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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Rayonier Advanced Materials Inc | NYSE:RYAM | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.1399 | 3.63% | 3.9899 | 4.00 | 3.85 | 3.92 | 210,352 | 18:44:58 |
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from to
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value
|
RYAM
|
The New York Stock Exchange
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
o
|
|
Smaller reporting company
|
☐
|
|
|
|
Emerging growth company
|
☐
|
Item
|
|
|
Page
|
|
|
Part I — Financial Information
|
|
1.
|
|
|
|
|
|
||
|
|
||
|
|
||
|
|
||
2.
|
|
||
3.
|
|
||
4.
|
|
||
|
|
Part II — Other Information
|
|
1.
|
|
||
1A.
|
|
||
2.
|
|
||
6.
|
|
||
|
|
Part I.
|
Financial Information
|
Item 1.
|
Financial Statements
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Net Sales
|
$
|
416,129
|
|
|
$
|
501,298
|
|
|
$
|
1,307,422
|
|
|
$
|
1,475,649
|
|
Cost of Sales
|
(399,510
|
)
|
|
(419,001
|
)
|
|
(1,265,217
|
)
|
|
(1,236,761
|
)
|
||||
Gross Margin
|
16,619
|
|
|
82,297
|
|
|
42,205
|
|
|
238,888
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
(23,416
|
)
|
|
(30,596
|
)
|
|
(72,026
|
)
|
|
(77,669
|
)
|
||||
Duties
|
(4,542
|
)
|
|
(816
|
)
|
|
(16,062
|
)
|
|
(20,680
|
)
|
||||
Other operating income (expense), net
|
2,775
|
|
|
(7,945
|
)
|
|
(5,600
|
)
|
|
(9,507
|
)
|
||||
Operating Income (Loss)
|
(8,564
|
)
|
|
42,940
|
|
|
(51,483
|
)
|
|
131,032
|
|
||||
Interest expense
|
(14,580
|
)
|
|
(13,831
|
)
|
|
(42,598
|
)
|
|
(41,839
|
)
|
||||
Interest income and other, net
|
3,439
|
|
|
(394
|
)
|
|
3,341
|
|
|
5,013
|
|
||||
Other components of pension and OPEB, excluding service costs
|
846
|
|
|
2,066
|
|
|
3,313
|
|
|
6,270
|
|
||||
Adjustment to gain on bargain purchase
|
—
|
|
|
6,175
|
|
|
—
|
|
|
20,836
|
|
||||
Income (Loss) From Continuing Operations Before Income Taxes
|
(18,859
|
)
|
|
36,956
|
|
|
(87,427
|
)
|
|
121,312
|
|
||||
Income tax (expense) benefit (Note 16)
|
4,506
|
|
|
(6,989
|
)
|
|
25,813
|
|
|
(28,960
|
)
|
||||
Income (Loss) from Continuing Operations
|
(14,353
|
)
|
|
29,967
|
|
|
(61,614
|
)
|
|
92,352
|
|
||||
Income (loss) from discontinued operations, net of taxes (Note 2)
|
137
|
|
|
7,969
|
|
|
10,431
|
|
|
23,429
|
|
||||
Net Income (Loss) Attributable to the Company
|
(14,216
|
)
|
|
37,936
|
|
|
(51,183
|
)
|
|
115,781
|
|
||||
Mandatory convertible stock dividends
|
(1,777
|
)
|
|
(3,441
|
)
|
|
(8,582
|
)
|
|
(10,284
|
)
|
||||
Net Income (Loss) Available to Common Stockholders
|
$
|
(15,993
|
)
|
|
$
|
34,495
|
|
|
$
|
(59,765
|
)
|
|
$
|
105,497
|
|
|
|
|
|
|
|
|
|
||||||||
Basic Earnings Per Common Share (Note 13)
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
(0.29
|
)
|
|
$
|
0.52
|
|
|
$
|
(1.36
|
)
|
|
$
|
1.61
|
|
Income from discontinued operations
|
—
|
|
|
0.16
|
|
|
0.20
|
|
|
0.46
|
|
||||
Net income per common share-basic
|
$
|
(0.29
|
)
|
|
$
|
0.68
|
|
|
$
|
(1.16
|
)
|
|
$
|
2.07
|
|
Diluted Earnings Per Common Share (Note 13)
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
(0.29
|
)
|
|
$
|
0.47
|
|
|
$
|
(1.36
|
)
|
|
$
|
1.45
|
|
Income from discontinued operations
|
—
|
|
|
0.13
|
|
|
0.20
|
|
|
0.37
|
|
||||
Net income per common share-diluted
|
$
|
(0.29
|
)
|
|
$
|
0.60
|
|
|
$
|
(1.16
|
)
|
|
$
|
1.82
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Net Income (Loss)
|
$
|
(14,216
|
)
|
|
$
|
37,936
|
|
|
$
|
(51,183
|
)
|
|
$
|
115,781
|
|
Other Comprehensive Income (Loss),
net of tax (Note 11):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(11,210
|
)
|
|
(2,014
|
)
|
|
(12,905
|
)
|
|
(10,265
|
)
|
||||
Unrealized gain (loss) on derivative instruments
|
(3,283
|
)
|
|
6,126
|
|
|
7,982
|
|
|
(936
|
)
|
||||
Net gain from pension and postretirement plans
|
2,365
|
|
|
2,398
|
|
|
6,122
|
|
|
7,193
|
|
||||
Total other comprehensive income
|
(12,128
|
)
|
|
6,510
|
|
|
1,199
|
|
|
(4,008
|
)
|
||||
Comprehensive Income (Loss)
|
$
|
(26,344
|
)
|
|
$
|
44,446
|
|
|
$
|
(49,984
|
)
|
|
$
|
111,773
|
|
|
September 28, 2019
|
|
December 31, 2018
|
||||
Assets
|
|||||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
62,762
|
|
|
$
|
108,966
|
|
Accounts receivable, net (Note 3)
|
162,107
|
|
|
199,284
|
|
||
Inventory (Note 4)
|
291,425
|
|
|
304,028
|
|
||
Prepaid and other current assets
|
71,828
|
|
|
61,314
|
|
||
Assets of discontinued operations-held for sale (Note 2)
|
84,298
|
|
|
42,500
|
|
||
Total current assets
|
672,420
|
|
|
716,092
|
|
||
|
|
|
|
||||
Property, Plant and Equipment (net of accumulated depreciation of $1,470,506 at September 28, 2019 and $1,385,837 at December 31, 2018)
|
1,327,052
|
|
|
1,363,557
|
|
||
Deferred Tax Assets
|
393,224
|
|
|
375,471
|
|
||
Intangible Assets, net
|
47,203
|
|
|
52,460
|
|
||
Other Assets
|
156,795
|
|
|
120,299
|
|
||
Assets of discontinued operations-held for sale (Note 2)
|
—
|
|
|
51,207
|
|
||
Total Assets
|
$
|
2,596,694
|
|
|
$
|
2,679,086
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|||||||
Current Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
144,677
|
|
|
$
|
181,705
|
|
Accrued and other current liabilities (Note 6)
|
116,718
|
|
|
146,155
|
|
||
Current maturities of long-term debt (Note 7)
|
21,357
|
|
|
15,012
|
|
||
Current environmental liabilities (Note 8)
|
11,445
|
|
|
11,310
|
|
||
Liabilities of discontinued operations-held for sale (Note 2)
|
18,774
|
|
|
16,236
|
|
||
Total current liabilities
|
312,971
|
|
|
370,418
|
|
||
|
|
|
|
||||
Long-Term Debt (Note 7)
|
1,212,432
|
|
|
1,173,157
|
|
||
Long-Term Environmental Liabilities (Note 8)
|
148,054
|
|
|
149,344
|
|
||
Pension and Other Postretirement Benefits
|
231,388
|
|
|
233,658
|
|
||
Deferred Tax Liabilities
|
23,842
|
|
|
28,016
|
|
||
Other Long-Term Liabilities
|
28,999
|
|
|
12,074
|
|
||
Liabilities of discontinued operations-held for sale (Note 2)
|
—
|
|
|
5,548
|
|
||
Commitments and Contingencies
|
|
|
|
||||
|
|
|
|
||||
Stockholders’ Equity
|
|
|
|
||||
Preferred stock, 0 and 10,000,000 shares authorized at $0.00 and $0.01 par value, 0 and 1,725,000 issued and outstanding as of September 28, 2019 and December 31, 2018, respectively, aggregate liquidation preference $0 and $172,500
|
—
|
|
|
17
|
|
||
Common stock, 140,000,000 shares authorized at $0.01 par value, 63,210,811 and 49,291,130 issued and outstanding, as of September 28, 2019 and December 31, 2018, respectively
|
632
|
|
|
493
|
|
||
Additional paid-in capital
|
399,234
|
|
|
399,490
|
|
||
Retained earnings
|
393,640
|
|
|
462,568
|
|
||
Accumulated other comprehensive income (loss) (Note 11)
|
(154,498
|
)
|
|
(155,697
|
)
|
||
Total Stockholders’ Equity
|
639,008
|
|
|
706,871
|
|
||
Total Liabilities and Stockholders’ Equity
|
$
|
2,596,694
|
|
|
$
|
2,679,086
|
|
|
Nine Months Ended
|
||||||
|
September 28, 2019
|
|
September 29, 2018
|
||||
Operating Activities
|
|
|
|
||||
Net income (loss)
|
$
|
(51,183
|
)
|
|
$
|
115,781
|
|
Loss (income) from discontinued operations
|
(10,431
|
)
|
|
(23,429
|
)
|
||
Adjustments to reconcile income (loss) from continuing operations to cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
111,695
|
|
|
105,703
|
|
||
Stock-based incentive compensation expense
|
5,696
|
|
|
10,146
|
|
||
Amortization of capitalized debt costs, discount and premium
|
429
|
|
|
942
|
|
||
Deferred income tax
|
(22,847
|
)
|
|
30,748
|
|
||
Gain on bargain purchase
|
—
|
|
|
(19,458
|
)
|
||
Net periodic benefit cost of pension and postretirement plans
|
5,412
|
|
|
4,313
|
|
||
Loss (gain) from foreign currency
|
4,180
|
|
|
(6,341
|
)
|
||
Other
|
(31
|
)
|
|
5,318
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables
|
35,232
|
|
|
(9,921
|
)
|
||
Inventories
|
11,308
|
|
|
(34,189
|
)
|
||
Accounts payable
|
(35,217
|
)
|
|
(4,887
|
)
|
||
Accrued liabilities
|
(8,612
|
)
|
|
5,582
|
|
||
All other operating activities
|
(32,459
|
)
|
|
(25,730
|
)
|
||
Contributions to pension and other postretirement benefit plans
|
(6,004
|
)
|
|
(8,000
|
)
|
||
Expenditures for environmental liabilities
|
(2,547
|
)
|
|
(5,549
|
)
|
||
Cash provided by operating activities-continuing operations
|
4,621
|
|
|
141,029
|
|
||
Cash provided by operating activities-discontinued operations
|
19,437
|
|
|
19,333
|
|
||
Cash Provided by Operating Activities
|
24,058
|
|
|
160,362
|
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
||||
Proceeds from sale of resin operations
|
—
|
|
|
16,143
|
|
||
Capital expenditures
|
(80,806
|
)
|
|
(90,094
|
)
|
||
Cash used for investing activities-continuing operations
|
(80,806
|
)
|
|
(73,951
|
)
|
||
Cash used for investing activities-discontinued operations
|
(2,606
|
)
|
|
(2,492
|
)
|
||
Cash Used for Investing Activities
|
(83,412
|
)
|
|
(76,443
|
)
|
||
|
|
|
|
||||
Financing Activities
|
|
|
|
||||
Revolving credit facility and other borrowings
|
88,627
|
|
|
—
|
|
||
Repayments of revolving credit facility
|
(36,000
|
)
|
|
—
|
|
||
Repayment of debt
|
(9,929
|
)
|
|
(34,141
|
)
|
||
Dividends paid on common stock
|
(8,569
|
)
|
|
(11,030
|
)
|
||
Dividends paid on preferred stock
|
(10,350
|
)
|
|
(10,350
|
)
|
||
Proceeds from the issuance of common stock
|
—
|
|
|
452
|
|
||
Common stock repurchased
|
(5,830
|
)
|
|
(17,784
|
)
|
||
Cash provided by (used for) financing activities-continuing operations
|
17,949
|
|
|
(72,853
|
)
|
||
Cash provided by (used for) financing activities-discontinued operations
|
—
|
|
|
—
|
|
||
Cash Provided by (Used for) Financing Activities
|
17,949
|
|
|
(72,853
|
)
|
||
|
|
|
|
||||
Cash and Cash Equivalents
|
|
|
|
||||
Change in cash and cash equivalents
|
(41,405
|
)
|
|
11,066
|
|
||
Net effect of foreign exchange on cash and cash equivalents
|
(4,799
|
)
|
|
(1,325
|
)
|
||
Balance, beginning of year
|
108,966
|
|
|
96,235
|
|
||
Balance, end of period
|
$
|
62,762
|
|
|
$
|
105,976
|
|
|
September 28, 2019
|
|
December 31, 2018
|
||||
Accounts receivable, net
|
$
|
15,355
|
|
|
$
|
23,093
|
|
Inventory
|
15,770
|
|
|
17,349
|
|
||
Prepaid and other current assets
|
811
|
|
|
2,058
|
|
||
Total current assets
|
31,936
|
|
|
42,500
|
|
||
Property, plant and equipment, net
|
18,437
|
|
|
17,482
|
|
||
Deferred tax assets
|
31,486
|
|
|
31,486
|
|
||
Other assets
|
2,439
|
|
|
2,239
|
|
||
Total assets
|
$
|
84,298
|
|
|
$
|
93,707
|
|
|
|
|
|
||||
Accounts payable
|
$
|
6,415
|
|
|
$
|
11,035
|
|
Accrued and other current liabilities
|
5,946
|
|
|
3,786
|
|
||
Other current liabilities
|
752
|
|
|
1,415
|
|
||
Total current liabilities
|
13,113
|
|
|
16,236
|
|
||
Other long-term liabilities
|
5,661
|
|
|
5,548
|
|
||
Total liabilities
|
$
|
18,774
|
|
|
$
|
21,784
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Revenues
|
$
|
34,781
|
|
|
$
|
43,041
|
|
|
$
|
114,085
|
|
|
$
|
132,401
|
|
Cost of sales
|
(31,271
|
)
|
|
(29,425
|
)
|
|
(93,567
|
)
|
|
(93,546
|
)
|
||||
Gross margin
|
3,510
|
|
|
13,616
|
|
|
20,518
|
|
|
38,855
|
|
||||
Selling, general and administrative expenses and other
|
(2,001
|
)
|
|
(406
|
)
|
|
(2,855
|
)
|
|
(1,258
|
)
|
||||
Operating income (loss)
|
1,509
|
|
|
13,210
|
|
|
17,663
|
|
|
37,597
|
|
||||
Interest expense (a)
|
(1,160
|
)
|
|
(1,142
|
)
|
|
(3,516
|
)
|
|
(3,298
|
)
|
||||
Other non-operating income
|
87
|
|
|
93
|
|
|
262
|
|
|
284
|
|
||||
Income (Loss) Before Income Taxes
|
436
|
|
|
12,161
|
|
|
14,409
|
|
|
34,583
|
|
||||
Income tax benefit (expense)
|
(299
|
)
|
|
(4,192
|
)
|
|
(3,978
|
)
|
|
(11,154
|
)
|
||||
Net Income (loss)
|
$
|
137
|
|
|
$
|
7,969
|
|
|
$
|
10,431
|
|
|
$
|
23,429
|
|
(a)
|
The Company is required to pay $100 million of debt from proceeds received from the sale of Matane. Interest expense has been allocated to discontinued operations using the weighted-average interest rates in effect for each period presented based on the proportionate amounts required to be repaid.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Depreciation and amortization
|
$
|
230
|
|
|
$
|
630
|
|
|
$
|
1,590
|
|
|
$
|
1,818
|
|
Capital expenditures
|
$
|
1,531
|
|
|
$
|
712
|
|
|
$
|
2,606
|
|
|
$
|
2,492
|
|
|
September 28, 2019
|
|
December 31, 2018
|
||||
Accounts receivable, trade
|
$
|
124,958
|
|
|
$
|
146,056
|
|
Accounts receivable, other (a)
|
37,796
|
|
|
53,787
|
|
||
Allowance for doubtful accounts
|
(647
|
)
|
|
(559
|
)
|
||
Total accounts receivable, net
|
$
|
162,107
|
|
|
$
|
199,284
|
|
(a)
|
Accounts receivable, other consists primarily of value added/consumption taxes, grants receivable and accrued billings due from government agencies.
|
|
September 28, 2019
|
|
December 31, 2018
|
||||
Finished goods
|
$
|
184,771
|
|
|
$
|
203,350
|
|
Work-in-progress
|
19,837
|
|
|
21,478
|
|
||
Raw materials
|
77,057
|
|
|
68,656
|
|
||
Manufacturing and maintenance supplies
|
9,760
|
|
|
10,544
|
|
||
Total inventory
|
$
|
291,425
|
|
|
$
|
304,028
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
|
September 28, 2019
|
|
September 28, 2019
|
||||
Operating Leases
|
|
|
|
|
||||
Operating lease expense
|
|
$
|
1,715
|
|
|
$
|
4,322
|
|
Finance Leases
|
|
|
|
|
||||
Amortization of ROU assets
|
|
77
|
|
|
228
|
|
||
Interest
|
|
52
|
|
|
159
|
|
||
Total
|
|
$
|
1,844
|
|
|
$
|
4,709
|
|
|
Balance Sheet Classification
|
|
September 28, 2019
|
||
Right-of-use assets
|
Other assets
|
|
$
|
22,516
|
|
Lease liabilities, current
|
Accrued and other current liabilities
|
|
$
|
5,276
|
|
Lease liabilities, non-current
|
Other non-current liabilities
|
|
$
|
17,935
|
|
|
September 28, 2019
|
|
December 31, 2018
|
||||
Accrued customer incentives and prepayments
|
$
|
34,556
|
|
|
$
|
41,734
|
|
Accrued payroll and benefits
|
24,461
|
|
|
29,567
|
|
||
Accrued interest
|
9,775
|
|
|
3,170
|
|
||
Derivative instruments
|
2,930
|
|
|
16,767
|
|
||
Accrued property and other taxes
|
14,814
|
|
|
10,663
|
|
||
Other current liabilities
|
30,182
|
|
|
44,254
|
|
||
Total accrued and other current liabilities
|
$
|
116,718
|
|
|
$
|
146,155
|
|
|
|
September 28, 2019
|
|
December 31, 2018
|
||||
U.S. Revolver of $100 million maturing in November 2022, $41 available, bearing interest at LIBOR plus 2.25%, interest of 4.30% at September 28, 2019
|
|
$
|
50,000
|
|
|
$
|
—
|
|
Multi-currency Revolver of $150 million maturing in November 2022, $126 available, bearing interest at LIBOR plus 2.00% at September 28, 2019
|
|
—
|
|
|
—
|
|
||
Term A-1 Loan Facility borrowings maturing through November 2022 bearing interest at LIBOR plus 2.25%, interest rate of 4.30% at September 28, 2019
|
|
160,000
|
|
|
160,000
|
|
||
Term A-2 Loan Facility borrowings maturing through November 2024 bearing interest at LIBOR plus 2.50% (after consideration of 0.60% patronage benefit), interest rate of 4.55% at September 28, 2019
|
|
438,875
|
|
|
438,875
|
|
||
Senior Notes due 2024 at a fixed interest rate of 5.50%
|
|
495,647
|
|
|
495,647
|
|
||
Canadian dollar, fixed interest rate term loans with rates ranging from 5.50% to 6.86% and maturity dates ranging from March 2020 through April 2028, secured by certain assets of the Temiscaming plant
|
|
85,501
|
|
|
91,304
|
|
||
Other loans
|
|
4,891
|
|
|
3,777
|
|
||
Finance lease obligation
|
|
2,896
|
|
|
3,124
|
|
||
Total debt principal payments due
|
|
1,237,810
|
|
|
1,192,727
|
|
||
Less: Debt premium, original issue discount and issuance costs, net
|
|
(4,021
|
)
|
|
(4,558
|
)
|
||
Total debt
|
|
1,233,789
|
|
|
1,188,169
|
|
||
Less: Current maturities of long-term debt
|
|
(21,357
|
)
|
|
(15,012
|
)
|
||
Long-term debt
|
|
$
|
1,212,432
|
|
|
$
|
1,173,157
|
|
|
Finance Lease Payments
|
|
|
Debt Principal Payments
|
||||
Remaining 2019
|
$
|
129
|
|
|
|
$
|
3,342
|
|
2020
|
515
|
|
|
|
23,124
|
|
||
2021
|
515
|
|
|
|
12,568
|
|
||
2022
|
515
|
|
|
|
239,779
|
|
||
2023
|
515
|
|
|
|
10,674
|
|
||
Thereafter
|
1,502
|
|
|
|
945,427
|
|
||
Total principal payments
|
$
|
3,691
|
|
|
|
$
|
1,234,914
|
|
Less: Imputed interest
|
(795
|
)
|
|
|
|
|||
Present value minimum finance lease payments
|
$
|
2,896
|
|
|
|
|
Balance, December 31, 2018
|
$
|
160,654
|
|
Increase in liabilities
|
928
|
|
|
Payments
|
(2,547
|
)
|
|
Foreign currency adjustments
|
464
|
|
|
Balance, September 28, 2019
|
159,499
|
|
|
Less: Current portion
|
(11,445
|
)
|
|
Long-term environmental liabilities
|
$
|
148,054
|
|
|
|
September 28, 2019
|
|
December 31, 2018
|
||||
Interest rate swaps (a)
|
|
$
|
200,000
|
|
|
$
|
200,000
|
|
Foreign exchange forward contracts (b)
|
|
$
|
359,648
|
|
|
$
|
388,930
|
|
Foreign exchange forward contracts (c)
|
|
$
|
95,051
|
|
|
$
|
125,979
|
|
|
|
Balance Sheet Location
|
|
September 28, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
|
|
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
||||
Interest rate swaps
|
|
Other current assets
|
|
$
|
—
|
|
|
$
|
1,194
|
|
Interest rate swaps
|
|
Other assets
|
|
—
|
|
|
937
|
|
||
Foreign exchange forward contracts
|
|
Other current assets
|
|
914
|
|
|
—
|
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
|
Other current assets
|
|
35
|
|
|
7
|
|
||
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
||||
Interest rate swaps
|
|
Other current liabilities
|
|
(557
|
)
|
|
—
|
|
||
Interest rate swaps
|
|
Other non-current liabilities
|
|
(277
|
)
|
|
—
|
|
||
Foreign exchange forward contracts
|
|
Other current liabilities
|
|
(2,373
|
)
|
|
(16,408
|
)
|
||
Foreign exchange forward contracts
|
|
Other non-current liabilities
|
|
(2,044
|
)
|
|
(3,105
|
)
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
|
Other current liabilities
|
|
—
|
|
|
(360
|
)
|
||
Total derivatives
|
|
|
|
$
|
(4,302
|
)
|
|
$
|
(17,735
|
)
|
|
|
Three Months Ended September 28, 2019
|
|
|
||||||
Derivatives Designated as Hedging Instruments
|
|
Gain (Loss) Recognized in OCI on Derivative
|
|
Gain (Loss) Reclassified from AOCI into Income
|
|
Location on Statement of Income
|
||||
Interest rate swaps
|
|
$
|
(64
|
)
|
|
$
|
172
|
|
|
Interest expense
|
Foreign exchange forward contracts
|
|
$
|
(5,940
|
)
|
|
$
|
(76
|
)
|
|
Other operating expense, net
|
Foreign exchange forward contracts
|
|
$
|
1,256
|
|
|
$
|
(1,256
|
)
|
|
Cost of sales
|
Foreign exchange forward contracts
|
|
$
|
(2,000
|
)
|
|
$
|
(1,290
|
)
|
|
Interest income and other, net
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended September 29, 2018
|
|
|
||||||
|
|
Gain (Loss) Recognized in OCI on Derivative
|
|
Gain (Loss) Reclassified from AOCI into Income
|
|
Location on Statement of Income
|
||||
Interest rate swaps
|
|
$
|
530
|
|
|
$
|
74
|
|
|
Interest expense
|
Foreign exchange forward contracts
|
|
$
|
5,002
|
|
|
$
|
60
|
|
|
Other operating expense, net
|
Foreign exchange forward contracts
|
|
$
|
1,399
|
|
|
$
|
(1,399
|
)
|
|
Cost of sales
|
Foreign exchange forward contracts
|
|
$
|
1,570
|
|
|
$
|
1,529
|
|
|
Interest income and other, net
|
|
|
|
|
|
|
|
||||
|
|
Nine Months Ended September 28, 2019
|
|
|
||||||
Derivatives Designated as Hedging Instruments
|
|
Gain (Loss) Recognized in OCI on Derivative
|
|
Gain (Loss) Reclassified from AOCI into Income
|
|
Location on Statement of Income
|
||||
Interest rate swaps
|
|
$
|
(2,237
|
)
|
|
$
|
728
|
|
|
Interest expense
|
Foreign exchange forward contracts
|
|
$
|
(1,903
|
)
|
|
$
|
600
|
|
|
Other operating expense, net
|
Foreign exchange forward contracts
|
|
$
|
8,822
|
|
|
$
|
(8,822
|
)
|
|
Cost of sales
|
Foreign exchange forward contracts
|
|
$
|
1,031
|
|
|
$
|
2,077
|
|
|
Interest income and other, net
|
|
|
|
|
|
|
|
||||
|
|
Nine Months Ended September 29, 2018
|
|
|
||||||
Derivatives Designated as Hedging Instruments
|
|
Gain (Loss) Recognized in OCI on Derivative
|
|
Gain (Loss) Reclassified from AOCI into Income
|
|
Location on Statement of Income
|
||||
Interest rate swaps
|
|
$
|
3,095
|
|
|
$
|
(112
|
)
|
|
Interest expense
|
Foreign exchange forward contracts
|
|
$
|
(5,406
|
)
|
|
$
|
1,188
|
|
|
Other operating expense, net
|
Foreign exchange forward contracts
|
|
$
|
1,466
|
|
|
$
|
(1,466
|
)
|
|
Cost of sales
|
Foreign exchange forward contracts
|
|
$
|
181
|
|
|
$
|
973
|
|
|
Interest income and other, net
|
|
|
|
|
|
||||||||||||||
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Derivatives Not Designated as Hedging Instruments
|
|
Location of Gain (Loss) Recognized in Income on Derivative
|
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Foreign exchange forward contracts
|
|
Other operating income (expense), net
|
|
$
|
(137
|
)
|
|
$
|
(250
|
)
|
|
$
|
193
|
|
|
$
|
(3,791
|
)
|
|
|
September 28, 2019
|
|
December 31, 2018
|
||||
Interest rate cash flow hedges
|
|
$
|
(650
|
)
|
|
$
|
1,663
|
|
Foreign exchange cash flow hedges
|
|
$
|
(2,990
|
)
|
|
$
|
(13,285
|
)
|
|
September 28, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Carrying
Amount
|
|
Fair Value
|
|
Carrying
Amount
|
|
Fair Value
|
||||||||||||||||
Assets:
|
|
Level 1
|
|
Level 2
|
|
|
Level 1
|
|
Level 2
|
||||||||||||||
Cash and cash equivalents
|
$
|
62,762
|
|
|
$
|
62,762
|
|
|
$
|
—
|
|
|
$
|
108,966
|
|
|
$
|
108,966
|
|
|
$
|
—
|
|
Interest rate swaps (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
2,131
|
|
|
—
|
|
|
2,131
|
|
||||||
Foreign currency forward contracts (a)
|
949
|
|
|
—
|
|
|
949
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities (b):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps (a)
|
834
|
|
|
—
|
|
|
834
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign currency forward contracts (a)
|
4,417
|
|
|
—
|
|
|
4,417
|
|
|
19,873
|
|
|
—
|
|
|
19,873
|
|
||||||
Fixed-rate long-term debt
|
580,068
|
|
|
—
|
|
|
448,325
|
|
|
585,824
|
|
|
—
|
|
|
541,267
|
|
||||||
Variable-rate long-term debt
|
650,824
|
|
|
—
|
|
|
653,766
|
|
|
599,221
|
|
|
—
|
|
|
602,652
|
|
|
Nine Months Ended
|
||||||
|
September 28, 2019
|
|
September 29, 2018
|
||||
Unrecognized components of employee benefit plans, net of tax:
|
|
|
|
|
|||
Balance, beginning of year
|
$
|
(135,590
|
)
|
|
$
|
(81,638
|
)
|
Reclassifications to earnings: (a)
|
|
|
|
||||
Amortization of losses
|
7,829
|
|
|
8,907
|
|
||
Amortization of prior service costs
|
311
|
|
|
429
|
|
||
Amortization of negative plan amendment
|
—
|
|
|
(115
|
)
|
||
Income tax on reclassifications
|
(1,804
|
)
|
|
(2,028
|
)
|
||
Foreign currency adjustments, net of tax of $75
|
(214
|
)
|
|
—
|
|
||
Net comprehensive gain (loss) on employee benefit plans, net of tax
|
6,122
|
|
|
7,193
|
|
||
Balance, end of quarter
|
(129,468
|
)
|
|
(74,445
|
)
|
||
|
|
|
|
||||
Unrealized gain (loss) on derivative instruments, net of tax:
|
|
|
|
||||
Balance, beginning of year
|
(11,622
|
)
|
|
619
|
|
||
Other comprehensive income before reclassifications
|
5,713
|
|
|
(664
|
)
|
||
Income tax on other comprehensive income
|
(1,446
|
)
|
|
281
|
|
||
Reclassifications to earnings: (b)
|
|
|
|
||||
Interest rate contracts
|
(728
|
)
|
|
112
|
|
||
Foreign exchange contracts
|
6,145
|
|
|
(695
|
)
|
||
Income tax on reclassifications
|
(1,702
|
)
|
|
30
|
|
||
Net comprehensive gain (loss) on derivative instruments, net of tax
|
7,982
|
|
|
(936
|
)
|
||
Balance, end of quarter
|
(3,640
|
)
|
|
(317
|
)
|
||
|
|
|
|
||||
Foreign currency translation adjustments:
|
|
|
|
||||
Balance, beginning of year
|
(8,485
|
)
|
|
4,868
|
|
||
Foreign currency translation adjustment, net of tax of $0 and $0
|
(12,905
|
)
|
|
(10,265
|
)
|
||
Balance, end of quarter
|
(21,390
|
)
|
|
(5,397
|
)
|
||
|
|
|
|
||||
Accumulated other comprehensive income (loss), end of quarter
|
$
|
(154,498
|
)
|
|
$
|
(80,159
|
)
|
(a)
|
The AOCI components for defined benefit pension and post-retirement plans are included in the computation of net periodic benefit cost. See Note 15— Employee Benefit Plans for additional information.
|
(b)
|
Reclassifications of interest rate contracts are recorded in interest expense. Reclassifications of foreign currency exchange contracts are recorded in cost of sales, other operating income or non-operating income as appropriate. See Note 9 —Derivative Instruments for additional information.
|
|
Common Stock
|
|
Preferred Stock
|
|
Additional Paid in Capital
|
|
Retained
Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Total Stockholders’
Equity
|
||||||||||||||||||
|
Shares
|
|
Par Value
|
|
Shares
|
|
Par Value
|
|
|
||||||||||||||||||||
For the nine months ended September 28, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance, December 31, 2018
|
49,291,130
|
|
|
$
|
493
|
|
|
1,725,000
|
|
|
$
|
17
|
|
|
$
|
399,490
|
|
|
$
|
462,568
|
|
|
$
|
(155,697
|
)
|
|
$
|
706,871
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(51,183
|
)
|
|
—
|
|
|
(51,183
|
)
|
||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,199
|
|
|
1,199
|
|
||||||
Preferred stock converted to common stock
|
13,361,678
|
|
|
133
|
|
|
(1,725,000
|
)
|
|
(17
|
)
|
|
(116
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common stock under incentive stock plans
|
980,968
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,696
|
|
|
—
|
|
|
—
|
|
|
5,696
|
|
||||||
Repurchase of common stock
|
(422,965
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(5,826
|
)
|
|
—
|
|
|
—
|
|
|
(5,830
|
)
|
||||||
Common stock dividends
($0.14 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,395
|
)
|
|
—
|
|
|
(7,395
|
)
|
||||||
Preferred stock dividends
($6.00 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,350
|
)
|
|
—
|
|
|
(10,350
|
)
|
||||||
Balance, September 28, 2019
|
63,210,811
|
|
|
$
|
632
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
399,234
|
|
|
$
|
393,640
|
|
|
$
|
(154,498
|
)
|
|
$
|
639,008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
For the three months ended September 28, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance, June 29, 2019
|
49,848,087
|
|
|
$
|
498
|
|
|
1,725,000
|
|
|
$
|
17
|
|
|
$
|
397,115
|
|
|
$
|
411,306
|
|
|
$
|
(142,370
|
)
|
|
$
|
666,566
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,216
|
)
|
|
—
|
|
|
(14,216
|
)
|
||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,128
|
)
|
|
(12,128
|
)
|
||||||
Preferred stock converted to common stock
|
13,361,678
|
|
|
133
|
|
|
(1,725,000
|
)
|
|
(17
|
)
|
|
(116
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common stock under incentive stock plans
|
953
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,240
|
|
|
—
|
|
|
—
|
|
|
2,240
|
|
||||||
Repurchase of common shares
|
93
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||||
Common stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Preferred stock dividends
($2.00 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,450
|
)
|
|
—
|
|
|
(3,450
|
)
|
||||||
Balance, September 28, 2019
|
63,210,811
|
|
|
$
|
632
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
399,234
|
|
|
$
|
393,640
|
|
|
$
|
(154,498
|
)
|
|
$
|
639,008
|
|
|
Common Stock
|
|
Preferred Stock
|
|
Additional Paid in Capital
|
|
Retained
Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Total Stockholders’
Equity
|
||||||||||||||||||
|
Shares
|
|
Par Value
|
|
Shares
|
|
Par Value
|
|
|
||||||||||||||||||||
For the nine months ended September 29, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, December 31, 2017
|
51,717,142
|
|
|
$
|
517
|
|
|
1,725,000
|
|
|
$
|
17
|
|
|
$
|
392,353
|
|
|
$
|
377,020
|
|
|
$
|
(76,151
|
)
|
|
$
|
693,756
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
115,781
|
|
|
—
|
|
|
115,781
|
|
||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,008
|
)
|
|
(4,008
|
)
|
||||||
Issuance of common stock under incentive stock plans
|
302,976
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
449
|
|
|
—
|
|
|
—
|
|
|
452
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,146
|
|
|
—
|
|
|
—
|
|
|
10,146
|
|
||||||
Repurchase of common stock
|
(959,163
|
)
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
(4,089
|
)
|
|
(13,686
|
)
|
|
—
|
|
|
(17,784
|
)
|
||||||
Common stock dividends
($0.21 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,137
|
)
|
|
—
|
|
|
(11,137
|
)
|
||||||
Preferred stock dividends
($6.00 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,350
|
)
|
|
—
|
|
|
(10,350
|
)
|
||||||
Balance, September 29, 2018
|
51,060,955
|
|
|
$
|
511
|
|
|
1,725,000
|
|
|
$
|
17
|
|
|
$
|
398,859
|
|
|
$
|
457,628
|
|
|
$
|
(80,159
|
)
|
|
$
|
776,856
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
For the three months ended September 29, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance, June 30, 2018
|
51,217,595
|
|
|
$
|
512
|
|
|
1,725,000
|
|
|
$
|
17
|
|
|
$
|
395,326
|
|
|
$
|
429,753
|
|
|
$
|
(86,669
|
)
|
|
$
|
738,939
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,936
|
|
|
—
|
|
|
37,936
|
|
||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,510
|
|
|
6,510
|
|
||||||
Issuance of common stock under incentive stock plans
|
414
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
109
|
|
|
—
|
|
|
—
|
|
|
109
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,647
|
|
|
—
|
|
|
—
|
|
|
3,647
|
|
||||||
Repurchase of common shares
|
(157,054
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(223
|
)
|
|
(3,031
|
)
|
|
—
|
|
|
(3,255
|
)
|
||||||
Common stock dividends
($0.07 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,580
|
)
|
|
—
|
|
|
(3,580
|
)
|
||||||
Preferred stock dividends
($2.00 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,450
|
)
|
|
—
|
|
|
(3,450
|
)
|
||||||
Balance, September 29, 2018
|
51,060,955
|
|
|
$
|
511
|
|
|
1,725,000
|
|
|
$
|
17
|
|
|
$
|
398,859
|
|
|
$
|
457,628
|
|
|
$
|
(80,159
|
)
|
|
$
|
776,856
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Income (loss) from continuing operations
|
$
|
(14,353
|
)
|
|
$
|
29,967
|
|
|
$
|
(61,614
|
)
|
|
$
|
92,352
|
|
Preferred Stock dividends
|
(1,777
|
)
|
|
(3,441
|
)
|
|
(8,582
|
)
|
|
(10,284
|
)
|
||||
Income (loss) from continuing operations attributable to common stockholders
|
(16,130
|
)
|
|
26,526
|
|
|
(70,196
|
)
|
|
82,068
|
|
||||
Income (loss) from discontinued operations
|
137
|
|
|
7,969
|
|
|
10,431
|
|
|
23,429
|
|
||||
Net income (loss) available for common stockholders
|
$
|
(15,993
|
)
|
|
$
|
34,495
|
|
|
$
|
(59,765
|
)
|
|
$
|
105,497
|
|
|
|
|
|
|
|
|
|
||||||||
Shares used for determining basic earnings per share of common stock
|
56,089,839
|
|
|
50,603,498
|
|
|
51,576,123
|
|
|
51,005,206
|
|
||||
Dilutive effect of:
|
|
|
|
|
|
|
|
||||||||
Stock options
|
—
|
|
|
3,620
|
|
|
—
|
|
|
4,127
|
|
||||
Performance and restricted stock
|
—
|
|
|
1,266,588
|
|
|
—
|
|
|
1,297,024
|
|
||||
Preferred stock
|
—
|
|
|
11,371,718
|
|
|
—
|
|
|
11,371,718
|
|
||||
Shares used for determining diluted earnings per share of common stock
|
56,089,839
|
|
|
63,245,424
|
|
|
51,576,123
|
|
|
63,678,075
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic per share amounts
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
(0.29
|
)
|
|
$
|
0.52
|
|
|
$
|
(1.36
|
)
|
|
$
|
1.61
|
|
Income (loss) from discontinued operations
|
—
|
|
|
0.16
|
|
|
0.20
|
|
|
0.46
|
|
||||
Net income (loss)
|
$
|
(0.29
|
)
|
|
$
|
0.68
|
|
|
$
|
(1.16
|
)
|
|
$
|
2.07
|
|
Diluted per share amounts
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
(0.29
|
)
|
|
$
|
0.47
|
|
|
$
|
(1.36
|
)
|
|
$
|
1.45
|
|
Income (loss) from discontinued operations
|
—
|
|
|
0.13
|
|
|
0.20
|
|
|
0.37
|
|
||||
Net income (loss)
|
$
|
(0.29
|
)
|
|
$
|
0.60
|
|
|
$
|
(1.16
|
)
|
|
$
|
1.82
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||
Stock options
|
225,934
|
|
|
263,184
|
|
|
225,934
|
|
|
263,184
|
|
Performance and restricted stock
|
688,029
|
|
|
11,687
|
|
|
502,888
|
|
|
398,576
|
|
Total anti-dilutive instruments
|
913,963
|
|
|
274,871
|
|
|
728,822
|
|
|
661,760
|
|
|
Stock Options
|
|
Restricted Stock and Stock Units
|
|
Performance-Based Stock Units
|
|||||||||||||||
|
Options
|
|
Weighted Average Exercise Price
|
|
Awards
|
|
Weighted Average Grant Date Fair Value
|
|
Awards
|
|
Weighted Average Grant Date Fair Value
|
|||||||||
Outstanding at January 1, 2019
|
286,613
|
|
|
$
|
34.23
|
|
|
917,098
|
|
|
$
|
13.71
|
|
|
1,325,894
|
|
|
$
|
14.69
|
|
Granted
|
—
|
|
|
—
|
|
|
395,777
|
|
|
11.99
|
|
|
400,921
|
|
|
14.98
|
|
|||
Forfeited
|
—
|
|
|
—
|
|
|
(9,533
|
)
|
|
15.22
|
|
|
(7,501
|
)
|
|
16.92
|
|
|||
Exercised or settled
|
—
|
|
|
—
|
|
|
(458,748
|
)
|
|
10.64
|
|
|
(520,167
|
)
|
|
7.80
|
|
|||
Expired or cancelled
|
(60,679
|
)
|
|
26.82
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Outstanding at September 28, 2019
|
225,934
|
|
|
$
|
36.22
|
|
|
844,594
|
|
|
$
|
14.56
|
|
|
1,199,147
|
|
|
$
|
17.76
|
|
|
Pension
|
Postretirement
|
|||||||||||||
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||
Components of Net Periodic Benefit Cost
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Service cost
|
$
|
2,411
|
|
|
$
|
2,845
|
|
|
$
|
456
|
|
|
$
|
521
|
|
Interest cost
|
9,199
|
|
|
7,907
|
|
|
352
|
|
|
217
|
|
||||
Expected return on plan assets
|
(13,110
|
)
|
|
(13,302
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
142
|
|
|
143
|
|
|
(38
|
)
|
|
—
|
|
||||
Amortization of losses
|
2,590
|
|
|
2,912
|
|
|
20
|
|
|
57
|
|
||||
Amortization of negative plan amendment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total net periodic benefit cost
|
$
|
1,232
|
|
|
$
|
505
|
|
|
$
|
790
|
|
|
$
|
795
|
|
|
|
|
|
|
|
|
|
||||||||
|
Pension
|
Postretirement
|
|||||||||||||
|
Nine Months Ended
|
|
Nine Months Ended
|
||||||||||||
Components of Net Periodic Benefit Cost
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Service cost
|
$
|
7,339
|
|
|
$
|
8,605
|
|
|
$
|
1,387
|
|
|
$
|
1,978
|
|
Interest cost
|
27,949
|
|
|
23,885
|
|
|
1,072
|
|
|
675
|
|
||||
Expected return on plan assets
|
(40,475
|
)
|
|
(40,166
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
426
|
|
|
429
|
|
|
(115
|
)
|
|
—
|
|
||||
Amortization of losses
|
7,768
|
|
|
8,735
|
|
|
61
|
|
|
172
|
|
||||
Amortization of negative plan amendment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total net periodic benefit cost
|
$
|
3,007
|
|
|
$
|
1,488
|
|
|
$
|
2,405
|
|
|
$
|
2,825
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
High Purity Cellulose
|
$
|
6,745
|
|
|
$
|
33,922
|
|
|
$
|
10,665
|
|
|
$
|
83,288
|
|
Forest Products
|
(5,076
|
)
|
|
7,986
|
|
|
(26,664
|
)
|
|
35,158
|
|
||||
Pulp
|
(2,061
|
)
|
|
12,825
|
|
|
2,700
|
|
|
37,373
|
|
||||
Paper
|
165
|
|
|
13,648
|
|
|
1,136
|
|
|
23,465
|
|
||||
Corporate
|
(8,337
|
)
|
|
(25,441
|
)
|
|
(39,320
|
)
|
|
(48,252
|
)
|
||||
Total operating income (loss)
|
$
|
(8,564
|
)
|
|
$
|
42,940
|
|
|
$
|
(51,483
|
)
|
|
$
|
131,032
|
|
|
September 28, 2019
|
|
December 31, 2018
|
||||
High Purity Cellulose
|
$
|
1,585,594
|
|
|
$
|
1,643,092
|
|
Forest Products
|
169,365
|
|
|
166,801
|
|
||
Pulp
|
33,284
|
|
|
41,087
|
|
||
Paper
|
223,302
|
|
|
240,427
|
|
||
Corporate
|
500,851
|
|
|
493,972
|
|
||
Assets Held for Sale
|
84,298
|
|
|
93,707
|
|
||
Total identifiable assets
|
$
|
2,596,694
|
|
|
$
|
2,679,086
|
|
|
Purchase Obligations
|
||
Remainder of 2019
|
$
|
2,818
|
|
2020
|
17,342
|
|
|
2021
|
11,399
|
|
|
2022
|
7,606
|
|
|
2023
|
2,524
|
|
|
Thereafter
|
5,225
|
|
|
Total
|
$
|
46,914
|
|
|
September 28, 2019
|
|
September 29, 2018
|
||||
Cash paid (received) during the period:
|
|
|
|
||||
Interest
|
$
|
37,126
|
|
|
$
|
35,000
|
|
Income taxes
|
$
|
1,858
|
|
|
$
|
12,834
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
Capital assets purchased on account
|
$
|
15,732
|
|
|
$
|
8,221
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
The businesses we operate are highly competitive and many of them are cyclical, which may result in fluctuations in pricing and volume that can adversely impact our business, financial condition and results of operations.
|
•
|
Our ten largest customers represent approximately 35 percent of our 2018 sales, and the loss of all or a substantial portion of our revenue from these large customers could have a material adverse effect on our business.
|
•
|
A material disruption at one of our major manufacturing facilities could prevent us from meeting customer demand, reduce our sales and profitability, increase our cost of production and capital needs, or otherwise adversely affect our business, financial condition and results of operation.
|
•
|
Changes in raw material and energy availability and prices could affect our business, financial condition and results of operations.
|
•
|
The availability of, and prices for, wood fiber could materially impact our business, results of operations and financial condition.
|
•
|
We are subject to risks associated with doing business outside of the United States.
|
•
|
Our operations require substantial capital.
|
•
|
Currency fluctuations may have a negative impact on our business, financial condition and results of operations.
|
•
|
Restrictions on trade through tariffs, countervailing and anti-dumping duties, quotas and other trade barriers, in the United States and internationally, especially with respect to China, Canada and as a result of “Brexit”, could adversely affect our ability to access certain markets and otherwise impact our results of operations.
|
•
|
We depend on third parties for transportation services and increases in costs and the availability of transportation could adversely affect our business.
|
•
|
Our business is subject to extensive environmental laws, regulations and permits that may restrict or adversely affect our financial results and how we conduct business.
|
•
|
The potential impacts of climate change and climate-related initiatives, remain uncertain at this time.
|
•
|
Our failure to maintain satisfactory labor relations could have a material adverse effect on our business.
|
•
|
We are dependent upon attracting and retaining key personnel, the loss of whom could adversely affect our business.
|
•
|
Failure to develop new products or discover new applications for our existing products, or our inability to protect the intellectual property underlying such new products or applications, could have a negative impact on our business.
|
•
|
The risk of loss of the Company’s intellectual property and sensitive business information, or disruption of its manufacturing operations, in each case due to cyberattacks or cybersecurity breaches, could adversely impact the Company.
|
•
|
We may need to make significant additional cash contributions to our retirement benefit plans if investment returns on pension assets are lower than expected or interest rates decline, and/or due to changes to regulatory, accounting and actuarial requirements.
|
•
|
We have significant debt obligations that could adversely affect our business and our ability to meet our obligations.
|
•
|
The phase-out of the London Inter Bank Office Rate (“LIBOR”) as an interest rate benchmark could result in an increase to our borrowing costs.
|
•
|
Challenges in the commercial and credit environments may materially adversely affect our future access to capital.
|
•
|
We may need additional financing in the future to meet our capital needs or to make acquisitions, and such financing may not be available on favorable terms, if at all, and may be dilutive to existing stockholders.
|
•
|
The inability to effectively integrate the Tembec Inc. (“Tembec”) acquisition and meet our financial objectives therefrom, and any future acquisitions we may make, may affect our results.
|
•
|
While the Company has entered into an amendment (the “Amendment”) to its Senior Secured Credit Facilities (as amended by the Amendment, the “Credit Agreement”) to address the risk of potential non-compliance with certain covenants at the end of the third quarter of 2019, there can be no assurances that the Company will continue in full compliance with the amended covenants provided in the Credit Amendment through December 31, 2021, which is the date covenant relief granted under the Amendment expires.
|
•
|
Go-to-Market Strategy - designed to improve cellulose specialties price and margin and align assets to market needs and sales mix to drive long term High Purity Cellulose segment EBITDA growth
|
•
|
Improve our competitive positioning through the following Four Strategic Pillars
|
•
|
New Products - expanding our business by developing next generation cellulose fibers and other value-added products utilizing our cellulose processing technology, expertise and co-products. We have made significant progress in developing and applying proprietary technologies to new products in many of the end-market segments we serve.
|
•
|
Market Optimization - maximizing the profitability of our existing products and assets by optimizing the intersection of our customers’ needs, our manufacturing capabilities and transportation costs to drive higher value for our customers and our Company.
|
•
|
Investments - delivering a capital allocation strategy that maximizes our risk adjusted returns. We intend to de-lever our balance sheet through EBITDA growth and repayment of indebtedness with a target net leverage ratio of 2.5 times EBITDA.
|
Financial Information
|
Three Months Ended
|
|
%
|
|
Nine Months Ended
|
|
%
|
||||||||||||
(in millions, except percentages)
|
September 28, 2019
|
|
September 29, 2018
|
|
Change
|
|
September 28, 2019
|
|
September 29, 2018
|
|
Change
|
||||||||
Net Sales
|
$
|
416
|
|
|
$
|
501
|
|
|
(17)%
|
|
$
|
1,307
|
|
|
$
|
1,476
|
|
|
(11)%
|
Cost of Sales
|
(399
|
)
|
|
(419
|
)
|
|
|
|
(1,265
|
)
|
|
(1,237
|
)
|
|
|
||||
Gross Margin
|
17
|
|
|
82
|
|
|
(79)%
|
|
42
|
|
|
239
|
|
|
(82)%
|
||||
Selling, general and administrative expenses
|
(23
|
)
|
|
(30
|
)
|
|
|
|
(72
|
)
|
|
(78
|
)
|
|
|
||||
Duties
|
(5
|
)
|
|
(1
|
)
|
|
|
|
(16
|
)
|
|
(21
|
)
|
|
|
||||
Other operating income (expense), net
|
3
|
|
|
(8
|
)
|
|
|
|
(5
|
)
|
|
(9
|
)
|
|
|
||||
Operating Income (Loss)
|
(8
|
)
|
|
43
|
|
|
(119)%
|
|
(51
|
)
|
|
131
|
|
|
(139)%
|
||||
Interest expense
|
(15
|
)
|
|
(14
|
)
|
|
|
|
(43
|
)
|
|
(42
|
)
|
|
|
||||
Interest income and other, net
|
3
|
|
|
—
|
|
|
|
|
3
|
|
|
5
|
|
|
|
||||
Adjustment to gain on bargain purchase
|
—
|
|
|
6
|
|
|
|
|
—
|
|
|
21
|
|
|
|
||||
Net periodic pension and OPEB income (expense), excluding service costs
|
1
|
|
|
2
|
|
|
|
|
3
|
|
|
6
|
|
|
|
||||
Income (Loss) From Continuing Operations Before Income Taxes
|
(19
|
)
|
|
37
|
|
|
(151)%
|
|
(88
|
)
|
|
122
|
|
|
(172)%
|
||||
Income tax benefit (expense)
|
5
|
|
|
(7
|
)
|
|
|
|
26
|
|
|
(29
|
)
|
|
|
||||
Income (Loss) from Continuing Operations
|
$
|
(14
|
)
|
|
$
|
30
|
|
|
(147)%
|
|
$
|
(62
|
)
|
|
$
|
93
|
|
|
(167)%
|
Income (loss) from discontinued operations, net of taxes
|
—
|
|
|
8
|
|
|
|
|
10
|
|
|
23
|
|
|
|
||||
Net Income (Loss)
|
$
|
(14
|
)
|
|
$
|
38
|
|
|
|
|
$
|
(52
|
)
|
|
$
|
116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross Margin %
|
4
|
%
|
|
16
|
%
|
|
|
|
3
|
%
|
|
16
|
%
|
|
|
||||
Operating Margin %
|
(2
|
)%
|
|
9
|
%
|
|
|
|
(4
|
)%
|
|
9
|
%
|
|
|
||||
Effective Tax Rate %
|
24
|
%
|
|
19
|
%
|
|
|
|
30
|
%
|
|
24
|
%
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Net sales (in millions)
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
High Purity Cellulose
|
$
|
268
|
|
|
$
|
308
|
|
|
$
|
822
|
|
|
$
|
876
|
|
Forest Products
|
65
|
|
|
86
|
|
|
222
|
|
|
282
|
|
||||
Pulp
|
26
|
|
|
46
|
|
|
95
|
|
|
133
|
|
||||
Paper
|
74
|
|
|
78
|
|
|
218
|
|
|
238
|
|
||||
Eliminations
|
(17
|
)
|
|
(17
|
)
|
|
(50
|
)
|
|
(53
|
)
|
||||
Total net sales
|
$
|
416
|
|
|
$
|
501
|
|
|
$
|
1,307
|
|
|
$
|
1,476
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Operating income (loss) (in millions)
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
High Purity Cellulose
|
$
|
7
|
|
|
$
|
34
|
|
|
$
|
11
|
|
|
$
|
83
|
|
Forest Products
|
(5
|
)
|
|
8
|
|
|
(27
|
)
|
|
35
|
|
||||
Pulp
|
(2
|
)
|
|
13
|
|
|
3
|
|
|
37
|
|
||||
Paper
|
—
|
|
|
13
|
|
|
1
|
|
|
24
|
|
||||
Corporate
|
(8
|
)
|
|
(25
|
)
|
|
(39
|
)
|
|
(48
|
)
|
||||
Total operating income (loss)
|
$
|
(8
|
)
|
|
$
|
43
|
|
|
$
|
(51
|
)
|
|
$
|
131
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions)
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Net Sales
|
$
|
268
|
|
|
$
|
308
|
|
|
$
|
822
|
|
|
$
|
876
|
|
Operating income (loss)
|
$
|
7
|
|
|
$
|
34
|
|
|
$
|
11
|
|
|
$
|
83
|
|
Average Sales Prices ($ per metric ton):
|
|
|
|
|
|
|
|
||||||||
Cellulose Specialties
|
$
|
1,317
|
|
|
$
|
1,333
|
|
|
$
|
1,303
|
|
|
$
|
1,344
|
|
Commodity Products
|
$
|
768
|
|
|
$
|
807
|
|
|
$
|
803
|
|
|
$
|
813
|
|
Sales Volumes (thousands of metric tons):
|
|
|
|
|
|
|
|
||||||||
Cellulose Specialties
|
137
|
|
|
163
|
|
|
432
|
|
|
466
|
|
||||
Commodity Products
|
88
|
|
|
70
|
|
|
246
|
|
|
188
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions)
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Net Sales
|
$
|
65
|
|
|
$
|
86
|
|
|
$
|
222
|
|
|
$
|
282
|
|
Operating income (loss)
|
(5
|
)
|
|
8
|
|
|
$
|
(27
|
)
|
|
$
|
35
|
|
||
Average Sales Prices ($ per thousand board feet):
|
|
|
|
|
|
|
|
||||||||
Lumber
|
$
|
366
|
|
|
$
|
487
|
|
|
$
|
370
|
|
|
$
|
500
|
|
Sales Volumes (millions of board feet):
|
|
|
|
|
|
|
|
||||||||
Lumber
|
134
|
|
|
141
|
|
|
462
|
|
|
457
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions)
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Net Sales
|
$
|
26
|
|
|
$
|
46
|
|
|
$
|
95
|
|
|
$
|
133
|
|
Operating income
|
$
|
(2
|
)
|
|
$
|
13
|
|
|
$
|
3
|
|
|
$
|
37
|
|
Average Sales Prices ($ per metric tons) (a):
|
|
|
|
|
|
|
|
||||||||
High-yield pulp
|
$
|
455
|
|
|
$
|
673
|
|
|
$
|
524
|
|
|
$
|
671
|
|
Sales Volumes (in thousands of metric tons) (a):
|
|
|
|
|
|
|
|
||||||||
High-yield pulp
|
45
|
|
|
59
|
|
|
145
|
|
|
168
|
|
||||
(a) Average sales prices and volumes for external sales only. For the three month period ended September 28, 2019 and September 29, 2018, the Pulp segment sold approximately 16,000 MT and 17,000 MT of high-yield pulp for $6 million and $7 million, respectively, to the Paper segment for the production of paperboard. For the nine months ended September 28, 2019 and September 29, 2018, 48,000 MT and 50,000 MT of high-yield pulp was sold to the Paper segment for $19 million and $20 million, respectively.
|
Three Months Ended
|
September 29, 2018
|
|
Changes Attributable to:
|
|
September 28, 2019
|
||||||||||
Net Sales
(in millions)
|
Price
|
|
Volume/Mix
|
|
|||||||||||
High-yield pulp
|
$
|
46
|
|
|
$
|
(10
|
)
|
|
$
|
(10
|
)
|
|
$
|
26
|
|
Nine Months Ended
|
September 29, 2018
|
|
Changes Attributable to:
|
|
September 28, 2019
|
||||||||||
Net Sales
(in millions)
|
Price
|
|
Volume/Mix
|
|
|||||||||||
High-yield pulp
|
$
|
133
|
|
|
$
|
(22
|
)
|
|
$
|
(16
|
)
|
|
$
|
95
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions)
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Net Sales
|
$
|
74
|
|
|
$
|
78
|
|
|
$
|
218
|
|
|
$
|
238
|
|
Operating income (loss)
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
1
|
|
|
$
|
24
|
|
Average Sales Prices ($ per metric ton):
|
|
|
|
|
|
|
|
||||||||
Paperboard
|
$
|
1,097
|
|
|
$
|
1,120
|
|
|
$
|
1,105
|
|
|
$
|
1,136
|
|
Newsprint
|
$
|
532
|
|
|
$
|
633
|
|
|
$
|
542
|
|
|
$
|
590
|
|
Sales Volumes (in metric tons):
|
|
|
|
|
|
|
|
||||||||
Paperboard
|
49
|
|
|
45
|
|
|
137
|
|
|
131
|
|
||||
Newsprint
|
38
|
|
|
44
|
|
|
123
|
|
|
151
|
|
Three Months Ended
|
September 29, 2018
|
|
Changes Attributable to:
|
|
September 28, 2019
|
||||||||||
Net Sales
(in millions)
|
Price
|
|
Volume/Mix
|
|
|||||||||||
Paperboard
|
$
|
51
|
|
|
$
|
(1
|
)
|
|
$
|
4
|
|
|
$
|
54
|
|
Newsprint
|
28
|
|
|
(4
|
)
|
|
(4
|
)
|
|
20
|
|
||||
Total Net Sales
|
$
|
79
|
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
74
|
|
Nine Months Ended
|
September 29, 2018
|
|
Changes Attributable to:
|
|
September 28, 2019
|
||||||||||
Net Sales
(in millions)
|
Price
|
|
Volume/Mix
|
|
|||||||||||
Paperboard
|
$
|
149
|
|
|
$
|
(4
|
)
|
|
$
|
6
|
|
|
$
|
151
|
|
Newsprint
|
89
|
|
|
(6
|
)
|
|
(16
|
)
|
|
67
|
|
||||
Total Net Sales
|
$
|
238
|
|
|
$
|
(10
|
)
|
|
$
|
(10
|
)
|
|
$
|
218
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Operating Income (Loss)
(in millions)
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Operating loss
|
$
|
(8
|
)
|
|
$
|
(25
|
)
|
|
$
|
(39
|
)
|
|
$
|
(48
|
)
|
|
September 28, 2019
|
|
December 31, 2018
|
||||
Cash and cash equivalents (a)
|
$
|
63
|
|
|
$
|
109
|
|
Availability under the Revolving Credit Facility (b)
|
167
|
|
|
217
|
|
||
Total debt (c)
|
1,234
|
|
|
1,188
|
|
||
Stockholders’ equity
|
639
|
|
|
707
|
|
||
Total capitalization (total debt plus equity)
|
$
|
1,873
|
|
|
$
|
1,895
|
|
Debt to capital ratio
|
66
|
%
|
|
63
|
%
|
(a)
|
Cash and cash equivalents consisted of cash, money market deposits and time deposits with original maturities of 90 days or less.
|
(b)
|
Availability under the revolving credit facility is reduced by standby letters of credit of approximately $33 million at September 28, 2019 and December 31, 2018.
|
(c)
|
See Note 7 — Debt and Finance Leases of our financial statements for additional information.
|
Cash Provided by (Used for):
|
September 28, 2019
|
|
September 29, 2018
|
||||
Operating activities
|
$
|
24
|
|
|
$
|
160
|
|
Investing activities
|
$
|
(83
|
)
|
|
$
|
(76
|
)
|
Financing activities
|
$
|
18
|
|
|
$
|
(73
|
)
|
Three Months Ended:
|
Forest Products
|
|
Pulp
|
|
Paper
|
|
High Purity Cellulose
|
|
Corporate & Other
|
|
Total
|
||||||||||||
September 28, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) from continuing operations
|
$
|
(5
|
)
|
|
$
|
(2
|
)
|
|
$
|
3
|
|
|
$
|
8
|
|
|
$
|
(18
|
)
|
|
$
|
(14
|
)
|
Depreciation and amortization
|
2
|
|
|
1
|
|
|
4
|
|
|
33
|
|
|
—
|
|
|
40
|
|
||||||
Interest expense, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
15
|
|
||||||
Income tax expense (benefit)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
||||||
EBITDA
|
$
|
(3
|
)
|
|
$
|
(1
|
)
|
|
$
|
7
|
|
|
$
|
41
|
|
|
$
|
(8
|
)
|
|
$
|
36
|
|
Loan Amendment Costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
||||||
Insurance Recovery
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
||||||
Adjusted EBITDA
|
$
|
(3
|
)
|
|
$
|
(1
|
)
|
|
$
|
7
|
|
|
$
|
41
|
|
|
$
|
(9
|
)
|
|
$
|
35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
September 29, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) from continuing operations
|
$
|
8
|
|
|
$
|
13
|
|
|
$
|
16
|
|
|
$
|
40
|
|
|
$
|
(47
|
)
|
|
$
|
30
|
|
Depreciation and amortization
|
2
|
|
|
1
|
|
|
4
|
|
|
30
|
|
|
—
|
|
|
37
|
|
||||||
Interest expense, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
||||||
Income tax expense (benefit)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
||||||
EBITDA
|
$
|
10
|
|
|
$
|
14
|
|
|
$
|
20
|
|
|
$
|
70
|
|
|
$
|
(26
|
)
|
|
$
|
88
|
|
Gain on bargain purchase
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
1
|
|
|
(6
|
)
|
||||||
Severance expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
||||||
Adjusted EBITDA
|
$
|
10
|
|
|
$
|
14
|
|
|
$
|
20
|
|
|
$
|
63
|
|
|
$
|
(21
|
)
|
|
$
|
86
|
|
Nine Months Ended:
|
Forest Products
|
|
Pulp
|
|
Paper
|
|
High Purity Cellulose
|
|
Corporate & Other
|
|
Total
|
||||||||||||
September 28, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) from continuing operations
|
$
|
(27
|
)
|
|
$
|
3
|
|
|
$
|
8
|
|
|
$
|
10
|
|
|
$
|
(56
|
)
|
|
$
|
(62
|
)
|
Depreciation and amortization
|
7
|
|
|
2
|
|
|
13
|
|
|
90
|
|
|
—
|
|
|
112
|
|
||||||
Interest expense, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|
43
|
|
||||||
Income tax expense (benefit)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
(26
|
)
|
||||||
EBITDA
|
$
|
(20
|
)
|
|
$
|
5
|
|
|
$
|
21
|
|
|
$
|
100
|
|
|
$
|
(39
|
)
|
|
$
|
67
|
|
Insurance recovery
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
||||||
Loan amendment costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
||||||
Non-recurring expense (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||
Adjusted EBITDA
|
$
|
(20
|
)
|
|
$
|
5
|
|
|
$
|
21
|
|
|
$
|
100
|
|
|
$
|
(39
|
)
|
|
$
|
67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
September 29, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) from continuing operations
|
$
|
35
|
|
|
$
|
37
|
|
|
$
|
31
|
|
|
$
|
97
|
|
|
$
|
(107
|
)
|
|
$
|
93
|
|
Depreciation and amortization
|
5
|
|
|
2
|
|
|
13
|
|
|
86
|
|
|
—
|
|
|
106
|
|
||||||
Interest expense, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
41
|
|
||||||
Income tax expense (benefit)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
28
|
|
||||||
EBITDA
|
$
|
40
|
|
|
$
|
39
|
|
|
$
|
44
|
|
|
$
|
183
|
|
|
$
|
(38
|
)
|
|
$
|
268
|
|
Severance expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
$
|
4
|
|
|||||
Gain on bargain purchase
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(11
|
)
|
|
$
|
(21
|
)
|
|||||
Adjusted EBITDA
|
$
|
40
|
|
|
$
|
39
|
|
|
$
|
44
|
|
|
$
|
173
|
|
|
$
|
(45
|
)
|
|
$
|
251
|
|
(a)
|
Capital expenditures exclude strategic capital expenditures which are deemed discretionary by management. Strategic expenditures for the first nine months of 2019 were approximately $18 million. Strategic capital expenditures for the same period of 2018 were approximately $29 million.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Part II.
|
Other Information
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total Number of Shares Purchased (b)
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (a)
|
||||||
June 30 to August 3
|
727
|
|
|
$
|
5.97
|
|
|
—
|
|
|
$
|
60,294,000
|
|
August 3 to August 31
|
250
|
|
|
2.53
|
|
|
—
|
|
|
$
|
60,294,000
|
|
|
September 1 to September 28
|
50
|
|
|
3.51
|
|
|
—
|
|
|
$
|
60,294,000
|
|
|
Total
|
1,027
|
|
|
|
|
—
|
|
|
|
(a)
|
As of September 28, 2019, approximately $60 million of share repurchase authorization remains under the authorization declared by the Board of Directors on January 29, 2018.
|
(b)
|
Repurchased to satisfy the tax withholding requirements related to the issuance of stock under the Rayonier Advanced Materials Incentive Stock Plan.
|
Item 6.
|
Exhibits
|
First Amendment to Amended and Restated Credit Agreement, dated as of September 30, 2019, among Rayonier Advanced Materials Inc., as Holdings, Rayonier A.M. Products Inc. and Rayonier Performance Fibers, LLC, as Borrowers, certain subsidiaries of Rayonier Advanced Materials Inc. party thereto, the lenders and L/C issuers party thereto and Bank of America, N.A., as Administrative Agent
|
|
Incorporated herein by reference to Exhibit 10.1 to the Registrant’s 8-K filed on October 2, 2019
|
|
First Amendment to the Rayonier Advanced Materials Inc. 2017 Incentive Stock Plan, effective May 22, 2017*
|
|
Filed herewith
|
|
Rayonier Advanced Materials Inc. Amended and Restated Executive Severance Pay Plan, effective October 21, 2019*
|
|
Filed herewith
|
|
First Amendment to the Rayonier Advanced Materials Inc. Non Change In Control Executive Severance Plan*
|
|
Filed herewith
|
|
Rayonier Advanced Materials Inc. Retirement Plan, Amended and Restated October 21, 2019*
|
|
Filed herewith
|
|
Chief Executive Officer’s Certification Pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
Chief Financial Officer’s Certification Pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
Certification of Periodic Financial Reports Under Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Furnished herewith
|
|
101
|
The following financial information from our Quarterly Report on Form 10-Q for the three and nine months ended September 28, 2019 formatted in Extensible Business Reporting Language (“XBRL”), includes: (i) the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the Three and Nine Months Ended September 28, 2019 and September 29, 2018; (ii) the Consolidated Balance Sheets as of September 28, 2019 and December 31, 2018; (iii) the Consolidated Statements of Cash Flows for the Nine Months Ended September 28, 2019 and September 29, 2018; and (iv) the Notes to Consolidated Financial Statements
|
|
Filed herewith
|
104
|
Cover Page Interactive Data File - formatted as Inline XBRL and contained in Exhibit 101
|
|
|
|
|
Rayonier Advanced Materials Inc.
|
|
|
(Registrant)
|
|
|
|
|
By:
|
/s/ MARCUS J. MOELTNER
|
|
|
Marcus J. Moeltner
Chief Financial Officer and
Senior Vice President, Finance
(Duly Authorized Officer and Principal Financial Officer)
|
1 Year Rayonier Advanced Materi... Chart |
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