in years) 2.95 Grant date fair value $ 13.21 The following table summarizes the activity for the Company’s restricted stock units and performance stock units for the three months ended March 31, 2021: Restricted Stock Units Performance Stock Units Number of Weighted Average Grant Date Fair Value (per share) Number of Weighted Average Grant Date Fair Value (per share) Nonvested as of December 31, 2020 1,841,139 $ 16.14 965,736 $ 17.69 Granted 1,697,623 $ 15.39 211,985 $ 13.21 Vested (745,647) $ 16.06 — $ — Forfeited (4,966) $ 16.11 (7,829) $ 12.24 Nonvested as of March 31, 2021 2,788,149 $ 15.70 1,169,892 $ 16.92 Stock-based compensation expense for the Company is as follows: Three months ended 2021 2020 Continuing operations $ 6,305 $ 4,294 Discontinued operations 1,875 1,626 Stock-based compensation expense 8,180 5,920 Continuing operations (1,543) (1,065) Discontinued operations (459) (403) Income tax benefit (2,002) (1,468) Continuing operations 4,762 3,229 Discontinued operations 1,416 1,223 Stock-based compensation expense, net of income tax benefit $ 6,178 $ 4,452 With the new grants of restricted stock units and performance stock units during the three months ended March 31, 2021, unrecognized compensation cost at March 31, 2021 was $40,425 for restricted stock units and $11,962 for performance stock units considered probable of vesting. The weighted-average period over which these costs are expected to be recognized at March 31, 2021 is 2.02 years for the restricted stock units and 1.66 years for the performance stock units. Activity related to the Company’s stock options and restricted stock awards was not material for the three months ended March 31, 2021. No expense had previously been recognized related to these awards, as the performance vesting condition was not achieved nor considered probable of achievement. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 20. Earnings per Share: Basic earnings per share is calculated as income (loss) available to common stockholders, divided by the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding during the period for the computation of basic earnings per share excludes restricted stock awards that have legally been issued but are nonvested during the period, as the sale of these shares is prohibited pending satisfaction of certain vesting conditions by the award recipients in order to earn the rights to the shares. Diluted earnings per share is calculated as income (loss) available to common stockholders, divided by the weighted average number of common and potential common shares outstanding during the period, if dilutive. Potential common shares reflect (1) unvested restricted stock awards and restricted stock units with service vesting conditions, (2) performance stock units with vesting conditions considered probable of achievement and (3) options to purchase common stock, all of which have been included in the diluted earnings per share calculation using the treasury stock method. The reconciliation from basic to diluted weighted average shares outstanding is as follows: Three months ended 2021 2020 Weighted average shares outstanding – Basic 136,006,082 135,240,897 Dilutive effect of unvested common shares and restricted stock units with service conditions, performance stock units considered probable of vesting and assumed stock option exercises and conversions — 845,185 Weighted average shares outstanding – Diluted 136,006,082 136,086,082 Basic and diluted loss per share are calculated as follows: Three months ended 2021 2020 Numerator: Net (loss) income attributable to PQ Group Holdings Inc. $ (92,635) $ 224 Denominator: Weighted average shares outstanding – Basic 136,006,082 135,240,897 Weighted average shares outstanding – Diluted 136,006,082 136,086,082 Net loss per share: Basic loss per share $ (0.68) $ 0.00 Diluted loss per share $ (0.68) $ 0.00 The table below presents the details of the Company’s weighted average equity-based awards outstanding during each respective period that were excluded from the calculation of diluted earnings per share: Three months ended 2021 2020 Restricted stock awards with performance only targets not yet achieved 883,380 1,526,613 Stock options with performance only targets not yet achieved 376,812 516,000 Anti-dilutive restricted stock awards, restricted stock units and performance stock units — 1,264,324 Anti-dilutive stock options — 850,807 Restricted stock awards and stock options with performance only vesting conditions were not included in the dilution calculation, as the performance targets have not been achieved nor were probable of achievement as of the end of the respective periods. On a weighted average basis, options to purchase 609,491 shares of common stock at $16.97 per share and 241,316 shares of common stock at $17.50 per share for the three months ended March 31, 2020, were excluded from the computation of diluted earnings per share, because the combination of the options’ exercise price and remaining unamortized stock-based compensation expense was greater than the average market price of the common shares. The stock options with an exercise price of $16.97 per share expire on October 2, 2027, while the stock options with an exercise price of $17.50 per share expire on August 9, 2028. Anti-dilutive awards are not included in the dilution calculation, as their inclusion would have the effect of increasing diluted income per share. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Mar. 31, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | 21. Supplemental Cash Flow Information: With the exception of operating leases, the following table presents supplemental cash flow information for the consolidated Company: Three months ended 2021 2020 Cash paid during the period for: Income taxes, net of refunds $ 4,248 $ 8,388 Interest (1) 17,791 19,751 Non-cash investing activity: Capital expenditures acquired on account but unpaid as of the period end 8,118 13,223 Right-of-use assets obtained in exchange for new lease liabilities (non-cash): Operating leases 4,738 499 (1) Cash paid for interest is shown net of capitalized interest for the periods presented and excludes $2,307 and $1,771 of net interest proceeds on swaps designated as net investment hedges for the three months ended March 31, 2021 and 2020, respectively, which are included within cash flows from investing activities, discontinued operations in the Company’s condensed consolidated statements of cash flows. The followin g table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets as of March 31, 2021 and 2020 to the total of the same amounts shown in the condensed consolidated statements of cash flows for the three months then ended: March 31, 2021 2020 Cash and cash equivalents $ 55,171 $ 54,655 Restricted cash included in prepaid and other current assets 1,591 2,277 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 56,762 $ 56,932 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 22. Subsequent Events: The Company has evaluated subsequent events since the balance sheet date and determined that there are no additional items to disclose. |
Background and Basis of Prese_2
Background and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of PresentationThe condensed consolidated financial statements included herein are unaudited. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations for interim reporting. In the opinion of management, all adjustments of a normal and recurring nature necessary to state fairly the financial position and results of operations have been included. The results of operations are not necessarily indicative of the results to be expected for the full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. |
Recently Issued Accounting Standards | Recently Adopted Accounting Standards In December 2019, the FASB issued new guidance to simplify the accounting for income taxes by removing certain exceptions to the general principles and also simplification of areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes. The new guidance is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years, with early adoption permitted. The Company adopted the new guidance effective January 1, 2021, with no material impact to the Company’s condensed consolidated financial position, results of operations or cash flows. Accounting Standards Not Yet Adopted In March 2020, the FASB issued guidance to address certain accounting consequences from the anticipated transition from the use of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The new guidance contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance is optional and may be elected over time as reference rate reform activities occur. The Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based on matches the index of the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. |
Fair Value Measurement | Derivative contracts Derivative assets and liabilities can be exchange-traded or traded over-the-counter (“OTC”). The Company generally values exchange-traded derivatives using models that calibrate to market transactions and eliminate timing differences between the closing price of the exchange-traded derivatives and their underlying instruments. OTC derivatives are valued using market transactions and other market evidence whenever possible, including market-based inputs to models, model calibration to market transactions, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. When models are used, the selection of a particular model to value an OTC derivative depends on the contractual terms of, and specific risks inherent in, the instrument as well as the availability of pricing information in the market. The Company generally uses similar models to value similar instruments. Valuation models require a variety of inputs, including contractual terms, market prices and rates, forward curves, measures of volatility, and correlations of such inputs. For OTC derivatives that trade in liquid markets, such as forward contracts, swaps and options, model inputs can generally be corroborated by observable market data by correlation or other means, and model selection does not involve significant management judgment. During the quarter ended March 31, 2021, the Company had interest rate c aps and cross-currency swaps th at were fair valued using Level 2 inputs. In March 2021, the Company settled its cross-currency swaps, which were used as a hedging instrument of its net investment in foreign assets in its Performance Chemicals segment. Refer to Note 14 of these condensed consolidated financial statements for additional information. In addition, the Company applies a credit valuation adjustment to reflect credit risk which is calculated based on credit default swaps. To the extent that the Company’s net exposure under a specific master agreement is an asset, the Company utilizes the counterparty’s default swap rate. If the net exposure under a specific master agreement is a liability, the Company utilizes a default swap rate comparable to PQ Group Holdings. The credit valuation adjustment is added to the discounted fair value to reflect the exit price that a market participant would be willing to receive to assume the Company’s liabilities or that a market participant would be willing to pay for the Company’s assets. |
Discontinued Operations and Dis
Discontinued Operations and Disposal Groups (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued operations | The following table summarizes the results of discontinued operations related to the Performance Materials divestiture: Three months ended 2020 Sales $ 67,891 Cost of goods sold 51,587 Selling, general and administrative expenses 9,285 Other operating expense, net 12,874 Operating loss (5,855) Interest expense, net (1) 5,132 Other income, net (912) Loss from discontinued operations before income tax (10,075) Benefit for income taxes (4,285) Loss from discontinued operations, net of tax $ (5,790) (1) The closing of the transaction triggered the Company’s obligation to provide partial repayment under its Amended and Restated Term Loan Credit Agreement, dated May 4, 2016 and its New Term Loan Credit Agreement, dated as of July 22, 2020. As such, interest expense has been allocated to discontinued operations on the basis of the Company’s mandatory repayment of $275,787 of the Senior Secured Term Loan Facility due February 2027 and its mandatory repayment of $188,722 of the New Senior Secured Term Loan Facility due February 2027. The following table summarizes the results of discontinued operations related to Performance Chemicals for the periods presented: Three months ended 2021 2020 Sales $ 164,523 $ 171,184 Cost of goods sold 125,853 136,593 Selling, general and administrative expenses 11,716 11,733 Other operating expense, net 17,480 5,617 Impairment of assets held for sale 95,594 — Operating (loss) income (86,120) 17,241 Equity in net income from affiliated companies (38) (55) Interest expense, net (1) 3,215 4,026 Other income, net (5,523) (3,753) (Loss) income from discontinued operations before income tax (83,774) 17,023 Provision for income taxes 4,411 7,377 (Loss) income from discontinued operations, net of tax $ (88,185) $ 9,646 (1) Upon the close of the transaction and finalization of net cash proceeds, the Company is required to use a portion of the proceeds to repay outstanding debt and is expected to restructure its debt, which is estimated to result in a debt reduction of $450,000 to $550,000. Certain debt requirements will be triggered that will result in the Company’s obligation to provide partial repayment under its Amended and Restated Term Loan Credit Agreement, dated May 4, 2016 and its New Term Loan Credit Agreement, dated as of July 22, 2020. As such, interest expense has been allocated to discontinued operations on the basis of the Company’s estimated mandatory repayment of $296,859 of the Senior Secured Term Loan Facility due February 2027 and its estimated mandatory repayment of $203,141 of the New Senior Secured Term Loan Facility due February 2027. The following table summarizes the assets and liabilities of discontinued operations related to the Performance Chemicals divestiture as of March 31, 2021 and December 31, 2020. March 31, December 31, ASSETS Cash and cash equivalents $ 16,579 $ 21,520 Accounts receivables, net 91,265 86,961 Inventories, net 68,907 74,647 Prepaid and other current assets 14,629 20,879 Current assets held for sale $ 191,380 $ 204,007 Investments in affiliated companies $ 362 $ 324 Property, plant and equipment, net 382,699 391,524 Goodwill 248,736 326,173 Other intangible assets, net 381,001 388,857 Right-of-use lease assets 19,610 19,296 Other long-term assets 23,524 23,269 Valuation allowance (20,514) — Long-term assets held for sale $ 1,035,418 $ 1,149,443 LIABILITIES Accounts payable $ 63,918 $ 74,754 Operating lease liabilities—current 8,105 8,479 Accrued liabilities 24,064 28,336 Current liabilities held for sale $ 96,087 $ 111,569 Deferred income taxes $ 53,572 $ 50,232 Operating lease liabilities—noncurrent 10,256 10,047 Other long-term liabilities 59,217 95,271 Long-term liabilities held for sale $ 123,045 $ 155,550 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The Company’s portfolio of products is integrated into a variety of end uses, which are described in the table below. Key End Uses Key Products Industrial & process chemicals • Sulfur derivatives for industrial production • Treatment services Fuels & emission control • Refining catalysts • Emission control catalysts • Catalyst recycling services Packaging & engineered plastics • Catalysts for high-density polyethlene and chemicals syntheses • Antiblock for film packaging • Sulfur derivatives for nylon production Natural resources • Sulfur derivatives for mining The following tables disaggregate the Company’s sales, by segment and end use, for the three months ended March 31, 2021 and 2020: Three months ended March 31, 2021 Refining Catalysts Total Industrial & process chemicals $ 16,947 $ — $ 16,947 Fuels & emission control (1) 55,192 — 55,192 Packaging & engineered plastics 10,622 26,402 37,024 Natural resources 17,461 — 17,461 Total segment sales 100,222 26,402 126,624 Three months ended March 31, 2020 Refining Catalysts Total Industrial & process chemicals $ 19,359 $ 47 $ 19,406 Fuels & emission control (1) 55,710 — 55,710 Packaging & engineered plastics 10,734 24,817 35,551 Natural resources 14,887 — 14,887 Total segment sales 100,690 24,864 125,554 (1) As described in Note 1, the Company experiences seasonal s ales fluctuations to customers in the fuels & emission control end use. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring | The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. March 31, Quoted Prices in Significant Other Significant Assets: Derivative contracts (Note 14) $ 285 $ — $ 285 $ — Liabilities: Derivative contracts (Note 14) $ 3,023 $ — $ 3,023 $ — December 31, Quoted Prices in Significant Other Significant Liabilities: Derivative contracts (Note 14) $ 3,704 $ — $ 3,704 $ — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following tables present the tax effects of each component of other comprehensive income (loss) for the three months ended March 31, 2021 and 2020: Three months ended March 31, 2021 2020 Pre-tax Tax benefit/ After-tax amount Pre-tax Tax benefit/ After-tax amount Defined benefit and other postretirement plans: Amortization of net gains $ 1 $ — $ 1 $ 44 $ (8) $ 36 Amortization of prior service cost (58) 14 (44) (64) 13 (51) Benefit plans, net (57) 14 (43) (20) 5 (15) Net gain (loss) from hedging activities 1,020 (255) 765 (705) 176 (529) Foreign currency translation (1) (6,308) 2,447 (3,861) (50,057) 3,702 (46,355) Other comprehensive loss $ (5,345) $ 2,206 $ (3,139) $ (50,782) $ 3,883 $ (46,899) (1) The income tax benefit or expense included in other comprehensive income is attributed to the portion of foreign currency translation associated with the Company’s cross-currency interest rate swaps, for which the tax effect is based on the applicable U.S. deferred income tax rate. See Note 14 to these condensed consolidated financial statements for information regarding the Company’s cross-currency interest rate swaps. The following table presents the changes in accumulated other comprehensive income (loss), net of tax, by component for the three months ended March 31, 2021 and 2020: Defined benefit Net gain (loss) Foreign Total December 31, 2020 $ 5,278 $ (660) $ (19,883) $ (15,265) Other comprehensive income (loss) before reclassifications (86) 683 (3,467) (2,870) Amounts reclassified from accumulated other comprehensive income (1) 43 82 — 125 March 31, 2021 $ 5,235 $ 105 $ (23,350) $ (18,010) December 31, 2019 $ 3,568 $ (1,838) $ (17,078) $ (15,348) Other comprehensive loss before reclassifications (2) (984) (42,867) (43,853) Amounts reclassified from accumulated other comprehensive income (1) (13) 455 — 442 March 31, 2020 $ 3,553 $ (2,367) $ (59,945) $ (58,759) (1) See the following table for details about these reclassifications. Amounts in parentheses indicate debits. |
Reclassification out of Accumulated Other Comprehensive Income | The following table presents the reclassifications out of accumulated other comprehensive income for the three months ended March 31, 2021 and 2020: Details about Accumulated Other Comprehensive Amounts Reclassified from Accumulated Other Comprehensive Income (1) Affected Line Item where Three months ended 2021 2020 Amortization of defined benefit and other postretirement items: Prior service (cost) credit $ (58) $ 52 Other income (expense) (2) Actuarial gains (losses) 1 (34) Other income (expense) (2) (57) 18 Total before tax 14 (5) Tax benefit (expense) $ (43) $ 13 Net of tax Gains and losses on cash flow hedges: Interest rate caps $ (109) $ (231) Interest expense Natural gas swaps — (373) Cost of goods sold (109) (604) Total before tax 27 149 Tax benefit $ (82) $ (455) Net of tax Total reclassifications for the period $ (125) $ (442) Net of tax (1) Amounts in parentheses indicate debits to profit/loss. (2) These accumulated other comprehensive income (loss) components are components of net periodic pension and other postretirement cost (see Note 16 to these condensed consolidated financial statements for additional details). |
Acquisition (Tables)
Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Purchase price allocation | The following table sets forth the calculation and preliminary allocation of the purchase price to the identifiable net assets acquired with respect to the Acquisition: Provisional Purchase Cash paid, net of cash acquired $ 41,994 Holdback 2,000 Total consideration, net of cash acquired $ 43,994 Recognized amounts of identifiable assets acquired and liabilities assumed: Receivables $ 1,368 Inventories 204 Prepaid and other current assets 351 Property, plant and equipment 5,046 Other long-term assets 38 Fair value of assets acquired 7,007 Accounts payable 207 Accrued liabilities 452 Fair value of net identifiable assets acquired 6,348 Goodwill 37,646 $ 43,994 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in the carrying amount of goodwill for the three months ended March 31, 2021 is summarized as follows: Refining Services Catalysts Total Balance as of December 31, 2020 $ 311,892 $ 79,673 $ 391,565 Goodwill recognized (Note 7) 37,646 — 37,646 Foreign exchange impact — 294 294 Balance as of March 31, 2021 $ 349,538 $ 79,967 $ 429,505 |
Other Operating Expense, Net (T
Other Operating Expense, Net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Operating Expense, Net | A summary of other operating expense, net is as follows: Three months ended 2021 2020 Amortization expense $ 2,186 $ 2,172 Transaction and other related costs 472 800 Restructuring, integration and business optimization costs (1) 2,259 348 Net loss on asset disposals 778 163 Other, net (188) (33) $ 5,507 $ 3,450 (1) During the three months ended March 31, 2021, the Company’s results were impacted by costs associated with severance charges for certain executives and employees. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories, net, are classified and valued as follows: March 31, December 31, Finished products and work in process $ 44,171 $ 48,500 Raw materials 4,763 4,289 $ 48,934 $ 52,789 Valued at lower of cost or market: LIFO basis $ 32,074 $ 31,072 Valued at lower of cost and net realizable value: FIFO or average cost basis 16,860 21,717 $ 48,934 $ 52,789 |
Investments in Affiliated Com_2
Investments in Affiliated Companies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | The Company accounts for investments in affiliated companies under the equity method. Affiliated companies accounted for on the equity basis as of March 31, 2021 are as follows: Company Country Percent Zeolyst International USA 50% Zeolyst C.V. Netherlands 50% Following is summarized information of the combined investments (1) : Three months ended 2021 2020 Sales $ 66,205 $ 70,300 Gross profit 21,946 30,864 Operating income 14,174 20,861 Net income 13,737 19,924 (1) Summarized information of the combined investments is presented at 100%; the Company’s share of the net assets and net income of affiliates is calculated based on the percent ownership specified in the table above. |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | A summary of property, plant and equipment, at cost, and related accumulated depreciation is as follows: March 31, December 31, Land $ 93,912 $ 93,650 Buildings 79,181 76,010 Machinery and equipment 669,655 656,502 Construction in progress 43,777 42,446 886,525 868,608 Less: accumulated depreciation (293,509) (276,898) $ 593,016 $ 591,710 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The summary of long-term debt is as follows: March 31, December 31, Senior Secured Term Loan Facility due February 2027 $ 671,710 $ 671,710 New Senior Secured Term Loan Facility due February 2027 459,653 459,653 5.75% Senior Unsecured Notes due 2025 295,000 295,000 ABL Facility — — Total debt 1,426,363 1,426,363 Original issue discount (15,072) (15,641) Deferred financing costs (9,718) (10,353) Total debt, net of original issue discount and deferred financing costs 1,401,573 1,400,369 Less: current portion — — Total long-term debt, excluding current portion $ 1,401,573 $ 1,400,369 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivatives Held | The fair values of derivative instruments held as of March 31, 2021 and December 31, 2020 are shown below: Balance sheet location March 31, December 31, Derivative assets: Derivatives designated as cash flow hedges: Interest rate caps Other long-term assets $ 285 $ — Total derivative assets $ 285 $ — Derivative liabilities: Derivatives designated as cash flow hedges: Interest rate caps Accrued liabilities $ 1,974 $ 1,954 Interest rate caps Other long-term liabilities 1,049 1,750 Total derivative liabilities $ 3,023 $ 3,704 |
Effect of Derivative Instruments Designated as Hedges on Other Comprehensive Income | The following tables show the effect of the Company’s derivative instruments designated as cash flow hedges on AOCI for the three months ended March 31, 2021 and 2020: Three months ended March 31, 2021 2020 Location of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized in OCI on derivatives Amount of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized in OCI on derivatives Amount of gain (loss) reclassified from AOCI into income Interest rate caps Interest (expense) income $ 912 $ (109) $ (595) $ (231) |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The following tables show the effect of the Company’s cash flow hedge accounting on the condensed consolidated statements of income for the three months ended March 31, 2021 and 2020: Location and amount of gain (loss) recognized in income on cash flow hedging relationships Three months ended March 31, 2021 2020 Cost of goods sold Interest (expense) Cost of goods sold Interest (expense) Total amounts of income and expense line items presented in the statement of income in which the effects of cash flow hedges are recorded (96,505) (10,456) (87,850) (15,298) The effects of cash flow hedging: Gain (loss) on cash flow hedging relationships: Interest contracts: Amount of gain (loss) reclassified from AOCI into income — (109) — (231) |
Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss) | The following tables show the effect of the Company’s net investment hedges on AOCI and the condensed consolidated statements of income for the three months ended March 31, 2021 and 2020: Amount of pre-tax gain (loss) recognized in OCI on derivative Location of gain (loss) reclassified from AOCI into income Amount of gain (loss) reclassified from AOCI into income Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) Three months ended Three months ended Three months ended 2021 2020 2021 2020 2021 2020 Cross-currency interest rate swaps $ 9,787 $ 14,809 Net income from discontinued operations (1) $ — $ — Interest (expense) income $ 545 $ 1,692 (1) Includes the gain (loss) on the sale of the underlying subsidiary. |
Benefit Plans (Tables)
Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Defined Benefit Pension Plans | |
Defined Benefit Plan Disclosure | |
Components of Net Periodic Expense (Benefit) | Components of net periodic expense (benefit) are as follows: Defined Benefit Pension Plans U.S. Foreign Three months ended Three months ended 2021 2020 2021 2020 Service cost $ — $ 192 $ — $ 261 Interest cost 551 675 65 72 Expected return on plan assets (1,094) (970) (65) (69) Amortization of net loss — — — 23 Net periodic (benefit) expense $ (543) $ (103) $ — $ 287 |
Other Postretirement Benefits Plans | |
Defined Benefit Plan Disclosure | |
Components of Net Periodic Expense (Benefit) | Other Postretirement Benefit Plans Three months ended 2021 2020 Interest cost 4 5 Amortization of prior service credit (58) (58) Amortization of net loss 1 — Net periodic benefit $ (53) $ (53) |
Reportable Segments (Tables)
Reportable Segments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Reportable Segments to Consolidated | Summarized financial information for the Company’s reportable segments is shown in the following table: Three months ended 2021 2020 Sales: Refining Services $ 100,222 $ 100,690 Catalysts (1) 26,402 24,864 Total $ 126,624 $ 125,554 Segment Adjusted EBITDA: (2) Refining Services $ 33,002 $ 37,183 Catalysts (3) 18,469 22,667 Total Segment Adjusted EBITDA (4) $ 51,471 $ 59,850 (1) Excludes the Company’s proportionate share of sales from the Zeolyst International and Zeolyst C.V. joint ventures (collectively, the “Zeolyst Joint Venture”) accounted for using the equity method (see Note 11 to these condensed consolidated financial statements for further information). The proportionate share of sales is $28,978 and $32,291 for the three months ended March 31, 2021 and 2020, respectively. (2) The Company defines Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation below. Management evaluates the performance of its segments and allocates resources based on several factors, of which the primary measure is Adjusted EBITDA. Adjusted EBITDA should not be considered as an alternative to net income as an indicator of the Company’s operating performance. Adjusted EBITDA as defined by the Company may not be comparable with EBITDA or Adjusted EBITDA as defined by other companies. (3) The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $10,537 for the three months ended March 31, 2021, which includes $5,237 of equity in net income plus $1,658 of amortization of investment in affiliate step-up and $3,645 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $13,725 for the three months ended March 31, 2020, which includes $8,317 of equity in net income plus $1,658 of amortization of investment in affiliate step-up and $3,750 of joint venture depreciation, amortization and interest. (4) Total Segment Adjusted EBITDA differs from the Company’s consolidated Adjusted EBITDA due to unallocated corporate expenses. |
Reconciliation of Net Loss to Segment Adjusted EBITDA | A reconciliation of net loss from continuing operations to Segment Adjusted EBITDA is as follows: Three months ended 2021 2020 Reconciliation of net loss from continuing operations to Segment Adjusted EBITDA Net loss from continuing operations $ (2,748) $ (3,347) Benefit for income taxes (5,190) (1,665) Interest expense, net 10,456 15,298 Depreciation and amortization 19,500 18,675 Segment EBITDA 22,018 28,961 Joint venture depreciation, amortization and interest 3,645 3,750 Amortization of investment in affiliate step-up 1,658 1,658 Debt extinguishment costs — 2,513 Net loss on asset disposals 778 163 Foreign currency exchange loss 5,101 7,070 LIFO benefit (253) (1,681) Transaction and other related costs 472 800 Equity-based compensation 6,305 4,294 Restructuring, integration and business optimization expenses 2,259 348 Defined benefit pension plan benefit (595) (131) Other 916 896 Adjusted EBITDA 42,304 48,641 Unallocated corporate expenses 9,167 11,209 Segment Adjusted EBITDA $ 51,471 $ 59,850 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stock-Based Compensation [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following table provides the assumptions used to determine the grant date fair value of the market condition-dependent / TSR goal-based portion of the Company’s performance stock units granted during the three months ended March 31, 2021 using a Monte Carlo simulation: Expected dividend yield — % Risk-free interest rate 0.20 % Expected volatility 41.70 % Expected term (in years) 2.95 Grant date fair value $ 13.21 |
Schedule of Nonvested Restricted Stock and Performance Stock Unit Activity | The following table summarizes the activity for the Company’s restricted stock units and performance stock units for the three months ended March 31, 2021: Restricted Stock Units Performance Stock Units Number of Weighted Average Grant Date Fair Value (per share) Number of Weighted Average Grant Date Fair Value (per share) Nonvested as of December 31, 2020 1,841,139 $ 16.14 965,736 $ 17.69 Granted 1,697,623 $ 15.39 211,985 $ 13.21 Vested (745,647) $ 16.06 — $ — Forfeited (4,966) $ 16.11 (7,829) $ 12.24 Nonvested as of March 31, 2021 2,788,149 $ 15.70 1,169,892 $ 16.92 |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | Stock-based compensation expense for the Company is as follows: Three months ended 2021 2020 Continuing operations $ 6,305 $ 4,294 Discontinued operations 1,875 1,626 Stock-based compensation expense 8,180 5,920 Continuing operations (1,543) (1,065) Discontinued operations (459) (403) Income tax benefit (2,002) (1,468) Continuing operations 4,762 3,229 Discontinued operations 1,416 1,223 Stock-based compensation expense, net of income tax benefit $ 6,178 $ 4,452 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Reconciliation from Basic to Diluted Weighted Average Number of Shares Outstanding | The reconciliation from basic to diluted weighted average shares outstanding is as follows: Three months ended 2021 2020 Weighted average shares outstanding – Basic 136,006,082 135,240,897 Dilutive effect of unvested common shares and restricted stock units with service conditions, performance stock units considered probable of vesting and assumed stock option exercises and conversions — 845,185 Weighted average shares outstanding – Diluted 136,006,082 136,086,082 |
Schedule of Earnings Per Share, Basic and Diluted | Basic and diluted loss per share are calculated as follows: Three months ended 2021 2020 Numerator: Net (loss) income attributable to PQ Group Holdings Inc. $ (92,635) $ 224 Denominator: Weighted average shares outstanding – Basic 136,006,082 135,240,897 Weighted average shares outstanding – Diluted 136,006,082 136,086,082 Net loss per share: Basic loss per share $ (0.68) $ 0.00 Diluted loss per share $ (0.68) $ 0.00 |
Schedule of Securities Excluded from Computation of Earnings Per Share | The table below presents the details of the Company’s weighted average equity-based awards outstanding during each respective period that were excluded from the calculation of diluted earnings per share: Three months ended 2021 2020 Restricted stock awards with performance only targets not yet achieved 883,380 1,526,613 Stock options with performance only targets not yet achieved 376,812 516,000 Anti-dilutive restricted stock awards, restricted stock units and performance stock units — 1,264,324 Anti-dilutive stock options — 850,807 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | With the exception of operating leases, the following table presents supplemental cash flow information for the consolidated Company: Three months ended 2021 2020 Cash paid during the period for: Income taxes, net of refunds $ 4,248 $ 8,388 Interest (1) 17,791 19,751 Non-cash investing activity: Capital expenditures acquired on account but unpaid as of the period end 8,118 13,223 Right-of-use assets obtained in exchange for new lease liabilities (non-cash): Operating leases 4,738 499 (1) Cash paid for interest is shown net of capitalized interest for the periods presented and excludes $2,307 and $1,771 of net interest proceeds on swaps designated as net investment hedges for the three months ended March 31, 2021 and 2020, respectively, which are included within cash flows from investing activities, discontinued operations in the Company’s condensed consolidated statements of cash flows. |
Schedule of Cash and Cash Equivalents | The followin g table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets as of March 31, 2021 and 2020 to the total of the same amounts shown in the condensed consolidated statements of cash flows for the three months then ended: March 31, 2021 2020 Cash and cash equivalents $ 55,171 $ 54,655 Restricted cash included in prepaid and other current assets 1,591 2,277 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 56,762 $ 56,932 |
Restrictions on Cash and Cash Equivalents | The followin g table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets as of March 31, 2021 and 2020 to the total of the same amounts shown in the condensed consolidated statements of cash flows for the three months then ended: March 31, 2021 2020 Cash and cash equivalents $ 55,171 $ 54,655 Restricted cash included in prepaid and other current assets 1,591 2,277 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 56,762 $ 56,932 |
Background and Basis of Prese_3
Background and Basis of Presentation (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($)segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reporting units | 2 |
Number of operating segments | 2 |
Proceeds from agreement to sell Performance Chemicals business | $ | $ 1,100,000 |
Performance Materials Divestitu
Performance Materials Divestiture - Income Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Discontinued Operations [Line Items] | |||
Loss from discontinued operations, net of tax | $ (89,770) | $ 3,856 | |
Transaction and other related costs | 472 | 800 | |
Stock-based compensation expense | 8,180 | 5,920 | |
Net income attributable to the noncontrolling interest - discontinued operations | 117 | 285 | |
Net loss attributable to PQ Group Holdings Inc. | (92,635) | 224 | |
Transition Service Agreement Income | 1,571 | ||
Performance Materials | |||
Discontinued Operations [Line Items] | |||
Sales | 67,891 | ||
Cost of goods sold | 51,587 | ||
Selling, general and administrative expenses | 9,285 | ||
Other operating expense, net | 12,874 | ||
Operating loss | (5,855) | ||
Interest expense, net | 5,132 | ||
Other income, net | (912) | ||
Loss from discontinued operations before income tax | (10,075) | ||
Benefit for income taxes | (4,285) | ||
Loss from discontinued operations, net of tax | (5,790) | ||
Repayments of long-term debt | $ 275,787 | ||
Transaction and other related costs | 1,446 | ||
Stock-based compensation expense | 653 | ||
Income tax benefit on transaction costs and stock-based compensation expense | 514 | ||
Net income attributable to the noncontrolling interest - discontinued operations | $ 51 | ||
Net loss attributable to PQ Group Holdings Inc. | $ 5,841 | ||
Performance Materials | New Term Loan Facility | |||
Discontinued Operations [Line Items] | |||
Repayments of long-term debt | $ 188,722 |
Performance Chemicals Divestitu
Performance Chemicals Divestiture - Income Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Discontinued Operations [Line Items] | ||
Proceeds from agreement to sell Performance Chemicals business | $ 1,100,000 | |
Equity in net income from affiliated companies | 5,210 | $ 8,295 |
(Loss) income from discontinued operations, net of tax | (89,770) | 3,856 |
Net income attributable to the noncontrolling interest - discontinued operations | 117 | 285 |
Net (loss) income attributable to PQ Group Holdings Inc. | (92,635) | 224 |
Minimum | ||
Discontinued Operations [Line Items] | ||
Debt instrument reduction | 450,000 | |
Maximum | ||
Discontinued Operations [Line Items] | ||
Debt instrument reduction | 550,000 | |
Performance Chemicals | ||
Discontinued Operations [Line Items] | ||
Loss on sale of Performance Chemicals | 95,594 | 0 |
Sales | 164,523 | 171,184 |
Cost of goods sold | 125,853 | 136,593 |
Selling, general and administrative expenses | 11,716 | 11,733 |
Other operating expense, net | 17,480 | 5,617 |
Operating (loss) income | (86,120) | 17,241 |
Equity in net income from affiliated companies | (38) | (55) |
Interest expense, net | 3,215 | 4,026 |
Other income, net | (5,523) | (3,753) |
(Loss) income from discontinued operations before income tax | (83,774) | 17,023 |
Provision for income taxes | 4,411 | 7,377 |
(Loss) income from discontinued operations, net of tax | (88,185) | 9,646 |
Repayments of long-term debt | 296,859 | |
Net income attributable to the noncontrolling interest - discontinued operations | 117 | 234 |
Net (loss) income attributable to PQ Group Holdings Inc. | (88,302) | $ 9,412 |
Performance Chemicals | Goodwill | ||
Discontinued Operations [Line Items] | ||
Loss on sale of Performance Chemicals | 75,084 | |
Performance Chemicals | Valuation allowance | ||
Discontinued Operations [Line Items] | ||
Loss on sale of Performance Chemicals | 20,514 | |
Performance Chemicals | New Term Loan Facility | ||
Discontinued Operations [Line Items] | ||
Repayments of long-term debt | $ 203,141 |
Discontinued Operations - Asset
Discontinued Operations - Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Current assets held for sale | $ 191,380 | $ 204,007 |
Long-term assets held for sale | 1,035,418 | 1,149,443 |
LIABILITIES | ||
Current liabilities held for sale | 96,087 | 111,569 |
Long-term liabilities held for sale | 123,045 | 155,550 |
Performance Chemicals | ||
ASSETS | ||
Cash and cash equivalents | 16,579 | 21,520 |
Accounts receivables, net | 91,265 | 86,961 |
Inventories, net | 68,907 | 74,647 |
Prepaid and other current assets | 14,629 | 20,879 |
Investments in affiliated companies | 362 | 324 |
Property, plant and equipment, net | 382,699 | 391,524 |
Goodwill | 248,736 | 326,173 |
Other intangible assets, net | 381,001 | 388,857 |
Right-of-use lease assets | 19,610 | 19,296 |
Other long-term assets | 23,524 | 23,269 |
Valuation allowance | 20,514 | 0 |
Long-term assets held for sale | 1,035,418 | 1,149,443 |
LIABILITIES | ||
Accounts payable | 63,918 | 74,754 |
Operating lease liabilities—current | 8,105 | 8,479 |
Accrued liabilities | 24,064 | 28,336 |
Current liabilities held for sale | 96,087 | 111,569 |
Deferred income taxes | 53,572 | 50,232 |
Operating lease liabilities—noncurrent | 10,256 | 10,047 |
Other long-term liabilities | 59,217 | 95,271 |
Long-term liabilities held for sale | $ 123,045 | $ 155,550 |
Disaggregated Revenue (Details)
Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregated Revenue | ||
Sales | $ 126,624 | $ 125,554 |
Operating segments | ||
Disaggregated Revenue | ||
Sales | 126,624 | 125,554 |
Operating segments | Industrial & process chemicals | ||
Disaggregated Revenue | ||
Sales | 16,947 | 19,406 |
Operating segments | Fuels & emission control | ||
Disaggregated Revenue | ||
Sales | 55,192 | 55,710 |
Operating segments | Packaging & engineered plastics | ||
Disaggregated Revenue | ||
Sales | 37,024 | 35,551 |
Operating segments | Natural resources | ||
Disaggregated Revenue | ||
Sales | 17,461 | 14,887 |
Operating segments | Refining Services | ||
Disaggregated Revenue | ||
Sales | 100,222 | 100,690 |
Operating segments | Refining Services | Industrial & process chemicals | ||
Disaggregated Revenue | ||
Sales | 16,947 | 19,359 |
Operating segments | Refining Services | Fuels & emission control | ||
Disaggregated Revenue | ||
Sales | 55,192 | 55,710 |
Operating segments | Refining Services | Packaging & engineered plastics | ||
Disaggregated Revenue | ||
Sales | 10,622 | 10,734 |
Operating segments | Refining Services | Natural resources | ||
Disaggregated Revenue | ||
Sales | 17,461 | 14,887 |
Operating segments | Catalysts | ||
Disaggregated Revenue | ||
Sales | 26,402 | 24,864 |
Operating segments | Catalysts | Industrial & process chemicals | ||
Disaggregated Revenue | ||
Sales | 0 | 47 |
Operating segments | Catalysts | Fuels & emission control | ||
Disaggregated Revenue | ||
Sales | 0 | 0 |
Operating segments | Catalysts | Packaging & engineered plastics | ||
Disaggregated Revenue | ||
Sales | 26,402 | 24,817 |
Operating segments | Catalysts | Natural resources | ||
Disaggregated Revenue | ||
Sales | $ 0 | $ 0 |
Contract Assets and Liabilities
Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract] | ||
Contract assets | $ 0 | $ 0 |
Contract liabilities | $ 0 | $ 0 |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Assets: | ||
Derivative contracts | $ 285 | |
Liabilities: | ||
Derivative contracts | 3,023 | $ 3,704 |
Quoted Prices in Active Markets (Level 1) | ||
Assets: | ||
Derivative contracts | 0 | |
Liabilities: | ||
Derivative contracts | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Derivative contracts | 285 | |
Liabilities: | ||
Derivative contracts | 3,023 | 3,704 |
Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Derivative contracts | 0 | |
Liabilities: | ||
Derivative contracts | $ 0 | $ 0 |
Pre-tax and After-tax Component
Pre-tax and After-tax Components of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
After-tax amount | ||
Pre-tax amount | $ (5,345) | $ (50,782) |
Tax benefit/ (expense) | 2,206 | 3,883 |
Total other comprehensive loss | (3,139) | (46,899) |
Amortization of net gains | ||
After-tax amount | ||
Pre-tax amount | 1 | 44 |
Tax benefit/ (expense) | 0 | (8) |
Total other comprehensive loss | 1 | 36 |
Amortization of prior service cost | ||
After-tax amount | ||
Pre-tax amount | (58) | (64) |
Tax benefit/ (expense) | 14 | 13 |
Total other comprehensive loss | (44) | (51) |
Benefit plans, net | ||
After-tax amount | ||
Pre-tax amount | (57) | (20) |
Tax benefit/ (expense) | 14 | 5 |
Total other comprehensive loss | (43) | (15) |
Net gain (loss) from hedging activities | ||
After-tax amount | ||
Pre-tax amount | 1,020 | (705) |
Tax benefit/ (expense) | (255) | 176 |
Total other comprehensive loss | 765 | (529) |
Foreign currency translation | ||
After-tax amount | ||
Pre-tax amount | (6,308) | (50,057) |
Tax benefit/ (expense) | 2,447 | 3,702 |
Total other comprehensive loss | $ (3,861) | $ (46,355) |
Change by Component (Details)
Change by Component (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ 1,277,126 | |
Ending balance | 1,187,223 | |
Total | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (15,265) | $ (15,348) |
Other comprehensive income (loss) before reclassifications | (2,870) | (43,853) |
Amounts reclassified from accumulated other comprehensive income | 125 | 442 |
Ending balance | (18,010) | (58,759) |
Defined benefit and other postretirement plans | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 5,278 | 3,568 |
Other comprehensive income (loss) before reclassifications | (86) | (2) |
Amounts reclassified from accumulated other comprehensive income | 43 | (13) |
Ending balance | 5,235 | 3,553 |
Net gain (loss) from hedging activities | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (660) | (1,838) |
Other comprehensive income (loss) before reclassifications | 683 | (984) |
Amounts reclassified from accumulated other comprehensive income | 82 | 455 |
Ending balance | 105 | (2,367) |
Foreign currency translation | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (19,883) | (17,078) |
Other comprehensive income (loss) before reclassifications | (3,467) | (42,867) |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 |
Ending balance | $ (23,350) | $ (59,945) |
Reclassifications out of AOCI (
Reclassifications out of AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Other expense, net | $ 5,174 | $ 7,470 |
Interest expense, net | 10,456 | 15,298 |
Cost of goods sold | 96,505 | 87,850 |
Income before income taxes and noncontrolling interest | 7,938 | 5,012 |
Tax benefit (expense) | (5,190) | (1,665) |
Net (loss) income | 92,518 | (509) |
Amount of gain (loss) reclassified from AOCI into income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net (loss) income | (125) | (442) |
Defined benefit and other postretirement plans | Amount of gain (loss) reclassified from AOCI into income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Income before income taxes and noncontrolling interest | (57) | 18 |
Tax benefit (expense) | 14 | (5) |
Net (loss) income | (43) | 13 |
Prior service (cost) credit | Amount of gain (loss) reclassified from AOCI into income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Other expense, net | (58) | 52 |
Actuarial gains (losses) | Amount of gain (loss) reclassified from AOCI into income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Other expense, net | 1 | (34) |
Net gain (loss) from hedging activities | Amount of gain (loss) reclassified from AOCI into income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Income before income taxes and noncontrolling interest | (109) | (604) |
Tax benefit (expense) | 27 | 149 |
Net (loss) income | (82) | (455) |
Net gain (loss) from hedging activities | Amount of gain (loss) reclassified from AOCI into income | Interest rate caps | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Interest expense, net | (109) | (231) |
Net gain (loss) from hedging activities | Amount of gain (loss) reclassified from AOCI into income | Natural gas swaps | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Cost of goods sold | $ 0 | $ (373) |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 12, 2020 | |
Equity [Abstract] | ||
Stock Repurchase Program, authorized amount | $ 50,000 | |
Shares acquired | 211,700 | |
Average cost per share | $ 9.73 | |
Repurchases of common shares value | $ 2,059 | |
Remaining authorized repurchase amount | $ 47,941 |
Acquisition (Details)
Acquisition (Details) - USD ($) $ in Thousands | Mar. 01, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Business Combination | ||||
Payments to Acquire Businesses, Gross | $ 44,000 | |||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
Cash paid, net of cash acquired | $ 41,994 | $ 41,994 | $ 0 | |
Goodwill | 429,505 | $ 391,565 | ||
Chem32 | ||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
Cash paid, net of cash acquired | 41,994 | |||
Holdback | 2,000 | |||
Total consideration, net of cash acquired | 43,994 | |||
Receivables | 1,368 | |||
Inventories | 204 | |||
Prepaid and other current assets | 351 | |||
Property, plant and equipment | 5,046 | |||
Other long-term assets | 38 | |||
Fair value of assets acquired | 7,007 | |||
Accounts payable | 207 | |||
Accrued liabilities | 452 | |||
Fair value of net assets acquired | 6,348 | |||
Goodwill | 37,646 | |||
Net assets including goodwill acquired | $ 43,994 |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Goodwill | |
Beginning balance | $ 391,565 |
Goodwill recognized (Note 7) | 37,646 |
Foreign exchange impact | 294 |
Ending balance | 429,505 |
Refining Services | |
Goodwill | |
Beginning balance | 311,892 |
Goodwill recognized (Note 7) | 37,646 |
Foreign exchange impact | 0 |
Ending balance | 349,538 |
Catalysts | |
Goodwill | |
Beginning balance | 79,673 |
Goodwill recognized (Note 7) | 0 |
Foreign exchange impact | 294 |
Ending balance | $ 79,967 |
Other Operating Expense, Net (D
Other Operating Expense, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Other Income and Expenses [Abstract] | ||
Amortization expense | $ 2,186 | $ 2,172 |
Transaction and other related costs | 472 | 800 |
Restructuring, integration and business optimization costs | 2,259 | 348 |
Net loss on asset disposals | 778 | 163 |
Other, net | (188) | (33) |
Other operating expense, net | $ 5,507 | $ 3,450 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory, Net | ||
Finished products and work in process | $ 44,171 | $ 48,500 |
Raw materials | 4,763 | 4,289 |
Inventories, net | 48,934 | 52,789 |
Valued at lower of cost or market: | ||
LIFO basis | 32,074 | 31,072 |
Valued at lower of cost and net realizable value: | ||
FIFO or average cost basis | 16,860 | 21,717 |
Inventories, net | $ 48,934 | $ 52,789 |
Ownership Percentage (Details)
Ownership Percentage (Details) | Mar. 31, 2021 |
Zeolyst International | |
Schedule of Equity Method Investments | |
Ownership percentage | 50.00% |
Zeolyst C.V. | |
Schedule of Equity Method Investments | |
Ownership percentage | 50.00% |
Summarized Income Statement (De
Summarized Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Schedule of Equity Method Investments | ||
Gross profit | $ 30,119 | $ 37,704 |
Net loss from continuing operations | (2,748) | (3,347) |
Net (loss) income | (92,518) | 509 |
Equity Method Investment, Nonconsolidated Investee | ||
Schedule of Equity Method Investments | ||
Sales | 66,205 | 70,300 |
Gross profit | 21,946 | 30,864 |
Net loss from continuing operations | 14,174 | 20,861 |
Net (loss) income | $ 13,737 | $ 19,924 |
Investments in Affiliated Com_3
Investments in Affiliated Companies Narrative (Details) - Business Combination - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Business Combination | |||
Net purchase accounting fair value adjustments | $ 242,240 | $ 243,899 | |
Amortization of investment in affiliate step-up | $ 1,658 | $ 1,658 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 886,525 | $ 868,608 |
Less: accumulated depreciation | (293,509) | (276,898) |
Property, plant and equipment, net | 593,016 | 591,710 |
Land | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 93,912 | 93,650 |
Buildings | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 79,181 | 76,010 |
Machinery and equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 669,655 | 656,502 |
Construction in progress | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 43,777 | $ 42,446 |
Property, Plant and Equipment N
Property, Plant and Equipment Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 16,526 | $ 15,777 |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument | ||
Total debt | $ 1,426,363 | $ 1,426,363 |
Original issue discount | (15,072) | (15,641) |
Deferred financing costs | (9,718) | (10,353) |
Total debt, net of original issue discount and deferred financing costs | 1,401,573 | 1,400,369 |
Less: current portion | 0 | 0 |
Total long-term debt, excluding current portion | 1,401,573 | 1,400,369 |
Term Loan Facility | ||
Debt Instrument | ||
Total debt | 671,710 | 671,710 |
Term Loan Facility | New Term Loan Facility | ||
Debt Instrument | ||
Total debt | 459,653 | 459,653 |
Senior Notes | 5.75% Senior Unsecured Notes due 2025 | ||
Debt Instrument | ||
Total debt | 295,000 | 295,000 |
ABL Facility | ||
Debt Instrument | ||
Total debt | $ 0 | $ 0 |
Long-term Debt Narrative (Detai
Long-term Debt Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Term Loan And Senior Notes | ||
Debt Instrument | ||
Long-term debt, fair value | $ 1,428,967 | $ 1,427,123 |
Financial Instruments Narrative
Financial Instruments Narrative (Details) € in Thousands, $ in Thousands | Mar. 31, 2021EUR (€) | Mar. 18, 2020USD ($) | Feb. 20, 2020USD ($) | Nov. 30, 2018USD ($) | Mar. 31, 2021USD ($) | Mar. 29, 2021EUR (€) | Feb. 28, 2018EUR (€) |
Cash flow hedging | |||||||
Derivative | |||||||
Amount of derivative loss expected to be transferred from OCI | $ 574 | ||||||
Cash flow hedging | November 2018 interest rate caps | |||||||
Derivative | |||||||
Premium paid to acquire derivative instrument | $ 900 | $ 130 | $ 3,380 | $ 4,410 | |||
Derivative, cap interest rate | 0.84% | 2.50% | 3.50% | 0.84% | |||
Derivative, notional amount | $ 500,000 | ||||||
Cash flow hedging | July 2020 Interest Rate Cap [Member] | |||||||
Derivative | |||||||
Derivative, cap interest rate | 1.00% | ||||||
Derivative, notional amount | $ 400,000 | ||||||
Net investment hedging | Cross-currency interest rate swaps | |||||||
Derivative | |||||||
Premium paid to acquire derivative instrument | € | € 13,170 | ||||||
Derivative, notional amount | $ 328,098 | € 311,380 | € 280,000 | ||||
Amount of derivative gain to be transferred from AOCI | € | € 16,708 |
Fair Value (Details)
Fair Value (Details) - Derivatives designated as hedging instrument - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Derivative assets: | ||
Total derivative assets | $ 285 | $ 0 |
Derivative liabilities: | ||
Total derivative liabilities | 3,023 | 3,704 |
Cash flow hedging | Other long-term assets | Interest rate caps | ||
Derivative assets: | ||
Total derivative assets | 285 | 0 |
Cash flow hedging | Accrued liabilities | Interest rate caps | ||
Derivative liabilities: | ||
Total derivative liabilities | 1,974 | 1,954 |
Cash flow hedging | Other long-term liabilities | Interest rate caps | ||
Derivative liabilities: | ||
Total derivative liabilities | $ 1,049 | $ 1,750 |
Effect on Other Comprehensive I
Effect on Other Comprehensive Income (Details) - Interest rate caps - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Amount of gain (loss) recognized in OCI on derivatives | ||
Amount of gain (loss) recognized in OCI on derivatives | $ 912 | $ (595) |
Interest expense | ||
Amount of gain (loss) reclassified from AOCI into income | ||
Amount of gain (loss) reclassified from AOCI into income | $ (109) | $ (231) |
Cash Flow Hedge Impact on Incom
Cash Flow Hedge Impact on Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivative | ||
Cost of goods sold | $ (96,505) | $ (87,850) |
Interest Expense | (10,456) | (15,298) |
Gain (loss) on cash flow hedging relationships | Amount of gain (loss) reclassified from AOCI into income | ||
Derivative | ||
Interest Expense | $ (109) | $ (231) |
Net Investment Hedge Impact on
Net Investment Hedge Impact on AOCI (Details) - Cross-currency interest rate swaps - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivative | ||
Amount of gain (loss) recognized in OCI on derivative | $ 9,787 | $ 14,809 |
Gain (loss) on sale of subsidiary | ||
Derivative | ||
Amount of gain (loss) reclassified from AOCI into income | 0 | 0 |
Interest (expense) income | ||
Derivative | ||
Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) | $ 545 | $ 1,692 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 65.40% | 33.20% |
Net Periodic Pension Expense Be
Net Periodic Pension Expense Benefit (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Defined Benefit Pension Plans | U.S. | ||
Defined Benefit Plan, Net Periodic Expense (Benefit) | ||
Service cost | $ 0 | $ 192 |
Interest cost | 551 | 675 |
Expected return on plan assets | (1,094) | (970) |
Amortization of net loss | 0 | 0 |
Net periodic (benefit) expense | (543) | (103) |
Defined Benefit Pension Plans | Foreign | ||
Defined Benefit Plan, Net Periodic Expense (Benefit) | ||
Service cost | 0 | 261 |
Interest cost | 65 | 72 |
Expected return on plan assets | (65) | (69) |
Amortization of net loss | 0 | 23 |
Net periodic (benefit) expense | 0 | 287 |
Other Postretirement Benefits Plans | ||
Defined Benefit Plan, Net Periodic Expense (Benefit) | ||
Interest cost | 4 | 5 |
Amortization of net loss | 1 | 0 |
Amortization of prior service credit | (58) | (58) |
Net periodic (benefit) expense | $ (53) | $ (53) |
Summary Financial Information b
Summary Financial Information by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting | ||
Sales | $ 126,624 | $ 125,554 |
Equity in net income from affiliated companies | 5,210 | 8,295 |
Operating segments | ||
Segment Reporting | ||
Sales | 126,624 | 125,554 |
Segment Adjusted EBITDA | 51,471 | 59,850 |
Operating segments | Refining Services | ||
Segment Reporting | ||
Sales | 100,222 | 100,690 |
Segment Adjusted EBITDA | 33,002 | 37,183 |
Operating segments | Catalysts | ||
Segment Reporting | ||
Sales | 26,402 | 24,864 |
Segment Adjusted EBITDA | 18,469 | 22,667 |
Zeolyst Joint Venture | Catalysts | ||
Segment Reporting | ||
Sales | 28,978 | 32,291 |
Segment Adjusted EBITDA | 10,537 | 13,725 |
Equity in net income from affiliated companies | 5,237 | 8,317 |
Amortization of investment in affiliate step-up | 1,658 | 1,658 |
Joint venture depreciation, amortization and interest | $ 3,645 | $ 3,750 |
Reconciliation of Net Loss to S
Reconciliation of Net Loss to Segment Adjusted EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information | ||
Net loss from continuing operations | $ (2,748) | $ (3,347) |
Benefit for income taxes | (5,190) | (1,665) |
Interest expense, net | 10,456 | 15,298 |
Depreciation and amortization | 19,500 | 18,675 |
Debt extinguishment costs | 0 | (2,513) |
Net loss on asset disposals | 778 | 163 |
Foreign currency exchange loss | 5,101 | 7,070 |
Transaction and other related costs | 472 | 800 |
Equity-based compensation | 8,180 | 5,920 |
Corporate, non-segment | ||
Segment Reporting Information | ||
Unallocated corporate expenses | 9,167 | 11,209 |
Segment reconciling items | ||
Segment Reporting Information | ||
Joint venture depreciation, amortization and interest | 3,645 | 3,750 |
Amortization of investment in affiliate step-up | 1,658 | 1,658 |
Debt extinguishment costs | 0 | 2,513 |
Net loss on asset disposals | 778 | 163 |
Foreign currency exchange loss | 5,101 | 7,070 |
LIFO benefit | (253) | (1,681) |
Transaction and other related costs | 472 | 800 |
Equity-based compensation | 6,305 | 4,294 |
Restructuring, integration and business optimization expenses | 2,259 | 348 |
Defined benefit pension plan benefit | (595) | (131) |
Other | 916 | 896 |
Operating segments | ||
Segment Reporting Information | ||
Segment EBITDA | 22,018 | 28,961 |
Adjusted EBITDA | 42,304 | 48,641 |
Segment Adjusted EBITDA | $ 51,471 | $ 59,850 |
Stock-Based Compensation Narrat
Stock-Based Compensation Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Stock-based compensation expense | $ 6,305 | $ 4,294 |
Stock-based compensation expense, tax benefit | $ 2,002 | $ 1,468 |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Granted | 1,697,623 | |
Unrecognized stock-based compensation expense | $ 40,425 | |
Unrecognized stock-based compensation expense, period for recognition | 2 years 7 days | |
Performance Stock Units (PSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Granted | 211,985 | |
Award vesting period | 3 years | |
Unrecognized stock-based compensation expense | $ 11,962 | |
Unrecognized stock-based compensation expense, period for recognition | 1 year 7 months 28 days | |
Director | Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Award vesting period | 1 year | |
Employee | Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Award vesting period | 3 years | |
Minimum | Performance Stock Units (PSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Award vesting percentage | 0.00% | |
Maximum | Performance Stock Units (PSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Award vesting percentage | 200.00% |
Performance Stock Units Assumpt
Performance Stock Units Assumptions and Methodology (Details) - Performance Stock Units (PSUs) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |
Expected dividend yield | 0.00% |
Risk-free interest rate | 0.20% |
Expected volatility | 41.70% |
Expected term (in years) | 2 years 11 months 12 days |
Grant date fair value | 13.21 |
Schedule of RSU and PSU Activit
Schedule of RSU and PSU Activity (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Restricted Stock Units (RSUs) | |
Number of Units | |
Nonvested, beginning balance | shares | 1,841,139 |
Granted | shares | 1,697,623 |
Vested | shares | (745,647) |
Forfeited | shares | (4,966) |
Nonvested, ending balance | shares | 2,788,149 |
Weighted Average Grant Date Fair Value (per share) | |
Weighted average grant date fair value, nonvested, beginning balance | $ / shares | $ 16.14 |
Weighted average grant date fair value, granted | $ / shares | 15.39 |
Weighted average grant date fair value, vested | $ / shares | 16.06 |
Weighted average grant date fair value, forfeited | $ / shares | 16.11 |
Weighted average grant date fair value, nonvested, ending balance | $ / shares | $ 15.70 |
Performance Stock Units (PSUs) | |
Number of Units | |
Nonvested, beginning balance | shares | 965,736 |
Granted | shares | 211,985 |
Vested | shares | 0 |
Forfeited | shares | (7,829) |
Nonvested, ending balance | shares | 1,169,892 |
Weighted Average Grant Date Fair Value (per share) | |
Weighted average grant date fair value, nonvested, beginning balance | $ / shares | $ 17.69 |
Weighted average grant date fair value, granted | $ / shares | 13.21 |
Weighted average grant date fair value, vested | $ / shares | 0 |
Weighted average grant date fair value, forfeited | $ / shares | 12.24 |
Weighted average grant date fair value, nonvested, ending balance | $ / shares | $ 16.92 |
Stock-based compensation expens
Stock-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | $ 8,180 | $ 5,920 |
Stock-based compensation expense, tax benefit | (2,002) | (1,468) |
Stock-based compensation expense, net of income tax benefit | 6,178 | 4,452 |
Continuing Operations | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 6,305 | 4,294 |
Stock-based compensation expense, tax benefit | (1,543) | (1,065) |
Stock-based compensation expense, net of income tax benefit | 4,762 | 3,229 |
Discontinued Operations | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 1,875 | 1,626 |
Stock-based compensation expense, tax benefit | (459) | (403) |
Stock-based compensation expense, net of income tax benefit | $ 1,416 | $ 1,223 |
Reconciliation from Basic to Di
Reconciliation from Basic to Diluted Weighted Average Shares Outstanding (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Weighted average shares outstanding – Basic (shares) | 136,006,082 | 135,240,897 |
Dilutive effect of unvested common shares and restricted stock units with service conditions, performance stock units considered probable of vesting and assumed stock option exercises and conversions (shares) | 0 | 845,185 |
Weighted average shares outstanding – Diluted (shares) | 136,006,082 | 136,086,082 |
Calculation of Basic and Dilute
Calculation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Numerator: | ||
Net (loss) income attributable to PQ Group Holdings Inc. | $ (92,635) | $ 224 |
Denominator: | ||
Weighted average shares outstanding – Basic (shares) | 136,006,082 | 135,240,897 |
Weighted average shares outstanding – Diluted (shares) | 136,006,082 | 136,086,082 |
Net loss per share: | ||
Basic loss per share | $ (0.68) | $ 0 |
Diluted loss per share | $ (0.68) | $ 0 |
Anti-dilutive Shares (Details)
Anti-dilutive Shares (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restricted stock awards with performance only targets not yet achieved | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive (shares) | 883,380 | 1,526,613 |
Stock options with performance only targets not yet achieved | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive (shares) | 376,812 | 516,000 |
Anti-dilutive restricted stock awards, restricted stock units and performance stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive (shares) | 0 | 1,264,324 |
Anti-dilutive stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive (shares) | 0 | 850,807 |
Anti-dilutive stock options | $16.97 (usd per share) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive (shares) | 609,491 | 609,491 |
Exercise price (usd per share) | $ 16.97 | $ 16.97 |
Anti-dilutive stock options | $17.50 (usd per share) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive (shares) | 241,316 | 241,316 |
Exercise price (usd per share) | $ 17.50 | $ 17.50 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash paid during the period for: | ||
Income taxes, net of refunds | $ 4,248 | $ 8,388 |
Interest | 17,791 | 19,751 |
Non-cash investing activity: | ||
Capital expenditures acquired on account but unpaid as of the period end | 8,118 | 13,223 |
Right-of-use assets obtained in exchange for new lease liabilities (non-cash): | ||
Operating leases | 4,738 | 499 |
Proceeds from hedge, investing activities | $ 2,307 | $ 1,771 |
Cash and Restricted Cash Reconc
Cash and Restricted Cash Reconciliation (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 |
Restricted Cash [Abstract] | |||
Cash and cash equivalents | $ 55,171 | $ 114,011 | $ 54,655 |
Restricted cash included in prepaid and other current assets | 1,591 | 2,277 | |
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ 56,762 | $ 56,932 |