ý
|
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
|
|
|
|
Delaware
|
|
20-3594554
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
601 West Riverside, Suite 1100
Spokane, Washington
|
|
99201
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
|
ý
|
|
Accelerated filer
|
|
¨
|
Non-accelerated filer
|
|
¨
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
¨
|
|
|
|
|
|
Page Number
|
|
|
|
PART I.
|
|
|
|
|
|
ITEM 1.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ITEM 2.
|
||
|
|
|
ITEM 3.
|
||
|
|
|
ITEM 4.
|
||
|
|
|
PART II.
|
|
|
|
|
|
ITEM 1.
|
||
|
|
|
ITEM 1A.
|
||
|
|
|
ITEM 2.
|
||
|
|
|
ITEM 6.
|
||
|
|
|
|
|
|
ITEM 1.
|
|
Consolidated Financial Statements
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net sales
|
$
|
498,759
|
|
|
$
|
471,002
|
|
|
$
|
983,679
|
|
|
$
|
931,826
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
(434,111
|
)
|
|
(414,521
|
)
|
|
(860,740
|
)
|
|
(828,730
|
)
|
||||
Selling, general and administrative expenses
|
(31,565
|
)
|
|
(26,767
|
)
|
|
(65,079
|
)
|
|
(60,899
|
)
|
||||
Impairment of assets
|
—
|
|
|
—
|
|
|
(4,259
|
)
|
|
—
|
|
||||
Total operating costs and expenses
|
(465,676
|
)
|
|
(441,288
|
)
|
|
(930,078
|
)
|
|
(889,629
|
)
|
||||
Income from operations
|
33,083
|
|
|
29,714
|
|
|
53,601
|
|
|
42,197
|
|
||||
Interest expense, net
|
(10,688
|
)
|
|
(11,094
|
)
|
|
(21,422
|
)
|
|
(22,076
|
)
|
||||
Debt retirement costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,058
|
)
|
||||
Earnings before income taxes
|
22,395
|
|
|
18,620
|
|
|
32,179
|
|
|
3,063
|
|
||||
Income tax (provision) benefit
|
(9,942
|
)
|
|
(6,962
|
)
|
|
(13,500
|
)
|
|
7,713
|
|
||||
Net earnings
|
$
|
12,453
|
|
|
$
|
11,658
|
|
|
$
|
18,679
|
|
|
$
|
10,776
|
|
Net earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.61
|
|
|
$
|
0.52
|
|
|
$
|
0.91
|
|
|
$
|
0.48
|
|
Diluted
|
0.61
|
|
|
0.52
|
|
|
0.90
|
|
|
0.47
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net earnings
|
$
|
12,453
|
|
|
$
|
11,658
|
|
|
$
|
18,679
|
|
|
$
|
10,776
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Defined benefit pension and other postretirement employee benefits:
|
|
|
|
|
|
|
|
||||||||
Amortization of actuarial loss included in net periodic
cost, net of tax of $934, $1,217, $1,899, and $2,923
|
1,479
|
|
|
1,872
|
|
|
3,008
|
|
|
4,496
|
|
||||
Amortization of prior service (credit) cost included in net periodic
cost, net of tax of $(353), $75, $(382), and $(32)
|
(559
|
)
|
|
113
|
|
|
(604
|
)
|
|
(50
|
)
|
||||
Curtailments, net of tax of $ -, $303, $ - and $303
|
—
|
|
|
466
|
|
|
—
|
|
|
466
|
|
||||
Other comprehensive income, net of tax
|
920
|
|
|
2,451
|
|
|
2,404
|
|
|
4,912
|
|
||||
Comprehensive income
|
$
|
13,373
|
|
|
$
|
14,109
|
|
|
$
|
21,083
|
|
|
$
|
15,688
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash
|
$
|
22,481
|
|
|
$
|
23,675
|
|
Restricted cash
|
1,501
|
|
|
1,500
|
|
||
Short-term investments
|
59,000
|
|
|
70,000
|
|
||
Receivables, net
|
168,555
|
|
|
158,874
|
|
||
Taxes receivable
|
6,840
|
|
|
10,503
|
|
||
Inventories
|
264,874
|
|
|
267,788
|
|
||
Deferred tax assets
|
29,536
|
|
|
37,538
|
|
||
Prepaid expenses
|
8,085
|
|
|
5,523
|
|
||
Total current assets
|
560,872
|
|
|
575,401
|
|
||
Property, plant and equipment, net
|
873,284
|
|
|
884,698
|
|
||
Goodwill
|
229,533
|
|
|
229,533
|
|
||
Intangible assets, net
|
36,208
|
|
|
40,778
|
|
||
Pension assets
|
11,284
|
|
|
4,488
|
|
||
Other assets, net
|
9,374
|
|
|
9,927
|
|
||
TOTAL ASSETS
|
$
|
1,720,555
|
|
|
$
|
1,744,825
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
220,393
|
|
|
$
|
190,648
|
|
Current liability for pensions and other postretirement employee benefits
|
8,778
|
|
|
8,778
|
|
||
Total current liabilities
|
229,171
|
|
|
199,426
|
|
||
Long-term debt
|
650,000
|
|
|
650,000
|
|
||
Liability for pensions and other postretirement employee benefits
|
105,015
|
|
|
109,807
|
|
||
Other long-term obligations
|
50,212
|
|
|
52,942
|
|
||
Accrued taxes
|
2,694
|
|
|
2,658
|
|
||
Deferred tax liabilities
|
128,270
|
|
|
124,898
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, par value $0.0001 per share, 5,000,000 authorized shares, no shares
issued
|
—
|
|
|
—
|
|
||
Common stock, par value $0.0001 per share, 100,000,000 authorized
shares-24,030,815 and 24,007,581 shares issued
|
2
|
|
|
2
|
|
||
Additional paid-in capital
|
329,884
|
|
|
326,546
|
|
||
Retained earnings
|
485,318
|
|
|
466,639
|
|
||
Treasury stock, at cost, common shares-4,115,900 and 2,923,640 shares repurchased
|
(204,322
|
)
|
|
(130,000
|
)
|
||
Accumulated other comprehensive loss, net of tax
|
(55,689
|
)
|
|
(58,093
|
)
|
||
Total stockholders’ equity
|
555,193
|
|
|
605,094
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
1,720,555
|
|
|
$
|
1,744,825
|
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
|
2014
|
|
2013
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
||||
Net earnings
|
$
|
18,679
|
|
|
$
|
10,776
|
|
Adjustments to reconcile net earnings to net cash flows from operating activities:
|
|
|
|
||||
Depreciation and amortization
|
44,246
|
|
|
45,404
|
|
||
Equity-based compensation expense
|
6,910
|
|
|
5,581
|
|
||
Impairment of assets
|
4,259
|
|
|
—
|
|
||
Deferred tax provision (benefit)
|
9,857
|
|
|
(9,384
|
)
|
||
Employee benefit plans
|
979
|
|
|
5,098
|
|
||
Deferred issuance costs and discounts on long-term debt
|
949
|
|
|
4,017
|
|
||
Disposal of plant and equipment, net
|
422
|
|
|
—
|
|
||
Changes in working capital, net
|
14,818
|
|
|
(43,805
|
)
|
||
Changes in taxes receivable, net
|
3,663
|
|
|
11,918
|
|
||
Changes in non-current accrued taxes, net
|
36
|
|
|
(2,763
|
)
|
||
Funding of qualified pension plans
|
(8,889
|
)
|
|
(4,633
|
)
|
||
Other, net
|
(1,016
|
)
|
|
(237
|
)
|
||
Net cash flows from operating activities
|
94,913
|
|
|
21,972
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
||||
Changes in short-term investments, net
|
11,000
|
|
|
(60,000
|
)
|
||
Additions to plant and equipment
|
(32,612
|
)
|
|
(31,413
|
)
|
||
Proceeds from sale of assets
|
619
|
|
|
—
|
|
||
Net cash flows from investing activities
|
(20,993
|
)
|
|
(91,413
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
||||
Proceeds from long-term debt
|
—
|
|
|
275,000
|
|
||
Repayment of long-term debt
|
—
|
|
|
(150,000
|
)
|
||
Purchase of treasury stock
|
(74,322
|
)
|
|
(59,984
|
)
|
||
Payments for long-term debt issuance costs
|
—
|
|
|
(4,779
|
)
|
||
Payment of tax withholdings on equity-based payment arrangements
|
(792
|
)
|
|
(2,195
|
)
|
||
Net cash flows from financing activities
|
(75,114
|
)
|
|
58,042
|
|
||
Decrease in cash
|
(1,194
|
)
|
|
(11,399
|
)
|
||
Cash at beginning of period
|
23,675
|
|
|
12,579
|
|
||
Cash at end of period
|
$
|
22,481
|
|
|
$
|
1,180
|
|
|
|
|
|
||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
|
|
|
|
||||
Cash paid for interest
|
$
|
19,547
|
|
|
$
|
16,326
|
|
Cash paid for income taxes
|
4,211
|
|
|
2,080
|
|
||
Cash received from income tax refunds
|
4,170
|
|
|
796
|
|
||
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING ACTIVITIES
|
|
|
|
||||
Changes in accrued plant and equipment
|
$
|
(912
|
)
|
|
$
|
7,269
|
|
(In thousands)
|
June 30,
2014 |
|
December 31,
2013 |
||||
Pulp, paperboard and tissue products
|
$
|
180,146
|
|
|
$
|
182,715
|
|
Materials and supplies
|
73,702
|
|
|
69,836
|
|
||
Logs, pulpwood, chips and sawdust
|
11,026
|
|
|
15,237
|
|
||
|
$
|
264,874
|
|
|
$
|
267,788
|
|
|
June 30, 2014
|
||||||||||||
(Dollars in thousands, lives in years)
|
Useful
Life
|
|
Historical
Cost
|
|
Accumulated
Amortization
|
|
Net
Balance
|
||||||
Customer relationships
|
9.0
|
|
$
|
53,957
|
|
|
$
|
(20,230
|
)
|
|
$
|
33,727
|
|
Trade names and trademarks
|
10.0
|
|
3,393
|
|
|
(1,188
|
)
|
|
2,205
|
|
|||
Non-compete agreements
|
2.5 - 5.0
|
|
1,189
|
|
|
(913
|
)
|
|
276
|
|
|||
|
|
|
$
|
58,539
|
|
|
$
|
(22,331
|
)
|
|
$
|
36,208
|
|
|
|
|
|
|
|
|
|
||||||
|
December 31, 2013
|
||||||||||||
(Dollars in thousands, lives in years)
|
Useful
Life
|
|
Historical
Cost
|
|
Accumulated
Amortization
|
|
Net
Balance
|
||||||
Customer relationships
|
9.0
|
|
$
|
53,957
|
|
|
$
|
(17,234
|
)
|
|
$
|
36,723
|
|
Trade names and trademarks
|
10.0
|
|
5,300
|
|
|
(1,590
|
)
|
|
3,710
|
|
|||
Non-compete agreements
|
2.5 - 5.0
|
|
1,674
|
|
|
(1,329
|
)
|
|
345
|
|
|||
|
|
|
$
|
60,931
|
|
|
$
|
(20,153
|
)
|
|
$
|
40,778
|
|
(In thousands)
|
June 30, 2014
|
|
December 31, 2013
|
||||
Trade accounts payable
|
$
|
136,104
|
|
|
$
|
108,192
|
|
Accrued wages, salaries and employee benefits
|
41,112
|
|
|
38,563
|
|
||
Accrued interest
|
9,664
|
|
|
9,691
|
|
||
Accrued discounts and allowances
|
8,268
|
|
|
6,410
|
|
||
Accrued utilities
|
7,796
|
|
|
8,309
|
|
||
Accrued taxes other than income taxes payable
|
6,761
|
|
|
6,322
|
|
||
Other
|
10,688
|
|
|
13,161
|
|
||
|
$
|
220,393
|
|
|
$
|
190,648
|
|
(In thousands)
|
June 30, 2014
|
|
December 31, 2013
|
||||
Long-term lease obligations, net of current portion
|
$
|
24,632
|
|
|
$
|
24,815
|
|
Deferred compensation
|
12,909
|
|
|
14,149
|
|
||
Deferred proceeds
|
10,217
|
|
|
11,205
|
|
||
Other
|
2,454
|
|
|
2,773
|
|
||
|
$
|
50,212
|
|
|
$
|
52,942
|
|
(In thousands)
|
Foreign Currency Translation Adjustments
1
|
|
Pension and Other Post Retirement Employee Benefit Plans Adjustments
|
|
Total
|
||||||
Balance at December 31, 2013
|
$
|
(874
|
)
|
|
$
|
(57,219
|
)
|
|
$
|
(58,093
|
)
|
Other comprehensive income, net of tax
2
|
—
|
|
|
2,404
|
|
|
2,404
|
|
|||
Balance at June 30, 2014
|
$
|
(874
|
)
|
|
$
|
(54,815
|
)
|
|
$
|
(55,689
|
)
|
|
|
|
|
|
|
||||||
(In thousands)
|
Foreign Currency Translation Adjustments
1
|
|
Pension and Other Post Retirement Employee Benefit Plans Adjustments
|
|
Total
|
||||||
Balance at December 31, 2012
|
$
|
(874
|
)
|
|
$
|
(114,819
|
)
|
|
$
|
(115,693
|
)
|
Other comprehensive income, net of tax
2
|
—
|
|
|
4,912
|
|
|
4,912
|
|
|||
Balance at June 30, 2013
|
$
|
(874
|
)
|
|
$
|
(109,907
|
)
|
|
$
|
(110,781
|
)
|
1
|
This balance consists of unrealized foreign currency translation adjustments related to the operations of our Canadian subsidiary before its functional currency was changed from Canadian dollars to U.S. dollars in 2012.
|
2
|
For the
six
months ended
June 30, 2014
and
2013
, net periodic costs associated with our pension and other postretirement employee benefit, or OPEB, plans included in other comprehensive income and reclassified from accumulated other comprehensive loss includes
$4.9 million
and
$7.4 million
, respectively, of actuarial loss amortization,
$1.0 million
and
$0.1 million
, respectively, of prior service credit amortization, net of tax of
$1.5 million
and
$3.2 million
, respectively, and
none
and
$0.8 million
, respectively, of curtailments. These accumulated other comprehensive loss components are included in the computation of net periodic pension and OPEB costs in Note 10, “Pension and Other Postretirement Employee Benefit Plans.”
|
|
Three Months Ended June 30,
|
||||||||||||||
(In thousands)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
Pension Benefit Plans
|
|
Other Postretirement
Employee Benefit Plans
|
||||||||||||
Service cost
|
$
|
340
|
|
|
$
|
384
|
|
|
$
|
109
|
|
|
$
|
70
|
|
Interest cost
|
3,724
|
|
|
3,329
|
|
|
980
|
|
|
1,047
|
|
||||
Expected return on plan assets
|
(5,083
|
)
|
|
(4,608
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost (credit)
|
51
|
|
|
58
|
|
|
(963
|
)
|
|
130
|
|
||||
Amortization of actuarial loss (gain)
|
2,555
|
|
|
3,545
|
|
|
(142
|
)
|
|
(456
|
)
|
||||
Curtailments
|
—
|
|
|
769
|
|
|
—
|
|
|
—
|
|
||||
Net periodic cost (benefit)
|
$
|
1,587
|
|
|
$
|
3,477
|
|
|
$
|
(16
|
)
|
|
$
|
791
|
|
|
Six Months Ended June 30,
|
||||||||||||||
(In thousands)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
Pension Benefit Plans
|
|
Other Postretirement
Employee Benefit Plans
|
||||||||||||
Service cost
|
$
|
695
|
|
|
$
|
869
|
|
|
$
|
226
|
|
|
$
|
276
|
|
Interest cost
|
7,412
|
|
|
6,688
|
|
|
2,282
|
|
|
2,365
|
|
||||
Expected return on plan assets
|
(10,098
|
)
|
|
(9,176
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost (credit)
|
103
|
|
|
169
|
|
|
(1,089
|
)
|
|
(251
|
)
|
||||
Amortization of actuarial loss (gain)
|
5,049
|
|
|
7,419
|
|
|
(142
|
)
|
|
—
|
|
||||
Curtailments
|
—
|
|
|
769
|
|
|
—
|
|
|
—
|
|
||||
Net periodic cost (benefit)
|
$
|
3,161
|
|
|
$
|
6,738
|
|
|
$
|
1,277
|
|
|
$
|
2,390
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Basic average common shares outstanding
1
|
20,256,137
|
|
|
22,279,056
|
|
|
20,614,305
|
|
|
22,574,300
|
|
||||
Incremental shares due to:
|
|
|
|
|
|
|
|
||||||||
Restricted stock units
|
78,508
|
|
|
61,192
|
|
|
73,692
|
|
|
53,208
|
|
||||
Performance shares
|
182,026
|
|
|
217,602
|
|
|
181,612
|
|
|
205,927
|
|
||||
Diluted average common shares outstanding
|
20,516,671
|
|
|
22,557,850
|
|
|
20,869,609
|
|
|
22,833,435
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic net earnings per common share
|
$
|
0.61
|
|
|
$
|
0.52
|
|
|
$
|
0.91
|
|
|
$
|
0.48
|
|
Diluted net earnings per common share
|
0.61
|
|
|
0.52
|
|
|
0.90
|
|
|
0.47
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive shares excluded from calculation
|
210,771
|
|
|
36,212
|
|
|
248,429
|
|
|
150,492
|
|
1
|
Basic average common shares outstanding include restricted stock awards that are fully vested, but are deferred for future issuance.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In thousands)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Restricted stock units
|
$
|
587
|
|
|
$
|
489
|
|
|
$
|
1,032
|
|
|
$
|
864
|
|
Performance shares
|
1,474
|
|
|
1,449
|
|
|
2,555
|
|
|
2,387
|
|
||||
Stock options
|
407
|
|
|
—
|
|
|
543
|
|
|
—
|
|
||||
Total employee equity-based compensation
|
$
|
2,468
|
|
|
$
|
1,938
|
|
|
$
|
4,130
|
|
|
$
|
3,251
|
|
|
Six Months Ended
|
|||||
|
June 30, 2014
|
|||||
|
Number of
Shares Subject to Award
|
|
Average Fair Value of
Award Per Share
|
|||
Restricted stock units
|
31,567
|
|
|
$
|
66.33
|
|
Performance shares
|
54,379
|
|
|
105.08
|
|
|
Stock options
|
163,137
|
|
|
22.99
|
|
|
June 30,
|
|
December 31,
|
||||||||||||
|
2014
|
|
2013
|
||||||||||||
|
Carrying
|
|
Fair
|
|
Carrying
|
|
Fair
|
||||||||
(In thousands)
|
Amount
|
|
Value
|
|
Amount
|
|
Value
|
||||||||
Cash, short-term investments and restricted cash (Level 1)
|
$
|
83,013
|
|
|
$
|
83,013
|
|
|
$
|
95,206
|
|
|
$
|
95,206
|
|
Long-term debt (Level 1)
|
650,000
|
|
|
660,988
|
|
|
650,000
|
|
|
651,313
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In thousands)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Segment net sales
1
:
|
|
|
|
|
|
|
|
||||||||
Consumer Products
|
$
|
299,130
|
|
|
$
|
289,708
|
|
|
$
|
585,638
|
|
|
$
|
574,610
|
|
Pulp and Paperboard
|
199,629
|
|
|
181,294
|
|
|
398,041
|
|
|
357,216
|
|
||||
Total segment net sales
|
$
|
498,759
|
|
|
$
|
471,002
|
|
|
$
|
983,679
|
|
|
$
|
931,826
|
|
|
|
|
|
|
|
|
|
||||||||
Operating (loss) income:
|
|
|
|
|
|
|
|
||||||||
Consumer Products
|
$
|
12,705
|
|
|
$
|
14,815
|
|
|
$
|
12,182
|
|
|
$
|
24,939
|
|
Pulp and Paperboard
|
33,635
|
|
|
24,772
|
|
|
70,411
|
|
|
42,325
|
|
||||
|
46,340
|
|
|
39,587
|
|
|
82,593
|
|
|
67,264
|
|
||||
Corporate
|
(13,257
|
)
|
|
(9,873
|
)
|
|
(28,992
|
)
|
|
(25,067
|
)
|
||||
Income from operations
|
$
|
33,083
|
|
|
$
|
29,714
|
|
|
$
|
53,601
|
|
|
$
|
42,197
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
||||||||
Consumer Products
|
$
|
15,071
|
|
|
$
|
17,030
|
|
|
$
|
30,561
|
|
|
$
|
33,122
|
|
Pulp and Paperboard
|
6,019
|
|
|
5,778
|
|
|
12,289
|
|
|
11,437
|
|
||||
Corporate
|
925
|
|
|
445
|
|
|
1,396
|
|
|
845
|
|
||||
Total depreciation and amortization
|
$
|
22,015
|
|
|
$
|
23,253
|
|
|
$
|
44,246
|
|
|
$
|
45,404
|
|
1
|
In 2013, pulp not utilized internally was sold by the Pulp and Paperboard segment to external customers resulting in net sales of
$0.9 million
and
$2.1 million
, respectively, during the three and
six
months ended
June 30, 2013
. Commencing in 2014, the majority of excess pulp is sold by the Consumer Products segment and totaled
$0.7 million
, of which
$0.3 million
was sold during the second quarter.
|
|
|
|
Guarantor
|
|
Non-Guarantor
|
|
|
|
|
||||||||||
(In thousands)
|
Issuer
|
|
Subsidiaries
|
|
Subsidiary
|
|
Eliminations
|
|
Total
|
||||||||||
Net sales
|
$
|
383,697
|
|
|
$
|
112,676
|
|
|
$
|
7,809
|
|
|
$
|
(5,423
|
)
|
|
$
|
498,759
|
|
Cost and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
(323,733
|
)
|
|
(109,818
|
)
|
|
(5,983
|
)
|
|
5,423
|
|
|
(434,111
|
)
|
|||||
Selling, general and administrative expenses
|
(25,907
|
)
|
|
(5,320
|
)
|
|
(338
|
)
|
|
—
|
|
|
(31,565
|
)
|
|||||
Total operating costs and expenses
|
(349,640
|
)
|
|
(115,138
|
)
|
|
(6,321
|
)
|
|
5,423
|
|
|
(465,676
|
)
|
|||||
Income (loss) from operations
|
34,057
|
|
|
(2,462
|
)
|
|
1,488
|
|
|
—
|
|
|
33,083
|
|
|||||
Interest expense, net
|
(10,681
|
)
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(10,688
|
)
|
|||||
Earnings (loss) before income taxes
|
23,376
|
|
|
(2,469
|
)
|
|
1,488
|
|
|
—
|
|
|
22,395
|
|
|||||
Income tax provision
|
(7,272
|
)
|
|
(5,675
|
)
|
|
(390
|
)
|
|
3,395
|
|
|
(9,942
|
)
|
|||||
Equity in (loss) income of subsidiary
|
(7,046
|
)
|
|
1,098
|
|
|
—
|
|
|
5,948
|
|
|
—
|
|
|||||
Net earnings (loss)
|
$
|
9,058
|
|
|
$
|
(7,046
|
)
|
|
$
|
1,098
|
|
|
$
|
9,343
|
|
|
$
|
12,453
|
|
Other comprehensive income, net of tax
|
920
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
920
|
|
|||||
Comprehensive income (loss)
|
$
|
9,978
|
|
|
$
|
(7,046
|
)
|
|
$
|
1,098
|
|
|
$
|
9,343
|
|
|
$
|
13,373
|
|
|
|
|
Guarantor
|
|
Non-Guarantor
|
|
|
|
|
||||||||||
(In thousands)
|
Issuer
|
|
Subsidiaries
|
|
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
Net sales
|
$
|
752,028
|
|
|
$
|
230,053
|
|
|
$
|
14,322
|
|
|
$
|
(12,724
|
)
|
|
$
|
983,679
|
|
Cost and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
(625,835
|
)
|
|
(234,611
|
)
|
|
(13,018
|
)
|
|
12,724
|
|
|
(860,740
|
)
|
|||||
Selling, general and administrative expenses
|
(53,566
|
)
|
|
(10,837
|
)
|
|
(676
|
)
|
|
—
|
|
|
(65,079
|
)
|
|||||
Impairment of assets
|
—
|
|
|
(4,259
|
)
|
|
—
|
|
|
—
|
|
|
(4,259
|
)
|
|||||
Total operating costs and expenses
|
(679,401
|
)
|
|
(249,707
|
)
|
|
(13,694
|
)
|
|
12,724
|
|
|
(930,078
|
)
|
|||||
Income (loss) from operations
|
72,627
|
|
|
(19,654
|
)
|
|
628
|
|
|
—
|
|
|
53,601
|
|
|||||
Interest expense, net
|
(21,404
|
)
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(21,422
|
)
|
|||||
Earnings (loss) before income taxes
|
51,223
|
|
|
(19,672
|
)
|
|
628
|
|
|
—
|
|
|
32,179
|
|
|||||
Income tax (provision) benefit
|
(20,749
|
)
|
|
3,697
|
|
|
(184
|
)
|
|
3,736
|
|
|
(13,500
|
)
|
|||||
Equity in loss of subsidiary
|
(15,531
|
)
|
|
444
|
|
|
—
|
|
|
15,087
|
|
|
—
|
|
|||||
Net earnings (loss)
|
$
|
14,943
|
|
|
$
|
(15,531
|
)
|
|
$
|
444
|
|
|
$
|
18,823
|
|
|
$
|
18,679
|
|
Other comprehensive income, net of tax
|
2,404
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,404
|
|
|||||
Comprehensive income (loss)
|
$
|
17,347
|
|
|
$
|
(15,531
|
)
|
|
$
|
444
|
|
|
$
|
18,823
|
|
|
$
|
21,083
|
|
|
|
|
Guarantor
|
|
Non-Guarantor
|
|
|
|
|
||||||||||
(In thousands)
|
Issuer
|
|
Subsidiaries
|
|
Subsidiary
|
|
Eliminations
|
|
Total
|
||||||||||
Net sales
|
$
|
348,075
|
|
|
$
|
120,636
|
|
|
$
|
7,286
|
|
|
$
|
(4,995
|
)
|
|
$
|
471,002
|
|
Cost and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
(295,589
|
)
|
|
(117,418
|
)
|
|
(6,509
|
)
|
|
4,995
|
|
|
(414,521
|
)
|
|||||
Selling, general and administrative expenses
|
(20,542
|
)
|
|
(5,734
|
)
|
|
(491
|
)
|
|
—
|
|
|
(26,767
|
)
|
|||||
Total operating costs and expenses
|
(316,131
|
)
|
|
(123,152
|
)
|
|
(7,000
|
)
|
|
4,995
|
|
|
(441,288
|
)
|
|||||
Income (loss) from operations
|
31,944
|
|
|
(2,516
|
)
|
|
286
|
|
|
—
|
|
|
29,714
|
|
|||||
Interest expense, net
|
(11,094
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,094
|
)
|
|||||
Earnings (loss) before income taxes
|
20,850
|
|
|
(2,516
|
)
|
|
286
|
|
|
—
|
|
|
18,620
|
|
|||||
Income tax (provision) benefit
|
(9,187
|
)
|
|
5,279
|
|
|
1
|
|
|
(3,055
|
)
|
|
(6,962
|
)
|
|||||
Equity in income of subsidiary
|
3,050
|
|
|
287
|
|
|
—
|
|
|
(3,337
|
)
|
|
—
|
|
|||||
Net earnings
|
$
|
14,713
|
|
|
$
|
3,050
|
|
|
$
|
287
|
|
|
$
|
(6,392
|
)
|
|
$
|
11,658
|
|
Other comprehensive income, net of tax
|
2,451
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,451
|
|
|||||
Comprehensive income
|
$
|
17,164
|
|
|
$
|
3,050
|
|
|
$
|
287
|
|
|
$
|
(6,392
|
)
|
|
$
|
14,109
|
|
|
|
|
Guarantor
|
|
Non-Guarantor
|
|
|
|
|
||||||||||
(In thousands)
|
Issuer
|
|
Subsidiaries
|
|
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
Net sales
|
$
|
692,323
|
|
|
$
|
235,352
|
|
|
$
|
14,141
|
|
|
$
|
(9,990
|
)
|
|
$
|
931,826
|
|
Cost and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
(597,940
|
)
|
|
(228,075
|
)
|
|
(12,705
|
)
|
|
9,990
|
|
|
(828,730
|
)
|
|||||
Selling, general and administrative expenses
|
(48,450
|
)
|
|
(11,468
|
)
|
|
(981
|
)
|
|
—
|
|
|
(60,899
|
)
|
|||||
Total operating costs and expenses
|
(646,390
|
)
|
|
(239,543
|
)
|
|
(13,686
|
)
|
|
9,990
|
|
|
(889,629
|
)
|
|||||
Income (loss) from operations
|
45,933
|
|
|
(4,191
|
)
|
|
455
|
|
|
—
|
|
|
42,197
|
|
|||||
Interest expense, net
|
(22,076
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,076
|
)
|
|||||
Debt retirement costs
|
(17,058
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,058
|
)
|
|||||
Earnings (loss) before income taxes
|
6,799
|
|
|
(4,191
|
)
|
|
455
|
|
|
—
|
|
|
3,063
|
|
|||||
Income tax benefit (provision)
|
5,155
|
|
|
6,492
|
|
|
(34
|
)
|
|
(3,900
|
)
|
|
7,713
|
|
|||||
Equity in income of subsidiary
|
2,722
|
|
|
421
|
|
|
—
|
|
|
(3,143
|
)
|
|
—
|
|
|||||
Net earnings
|
$
|
14,676
|
|
|
$
|
2,722
|
|
|
$
|
421
|
|
|
$
|
(7,043
|
)
|
|
$
|
10,776
|
|
Other comprehensive income, net of tax
|
4,912
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,912
|
|
|||||
Comprehensive income
|
$
|
19,588
|
|
|
$
|
2,722
|
|
|
$
|
421
|
|
|
$
|
(7,043
|
)
|
|
$
|
15,688
|
|
(In thousands)
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiary
|
|
Eliminations
|
|
Total
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash
|
$
|
18,843
|
|
|
$
|
—
|
|
|
$
|
3,638
|
|
|
$
|
—
|
|
|
$
|
22,481
|
|
Restricted cash
|
1,501
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,501
|
|
|||||
Short-term investments
|
59,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59,000
|
|
|||||
Receivables, net
|
126,894
|
|
|
39,288
|
|
|
3,112
|
|
|
(739
|
)
|
|
168,555
|
|
|||||
Taxes receivable
|
6,655
|
|
|
(3,254
|
)
|
|
269
|
|
|
3,170
|
|
|
6,840
|
|
|||||
Inventories
|
207,113
|
|
|
52,717
|
|
|
5,044
|
|
|
—
|
|
|
264,874
|
|
|||||
Deferred tax assets
|
20,903
|
|
|
8,070
|
|
|
(3
|
)
|
|
566
|
|
|
29,536
|
|
|||||
Prepaid expenses
|
7,498
|
|
|
489
|
|
|
98
|
|
|
—
|
|
|
8,085
|
|
|||||
Total current assets
|
448,407
|
|
|
97,310
|
|
|
12,158
|
|
|
2,997
|
|
|
560,872
|
|
|||||
Property, plant and equipment, net
|
632,272
|
|
|
224,649
|
|
|
16,363
|
|
|
—
|
|
|
873,284
|
|
|||||
Goodwill
|
229,533
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
229,533
|
|
|||||
Intangible assets, net
|
5,746
|
|
|
29,409
|
|
|
1,053
|
|
|
—
|
|
|
36,208
|
|
|||||
Intercompany receivable (payable)
|
95,532
|
|
|
(76,042
|
)
|
|
(15,754
|
)
|
|
(3,736
|
)
|
|
—
|
|
|||||
Investment in subsidiary
|
181,676
|
|
|
6,019
|
|
|
—
|
|
|
(187,695
|
)
|
|
—
|
|
|||||
Pension assets
|
11,284
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,284
|
|
|||||
Other assets, net
|
8,189
|
|
|
1,185
|
|
|
—
|
|
|
—
|
|
|
9,374
|
|
|||||
TOTAL ASSETS
|
$
|
1,612,639
|
|
|
$
|
282,530
|
|
|
$
|
13,820
|
|
|
$
|
(188,434
|
)
|
|
$
|
1,720,555
|
|
LIABILITIES AND STOCKHOLDERS’
EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued
liabilities
|
$
|
173,928
|
|
|
$
|
42,272
|
|
|
$
|
4,932
|
|
|
$
|
(739
|
)
|
|
$
|
220,393
|
|
Current liability for pensions and
other postretirement employee
benefits
|
8,778
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,778
|
|
|||||
Total current liabilities
|
182,706
|
|
|
42,272
|
|
|
4,932
|
|
|
(739
|
)
|
|
229,171
|
|
|||||
Long-term debt
|
650,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
650,000
|
|
|||||
Liability for pensions and other
postretirement employee benefits
|
105,015
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105,015
|
|
|||||
Other long-term obligations
|
49,159
|
|
|
1,053
|
|
|
—
|
|
|
—
|
|
|
50,212
|
|
|||||
Accrued taxes
|
1,449
|
|
|
926
|
|
|
319
|
|
|
—
|
|
|
2,694
|
|
|||||
Deferred tax liabilities
|
69,117
|
|
|
56,603
|
|
|
2,550
|
|
|
—
|
|
|
128,270
|
|
|||||
Accumulated other comprehensive loss,
net of tax
|
(55,689
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55,689
|
)
|
|||||
Stockholders’ equity excluding
accumulated other comprehensive loss
|
610,882
|
|
|
181,676
|
|
|
6,019
|
|
|
(187,695
|
)
|
|
610,882
|
|
|||||
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY
|
$
|
1,612,639
|
|
|
$
|
282,530
|
|
|
$
|
13,820
|
|
|
$
|
(188,434
|
)
|
|
$
|
1,720,555
|
|
(In thousands)
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiary
|
|
Eliminations
|
|
Total
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash
|
$
|
18,273
|
|
|
$
|
—
|
|
|
$
|
5,402
|
|
|
$
|
—
|
|
|
$
|
23,675
|
|
Restricted cash
|
1,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,500
|
|
|||||
Short-term investments
|
70,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70,000
|
|
|||||
Receivables, net
|
119,278
|
|
|
38,063
|
|
|
2,700
|
|
|
(1,167
|
)
|
|
158,874
|
|
|||||
Taxes receivable
|
3,709
|
|
|
(15,882
|
)
|
|
324
|
|
|
22,352
|
|
|
10,503
|
|
|||||
Inventories
|
198,476
|
|
|
65,017
|
|
|
4,295
|
|
|
—
|
|
|
267,788
|
|
|||||
Deferred tax assets
|
42,289
|
|
|
6,094
|
|
|
5
|
|
|
(10,850
|
)
|
|
37,538
|
|
|||||
Prepaid expenses
|
4,704
|
|
|
695
|
|
|
124
|
|
|
—
|
|
|
5,523
|
|
|||||
Total current assets
|
458,229
|
|
|
93,987
|
|
|
12,850
|
|
|
10,335
|
|
|
575,401
|
|
|||||
Property, plant and equipment, net
|
636,662
|
|
|
231,225
|
|
|
16,811
|
|
|
—
|
|
|
884,698
|
|
|||||
Goodwill
|
229,533
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
229,533
|
|
|||||
Intangible assets, net
|
—
|
|
|
39,619
|
|
|
1,159
|
|
|
—
|
|
|
40,778
|
|
|||||
Intercompany receivable (payable)
|
91,865
|
|
|
(63,932
|
)
|
|
(16,431
|
)
|
|
(11,502
|
)
|
|
—
|
|
|||||
Investment in subsidiary
|
196,763
|
|
|
5,575
|
|
|
—
|
|
|
(202,338
|
)
|
|
—
|
|
|||||
Pension assets
|
4,488
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,488
|
|
|||||
Other assets, net
|
8,772
|
|
|
1,155
|
|
|
—
|
|
|
—
|
|
|
9,927
|
|
|||||
TOTAL ASSETS
|
$
|
1,626,312
|
|
|
$
|
307,629
|
|
|
$
|
14,389
|
|
|
$
|
(203,505
|
)
|
|
$
|
1,744,825
|
|
LIABILITIES AND STOCKHOLDERS’
EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued
liabilities
|
$
|
140,125
|
|
|
$
|
45,736
|
|
|
$
|
5,954
|
|
|
$
|
(1,167
|
)
|
|
$
|
190,648
|
|
Current liability for pensions and
other postretirement employee
benefits
|
8,778
|
|
|
—
|
|
|
—
|
|
|
|
|
|
8,778
|
|
|||||
Total current liabilities
|
148,903
|
|
|
45,736
|
|
|
5,954
|
|
|
(1,167
|
)
|
|
199,426
|
|
|||||
Long-term debt
|
650,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
650,000
|
|
|||||
Liability for pensions and other
postretirement employee benefits
|
109,807
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
109,807
|
|
|||||
Other long-term obligations
|
51,740
|
|
|
1,202
|
|
|
—
|
|
|
—
|
|
|
52,942
|
|
|||||
Accrued taxes
|
1,430
|
|
|
911
|
|
|
317
|
|
|
—
|
|
|
2,658
|
|
|||||
Deferred tax liabilities
|
59,338
|
|
|
63,017
|
|
|
2,543
|
|
|
—
|
|
|
124,898
|
|
|||||
Accumulated other comprehensive loss,
net of tax
|
(58,093
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,093
|
)
|
|||||
Stockholders’ equity excluding
accumulated other comprehensive loss
|
663,187
|
|
|
196,763
|
|
|
5,575
|
|
|
(202,338
|
)
|
|
663,187
|
|
|||||
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY
|
$
|
1,626,312
|
|
|
$
|
307,629
|
|
|
$
|
14,389
|
|
|
$
|
(203,505
|
)
|
|
$
|
1,744,825
|
|
(In thousands)
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiary
|
|
Eliminations
|
|
Total
|
||||||||||
CASH FLOWS FROM OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net earnings (loss)
|
$
|
14,943
|
|
|
$
|
(15,531
|
)
|
|
$
|
444
|
|
|
$
|
18,823
|
|
|
$
|
18,679
|
|
Adjustments to reconcile net earnings (loss) to
net cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
28,559
|
|
|
14,515
|
|
|
1,172
|
|
|
—
|
|
|
44,246
|
|
|||||
Equity-based compensation expense
|
6,910
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,910
|
|
|||||
Impairment of assets
|
—
|
|
|
4,259
|
|
|
—
|
|
|
—
|
|
|
4,259
|
|
|||||
Deferred tax provision (benefit)
|
29,648
|
|
|
(8,390
|
)
|
|
15
|
|
|
(11,416
|
)
|
|
9,857
|
|
|||||
Employee benefit plans
|
979
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
979
|
|
|||||
Deferred issuance costs and discounts on
long-term debt
|
949
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
949
|
|
|||||
Disposal of plant and equipment, net
|
204
|
|
|
218
|
|
|
—
|
|
|
—
|
|
|
422
|
|
|||||
Changes in working capital, net
|
10,145
|
|
|
7,089
|
|
|
(2,416
|
)
|
|
—
|
|
|
14,818
|
|
|||||
Changes in taxes receivable, net
|
(2,946
|
)
|
|
(12,628
|
)
|
|
55
|
|
|
19,182
|
|
|
3,663
|
|
|||||
Changes in non-current accrued taxes, net
|
19
|
|
|
15
|
|
|
2
|
|
|
—
|
|
|
36
|
|
|||||
Funding of qualified pension plans
|
(8,889
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,889
|
)
|
|||||
Other, net
|
(850
|
)
|
|
(166
|
)
|
|
—
|
|
|
—
|
|
|
(1,016
|
)
|
|||||
Net cash flows from operating activities
|
79,671
|
|
|
(10,619
|
)
|
|
(728
|
)
|
|
26,589
|
|
|
94,913
|
|
|||||
CASH FLOWS FROM INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Changes in short-term investments, net
|
11,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,000
|
|
|||||
Additions to plant and equipment
|
(24,994
|
)
|
|
(7,500
|
)
|
|
(118
|
)
|
|
—
|
|
|
(32,612
|
)
|
|||||
Proceeds from the sale of assets
|
38
|
|
|
581
|
|
|
—
|
|
|
—
|
|
|
619
|
|
|||||
Net cash flows from investing activities
|
(13,956
|
)
|
|
(6,919
|
)
|
|
(118
|
)
|
|
—
|
|
|
(20,993
|
)
|
|||||
CASH FLOWS FROM FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of treasury stock
|
(74,322
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(74,322
|
)
|
|||||
Investment from (to) parent
|
9,969
|
|
|
17,538
|
|
|
(918
|
)
|
|
(26,589
|
)
|
|
—
|
|
|||||
Payment of tax withholdings on equity-
based payment arrangements
|
(792
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(792
|
)
|
|||||
Net cash flows from financing activities
|
(65,145
|
)
|
|
17,538
|
|
|
(918
|
)
|
|
(26,589
|
)
|
|
(75,114
|
)
|
|||||
Increase (decrease) in cash
|
570
|
|
|
—
|
|
|
(1,764
|
)
|
|
—
|
|
|
(1,194
|
)
|
|||||
Cash at beginning of period
|
18,273
|
|
|
—
|
|
|
5,402
|
|
|
—
|
|
|
23,675
|
|
|||||
Cash at end of period
|
$
|
18,843
|
|
|
$
|
—
|
|
|
$
|
3,638
|
|
|
$
|
—
|
|
|
$
|
22,481
|
|
(In thousands)
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor
Subsidiary
|
|
Eliminations
|
|
Total
|
||||||||||
CASH FLOWS FROM OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net earnings
|
$
|
14,676
|
|
|
$
|
2,722
|
|
|
$
|
421
|
|
|
$
|
(7,043
|
)
|
|
$
|
10,776
|
|
Adjustments to reconcile net earnings to net
cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
27,153
|
|
|
17,144
|
|
|
1,107
|
|
|
—
|
|
|
45,404
|
|
|||||
Equity-based compensation expense
|
5,581
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,581
|
|
|||||
Deferred tax provision (benefit)
|
4,362
|
|
|
(14,202
|
)
|
|
(587
|
)
|
|
1,043
|
|
|
(9,384
|
)
|
|||||
Employee benefit plans
|
5,098
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,098
|
|
|||||
Deferred issuance costs and discounts on
long-term debt
|
4,017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,017
|
|
|||||
Changes in working capital, net
|
(43,863
|
)
|
|
392
|
|
|
(334
|
)
|
|
—
|
|
|
(43,805
|
)
|
|||||
Changes in taxes receivable, net
|
9,270
|
|
|
(879
|
)
|
|
(121
|
)
|
|
3,648
|
|
|
11,918
|
|
|||||
Changes in non-current accrued taxes, net
|
(2,775
|
)
|
|
10
|
|
|
2
|
|
|
—
|
|
|
(2,763
|
)
|
|||||
Funding of qualified pension plans
|
(4,633
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,633
|
)
|
|||||
Other, net
|
(113
|
)
|
|
(124
|
)
|
|
—
|
|
|
—
|
|
|
(237
|
)
|
|||||
Net cash flows from operating activities
|
18,773
|
|
|
5,063
|
|
|
488
|
|
|
(2,352
|
)
|
|
21,972
|
|
|||||
CASH FLOWS FROM INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Changes in short-term investments, net
|
(60,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60,000
|
)
|
|||||
Additions to plant and equipment
|
(23,934
|
)
|
|
(6,267
|
)
|
|
(1,212
|
)
|
|
—
|
|
|
(31,413
|
)
|
|||||
Net cash flows from investing activities
|
(83,934
|
)
|
|
(6,267
|
)
|
|
(1,212
|
)
|
|
—
|
|
|
(91,413
|
)
|
|||||
CASH FLOWS FROM FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from long-term debt
|
275,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
275,000
|
|
|||||
Repayment of long-term debt
|
(150,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(150,000
|
)
|
|||||
Purchase of treasury stock
|
(59,984
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59,984
|
)
|
|||||
Investment (to) from parent
|
(4,670
|
)
|
|
1,200
|
|
|
1,118
|
|
|
2,352
|
|
|
—
|
|
|||||
Payments for long-term debt issuance costs
|
(4,779
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,779
|
)
|
|||||
Payment of tax withholdings on equity-
based payment arrangements
|
(2,195
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,195
|
)
|
|||||
Net cash flows from financing activities
|
53,372
|
|
|
1,200
|
|
|
1,118
|
|
|
2,352
|
|
|
58,042
|
|
|||||
(Decrease) increase in cash
|
(11,789
|
)
|
|
(4
|
)
|
|
394
|
|
|
—
|
|
|
(11,399
|
)
|
|||||
Cash at beginning of period
|
11,105
|
|
|
5
|
|
|
1,469
|
|
|
—
|
|
|
12,579
|
|
|||||
Cash at end of period
|
$
|
(684
|
)
|
|
$
|
1
|
|
|
$
|
1,863
|
|
|
$
|
—
|
|
|
$
|
1,180
|
|
•
|
customer acceptance, timing and quantity of purchases of our new through-air-dried, or TAD, products;
|
•
|
competitive pricing pressures for our products, including as a result of increased capacity as additional manufacturing facilities are operated by our competitors;
|
•
|
difficulties with the optimization and realization of the benefits expected from our new TAD paper machine and converting lines in Shelby, North Carolina;
|
•
|
the loss of or changes in prices in regards to a significant customer;
|
•
|
manufacturing or operating disruptions, including increased energy and chemical consumption, equipment malfunction and damage to our manufacturing facilities caused by fire or weather-related events and IT system failures;
|
•
|
changes in the cost and availability of wood fiber and wood pulp;
|
•
|
changes in transportation costs and disruptions in transportation services;
|
•
|
labor disruptions;
|
•
|
changes in costs for and availability of packaging supplies, chemicals, energy and maintenance and repairs;
|
•
|
changes in customer product preferences and competitors' product offerings;
|
•
|
changes in expenses and required contributions associated with our pension plans;
|
•
|
environmental liabilities or expenditures;
|
•
|
changes in the U.S. and international economies and in general economic conditions in the regions and industries in which we operate;
|
•
|
increased supply and pricing pressures resulting from increasing Asian paper production capabilities;
|
•
|
cyclical industry conditions;
|
•
|
reliance on a limited number of third-party suppliers for raw materials;
|
•
|
inability to successfully implement our expansion strategies;
|
•
|
inability to fund our debt obligations;
|
•
|
restrictions on our business from debt covenants and terms;
|
•
|
changes in laws, regulations or industry standards affecting our business; and
|
•
|
our qualification to retain, or ability to utilize, tax credits associated with alternative fuels or cellulosic biofuels and the tax treatment associated with receipt of such credits.
|
Operating costs
|
|||||||||||||
|
Three Months Ended June 30,
|
||||||||||||
(Dollars in thousands)
|
2014
|
|
2013
|
||||||||||
|
Cost
|
|
Percentage of
Cost of Sales
|
|
Cost
|
|
Percentage of
Cost of Sales
|
||||||
Purchased pulp
|
$
|
76,138
|
|
|
17.5
|
%
|
|
$
|
73,049
|
|
|
17.6
|
%
|
Chemicals
|
50,377
|
|
|
11.6
|
|
|
48,644
|
|
|
11.7
|
|
||
Transportation
1
|
46,500
|
|
|
10.7
|
|
|
45,814
|
|
|
11.1
|
|
||
Chips, sawdust and logs
|
35,300
|
|
|
8.1
|
|
|
35,656
|
|
|
8.6
|
|
||
Energy
|
34,066
|
|
|
7.8
|
|
|
31,453
|
|
|
7.6
|
|
||
Packaging supplies
|
24,707
|
|
|
5.7
|
|
|
26,206
|
|
|
6.3
|
|
||
Maintenance and repairs
2
|
22,017
|
|
|
5.1
|
|
|
20,773
|
|
|
5.0
|
|
||
Depreciation
|
19,388
|
|
|
4.6
|
|
|
20,792
|
|
|
5.0
|
|
||
|
$
|
308,493
|
|
|
71.1
|
%
|
|
$
|
302,387
|
|
|
72.9
|
%
|
|
|
|
|
|
|
|
|
||||||
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in thousands)
|
2014
|
|
2013
|
||||||||||
|
Cost
|
|
Percentage of
Cost of Sales |
|
Cost
|
|
Percentage of
Cost of Sales |
||||||
Purchased pulp
|
$
|
149,210
|
|
|
17.3
|
%
|
|
$
|
144,684
|
|
|
17.4
|
%
|
Chemicals
|
99,439
|
|
|
11.6
|
|
|
96,091
|
|
|
11.6
|
|
||
Transportation
1
|
92,436
|
|
|
10.7
|
|
|
91,259
|
|
|
11.0
|
|
||
Energy
|
71,134
|
|
|
8.3
|
|
|
63,306
|
|
|
7.6
|
|
||
Chips, sawdust and logs
|
70,853
|
|
|
8.2
|
|
|
72,754
|
|
|
8.8
|
|
||
Packaging supplies
|
49,975
|
|
|
5.8
|
|
|
50,475
|
|
|
6.1
|
|
||
Maintenance and repairs
2
|
41,126
|
|
|
4.8
|
|
|
43,735
|
|
|
5.3
|
|
||
Depreciation
|
39,383
|
|
|
4.6
|
|
|
40,542
|
|
|
4.9
|
|
||
|
$
|
613,556
|
|
|
71.3
|
%
|
|
$
|
602,846
|
|
|
72.7
|
%
|
1
|
Includes internal and external transportation costs.
|
2
|
Excluding related labor costs.
|
|
Three Months Ended June 30,
|
||||||||||||
(Dollars in thousands)
|
2014
|
|
2013
|
||||||||||
Net sales
|
$
|
498,759
|
|
|
100.0
|
%
|
|
$
|
471,002
|
|
|
100.0
|
%
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||
Cost of sales
|
(434,111
|
)
|
|
87.0
|
|
|
(414,521
|
)
|
|
88.0
|
|
||
Selling, general and administrative expenses
|
(31,565
|
)
|
|
6.3
|
|
|
(26,767
|
)
|
|
5.7
|
|
||
Total operating costs and expenses
|
(465,676
|
)
|
|
93.4
|
|
|
(441,288
|
)
|
|
93.7
|
|
||
Income from operations
|
33,083
|
|
|
6.6
|
|
|
29,714
|
|
|
6.3
|
|
||
Interest expense, net
|
(10,688
|
)
|
|
2.1
|
|
|
(11,094
|
)
|
|
2.4
|
|
||
Earnings before income taxes
|
22,395
|
|
|
4.5
|
|
|
18,620
|
|
|
4.0
|
|
||
Income tax provision
|
(9,942
|
)
|
|
2.0
|
|
|
(6,962
|
)
|
|
1.5
|
|
||
Net earnings
|
$
|
12,453
|
|
|
2.5
|
%
|
|
$
|
11,658
|
|
|
2.5
|
%
|
|
Three Months Ended
|
||||||
|
June 30,
|
||||||
(In thousands)
|
2014
|
|
2013
|
||||
Income tax provision
|
$
|
(9,942
|
)
|
|
$
|
(6,962
|
)
|
Special items, tax impact:
|
|
|
|
||||
Directors' equity-based compensation benefit
|
13
|
|
|
435
|
|
||
Costs associated with Thomaston facility closure
|
(132
|
)
|
|
(386
|
)
|
||
Costs associated with Long Island facility closure
|
(650
|
)
|
|
—
|
|
||
Discrete tax items related to state tax rate change
|
1,388
|
|
|
—
|
|
||
Adjusted income tax provision
|
$
|
(9,323
|
)
|
|
$
|
(6,913
|
)
|
|
Three Months Ended
|
||||||
|
June 30,
|
||||||
(Dollars in thousands - except per ton amounts)
|
2014
|
|
2013
|
||||
Net sales
|
$
|
299,130
|
|
|
$
|
289,708
|
|
Operating income
|
12,705
|
|
|
14,815
|
|
||
Percent of net sales
|
4.2
|
%
|
|
5.1
|
%
|
||
|
|
|
|
||||
Shipments (short tons)
|
|
|
|
||||
Non-retail
|
59,832
|
|
|
57,012
|
|
||
Retail
|
75,009
|
|
|
75,045
|
|
||
Total tissue tons
|
134,841
|
|
|
132,057
|
|
||
Converted products cases (in thousands)
|
14,101
|
|
|
14,021
|
|
||
|
|
|
|
||||
Sales price (per short ton)
|
|
|
|
||||
Non-retail
|
$
|
1,492
|
|
|
$
|
1,475
|
|
Retail
|
2,795
|
|
|
2,740
|
|
||
Total tissue
|
$
|
2,217
|
|
|
$
|
2,194
|
|
|
Three Months Ended
|
||||||
|
June 30,
|
||||||
(Dollars in thousands - except per ton amounts)
|
2014
|
|
2013
|
||||
Net sales
|
$
|
199,629
|
|
|
$
|
181,294
|
|
Operating income
|
33,635
|
|
|
24,772
|
|
||
Percent of net sales
|
16.8
|
%
|
|
13.7
|
%
|
||
|
|
|
|
||||
Paperboard shipments (short tons)
|
195,924
|
|
|
190,518
|
|
||
Paperboard sales price (per short ton)
|
$
|
1,017
|
|
|
$
|
946
|
|
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in thousands)
|
2014
|
|
2013
|
||||||||||
Net sales
|
$
|
983,679
|
|
|
100.0
|
%
|
|
$
|
931,826
|
|
|
100.0
|
%
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||
Cost of sales
|
(860,740
|
)
|
|
87.5
|
|
|
(828,730
|
)
|
|
88.9
|
|
||
Selling, general and administrative expenses
|
(65,079
|
)
|
|
6.6
|
|
|
(60,899
|
)
|
|
6.5
|
|
||
Impairment of assets
|
(4,259
|
)
|
|
0.4
|
|
|
—
|
|
|
—
|
|
||
Total operating costs and expenses
|
(930,078
|
)
|
|
94.6
|
|
|
(889,629
|
)
|
|
95.5
|
|
||
Income from operations
|
53,601
|
|
|
5.4
|
|
|
42,197
|
|
|
4.5
|
|
||
Interest expense, net
|
(21,422
|
)
|
|
2.2
|
|
|
(22,076
|
)
|
|
2.4
|
|
||
Debt retirement costs
|
—
|
|
|
—
|
|
|
(17,058
|
)
|
|
1.8
|
|
||
Earnings before income taxes
|
32,179
|
|
|
3.3
|
|
|
3,063
|
|
|
0.3
|
|
||
Income tax (provision) benefit
|
(13,500
|
)
|
|
1.4
|
|
|
7,713
|
|
|
0.8
|
|
||
Net earnings
|
$
|
18,679
|
|
|
1.9
|
|
|
$
|
10,776
|
|
|
1.2
|
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
(In thousands)
|
2014
|
|
2013
|
||||
Income tax (provision) benefit
|
$
|
(13,500
|
)
|
|
$
|
7,713
|
|
Special items, tax impact:
|
|
|
|
||||
Debt retirement costs
|
—
|
|
|
(6,277
|
)
|
||
Directors' equity-based compensation expense
|
(1,002
|
)
|
|
(843
|
)
|
||
Costs associated with Thomaston facility closure
|
(402
|
)
|
|
(453
|
)
|
||
Costs associated with Long Island facility closure
|
(3,688
|
)
|
|
—
|
|
||
Discrete tax items related to state tax rate change
|
1,388
|
|
|
—
|
|
||
Discrete tax items related to tax credit conversions
|
—
|
|
|
(9,766
|
)
|
||
Adjusted income tax provision
|
$
|
(17,204
|
)
|
|
$
|
(9,626
|
)
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
(Dollars in thousands - except per ton amounts)
|
2014
|
|
2013
|
||||
Net sales
|
$
|
585,638
|
|
|
$
|
574,610
|
|
Operating income
|
12,182
|
|
|
24,939
|
|
||
Percent of net sales
|
2.1
|
%
|
|
4.3
|
%
|
||
|
|
|
|
||||
Shipments (short tons)
|
|
|
|
||||
Non-retail
|
116,671
|
|
|
112,247
|
|
||
Retail
|
145,928
|
|
|
152,406
|
|
||
Total tissue tons
|
262,599
|
|
|
264,653
|
|
||
Converted products cases (in thousands)
|
27,538
|
|
|
27,802
|
|
||
|
|
|
|
||||
Sales price (per short ton)
|
|
|
|
||||
Non-retail
|
$
|
1,491
|
|
|
$
|
1,454
|
|
Retail
|
2,817
|
|
|
2,699
|
|
||
Total tissue
|
$
|
2,228
|
|
|
$
|
2,171
|
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
(Dollars in thousands - except per ton amounts)
|
2014
|
|
2013
|
||||
Net sales
|
$
|
398,041
|
|
|
$
|
357,216
|
|
Operating income
|
70,411
|
|
|
42,325
|
|
||
Percent of net sales
|
17.7
|
%
|
|
11.8
|
%
|
||
|
|
|
|
||||
Paperboard shipments (short tons)
|
396,589
|
|
|
376,868
|
|
||
Paperboard sales price (per short ton)
|
$
|
1,002
|
|
|
$
|
940
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
(In thousands)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net earnings
|
$
|
12,453
|
|
|
$
|
11,658
|
|
|
$
|
18,679
|
|
|
$
|
10,776
|
|
Interest expense, net
1
|
10,688
|
|
|
11,094
|
|
|
21,422
|
|
|
39,134
|
|
||||
Income tax provision (benefit)
|
9,942
|
|
|
6,962
|
|
|
13,500
|
|
|
(7,713
|
)
|
||||
Depreciation and amortization expense
|
22,015
|
|
|
23,253
|
|
|
44,246
|
|
|
45,404
|
|
||||
EBITDA
|
$
|
55,098
|
|
|
$
|
52,967
|
|
|
$
|
97,847
|
|
|
$
|
87,601
|
|
Directors' equity-based compensation (benefit) expense
|
(36
|
)
|
|
(1,141
|
)
|
|
2,781
|
|
|
2,331
|
|
||||
Costs associated with Thomaston facility closure
|
374
|
|
|
1,013
|
|
|
1,124
|
|
|
1,196
|
|
||||
Costs associated with Long Island facility closure
|
1,843
|
|
|
—
|
|
|
10,275
|
|
|
—
|
|
||||
Adjusted EBITDA
|
$
|
57,279
|
|
|
$
|
52,839
|
|
|
$
|
112,027
|
|
|
$
|
91,128
|
|
1
|
Interest expense, net for the
six
months ended
June 30, 2013
includes debt retirement costs of $17.1 million.
|
(In thousands)
|
2014
|
|
2013
|
||||
Net cash flows from operating activities
|
$
|
94,913
|
|
|
$
|
21,972
|
|
Net cash flows from investing activities
|
(20,993
|
)
|
|
(91,413
|
)
|
||
Net cash flows from financing activities
|
(75,114
|
)
|
|
58,042
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
(In thousands)
|
|
Total
|
|
Less
Than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than
5 Years
|
||||||||||
Long-term debt
|
|
$
|
575,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
575,000
|
|
Interest on long-term debt
|
|
280,823
|
|
|
6,188
|
|
|
57,134
|
|
|
57,000
|
|
|
160,501
|
|
|||||
Borrowings under revolving credit facility
|
|
37,400
|
|
|
37,400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
893,223
|
|
|
$
|
43,588
|
|
|
$
|
57,134
|
|
|
$
|
57,000
|
|
|
$
|
735,501
|
|
|
|
Expected Maturity Date
|
||||||||||||||||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
|
Total
|
||||||||||||||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed rate
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
575,000
|
|
|
$
|
575,000
|
|
Average interest rate
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
4.957
|
%
|
|
4.957
|
%
|
|||||||
Pro forma fair value at
June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
566,750
|
|
ITEM 4.
|
|
Controls and Procedures
|
ITEM 1.
|
|
Legal Proceedings
|
ITEM 1A.
|
|
Risk Factors
|
ITEM 2.
|
|
Unregistered Sales of Equity Securities and Uses of Proceeds
|
Period
|
Total
Number of
Shares
Purchased
|
|
Average
Price Paid per
Share
|
|
Total
Number of
Shares
Purchased as
Part of Publicly
Announced
Program
|
|
Approximate
Dollar Value of
Shares that May
Yet Be Purchased
Under the
Program
|
||||||
April 1, 2014 to April 30, 2014
|
470,948
|
|
|
$
|
61.10
|
|
|
470,948
|
|
|
$
|
41,893
|
|
May 1, 2014 to May 31, 2014
|
58,459
|
|
|
$
|
61.41
|
|
|
58,459
|
|
|
$
|
38,303
|
|
June 1, 2014 to June 30, 2014
|
204,269
|
|
|
$
|
61.81
|
|
|
204,269
|
|
|
$
|
25,678
|
|
Total
|
733,676
|
|
|
$
|
61.32
|
|
|
733,676
|
|
|
|
ITEM 6.
|
|
Exhibits
|
|
The exhibit index is located on page
40
of this Form 10-Q.
|
|
|
|
|
|
|
|
|
CLEARWATER PAPER CORPORATION
|
|
|
|
|
|
(Registrant)
|
|
|
|
||
|
|
|
|
|
Date: July 31, 2014
|
|
By
|
/s/ JOHN D. HERTZ
|
|
|
|
|
|
John D. Hertz
|
|
|
|
|
Senior Vice President, Finance and
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Duly Authorized Officer; Principal
|
|
|
|
|
Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
Date: July 31, 2014
|
|
By
|
/s/ JOHNATHAN D. HUNTER
|
|
|
|
|
|
Johnathan D. Hunter
|
|
|
|
|
Vice President, Corporate Controller
|
|
|
|
|
(Duly Authorized Officer; Principal
|
|
|
|
|
Accounting Officer)
|
|
|
|
|
|
|
|
|
|
|
EXHIBIT
NUMBER
|
|
DESCRIPTION
|
10.1
1*
|
|
Clearwater Paper Corporation Annual Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 9, 2014).
|
|
|
|
10.2
1
|
|
Clearwater Paper Corporation 2008 Stock Incentive Plan-Form of Restricted Stock Unit Award, to be used for special restricted stock unit awards.
|
|
|
|
(31)
|
|
Rule 13a-14(a)/15d-14(a) Certifications.
|
|
|
|
(32)**
|
|
Furnished statements of the Chief Executive Officer and Chief Financial Officer under 18 U.S.C Section 1350.
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase.
|
1
|
Management contract or compensatory plan, contract or arrangement.
|
|
|
*
|
Incorporated by reference.
|
|
|
**
|
In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibit 32 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act.
|
a.
|
The provisions of Sections 5 and 8 requiring payment after a Double Trigger Event or otherwise upon an Employee’s termination of Service shall be construed to require that the Employee “separate from service” with Clearwater and its Affiliates within the meaning of Treasury Regulation Section 1.409A-1(h) as a condition to the Employee receiving such payment.
|
b.
|
If the Employee is entitled to receive a payment subject to Section 409A of the Code after a Double Trigger Event or otherwise upon a termination of Service, and the Corporation determines in good faith that the Employee is a “specified employee” as defined in Section 409A as of the date his Service terminates, then such payment shall be deferred and paid 6 months and 1 day following the date of the Employee’s termination of Service (or if earlier, payment shall be made within 60 days after the date of the Employee’s death).
|
c.
|
Any deferrals of payment required under Section 12 are intended to comply with Section 409A of the Code.
|
1.
|
I have reviewed this report on Form 10-Q of Clearwater Paper Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
Date: July 31, 2014
|
|
|
|
/S/ LINDA K. MASSMAN
|
|
|
|
|
Linda K. Massman
|
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q of Clearwater Paper Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
Date: July 31, 2014
|
|
|
|
/S/ JOHN D. HERTZ
|
|
|
|
|
John D. Hertz
|
|
|
|
|
Senior Vice President, Finance and Chief Financial Officer
|
(1)
|
the Quarterly Report of the Company on Form 10-Q for the period ended
June 30, 2014
, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/S/ LINDA K. MASSMAN
|
Linda K. Massman
|
President and Chief Executive Officer
|
July 31, 2014
|
(1)
|
the Quarterly Report of the Company on Form 10-Q for the period ended
June 30, 2014
, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/S/ JOHN D. HERTZ
|
John D. Hertz
|
Senior Vice President, Finance and Chief Financial Officer
|
July 31, 2014
|