|
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
06-1826563
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification Number)
|
|
|
|
475 N. Martingale Road Suite 1200
Schaumburg, IL
|
|
60173
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(Address of principal executive offices)
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|
(Zip Code)
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Title of each class
|
|
Name of each exchange on which registered
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Common stock, $0.01 par value
|
|
New York Stock Exchange
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Large accelerated filer
|
¨
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Accelerated filer
|
x
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Non-accelerated filer
|
¨
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Smaller reporting company
|
¨
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Emerging growth company
|
¨
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Item 1.
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||
Item 1A.
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||
Item 1B.
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||
Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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||
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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||
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Item 15.
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Item 16.
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Activities
|
●
Leading manufacturer, fabricator and converter
|
●
Leading manufacturer and supplier
|
●
Leading processor and distributor
|
Products
|
● Specialized copper and brass sheet, strip, foil, tube, and fabricated products
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● Brass rod, including environmentally friendly alloys
|
● Primarily copper, brass, and aluminum sheet, strip and coated products
|
Key Markets
|
●
Building and Housing
|
●
Building and Housing
|
●
Building and Housing
|
|
●
Automotive
|
●
Transportation
|
●
Automotive
|
|
●
Electronics / Electrical Components
|
●
Electronics / Electrical Components
|
●
Electronics / Electrical Components
|
|
●
Munitions
|
●
Industrial Machinery and Equipment
|
|
|
●
Coinage
|
|
|
•
|
a stamping operation located in East Alton;
|
•
|
a rolling mill in Waterbury, Connecticut with rolling, annealing, leveling, plating and slitting capabilities for various products (“Somers Thin Strip”), including stainless steel thin strip;
|
•
|
a manufacturing facility in Bryan, Ohio specializing in products sold in the automotive and electronics / electrical components markets; and
|
•
|
a manufacturing facility in Cuba, Missouri that produces high frequency welded copper-alloy tube for heat transfer, utility, decorative, automotive and plumbing applications.
|
•
|
Aurubis and PMX Industries, Inc.: manufacturers of copper and copper-alloys in the form of strip, sheet and plate (Olin Brass competitor);
|
•
|
ThyssenKrupp Materials NA, Copper and Brass Sales Division: processor and distributor of copper, brass, stainless and aluminum products; Wieland Metals, Inc.: re-roll mill and service center for copper and copper-alloy strip (A.J. Oster competitor); and
|
•
|
Mueller Industries, Inc.: manufacturer of brass rod (Chase Brass competitor).
|
•
|
Olin Brass accounted for
31%
of North American shipments (including shipments to A.J. Oster) of copper and brass alloys in the form of sheet, strip and plate;
|
•
|
A.J. Oster accounted for
42%
of North American shipments of copper and brass, sheet and strip products from distribution centers and rerolling facilities; and
|
•
|
Chase Brass accounted for
51%
of North American shipments of brass rod, not including imports.
|
•
|
compliance with all obligations to perform investigations and remedial action required under the Connecticut Real Property Transfer Act at properties in Connecticut;
|
•
|
pending corrective action / compliance obligations under the Federal Resource Conservation and Recovery Act for certain areas of concern at our East Alton, Illinois facility; and
|
•
|
all obligations under environmental laws arising out of 24 additional specifically identified areas of concern on various of our properties.
|
|
|
Employees
|
|
% of Total
|
||
Olin Brass
|
|
1,093
|
|
|
58
|
%
|
A.J. Oster
|
|
433
|
|
|
23
|
%
|
Chase Brass
|
|
335
|
|
|
18
|
%
|
Corporate
|
|
21
|
|
|
1
|
%
|
Total
|
|
1,882
|
|
|
100
|
%
|
•
|
incur or guarantee additional indebtedness;
|
•
|
pay dividends on our capital stock or redeem, repurchase, retire or make distributions in respect of our capital stock or subordinated indebtedness or make certain other restricted payments;
|
•
|
make certain loans, acquisitions, capital expenditures or investments;
|
•
|
sell certain assets, including stock of our subsidiaries;
|
•
|
enter into certain sale and leaseback transactions;
|
•
|
create or incur certain liens;
|
•
|
consolidate, merge, sell, transfer or otherwise dispose of all or substantially all of our assets;
|
•
|
enter into certain transactions with our affiliates; and
|
•
|
engage in certain business activities.
|
•
|
changes in U.S. and international governmental regulations, trade restrictions and laws, including tax laws and regulations;
|
•
|
currency exchange rate fluctuations;
|
•
|
tariffs and other trade barriers;
|
•
|
the potential for nationalization of enterprises or government policies favoring local production;
|
•
|
interest rate fluctuations;
|
•
|
high rates of inflation;
|
•
|
currency restrictions and limitations on repatriation of profits;
|
•
|
differing protections for intellectual property and enforcement thereof;
|
•
|
divergent environmental laws and regulations;
|
•
|
political, economic and social instability;
|
•
|
unfamiliarity with foreign laws and regulations and ability to enforce obligations of foreign counterparties;
|
•
|
difficulties in staffing and managing international operations and labor unrest;
|
•
|
language and cultural barriers;
|
•
|
natural disasters and widespread illness;
|
•
|
geopolitical conditions, such as terrorist attacks, war, or other military action; and
|
•
|
a divergence between the price of copper on the copper exchange in China and the LME, and the COMEX.
|
•
|
we may experience adverse short-term effects on our operating results;
|
•
|
we may be unable to successfully and rapidly integrate the new businesses, personnel and products with our existing business, including financial reporting, management and information technology systems;
|
•
|
we may experience higher than anticipated costs of integration and unforeseen operating difficulties and expenditures, including potential disruption of our ongoing business and distraction of management;
|
•
|
an acquisition may be in a market or geographical area in which we have little experience and could increase the scope, geographic diversity and complexity of our operations;
|
•
|
the acquisition or joint venture formation process may require significant attention by our senior management and the engagement of outside advisors (and the payment of related fees), and proposed acquisitions and joint ventures may not be successfully completed;
|
•
|
we may lose key employees or customers of the acquired company; and
|
•
|
we may encounter unknown contingent liabilities that could be material.
|
Entity
|
|
Operation
|
|
Location
|
|
Owned or
Leased
|
|
Products
|
Corporate
|
|
Corporate Headquarters
|
|
Schaumburg, Illinois
|
|
Leased
|
|
N/A
|
Olin Brass segment
|
|
Mill Products
|
|
East Alton, Illinois
|
|
Owned (1)
|
|
Copper-based strip
Clad copper & copper-alloy strip |
|
|
Fabricated Products
|
|
East Alton, Illinois
|
|
Owned (1)
|
|
Stamped & drawn copper-based parts
|
|
|
Fineweld Tube
|
|
Cuba, Missouri
|
|
Owned
|
|
Welded copper-alloy tube
|
|
|
Bryan Metals
|
|
Bryan, Ohio
|
|
Owned
|
|
Copper-based strip
|
|
|
Somers Thin Strip
|
|
Waterbury, Connecticut
|
|
Owned
|
|
Copper-based strip and foil
Stainless steel light gauge strip
|
|
|
Olin Luotong Metals
|
|
Guangzhou, China
|
|
Owned building; 50-year lease on land
|
|
Copper-based strip
|
|
|
Olin Brass
Headquarters
|
|
Louisville, Kentucky
|
|
Leased
|
|
N/A
|
Chase Brass segment
|
|
Manufacturing
|
|
Montpelier, Ohio
|
|
Owned
|
|
Copper-based rod
|
|
|
Warehouse
|
|
Los Angeles, California
|
|
Leased
|
|
Copper-based rod
|
A.J. Oster segment
|
|
Processing and Distribution
|
|
Warwick, Rhode Island
|
|
Leased
|
|
Copper-alloy sheet, strip, bar, rod and wire
Aluminum sheet and strip
Stainless steel sheet, strip and specialty rod
|
|
|
Processing and Distribution
|
|
Alliance, Ohio
|
|
Owned
|
|
|
|
|
Processing and Distribution
|
|
Carol Stream, Illinois
|
|
Owned
|
|
|
|
|
Processing and Distribution
|
|
Yorba Linda, California
|
|
Leased
|
|
|
|
|
Processing and Distribution
|
|
Fullerton, California
|
|
Leased
|
|
|
|
|
Processing and Distribution
|
|
Caguas, Puerto Rico
|
|
Owned
|
|
|
|
|
Processing and Distribution
|
|
Queretaro, Mexico
|
|
Owned
|
|
|
|
|
Processing and Distribution
|
|
Parsippany, New Jersey
|
|
Leased
|
|
|
|
|
Processing and Distribution
|
|
Irving, Texas
|
|
Leased
|
|
|
|
|
Distribution
|
|
Houston, Texas
|
|
Leased
|
|
|
|
|
Distribution
|
|
Atlanta, Georgia
|
|
Leased
|
|
|
|
|
A.J. Oster
Headquarters
|
|
Warwick, Rhode Island
|
|
Leased
|
|
N/A
|
|
Stock Compensation Plans
|
|
Share Repurchase Program
|
|||||||||||||
Period
|
Total
Number of
Shares Purchased (1) |
|
Average
Price
per Share |
|
Total
Number of
Shares Purchased (2) |
|
Average
Price
per Share |
|
Maximum Dollar Value of Shares That May Yet be Purchased Under the Program (millions) (2)
|
|||||||
October 1, 2018 through October 31, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
35.0
|
|
November 1, 2018 through November 30, 2018
|
—
|
|
|
$
|
—
|
|
|
400,000
|
|
|
31.48
|
|
|
$
|
22.4
|
|
December 1, 2018 through December 31, 2018
|
1,026
|
|
|
$
|
25.15
|
|
|
—
|
|
|
—
|
|
|
$
|
22.4
|
|
Total
|
1,026
|
|
|
$
|
25.15
|
|
|
400,000
|
|
|
31.48
|
|
|
N/A
|
|
(1)
|
Includes shares which were surrendered to the Company by participants under share-based compensation plans to satisfy tax withholding obligations relating to the vesting of equity awards.
|
(2)
|
On July 31, 2018, the Company’s Board of Directors authorized a share repurchase program (the “2018 Share Repurchase Program”), authorizing the Company to repurchase up to
$35.0 million
of its common stock on the open market through September 30, 2020. As of
December 31, 2018
, we had approximately
$22.4 million
of remaining authorization.
|
(in millions, except per share data)
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Pounds shipped (1)
|
564.6
|
|
|
507.3
|
|
|
520.8
|
|
|
511.9
|
|
|
520.4
|
|
|||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
1,765.4
|
|
|
$
|
1,578.6
|
|
|
$
|
1,338.3
|
|
|
$
|
1,506.2
|
|
|
$
|
1,711.4
|
|
Cost of sales
|
(1,578.7
|
)
|
|
(1,394.4
|
)
|
|
(1,156.6
|
)
|
|
(1,335.9
|
)
|
|
(1,546.8
|
)
|
|||||
Gross profit
|
186.7
|
|
|
184.2
|
|
|
181.7
|
|
|
170.3
|
|
|
164.6
|
|
|||||
Selling, general and administrative expenses
|
(92.7
|
)
|
|
(83.8
|
)
|
|
(82.8
|
)
|
|
(83.2
|
)
|
|
(76.9
|
)
|
|||||
Operating income
|
94.0
|
|
|
100.4
|
|
|
98.9
|
|
|
87.1
|
|
|
87.7
|
|
|||||
Interest expense, net
|
(16.8
|
)
|
|
(17.6
|
)
|
|
(26.2
|
)
|
|
(39.1
|
)
|
|
(39.6
|
)
|
|||||
Loss on extinguishment of debt
|
(0.5
|
)
|
|
(0.2
|
)
|
|
(23.4
|
)
|
|
(3.1
|
)
|
|
—
|
|
|||||
Gain on sale of investment in joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
6.3
|
|
|
—
|
|
|||||
Other income (expense), net
|
(0.8
|
)
|
|
3.0
|
|
|
0.2
|
|
|
0.2
|
|
|
(0.5
|
)
|
|||||
Income before provision for income taxes and equity income
|
75.9
|
|
|
85.6
|
|
|
49.5
|
|
|
51.4
|
|
|
47.6
|
|
|||||
Provision for income taxes
|
(17.3
|
)
|
|
(33.9
|
)
|
|
(16.7
|
)
|
|
(15.9
|
)
|
|
(16.6
|
)
|
|||||
Income before equity income
|
58.6
|
|
|
51.7
|
|
|
32.8
|
|
|
35.5
|
|
|
31.0
|
|
|||||
Equity income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
1.1
|
|
|||||
Net income
|
58.6
|
|
|
51.7
|
|
|
32.8
|
|
|
35.8
|
|
|
32.1
|
|
|||||
Net income attributable to noncontrolling interest
|
(0.4
|
)
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|
(0.2
|
)
|
|
(0.4
|
)
|
|||||
Net income attributable to Global Brass and Copper Holdings, Inc.
|
$
|
58.2
|
|
|
$
|
51.1
|
|
|
$
|
32.2
|
|
|
$
|
35.6
|
|
|
$
|
31.7
|
|
Per Share Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends declared per common share (2)
|
$
|
0.3000
|
|
|
$
|
0.1950
|
|
|
$
|
0.1500
|
|
|
$
|
0.1500
|
|
|
$
|
0.1500
|
|
Basic net income attributable to Global Brass and Copper Holdings, Inc. per common share
|
$
|
2.66
|
|
|
$
|
2.35
|
|
|
$
|
1.50
|
|
|
$
|
1.67
|
|
|
$
|
1.50
|
|
Diluted net income attributable to Global Brass and Copper Holdings, Inc. per common share
|
$
|
2.61
|
|
|
$
|
2.31
|
|
|
$
|
1.49
|
|
|
$
|
1.66
|
|
|
$
|
1.49
|
|
Number of common shares used in basic per share calculations
|
21.9
|
|
|
21.7
|
|
|
21.4
|
|
|
21.3
|
|
|
21.2
|
|
|||||
Number of common shares used in diluted per share calculations
|
22.3
|
|
|
22.1
|
|
|
21.6
|
|
|
21.4
|
|
|
21.3
|
|
|||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash
|
$
|
125.5
|
|
|
$
|
59.0
|
|
|
$
|
88.2
|
|
|
$
|
83.5
|
|
|
$
|
44.6
|
|
Total assets
|
691.0
|
|
|
652.2
|
|
|
578.6
|
|
|
557.2
|
|
|
566.3
|
|
|||||
Total debt (3)
|
310.3
|
|
|
314.0
|
|
|
316.0
|
|
|
343.1
|
|
|
371.4
|
|
|||||
Total liabilities
|
503.2
|
|
|
504.9
|
|
|
483.4
|
|
|
496.5
|
|
|
540.3
|
|
|||||
Total equity
|
187.8
|
|
|
147.3
|
|
|
95.2
|
|
|
60.7
|
|
|
26.0
|
|
(1)
|
Amounts exclude quantity of unprocessed metal sold.
|
(2)
|
In
2018
,
2017
,
2016
,
2015
and
2014
, we declared dividends of
$6.7 million
,
$4.5 million
,
$3.3 million
,
$3.2 million
and
$3.2 million
, respectively, to the Company’s stockholders.
|
(3)
|
Consists of long-term debt, capital lease obligations and current maturities of long-term debt (presented net of discount and net of deferred financing fees incurred in connection with the issuance of debt).
|
•
|
“Price date of shipment” terms - meaning that the metal sale price to the customer and the purchase price for replacement metal from a supplier are set on the date of shipment. At the time we receive an order from a customer on price date of shipment terms, we place an order with a vendor on price date of shipment terms to correlate the price of the replacement metal with what we will sell to the customer. Thus, the customer bears the risk of metal price changes from the date of order to the date of shipment;
|
•
|
Firm pricing - meaning that the metal sale price to the customer is fixed on the order date and a matching replacement purchase from a supplier is made at a fixed price. At the time we receive an order from a customer, we give the customer a fixed metal price, and, shortly thereafter, we place an order with a vendor at a fixed price to lock in the price of the metal to replace what we will sell to the customer. Thus, the supplier bears the risk of metal price changes from the date of order to the date of shipment;
|
•
|
Financial derivatives - meaning we use financial derivatives when one of the other two mechanisms is unavailable. In this situation, we give the customer a fixed metal price at the time we receive the order, and, shortly thereafter, we (i) place a purchase order for scrap metal with a vendor on price date of shipment terms and (ii) enter into a financial derivative transaction in the form of a forward purchase contract to lock in the price of the metal to replace what we will sell to the customer. Typically, we will net settle this derivative and use the gain or loss on the derivative transaction to offset any loss or gain from the metal purchase transaction we entered into with our scrap vendor. Thus, the derivative counterparty bears the risk of metal price changes from the date of order to the date of shipment.
|
|
Year Ended
December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Non-toll revenue
|
$
|
1,709.8
|
|
|
$
|
1,503.3
|
|
|
$
|
1,332.2
|
|
Unprocessed metal sales
|
126.6
|
|
|
138.6
|
|
|
70.3
|
|
|||
Toll processing revenue
|
16.7
|
|
|
15.9
|
|
|
12.3
|
|
|||
Intersegment net sales elimination
|
(87.7
|
)
|
|
(79.2
|
)
|
|
(76.5
|
)
|
|||
Net sales
|
$
|
1,765.4
|
|
|
$
|
1,578.6
|
|
|
$
|
1,338.3
|
|
|
Year Ended
December 31, |
|
Change:
2018 vs. 2017 |
|
Change:
2017 vs. 2016 |
||||||||||||||||||||
(in millions, except per pound values)
|
2018
|
|
2017
|
|
2016
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
||||||||||||
Pounds shipped (a)
|
564.6
|
|
|
507.3
|
|
|
520.8
|
|
|
57.3
|
|
|
11.3
|
%
|
|
(13.5
|
)
|
|
(2.6
|
)%
|
|||||
Net sales
|
$
|
1,765.4
|
|
|
$
|
1,578.6
|
|
|
$
|
1,338.3
|
|
|
$
|
186.8
|
|
|
11.8
|
%
|
|
$
|
240.3
|
|
|
18.0
|
%
|
Metal component of net sales
|
(1,148.8
|
)
|
|
(1,042.8
|
)
|
|
(796.0
|
)
|
|
(106.0
|
)
|
|
10.2
|
%
|
|
(246.8
|
)
|
|
31.0
|
%
|
|||||
Adjusted sales
|
$
|
616.6
|
|
|
$
|
535.8
|
|
|
$
|
542.3
|
|
|
$
|
80.8
|
|
|
15.1
|
%
|
|
$
|
(6.5
|
)
|
|
(1.2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales per pound
|
$
|
3.13
|
|
|
$
|
3.11
|
|
|
$
|
2.57
|
|
|
$
|
0.02
|
|
|
0.6
|
%
|
|
$
|
0.54
|
|
|
21.0
|
%
|
less: Metal component of net sales per pound
|
2.04
|
|
|
2.05
|
|
|
1.53
|
|
|
(0.01
|
)
|
|
(0.5
|
)%
|
|
0.52
|
|
|
34.0
|
%
|
|||||
Adjusted sales per pound
|
$
|
1.09
|
|
|
$
|
1.06
|
|
|
$
|
1.04
|
|
|
$
|
0.03
|
|
|
2.8
|
%
|
|
$
|
0.02
|
|
|
1.9
|
%
|
Average copper price per pound (b)
|
$
|
2.93
|
|
|
$
|
2.80
|
|
|
$
|
2.20
|
|
|
$
|
0.13
|
|
|
4.6
|
%
|
|
$
|
0.60
|
|
|
27.3
|
%
|
|
Year Ended
December 31, |
|
Amount change:
|
||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||
Total gross profit
|
$
|
186.7
|
|
|
$
|
184.2
|
|
|
$
|
181.7
|
|
|
$
|
2.5
|
|
|
$
|
2.5
|
|
Unrealized (gain) loss on derivative contracts
|
2.8
|
|
|
0.8
|
|
|
(3.1
|
)
|
|
2.0
|
|
|
3.9
|
|
|||||
LIFO liquidation loss (gain)
|
0.1
|
|
|
1.0
|
|
|
1.9
|
|
|
(0.9
|
)
|
|
(0.9
|
)
|
|||||
Lower of cost or market adjustment to inventory
|
2.9
|
|
|
(3.6
|
)
|
|
(1.7
|
)
|
|
6.5
|
|
|
(1.9
|
)
|
|||||
Share-based compensation expense
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|||||
Restructuring and other business transformation charges
|
—
|
|
|
0.2
|
|
|
—
|
|
|
(0.2
|
)
|
|
0.2
|
|
|||||
Inventory step-up costs from acquisition accounting
|
0.2
|
|
|
0.3
|
|
|
—
|
|
|
(0.1
|
)
|
|
0.3
|
|
|||||
Depreciation expense
|
17.1
|
|
|
15.0
|
|
|
12.9
|
|
|
2.1
|
|
|
2.1
|
|
|||||
Adjusted gross profit
|
$
|
210.1
|
|
|
$
|
197.9
|
|
|
$
|
191.7
|
|
|
$
|
12.2
|
|
|
$
|
6.2
|
|
•
|
the addition of Alumet (
$14.5 million
);
|
•
|
$7.8 million
improvement from our metal pricing, sourcing, and blending initiatives;
|
•
|
the fact that 2017 includes $1.5 million more of costs associated with transitioning to a health savings account (“HSA”), increased cost of sales due to the reduction of inventories at Olin Brass and additional costs from the implementation of A.J. Oster’s fully integrated Enterprise Resource Planning (“ERP”) system;
|
•
|
the absence of a $3.5 million benefit recognized in the prior year resulting from the recovery of insurance proceeds related to our 2016 production outage;
|
•
|
increased conversion costs of
$1.8 million
stemming from operational inefficiencies that negatively impacted yields and productivity;
|
•
|
increased shrinkage costs as a result of higher metal prices; and
|
•
|
$0.4 million of expenses related to an environmental incident at an Olin Brass facility.
|
|
Year Ended
December 31, |
|
Amount change:
|
||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||
Total selling, general and administrative expenses
|
$
|
92.7
|
|
|
$
|
83.8
|
|
|
$
|
82.8
|
|
|
$
|
8.9
|
|
|
$
|
1.0
|
|
Specified legal / professional expenses
|
(0.4
|
)
|
|
(1.3
|
)
|
|
(1.2
|
)
|
|
0.9
|
|
|
(0.1
|
)
|
|||||
Share-based compensation expense
|
(6.4
|
)
|
|
(8.2
|
)
|
|
(6.9
|
)
|
|
1.8
|
|
|
(1.3
|
)
|
|||||
Restructuring and other business transformation charges
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
0.2
|
|
|
(0.2
|
)
|
|||||
Depreciation and amortization expense
|
(4.4
|
)
|
|
(3.6
|
)
|
|
(2.0
|
)
|
|
(0.8
|
)
|
|
(1.6
|
)
|
|||||
Adjusted selling, general and administrative expenses
|
$
|
81.5
|
|
|
$
|
70.5
|
|
|
$
|
72.7
|
|
|
$
|
11.0
|
|
|
$
|
(2.2
|
)
|
•
|
unrealized gains and losses on derivative contracts in support of our balanced book approach;
|
•
|
unrealized gains and losses associated with derivative contracts related to energy and utility costs;
|
•
|
impact associated with lower of cost or market adjustments to inventory;
|
•
|
gains and losses due to the depletion of a LIFO layer of metal inventory;
|
•
|
share-based compensation expense;
|
•
|
refinancing costs;
|
•
|
restructuring and other business transformation charges;
|
•
|
inventory step-up costs related to acquisition accounting;
|
•
|
specified legal and professional expenses; and
|
•
|
certain other items.
|
|
Year Ended
December 31, |
|
Amount change:
|
||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||
Net income attributable to Global Brass and Copper Holdings, Inc.
|
$
|
58.2
|
|
|
$
|
51.1
|
|
|
$
|
32.2
|
|
|
$
|
7.1
|
|
|
$
|
18.9
|
|
Interest expense, net
|
16.8
|
|
|
17.6
|
|
|
26.2
|
|
|
(0.8
|
)
|
|
(8.6
|
)
|
|||||
Provision for income taxes
|
17.3
|
|
|
33.9
|
|
|
16.7
|
|
|
(16.6
|
)
|
|
17.2
|
|
|||||
Depreciation expense
|
21.1
|
|
|
18.5
|
|
|
14.8
|
|
|
2.6
|
|
|
3.7
|
|
|||||
Amortization expense
|
0.4
|
|
|
0.1
|
|
|
0.1
|
|
|
0.3
|
|
|
—
|
|
|||||
Unrealized (gain) loss on derivative contracts
|
2.8
|
|
|
0.8
|
|
|
(3.1
|
)
|
|
2.0
|
|
|
3.9
|
|
|||||
LIFO liquidation loss (gain)
|
0.1
|
|
|
1.0
|
|
|
1.9
|
|
|
(0.9
|
)
|
|
(0.9
|
)
|
|||||
Refinancing costs
|
1.6
|
|
|
0.9
|
|
|
23.4
|
|
|
0.7
|
|
|
(22.5
|
)
|
|||||
Specified legal / professional expenses (a)
|
0.4
|
|
|
1.3
|
|
|
1.2
|
|
|
(0.9
|
)
|
|
0.1
|
|
|||||
Lower of cost or market adjustment to inventory
|
2.9
|
|
|
(3.6
|
)
|
|
(1.7
|
)
|
|
6.5
|
|
|
(1.9
|
)
|
|||||
Share-based compensation expense
|
6.7
|
|
|
8.2
|
|
|
6.9
|
|
|
(1.5
|
)
|
|
1.3
|
|
|||||
Restructuring and other business transformation charges (b)
|
—
|
|
|
0.4
|
|
|
—
|
|
|
(0.4
|
)
|
|
0.4
|
|
|||||
Inventory step-up costs from acquisition accounting
|
0.2
|
|
|
0.3
|
|
|
—
|
|
|
(0.1
|
)
|
|
0.3
|
|
|||||
Adjusted EBITDA
|
$
|
128.5
|
|
|
$
|
130.5
|
|
|
$
|
118.6
|
|
|
$
|
(2.0
|
)
|
|
$
|
11.9
|
|
(a)
|
Represents selected professional fees for accounting, tax, legal, and consulting services for merger and acquisition activity or incurred as a public company that exceed our expected long-term requirements.
|
(b)
|
Restructuring and other business transformation charges in
2017
represent severance charges at Olin Brass.
|
•
|
a decrease in tax expense of
$16.6 million
;
|
•
|
$7.8 million
improvement from our metal pricing, sourcing, and blending initiatives;
|
•
|
the Alumet acquisition (
$4.7 million
);
|
•
|
$2.4 million more of expenses recorded in the prior year for unusual costs associated with our transition to an HSA medical plan, increased cost of sales due to inventory reductions at Olin Brass, and costs incurred at A.J. Oster related to its ERP implementation;
|
•
|
favorable share based compensation expense of
$1.5 million
;
|
•
|
favorable specified legal / professional expenses of
$0.9 million
;
|
•
|
a favorable change in our LIFO liquidation loss (gain) of
$0.9 million
;
|
•
|
the absence of a
$7.4 million
benefit recorded in the prior year related to the recovery of insurance proceeds associated with our 2016 production outage;
|
•
|
an unfavorable change in our lower of cost or market adjustment to inventory of
$6.5 million
;
|
•
|
an unfavorable increase in employee and employee related costs;
|
•
|
an increase in depreciation expense of
$2.6 million
;
|
•
|
an unfavorable unrealized (gain) loss on derivative contracts of
$2.0 million
;
|
•
|
increased conversion costs of
$1.8 million
stemming from operational inefficiencies that negatively impacted yields and productivity;
|
•
|
increased shrinkage costs as a result of higher metal prices; and
|
•
|
costs incurred of $0.7 million associated with an environmental incident at an Olin Brass facility.
|
•
|
$7.4 million
of income related to insurance proceeds recorded in 2017 related to our 2016 production outage;
|
•
|
increased employee and employee related costs;
|
•
|
increased conversion costs of
$1.8 million
stemming from operational inefficiencies that negatively impacted yields and productivity;
|
•
|
increased shrinkage costs as a result of higher metal prices;
|
•
|
$0.7 million of costs associated with an environmental incident at an Olin Brass facility;
|
•
|
$7.8 million
improvement from our metal pricing, sourcing, and blending initiatives;
|
•
|
the Alumet acquisition (
$5.9 million
); and
|
•
|
$2.4 million more of unusual costs in the prior year, as mentioned above.
|
|
Year Ended
December 31, |
|
Amount change:
|
||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||
Diluted net income attributable to Global Brass and
Copper Holdings, Inc. per common share |
$
|
2.61
|
|
|
$
|
2.31
|
|
|
$
|
1.49
|
|
|
$
|
0.30
|
|
|
$
|
0.82
|
|
Unrealized (gain) loss on derivative contracts
|
0.13
|
|
|
0.03
|
|
|
(0.15
|
)
|
|
0.10
|
|
|
0.18
|
|
|||||
Refinancing costs
|
0.07
|
|
|
0.04
|
|
|
1.08
|
|
|
0.03
|
|
|
(1.04
|
)
|
|||||
Specified legal / professional expenses
|
0.02
|
|
|
0.06
|
|
|
0.06
|
|
|
(0.04
|
)
|
|
—
|
|
|||||
Lower of cost or market adjustment to inventory
|
0.13
|
|
|
(0.16
|
)
|
|
(0.08
|
)
|
|
0.29
|
|
|
(0.08
|
)
|
|||||
LIFO liquidation loss (gain)
|
—
|
|
|
0.04
|
|
|
0.09
|
|
|
(0.04
|
)
|
|
(0.05
|
)
|
|||||
Share-based compensation expense
|
0.30
|
|
|
0.37
|
|
|
0.32
|
|
|
(0.07
|
)
|
|
0.05
|
|
|||||
Restructuring and other business transformation charges
|
—
|
|
|
0.02
|
|
|
—
|
|
|
(0.02
|
)
|
|
0.02
|
|
|||||
Inventory step-up costs from acquisition accounting
|
0.01
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|||||
Tax impact on above adjustments (a)
|
(0.15
|
)
|
|
(0.26
|
)
|
|
(0.45
|
)
|
|
0.11
|
|
|
0.19
|
|
|||||
Adjusted diluted earnings per common share
|
$
|
3.12
|
|
|
$
|
2.46
|
|
|
$
|
2.36
|
|
|
$
|
0.66
|
|
|
$
|
0.10
|
|
|
Year ended December 31,
|
|
Change:
2018 vs. 2017 |
|||||||||||||||||
(in millions)
|
2018
|
|
% of Net
Sales
|
|
2017
|
|
% of Net
Sales |
|
Amount
|
|
Percent
|
|||||||||
Net sales
|
$
|
1,765.4
|
|
|
100.0
|
%
|
|
$
|
1,578.6
|
|
|
100.0
|
%
|
|
$
|
186.8
|
|
|
11.8
|
%
|
Cost of sales
|
(1,578.7
|
)
|
|
89.4
|
%
|
|
(1,394.4
|
)
|
|
88.3
|
%
|
|
(184.3
|
)
|
|
13.2
|
%
|
|||
Gross profit
|
186.7
|
|
|
10.6
|
%
|
|
184.2
|
|
|
11.7
|
%
|
|
2.5
|
|
|
1.4
|
%
|
|||
Selling, general and administrative expenses
|
(92.7
|
)
|
|
5.3
|
%
|
|
(83.8
|
)
|
|
5.3
|
%
|
|
(8.9
|
)
|
|
10.6
|
%
|
|||
Operating income
|
94.0
|
|
|
5.3
|
%
|
|
100.4
|
|
|
6.4
|
%
|
|
(6.4
|
)
|
|
(6.4
|
)%
|
|||
Interest expense, net
|
(16.8
|
)
|
|
1.0
|
%
|
|
(17.6
|
)
|
|
1.1
|
%
|
|
0.8
|
|
|
(4.5
|
)%
|
|||
Loss on extinguishment of debt
|
(0.5
|
)
|
|
—
|
%
|
|
(0.2
|
)
|
|
—
|
%
|
|
(0.3
|
)
|
|
150.0
|
%
|
|||
Other income (expense), net
|
(0.8
|
)
|
|
—
|
%
|
|
3.0
|
|
|
0.2
|
%
|
|
(3.8
|
)
|
|
(126.7
|
)%
|
|||
Income before provision for income taxes
|
75.9
|
|
|
4.3
|
%
|
|
85.6
|
|
|
5.5
|
%
|
|
(9.7
|
)
|
|
(11.3
|
)%
|
|||
Provision for income taxes
|
(17.3
|
)
|
|
1.0
|
%
|
|
(33.9
|
)
|
|
2.2
|
%
|
|
16.6
|
|
|
(49.0
|
)%
|
|||
Net income
|
58.6
|
|
|
3.3
|
%
|
|
51.7
|
|
|
3.3
|
%
|
|
6.9
|
|
|
13.3
|
%
|
|||
Net income attributable to noncontrolling interest
|
(0.4
|
)
|
|
—
|
%
|
|
(0.6
|
)
|
|
—
|
%
|
|
0.2
|
|
|
(33.3
|
)%
|
|||
Net income attributable to Global Brass and Copper Holdings, Inc.
|
$
|
58.2
|
|
|
3.3
|
%
|
|
$
|
51.1
|
|
|
3.3
|
%
|
|
$
|
7.1
|
|
|
13.9
|
%
|
Adjusted EBITDA (a)
|
$
|
128.5
|
|
|
7.3
|
%
|
|
$
|
130.5
|
|
|
8.3
|
%
|
|
$
|
(2.0
|
)
|
|
(1.5
|
)%
|
|
Year Ended
December 31, |
|
Amount change:
|
||||||||
(in millions)
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||
Interest on principal
|
$
|
16.1
|
|
|
$
|
16.1
|
|
|
$
|
—
|
|
Amortization of debt discount and issuance costs
|
1.2
|
|
|
1.3
|
|
|
(0.1
|
)
|
|||
Capitalized interest
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|||
Other borrowing costs (a)
|
0.8
|
|
|
0.8
|
|
|
—
|
|
|||
Interest income
|
(1.2
|
)
|
|
(0.5
|
)
|
|
(0.7
|
)
|
|||
Total interest expense, net
|
$
|
16.8
|
|
|
$
|
17.6
|
|
|
$
|
(0.8
|
)
|
|
Year Ended
December 31, |
|
Change:
2018 vs. 2017 |
|||||||||||
(in millions)
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
|||||||
Pounds shipped (a)
|
|
|
|
|
|
|
|
|||||||
Olin Brass
|
255.9
|
|
|
245.5
|
|
|
10.4
|
|
|
4.2
|
%
|
|||
Chase Brass
|
212.4
|
|
|
218.5
|
|
|
(6.1
|
)
|
|
(2.8
|
)%
|
|||
A.J. Oster
|
134.7
|
|
|
81.0
|
|
|
53.7
|
|
|
66.3
|
%
|
|||
Corporate and other (b)
|
(38.4
|
)
|
|
(37.7
|
)
|
|
(0.7
|
)
|
|
(1.9
|
)%
|
|||
Total
|
564.6
|
|
|
507.3
|
|
|
57.3
|
|
|
11.3
|
%
|
|||
Net sales
|
|
|
|
|
|
|
|
|||||||
Olin Brass
|
$
|
767.3
|
|
|
$
|
743.1
|
|
|
$
|
24.2
|
|
|
3.3
|
%
|
Chase Brass
|
612.1
|
|
|
591.1
|
|
|
21.0
|
|
|
3.6
|
%
|
|||
A.J. Oster
|
473.7
|
|
|
323.6
|
|
|
150.1
|
|
|
46.4
|
%
|
|||
Corporate and other (b)
|
(87.7
|
)
|
|
(79.2
|
)
|
|
(8.5
|
)
|
|
(10.7
|
)%
|
|||
Total
|
$
|
1,765.4
|
|
|
$
|
1,578.6
|
|
|
$
|
186.8
|
|
|
11.8
|
%
|
Adjusted EBITDA
|
|
|
|
|
|
|
|
|||||||
Olin Brass
|
$
|
57.2
|
|
|
$
|
51.2
|
|
|
$
|
6.0
|
|
|
11.7
|
%
|
Chase Brass
|
66.3
|
|
|
73.2
|
|
|
(6.9
|
)
|
|
(9.4
|
)%
|
|||
A.J. Oster
|
23.1
|
|
|
14.8
|
|
|
8.3
|
|
|
56.1
|
%
|
|||
Total adjusted EBITDA of operating segments
|
146.6
|
|
|
139.2
|
|
|
7.4
|
|
|
5.3
|
%
|
|||
Corporate and other (c)
|
(18.1
|
)
|
|
(8.7
|
)
|
|
(9.4
|
)
|
|
108.0
|
%
|
|||
Total consolidated adjusted EBITDA
|
$
|
128.5
|
|
|
$
|
130.5
|
|
|
$
|
(2.0
|
)
|
|
(1.5
|
)%
|
(in millions)
|
Base
|
|
Acquisition
|
|
Total
|
||||||
Pounds shipped
|
3.8
|
|
|
49.9
|
|
|
53.7
|
|
|||
Net sales
|
$
|
29.3
|
|
|
$
|
120.8
|
|
|
$
|
150.1
|
|
Adjusted EBITDA
|
$
|
2.5
|
|
|
$
|
5.8
|
|
|
$
|
8.3
|
|
|
Year ended December 31,
|
|
Change:
2017 vs. 2016 |
|||||||||||||||||
(in millions)
|
2017
|
|
% of Net Sales
|
|
2016
|
|
% of Net Sales
|
|
Amount
|
|
Percent
|
|||||||||
Net sales
|
$
|
1,578.6
|
|
|
100.0
|
%
|
|
$
|
1,338.3
|
|
|
100.0
|
%
|
|
$
|
240.3
|
|
|
18.0
|
%
|
Cost of sales
|
(1,394.4
|
)
|
|
88.3
|
%
|
|
(1,156.6
|
)
|
|
86.4
|
%
|
|
(237.8
|
)
|
|
20.6
|
%
|
|||
Gross profit
|
184.2
|
|
|
11.7
|
%
|
|
181.7
|
|
|
13.6
|
%
|
|
2.5
|
|
|
1.4
|
%
|
|||
Selling, general and administrative expenses
|
(83.8
|
)
|
|
5.3
|
%
|
|
(82.8
|
)
|
|
6.2
|
%
|
|
(1.0
|
)
|
|
1.2
|
%
|
|||
Operating income
|
100.4
|
|
|
6.4
|
%
|
|
98.9
|
|
|
7.4
|
%
|
|
1.5
|
|
|
1.5
|
%
|
|||
Interest expense, net
|
(17.6
|
)
|
|
1.1
|
%
|
|
(26.2
|
)
|
|
2.0
|
%
|
|
8.6
|
|
|
(32.8
|
)%
|
|||
Loss on extinguishment of debt
|
(0.2
|
)
|
|
—
|
%
|
|
(23.4
|
)
|
|
1.7
|
%
|
|
23.2
|
|
|
(99.1
|
)%
|
|||
Other income (expense), net
|
3.0
|
|
|
0.2
|
%
|
|
0.2
|
|
|
—
|
%
|
|
2.8
|
|
|
N/M
|
|
|||
Income before provision for income taxes
|
85.6
|
|
|
5.5
|
%
|
|
49.5
|
|
|
3.7
|
%
|
|
36.1
|
|
|
72.9
|
%
|
|||
Provision for income taxes
|
(33.9
|
)
|
|
2.2
|
%
|
|
(16.7
|
)
|
|
1.2
|
%
|
|
(17.2
|
)
|
|
103.0
|
%
|
|||
Net income
|
51.7
|
|
|
3.3
|
%
|
|
32.8
|
|
|
2.5
|
%
|
|
18.9
|
|
|
57.6
|
%
|
|||
Net income attributable to noncontrolling interest
|
(0.6
|
)
|
|
—
|
%
|
|
(0.6
|
)
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Net income attributable to Global Brass and Copper Holdings, Inc.
|
$
|
51.1
|
|
|
3.3
|
%
|
|
$
|
32.2
|
|
|
2.5
|
%
|
|
$
|
18.9
|
|
|
58.7
|
%
|
Adjusted EBITDA (a)
|
$
|
130.5
|
|
|
8.3
|
%
|
|
$
|
118.6
|
|
|
8.9
|
%
|
|
$
|
11.9
|
|
|
10.0
|
%
|
|
Year Ended
December 31, |
|
Amount change:
|
||||||||
(in millions)
|
2017
|
|
2016
|
|
2017 vs. 2016
|
||||||
Interest on principal
|
$
|
16.1
|
|
|
$
|
24.4
|
|
|
$
|
(8.3
|
)
|
Amortization of debt issuance costs
|
1.3
|
|
|
2.0
|
|
|
(0.7
|
)
|
|||
Capitalized interest
|
(0.1
|
)
|
|
(1.1
|
)
|
|
1.0
|
|
|||
Other borrowing costs (a)
|
0.8
|
|
|
0.9
|
|
|
(0.1
|
)
|
|||
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
|||
Total interest expense, net
|
$
|
17.6
|
|
|
$
|
26.2
|
|
|
$
|
(8.6
|
)
|
•
|
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “2017 Tax Act”). The 2017 Tax Act makes broad and complex changes to the U.S. tax code, which resulted in an increase in the provision for income taxes in 2017 of
$7.3 million
, an 860 basis point increase in our effective tax rate;
|
•
|
We adopted a new accounting standard covering stock compensation in 2017 as mandated by the Securities Exchange Commission. As a result of adopting the new standard, we recorded a
$2.7 million
tax benefit related to the vesting of share awards and option exercises during 2017, reducing the effective tax rate by 321 basis points;
|
•
|
The prior year effective tax rate benefited from the release of our valuation allowance recorded against our foreign tax credits, resulting in a one-time reduction in income tax expense of approximately $1.0 million or 198 basis points.
|
|
Year Ended
December 31, |
|
Change:
2017 vs. 2016 |
|||||||||||
(in millions)
|
2017
|
|
2016
|
|
Amount
|
|
Percent
|
|||||||
Pounds shipped (a)
|
|
|
|
|
|
|
|
|||||||
Olin Brass
|
245.5
|
|
|
260.5
|
|
|
(15.0
|
)
|
|
(5.8
|
)%
|
|||
Chase Brass
|
218.5
|
|
|
222.7
|
|
|
(4.2
|
)
|
|
(1.9
|
)%
|
|||
A.J. Oster
|
81.0
|
|
|
75.6
|
|
|
5.4
|
|
|
7.1
|
%
|
|||
Corporate and other (b)
|
(37.7
|
)
|
|
(38.0
|
)
|
|
0.3
|
|
|
0.8
|
%
|
|||
Total
|
507.3
|
|
|
520.8
|
|
|
(13.5
|
)
|
|
(2.6
|
)%
|
|||
Net Sales
|
|
|
|
|
|
|
|
|||||||
Olin Brass
|
$
|
743.1
|
|
|
$
|
629.4
|
|
|
$
|
113.7
|
|
|
18.1
|
%
|
Chase Brass
|
591.1
|
|
|
502.7
|
|
|
88.4
|
|
|
17.6
|
%
|
|||
A.J. Oster
|
323.6
|
|
|
282.7
|
|
|
40.9
|
|
|
14.5
|
%
|
|||
Corporate and other (b)
|
(79.2
|
)
|
|
(76.5
|
)
|
|
(2.7
|
)
|
|
(3.5
|
)%
|
|||
Total
|
$
|
1,578.6
|
|
|
$
|
1,338.3
|
|
|
$
|
240.3
|
|
|
18.0
|
%
|
Adjusted EBITDA
|
|
|
|
|
|
|
|
|||||||
Olin Brass
|
$
|
51.2
|
|
|
$
|
49.9
|
|
|
$
|
1.3
|
|
|
2.6
|
%
|
Chase Brass
|
73.2
|
|
|
68.0
|
|
|
5.2
|
|
|
7.6
|
%
|
|||
A.J. Oster
|
14.8
|
|
|
18.4
|
|
|
(3.6
|
)
|
|
(19.6
|
)%
|
|||
Total adjusted EBITDA of operating segments
|
139.2
|
|
|
136.3
|
|
|
2.9
|
|
|
2.1
|
%
|
|||
Corporate and other (c)
|
(8.7
|
)
|
|
(17.7
|
)
|
|
9.0
|
|
|
(50.8
|
)%
|
|||
Total consolidated adjusted EBITDA
|
$
|
130.5
|
|
|
$
|
118.6
|
|
|
$
|
11.9
|
|
|
10.0
|
%
|
•
|
decreased volumes;
|
•
|
improved productivity, especially taking into account the impact of the 2016 production outage at Olin Brass;
|
•
|
reduced selling, general and administrative expenses stemming from less consulting expenses in 2017 than were incurred in 2016 given the software upgrades undertaken at that time;
|
•
|
increased benefit costs associated with transitioning to a HSA medical plan; and
|
•
|
increased cost of goods sold due to a reduction in inventories.
|
(in millions)
|
Base
|
|
Acquisition
|
|
Total
|
||||||
Pounds shipped
|
(2.9
|
)
|
|
8.3
|
|
|
5.4
|
|
|||
Net sales
|
$
|
21.9
|
|
|
$
|
19.0
|
|
|
$
|
40.9
|
|
Adjusted EBITDA
|
$
|
(4.7
|
)
|
|
$
|
1.1
|
|
|
$
|
(3.6
|
)
|
Cash Flow Analysis
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||
Net cash provided by operating activities
|
$
|
122.1
|
|
|
$
|
49.2
|
|
|
$
|
96.0
|
|
|
$
|
72.9
|
|
|
$
|
(46.8
|
)
|
Net cash used in investing activities
|
$
|
(27.8
|
)
|
|
$
|
(64.6
|
)
|
|
$
|
(34.3
|
)
|
|
$
|
36.8
|
|
|
$
|
(30.3
|
)
|
Net cash used in financing activities
|
$
|
(26.8
|
)
|
|
$
|
(13.8
|
)
|
|
$
|
(56.5
|
)
|
|
$
|
(13.0
|
)
|
|
$
|
42.7
|
|
Contractual commitments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
(in millions)
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Beyond
|
|
Total
|
||||||||||||||
Term Loan B—Principal (a)
|
|
$
|
3.2
|
|
|
$
|
3.2
|
|
|
$
|
3.2
|
|
|
$
|
3.2
|
|
|
$
|
3.2
|
|
|
$
|
296.8
|
|
|
$
|
312.8
|
|
Term Loan B—Interest (b)
|
|
16.1
|
|
|
15.9
|
|
|
15.7
|
|
|
15.6
|
|
|
15.2
|
|
|
21.0
|
|
|
99.5
|
|
|||||||
Capital Lease Obligation (c)
|
|
1.5
|
|
|
0.5
|
|
|
0.3
|
|
|
0.3
|
|
|
0.1
|
|
|
0.1
|
|
|
2.8
|
|
|||||||
Purchase Obligations
|
|
181.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
181.5
|
|
|||||||
IAM National Pension Fund
|
|
3.8
|
|
|
3.9
|
|
|
4.0
|
|
|
3.5
|
|
|
—
|
|
|
—
|
|
|
15.2
|
|
|||||||
Leases
|
|
3.2
|
|
|
2.1
|
|
|
1.5
|
|
|
0.6
|
|
|
0.3
|
|
|
0.2
|
|
|
7.9
|
|
|||||||
Total
|
|
$
|
209.3
|
|
|
$
|
25.6
|
|
|
$
|
24.7
|
|
|
$
|
23.2
|
|
|
$
|
18.8
|
|
|
$
|
318.1
|
|
|
$
|
619.7
|
|
(a)
|
Represents quarterly payments required in connection with the Term Loan B Facility. As discussed in “Liquidity and Capital Resources—
Outstanding Indebtedness
,” we are also subject to excess cash flow sweep payments depending on the total net leverage ratio from time to time; however, it is not practicable to estimate these payments.
|
(b)
|
Assumes that interest will be paid on the Term Loan B Facility at the
December 31, 2018
weighted average interest rate through the maturity of the interest rate swap agreement on
May 31, 2023
and the
December 31, 2018
prevailing Term Loan B interest rate from the maturity of the interest rate swap agreement through maturity of the Term Loan B Facility on
May 29, 2025
. Future interest rates may change and actual interest payments could differ from those disclosed in the table above.
|
(c)
|
Represents principal and interest portion of capital lease obligation.
|
•
|
Level 1
—Quoted prices for identical instruments in active markets.
|
•
|
Level 2
—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.
|
•
|
Level 3
—Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.
|
December 31, 2017
|
|
Notional value
|
|
Fair value
|
|
Unrealized
(losses) gains |
|
Impact of 10%
price change
on fair value
|
||||||||
Metals
|
|
$
|
12.8
|
|
|
$
|
14.9
|
|
|
$
|
2.1
|
|
|
$
|
1.5
|
|
Energy and utilities
|
|
3.8
|
|
|
3.4
|
|
|
(0.4
|
)
|
|
0.3
|
|
||||
Totals
|
|
$
|
16.6
|
|
|
$
|
18.3
|
|
|
$
|
1.7
|
|
|
$
|
1.8
|
|
/s/ PricewaterhouseCoopers LLP
|
Chicago, IL
|
February 28, 2019
|
|
|
As of
|
||||||
(in millions, except share and par value data)
|
December 31,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
125.5
|
|
|
$
|
59.0
|
|
Accounts receivable (net of allowance of $1.3 and $1.0 at December 31, 2018 and December 31, 2017, respectively)
|
165.6
|
|
|
197.8
|
|
||
Inventories
|
218.2
|
|
|
208.1
|
|
||
Prepaid expenses and other current assets
|
8.5
|
|
|
11.7
|
|
||
Income tax receivable
|
2.8
|
|
|
3.6
|
|
||
Total current assets
|
520.6
|
|
|
480.2
|
|
||
Property, plant and equipment, net
|
147.8
|
|
|
142.9
|
|
||
Goodwill
|
4.4
|
|
|
4.5
|
|
||
Intangible assets, net
|
1.6
|
|
|
2.0
|
|
||
Deferred income taxes
|
11.3
|
|
|
16.1
|
|
||
Other noncurrent assets
|
5.3
|
|
|
6.5
|
|
||
Total assets
|
$
|
691.0
|
|
|
$
|
652.2
|
|
Liabilities and equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of debt
|
$
|
4.6
|
|
|
$
|
5.0
|
|
Accounts payable
|
114.1
|
|
|
117.1
|
|
||
Accrued liabilities
|
40.2
|
|
|
36.0
|
|
||
Accrued interest
|
0.1
|
|
|
0.2
|
|
||
Income tax payable
|
—
|
|
|
0.5
|
|
||
Total current liabilities
|
159.0
|
|
|
158.8
|
|
||
Noncurrent portion of debt
|
305.7
|
|
|
309.0
|
|
||
Other noncurrent liabilities
|
38.5
|
|
|
37.1
|
|
||
Total liabilities
|
503.2
|
|
|
504.9
|
|
||
Commitments and contingencies (Note 15)
|
|
|
|
||||
Global Brass and Copper Holdings, Inc. stockholders’ equity:
|
|
|
|
||||
Common stock - $0.01 par value; 80,000,000 shares authorized; 22,541,310 and 22,133,764 shares issued at December 31, 2018 and December 31, 2017, respectively
|
0.2
|
|
|
0.2
|
|
||
Additional paid-in capital
|
62.5
|
|
|
54.5
|
|
||
Retained earnings
|
148.8
|
|
|
97.3
|
|
||
Treasury stock - 743,057 and 226,576 shares at December 31, 2018 and December 31, 2017, respectively
|
(22.6
|
)
|
|
(6.6
|
)
|
||
Accumulated other comprehensive loss
|
(6.1
|
)
|
|
(2.9
|
)
|
||
Total Global Brass and Copper Holdings, Inc. stockholders’ equity
|
182.8
|
|
|
142.5
|
|
||
Noncontrolling interest
|
5.0
|
|
|
4.8
|
|
||
Total equity
|
187.8
|
|
|
147.3
|
|
||
Total liabilities and equity
|
$
|
691.0
|
|
|
$
|
652.2
|
|
|
|
Year Ended
December 31, |
||||||||||
(in millions, except per share data)
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales
|
$
|
1,765.4
|
|
|
$
|
1,578.6
|
|
|
$
|
1,338.3
|
|
Cost of sales
|
(1,578.7
|
)
|
|
(1,394.4
|
)
|
|
(1,156.6
|
)
|
|||
Gross profit
|
186.7
|
|
|
184.2
|
|
|
181.7
|
|
|||
Selling, general and administrative expenses
|
(92.7
|
)
|
|
(83.8
|
)
|
|
(82.8
|
)
|
|||
Operating income
|
94.0
|
|
|
100.4
|
|
|
98.9
|
|
|||
Interest expense, net
|
(16.8
|
)
|
|
(17.6
|
)
|
|
(26.2
|
)
|
|||
Loss on extinguishment of debt
|
(0.5
|
)
|
|
(0.2
|
)
|
|
(23.4
|
)
|
|||
Other income (expense), net
|
(0.8
|
)
|
|
3.0
|
|
|
0.2
|
|
|||
Income before provision for income taxes
|
75.9
|
|
|
85.6
|
|
|
49.5
|
|
|||
Provision for income taxes
|
(17.3
|
)
|
|
(33.9
|
)
|
|
(16.7
|
)
|
|||
Net income
|
58.6
|
|
|
51.7
|
|
|
32.8
|
|
|||
Net income attributable to noncontrolling interest
|
(0.4
|
)
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|||
Net income attributable to Global Brass and Copper Holdings, Inc.
|
$
|
58.2
|
|
|
$
|
51.1
|
|
|
$
|
32.2
|
|
Net income attributable to Global Brass and Copper Holdings, Inc. per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.66
|
|
|
$
|
2.35
|
|
|
$
|
1.50
|
|
Diluted
|
$
|
2.61
|
|
|
$
|
2.31
|
|
|
$
|
1.49
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
21.9
|
|
|
21.7
|
|
|
21.4
|
|
|||
Diluted
|
22.3
|
|
|
22.1
|
|
|
21.6
|
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
58.6
|
|
|
$
|
51.7
|
|
|
$
|
32.8
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Derivatives:
|
|
|
|
|
|
||||||
Net derivative gain (loss) on hedge transactions
|
(2.0
|
)
|
|
—
|
|
|
—
|
|
|||
Income taxes on derivative transactions
|
0.5
|
|
|
—
|
|
|
—
|
|
|||
Foreign currency translation:
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
(1.8
|
)
|
|
1.4
|
|
|
(2.8
|
)
|
|||
Income tax (expense) benefit on foreign currency translation adjustment
|
(0.1
|
)
|
|
—
|
|
|
0.7
|
|
|||
Comprehensive income
|
55.2
|
|
|
53.1
|
|
|
30.7
|
|
|||
Comprehensive income attributable to noncontrolling interest
|
(0.2
|
)
|
|
(0.8
|
)
|
|
(0.3
|
)
|
|||
Comprehensive income attributable to Global Brass and Copper Holdings, Inc.
|
$
|
55.0
|
|
|
$
|
52.3
|
|
|
$
|
30.4
|
|
|
(in millions, except share data)
|
Shares outstanding
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Retained earnings
|
|
Treasury
stock
|
|
Accumulated
other
comprehensive
loss
|
|
Total
Global Brass
and Copper
Holdings, Inc.
stockholders’
equity
|
|
Noncontrolling
interest
|
|
Total
equity
|
|||||||||||||||||
Balance at December 31, 2015
|
21,507,154
|
|
|
$
|
0.2
|
|
|
$
|
36.9
|
|
|
$
|
22.3
|
|
|
$
|
(0.7
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
56.4
|
|
|
$
|
4.3
|
|
|
$
|
60.7
|
|
Share-based compensation
|
117,267
|
|
|
—
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.9
|
|
|
—
|
|
|
6.9
|
|
||||||||
Exercise of stock options
|
41,066
|
|
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|||||||||
Share repurchases
|
(32,420
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
(0.8
|
)
|
||||||||
Excess tax benefit on share-based compensation
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
||||||||
Dividends declared ($0.15 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.3
|
)
|
|
—
|
|
|
—
|
|
|
(3.3
|
)
|
|
—
|
|
|
(3.3
|
)
|
||||||||
Distribution to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
32.2
|
|
|
—
|
|
|
—
|
|
|
32.2
|
|
|
0.6
|
|
|
32.8
|
|
||||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.8
|
)
|
|
(1.8
|
)
|
|
(0.3
|
)
|
|
(2.1
|
)
|
||||||||
Balance at December 31, 2016
|
21,633,067
|
|
|
$
|
0.2
|
|
|
$
|
45.0
|
|
|
$
|
51.2
|
|
|
$
|
(1.5
|
)
|
|
$
|
(4.1
|
)
|
|
$
|
90.8
|
|
|
$
|
4.4
|
|
|
$
|
95.2
|
|
Share-based compensation
|
383,167
|
|
|
—
|
|
|
8.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.2
|
|
|
—
|
|
|
8.2
|
|
||||||||
Exercise of stock options
|
38,381
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
0.8
|
|
||||||||
Share repurchases
|
(147,427
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.1
|
)
|
|
—
|
|
|
(5.1
|
)
|
|
—
|
|
|
(5.1
|
)
|
||||||||
Adoption of ASU 2016-09
|
—
|
|
|
—
|
|
|
0.5
|
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Dividends declared ($0.195 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.5
|
)
|
|
—
|
|
|
—
|
|
|
(4.5
|
)
|
|
—
|
|
|
(4.5
|
)
|
||||||||
Distribution to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
(0.4
|
)
|
||||||||
Net income
|
|
|
|
|
|
|
—
|
|
|
51.1
|
|
|
|
|
|
—
|
|
|
51.1
|
|
|
0.6
|
|
|
51.7
|
|
||||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
1.2
|
|
|
0.2
|
|
|
1.4
|
|
||||||||
Balance at December 31, 2017
|
21,907,188
|
|
|
$
|
0.2
|
|
|
$
|
54.5
|
|
|
$
|
97.3
|
|
|
$
|
(6.6
|
)
|
|
$
|
(2.9
|
)
|
|
$
|
142.5
|
|
|
$
|
4.8
|
|
|
$
|
147.3
|
|
Share-based compensation
|
326,446
|
|
|
—
|
|
|
6.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.7
|
|
|
—
|
|
|
6.7
|
|
||||||||
Exercise of stock options
|
81,100
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
1.3
|
|
||||||||
Share repurchases
|
(516,481
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.0
|
)
|
|
—
|
|
|
(16.0
|
)
|
|
—
|
|
|
(16.0
|
)
|
||||||||
Dividends declared ($0.30 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.7
|
)
|
|
—
|
|
|
—
|
|
|
(6.7
|
)
|
|
—
|
|
|
(6.7
|
)
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
58.2
|
|
|
—
|
|
|
—
|
|
|
58.2
|
|
|
0.4
|
|
|
58.6
|
|
||||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.2
|
)
|
|
(3.2
|
)
|
|
(0.2
|
)
|
|
(3.4
|
)
|
||||||||
Balance at December 31, 2018
|
21,798,253
|
|
|
$
|
0.2
|
|
|
$
|
62.5
|
|
|
$
|
148.8
|
|
|
$
|
(22.6
|
)
|
|
$
|
(6.1
|
)
|
|
$
|
182.8
|
|
|
$
|
5.0
|
|
|
$
|
187.8
|
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
58.6
|
|
|
$
|
51.7
|
|
|
$
|
32.8
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Lower of cost or market adjustment to inventory
|
2.9
|
|
|
(3.6
|
)
|
|
(1.7
|
)
|
|||
Unrealized (gain) loss on derivatives
|
2.8
|
|
|
0.8
|
|
|
(3.1
|
)
|
|||
Depreciation
|
21.1
|
|
|
18.5
|
|
|
14.8
|
|
|||
Amortization of intangible assets
|
0.4
|
|
|
0.1
|
|
|
0.1
|
|
|||
Amortization of debt discount and issuance costs
|
1.2
|
|
|
1.3
|
|
|
2.0
|
|
|||
Loss on extinguishment of debt
|
0.5
|
|
|
0.2
|
|
|
23.4
|
|
|||
Uncertain tax positions
|
—
|
|
|
2.1
|
|
|
—
|
|
|||
Share-based compensation expense
|
6.7
|
|
|
8.2
|
|
|
6.9
|
|
|||
Provision for bad debts, net of reductions
|
0.8
|
|
|
0.1
|
|
|
(0.3
|
)
|
|||
Deferred income taxes
|
5.3
|
|
|
18.0
|
|
|
4.7
|
|
|||
Loss on disposal of property, plant and equipment
|
0.3
|
|
|
—
|
|
|
0.1
|
|
|||
Change in assets and liabilities, net of effects of business acquisition:
|
|
|
|
|
|
||||||
Accounts receivable
|
31.6
|
|
|
(49.8
|
)
|
|
(15.0
|
)
|
|||
Inventories
|
(13.3
|
)
|
|
(9.7
|
)
|
|
13.0
|
|
|||
Prepaid expenses and other current assets
|
1.0
|
|
|
2.6
|
|
|
2.5
|
|
|||
Accounts payable
|
(1.5
|
)
|
|
18.9
|
|
|
18.5
|
|
|||
Accrued liabilities
|
3.5
|
|
|
(10.1
|
)
|
|
0.9
|
|
|||
Accrued interest
|
(0.1
|
)
|
|
—
|
|
|
(2.8
|
)
|
|||
Income taxes, net
|
0.1
|
|
|
0.9
|
|
|
(1.2
|
)
|
|||
Other, net
|
0.2
|
|
|
(1.0
|
)
|
|
0.4
|
|
|||
Net cash provided by (used in) operating activities
|
122.1
|
|
|
49.2
|
|
|
96.0
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Capital expenditures
|
(26.2
|
)
|
|
(24.7
|
)
|
|
(34.4
|
)
|
|||
Business acquisition
|
(1.7
|
)
|
|
(40.0
|
)
|
|
—
|
|
|||
Proceeds from sale of property, plant and equipment
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|||
Net cash used in investing activities
|
(27.8
|
)
|
|
(64.6
|
)
|
|
(34.3
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Borrowings on ABL Facility
|
0.9
|
|
|
0.8
|
|
|
1.2
|
|
|||
Payments on ABL Facility
|
(0.9
|
)
|
|
(0.8
|
)
|
|
(1.2
|
)
|
|||
Retirement of Senior Secured Notes
|
—
|
|
|
—
|
|
|
(345.3
|
)
|
|||
Premium payment on extinguishment of debt
|
—
|
|
|
—
|
|
|
(17.0
|
)
|
|||
Payments of debt issuance costs
|
(0.4
|
)
|
|
(0.2
|
)
|
|
(5.4
|
)
|
|||
Proceeds from term loan, net of discount
|
25.4
|
|
|
8.7
|
|
|
316.8
|
|
|||
Payments on term loan
|
(28.6
|
)
|
|
(11.9
|
)
|
|
(0.8
|
)
|
|||
Principal payments under capital lease obligation
|
(1.8
|
)
|
|
(1.3
|
)
|
|
(1.1
|
)
|
|||
Dividends paid
|
(6.7
|
)
|
|
(4.4
|
)
|
|
(3.2
|
)
|
|||
Distribution to noncontrolling interest owner
|
—
|
|
|
(0.4
|
)
|
|
(0.2
|
)
|
|||
Proceeds from exercise of stock options
|
1.3
|
|
|
0.8
|
|
|
0.5
|
|
|||
Share repurchases
|
(16.0
|
)
|
|
(5.1
|
)
|
|
(0.8
|
)
|
|||
Net cash used in financing activities
|
(26.8
|
)
|
|
(13.8
|
)
|
|
(56.5
|
)
|
|||
Effect of foreign currency exchange rates
|
(1.0
|
)
|
|
—
|
|
|
(0.5
|
)
|
|||
Net increase (decrease) in cash
|
66.5
|
|
|
(29.2
|
)
|
|
4.7
|
|
|||
Cash and cash equivalents at beginning of period
|
59.0
|
|
|
88.2
|
|
|
83.5
|
|
|||
Cash and cash equivalents at end of period
|
$
|
125.5
|
|
|
$
|
59.0
|
|
|
$
|
88.2
|
|
Noncash investing and financing activities
|
|
|
|
|
|
||||||
Purchases of property, plant and equipment not yet paid
|
$
|
4.4
|
|
|
$
|
5.0
|
|
|
$
|
4.1
|
|
Acquisition of equipment under capital lease obligation
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Interest, net of amount capitalized
|
$
|
16.9
|
|
|
$
|
16.8
|
|
|
$
|
27.0
|
|
Income taxes, net of refunds
|
$
|
12.4
|
|
|
$
|
12.6
|
|
|
$
|
13.3
|
|
(in millions)
|
|
|
||
Year
|
|
Amortization
|
||
2019
|
|
$
|
0.4
|
|
2020
|
|
0.2
|
|
|
2021
|
|
0.1
|
|
|
2022
|
|
0.1
|
|
|
2023
|
|
0.1
|
|
|
Thereafter
|
|
0.7
|
|
|
|
|
$
|
1.6
|
|
Consolidated Balance Sheet (Unaudited)
|
December 31, 2017
As Reported
|
|
Effects of the Adoption of ASC Topic 606
|
|
December 31, 2017
As Adjusted
|
||||||
(in millions, except share data)
|
|||||||||||
Assets
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
59.0
|
|
|
$
|
—
|
|
|
$
|
59.0
|
|
Accounts receivable (net of allowance of $1.0)
|
197.9
|
|
|
(0.1
|
)
|
|
197.8
|
|
|||
Inventories
|
208.1
|
|
|
—
|
|
|
208.1
|
|
|||
Prepaid expenses and other current assets
|
33.3
|
|
|
(21.6
|
)
|
|
11.7
|
|
|||
Income tax receivable
|
3.6
|
|
|
—
|
|
|
3.6
|
|
|||
Total current assets
|
501.9
|
|
|
(21.7
|
)
|
|
480.2
|
|
|||
Property, plant and equipment, net
|
142.9
|
|
|
—
|
|
|
142.9
|
|
|||
Goodwill
|
4.5
|
|
|
—
|
|
|
4.5
|
|
|||
Intangible assets, net
|
2.0
|
|
|
—
|
|
|
2.0
|
|
|||
Deferred income taxes
|
16.1
|
|
|
—
|
|
|
16.1
|
|
|||
Other noncurrent assets
|
6.5
|
|
|
—
|
|
|
6.5
|
|
|||
Total assets
|
$
|
673.9
|
|
|
$
|
(21.7
|
)
|
|
$
|
652.2
|
|
Liabilities and equity
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Current portion of debt
|
$
|
5.0
|
|
|
$
|
—
|
|
|
$
|
5.0
|
|
Accounts payable
|
117.1
|
|
|
—
|
|
|
117.1
|
|
|||
Accrued liabilities
|
57.9
|
|
|
(21.9
|
)
|
|
36.0
|
|
|||
Accrued interest
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|||
Income tax payable
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|||
Total current liabilities
|
180.7
|
|
|
(21.9
|
)
|
|
158.8
|
|
|||
Noncurrent portion of debt
|
309.0
|
|
|
—
|
|
|
309.0
|
|
|||
Other noncurrent liabilities
|
37.1
|
|
|
—
|
|
|
37.1
|
|
|||
Total liabilities
|
526.8
|
|
|
(21.9
|
)
|
|
504.9
|
|
|||
Global Brass and Copper Holdings, Inc. stockholders’ equity:
|
|
|
|
|
|
||||||
Common stock - 22,133,764 shares issued
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|||
Additional paid-in capital
|
54.5
|
|
|
—
|
|
|
54.5
|
|
|||
Retained earnings
|
97.1
|
|
|
0.2
|
|
|
97.3
|
|
|||
Treasury stock - 226,576 shares
|
(6.6
|
)
|
|
—
|
|
|
(6.6
|
)
|
|||
Accumulated other comprehensive loss
|
(2.9
|
)
|
|
—
|
|
|
(2.9
|
)
|
|||
Total Global Brass and Copper Holdings, Inc. stockholders’ equity
|
142.3
|
|
|
0.2
|
|
|
142.5
|
|
|||
Noncontrolling interest
|
4.8
|
|
|
—
|
|
|
4.8
|
|
|||
Total equity
|
147.1
|
|
|
0.2
|
|
|
147.3
|
|
|||
Total liabilities and equity
|
$
|
673.9
|
|
|
$
|
(21.7
|
)
|
|
$
|
652.2
|
|
Consolidated Statement of Operations (Unaudited)
|
Year Ended
December 31, 2017 As Reported |
|
Effects of the Adoption of ASC Topic 606
|
|
Year Ended
December 31, 2017 As Adjusted |
|
Year Ended
December 31, 2016 As Reported |
|
Effects of the Adoption of ASC Topic 606
|
|
Year Ended
December 31, 2016 As Adjusted |
||||||||||||
(in millions, except per share data)
|
|||||||||||||||||||||||
Net sales
|
$
|
1,560.8
|
|
|
$
|
17.8
|
|
|
$
|
1,578.6
|
|
|
$
|
1,338.5
|
|
|
$
|
(0.2
|
)
|
|
$
|
1,338.3
|
|
Cost of sales
|
(1,376.8
|
)
|
|
(17.6
|
)
|
|
(1,394.4
|
)
|
|
(1,156.9
|
)
|
|
0.3
|
|
|
(1,156.6
|
)
|
||||||
Gross profit
|
184.0
|
|
|
0.2
|
|
|
184.2
|
|
|
181.6
|
|
|
0.1
|
|
|
181.7
|
|
||||||
Selling, general and administrative expenses
|
(83.8
|
)
|
|
—
|
|
|
(83.8
|
)
|
|
(82.8
|
)
|
|
—
|
|
|
(82.8
|
)
|
||||||
Operating income
|
100.2
|
|
|
0.2
|
|
|
100.4
|
|
|
98.8
|
|
|
0.1
|
|
|
98.9
|
|
||||||
Interest expense
|
(17.6
|
)
|
|
—
|
|
|
(17.6
|
)
|
|
(26.2
|
)
|
|
—
|
|
|
(26.2
|
)
|
||||||
Loss on extinguishment of debt
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
(23.4
|
)
|
|
—
|
|
|
(23.4
|
)
|
||||||
Other income (expense), net
|
3.0
|
|
|
—
|
|
|
3.0
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||||
Income before provision for income taxes
|
85.4
|
|
|
0.2
|
|
|
85.6
|
|
|
49.4
|
|
|
0.1
|
|
|
49.5
|
|
||||||
Provision for income taxes
|
(33.9
|
)
|
|
—
|
|
|
(33.9
|
)
|
|
(16.6
|
)
|
|
(0.1
|
)
|
|
(16.7
|
)
|
||||||
Net income
|
51.5
|
|
|
0.2
|
|
|
51.7
|
|
|
32.8
|
|
|
—
|
|
|
32.8
|
|
||||||
Net income attributable to noncontrolling interest
|
(0.6
|
)
|
|
—
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
(0.6
|
)
|
||||||
Net income attributable to Global Brass and Copper Holdings, Inc.
|
$
|
50.9
|
|
|
$
|
0.2
|
|
|
$
|
51.1
|
|
|
$
|
32.2
|
|
|
$
|
—
|
|
|
$
|
32.2
|
|
Net income attributable to Global Brass and Copper Holdings, Inc. per common share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
$
|
2.35
|
|
|
$
|
—
|
|
|
$
|
2.35
|
|
|
$
|
1.50
|
|
|
$
|
—
|
|
|
$
|
1.50
|
|
Diluted
|
$
|
2.30
|
|
|
$
|
0.01
|
|
|
$
|
2.31
|
|
|
$
|
1.49
|
|
|
$
|
—
|
|
|
$
|
1.49
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
21.7
|
|
|
—
|
|
|
21.7
|
|
|
21.4
|
|
|
—
|
|
|
21.4
|
|
||||||
Diluted
|
22.1
|
|
|
—
|
|
|
22.1
|
|
|
21.6
|
|
|
—
|
|
|
21.6
|
|
Consolidated Statement of Comprehensive Income (Unaudited)
|
Year Ended
December 31, 2017 As Reported |
|
Effects of the Adoption of ASC Topic 606
|
|
Year Ended
December 31, 2017 As Adjusted |
|
Year Ended
December 31, 2016 As Reported |
|
Effects of the Adoption of ASC Topic 606
|
|
Year Ended
December 31, 2016 As Adjusted |
||||||||||||
(in millions)
|
|||||||||||||||||||||||
Net income
|
$
|
51.5
|
|
|
$
|
0.2
|
|
|
$
|
51.7
|
|
|
$
|
32.8
|
|
|
$
|
—
|
|
|
$
|
32.8
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustment
|
1.4
|
|
|
—
|
|
|
1.4
|
|
|
(2.8
|
)
|
|
—
|
|
|
(2.8
|
)
|
||||||
Income tax (expense) benefit on foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
||||||
Comprehensive income
|
52.9
|
|
|
0.2
|
|
|
53.1
|
|
|
30.7
|
|
|
—
|
|
|
30.7
|
|
||||||
Comprehensive income attributable to noncontrolling interest
|
(0.8
|
)
|
|
—
|
|
|
(0.8
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
||||||
Comprehensive income attributable to Global Brass and Copper Holdings, Inc.
|
$
|
52.1
|
|
|
$
|
0.2
|
|
|
$
|
52.3
|
|
|
$
|
30.4
|
|
|
$
|
—
|
|
|
$
|
30.4
|
|
Consolidated Statement of Changes in Equity (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
(in millions, except share data)
|
Shares outstanding
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Retained earnings
|
|
Treasury
stock
|
|
Accumulated
other
comprehensive
loss
|
|
Total
Global Brass
and Copper
Holdings, Inc.
stockholders’
equity
|
|
Noncontrolling
interest
|
|
Total
equity
|
|||||||||||||||||
December 31, 2015 - as reported
|
21,507,154
|
|
|
$
|
0.2
|
|
|
$
|
36.9
|
|
|
$
|
22.3
|
|
|
$
|
(0.7
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
56.4
|
|
|
$
|
4.3
|
|
|
$
|
60.7
|
|
Cumulative effect adjustment of ASC Topic 606 on January 1, 2016
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
December 31, 2015 - as adjusted
|
21,507,154
|
|
|
0.2
|
|
|
36.9
|
|
|
22.3
|
|
|
(0.7
|
)
|
|
(2.3
|
)
|
|
56.4
|
|
|
4.3
|
|
|
60.7
|
|
||||||||
Year ended December 31, 2016 - as reported
|
125,913
|
|
|
—
|
|
|
8.1
|
|
|
28.9
|
|
|
(0.8
|
)
|
|
(1.8
|
)
|
|
34.4
|
|
|
0.1
|
|
|
34.5
|
|
||||||||
Effect of the adoption of ASC Topic 606
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
December 31, 2016 - as adjusted
|
21,633,067
|
|
|
0.2
|
|
|
45.0
|
|
|
51.2
|
|
|
(1.5
|
)
|
|
(4.1
|
)
|
|
90.8
|
|
|
4.4
|
|
|
95.2
|
|
||||||||
Year ended December 31, 2017 - as reported
|
274,121
|
|
|
—
|
|
|
9.5
|
|
|
45.9
|
|
|
(5.1
|
)
|
|
1.2
|
|
|
51.5
|
|
|
0.4
|
|
|
51.9
|
|
||||||||
Effect of the adoption of ASC Topic 606
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||||||
December 31, 2017 - as adjusted
|
21,907,188
|
|
|
$
|
0.2
|
|
|
$
|
54.5
|
|
|
$
|
97.3
|
|
|
$
|
(6.6
|
)
|
|
$
|
(2.9
|
)
|
|
$
|
142.5
|
|
|
$
|
4.8
|
|
|
$
|
147.3
|
|
Consolidated Statement of Cash Flows (Unaudited)
|
Year Ended
December 31, 2017 As Reported |
|
Effects of the Adoption of ASC Topic 606
|
|
Year Ended
December 31, 2017 As Adjusted |
|
Year Ended
December 31, 2016 As Reported |
|
Effects of the Adoption of ASC Topic 606
|
|
Year Ended
December 31, 2016 As Adjusted |
||||||||||||
(in millions)
|
|||||||||||||||||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
$
|
51.5
|
|
|
$
|
0.2
|
|
|
$
|
51.7
|
|
|
$
|
32.8
|
|
|
$
|
—
|
|
|
$
|
32.8
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lower of cost or market adjustment to inventory
|
(3.6
|
)
|
|
—
|
|
|
(3.6
|
)
|
|
(1.7
|
)
|
|
—
|
|
|
(1.7
|
)
|
||||||
Unrealized (gain) loss on derivatives
|
0.8
|
|
|
—
|
|
|
0.8
|
|
|
(3.1
|
)
|
|
—
|
|
|
(3.1
|
)
|
||||||
Depreciation
|
18.5
|
|
|
—
|
|
|
18.5
|
|
|
14.8
|
|
|
—
|
|
|
14.8
|
|
||||||
Amortization of intangible assets
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||||
Amortization of debt discount and issuance costs
|
1.3
|
|
|
—
|
|
|
1.3
|
|
|
2.0
|
|
|
—
|
|
|
2.0
|
|
||||||
Loss on extinguishment of debt
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
23.4
|
|
|
—
|
|
|
23.4
|
|
||||||
Uncertain tax positions
|
2.1
|
|
|
—
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation expense
|
8.2
|
|
|
—
|
|
|
8.2
|
|
|
6.9
|
|
|
—
|
|
|
6.9
|
|
||||||
Provision for bad debts, net of reductions
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
||||||
Deferred income taxes
|
18.0
|
|
|
—
|
|
|
18.0
|
|
|
4.6
|
|
|
0.1
|
|
|
4.7
|
|
||||||
Loss on disposal of property, plant and equipment
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||||
Change in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts receivable
|
(49.8
|
)
|
|
—
|
|
|
(49.8
|
)
|
|
(15.0
|
)
|
|
—
|
|
|
(15.0
|
)
|
||||||
Inventories
|
(9.7
|
)
|
|
—
|
|
|
(9.7
|
)
|
|
13.0
|
|
|
—
|
|
|
13.0
|
|
||||||
Prepaid expenses and other current assets
|
(15.0
|
)
|
|
17.6
|
|
|
2.6
|
|
|
2.8
|
|
|
(0.3
|
)
|
|
2.5
|
|
||||||
Accounts payable
|
18.9
|
|
|
—
|
|
|
18.9
|
|
|
18.5
|
|
|
—
|
|
|
18.5
|
|
||||||
Accrued liabilities
|
7.7
|
|
|
(17.8
|
)
|
|
(10.1
|
)
|
|
0.7
|
|
|
0.2
|
|
|
0.9
|
|
||||||
Accrued interest
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.8
|
)
|
|
—
|
|
|
(2.8
|
)
|
||||||
Income taxes, net
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|
(1.2
|
)
|
|
—
|
|
|
(1.2
|
)
|
||||||
Other, net
|
(1.0
|
)
|
|
—
|
|
|
(1.0
|
)
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
||||||
Net cash provided by (used in) operating activities
|
49.2
|
|
|
—
|
|
|
49.2
|
|
|
96.0
|
|
|
—
|
|
|
96.0
|
|
||||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
(24.7
|
)
|
|
—
|
|
|
(24.7
|
)
|
|
(34.4
|
)
|
|
—
|
|
|
(34.4
|
)
|
||||||
Business acquisition
|
(40.0
|
)
|
|
—
|
|
|
(40.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Proceeds from sale of property, plant and equipment
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||||
Net cash used in investing activities
|
(64.6
|
)
|
|
—
|
|
|
(64.6
|
)
|
|
(34.3
|
)
|
|
—
|
|
|
(34.3
|
)
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Borrowings on ABL Facility
|
0.8
|
|
|
—
|
|
|
0.8
|
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
||||||
Payments on ABL Facility
|
(0.8
|
)
|
|
—
|
|
|
(0.8
|
)
|
|
(1.2
|
)
|
|
—
|
|
|
(1.2
|
)
|
||||||
Retirement of Senior Secured Notes
|
—
|
|
|
—
|
|
|
—
|
|
|
(345.3
|
)
|
|
—
|
|
|
(345.3
|
)
|
||||||
Premium payment on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(17.0
|
)
|
|
—
|
|
|
(17.0
|
)
|
||||||
Payments of debt issuance costs
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
(5.4
|
)
|
|
—
|
|
|
(5.4
|
)
|
||||||
Proceeds from term loan, net of discount
|
8.7
|
|
|
—
|
|
|
8.7
|
|
|
316.8
|
|
|
—
|
|
|
316.8
|
|
||||||
Payments on term loan
|
(11.9
|
)
|
|
—
|
|
|
(11.9
|
)
|
|
(0.8
|
)
|
|
—
|
|
|
(0.8
|
)
|
||||||
Principal payments under capital lease obligation
|
(1.3
|
)
|
|
—
|
|
|
(1.3
|
)
|
|
(1.1
|
)
|
|
—
|
|
|
(1.1
|
)
|
||||||
Dividends paid
|
(4.4
|
)
|
|
—
|
|
|
(4.4
|
)
|
|
(3.2
|
)
|
|
—
|
|
|
(3.2
|
)
|
||||||
Distribution to noncontrolling interest owner
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
||||||
Proceeds from exercise of stock options
|
0.8
|
|
|
—
|
|
|
0.8
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
||||||
Share repurchases
|
(5.1
|
)
|
|
—
|
|
|
(5.1
|
)
|
|
(0.8
|
)
|
|
—
|
|
|
(0.8
|
)
|
||||||
Net cash used in financing activities
|
(13.8
|
)
|
|
—
|
|
|
(13.8
|
)
|
|
(56.5
|
)
|
|
—
|
|
|
(56.5
|
)
|
||||||
Effect of foreign currency exchange rates
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
||||||
Net increase (decrease) in cash
|
(29.2
|
)
|
|
—
|
|
|
(29.2
|
)
|
|
4.7
|
|
|
—
|
|
|
4.7
|
|
||||||
Cash and cash equivalents at beginning of period
|
88.2
|
|
|
—
|
|
|
88.2
|
|
|
83.5
|
|
|
—
|
|
|
83.5
|
|
||||||
Cash and cash equivalents at end of period
|
$
|
59.0
|
|
|
$
|
—
|
|
|
$
|
59.0
|
|
|
$
|
88.2
|
|
|
$
|
—
|
|
|
$
|
88.2
|
|
|
Year Ended
December 31, |
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Building and housing
|
$
|
585.8
|
|
|
$
|
494.0
|
|
|
$
|
413.3
|
|
Automotive and transportation
|
339.1
|
|
|
309.4
|
|
|
274.1
|
|
|||
Munitions
|
185.0
|
|
|
190.3
|
|
|
142.3
|
|
|||
Coinage
|
168.3
|
|
|
155.6
|
|
|
131.6
|
|
|||
Industrial machinery and equipment
|
146.4
|
|
|
140.3
|
|
|
118.2
|
|
|||
Electronics / electrical components
|
146.0
|
|
|
135.5
|
|
|
126.4
|
|
|||
Other
|
194.8
|
|
|
153.5
|
|
|
132.4
|
|
|||
Net sales
|
$
|
1,765.4
|
|
|
$
|
1,578.6
|
|
|
$
|
1,338.3
|
|
|
Year Ended December 31,
|
||||||||||
(in millions, except per share data)
|
2018
|
|
2017
|
|
2016
|
||||||
Numerator
|
|
|
|
|
|
||||||
Net income attributable to Global Brass and Copper Holdings, Inc.
|
$
|
58.2
|
|
|
$
|
51.1
|
|
|
$
|
32.2
|
|
Denominator
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding
|
21.9
|
|
|
21.7
|
|
|
21.4
|
|
|||
Effect of potentially dilutive securities:
|
|
|
|
|
|
||||||
Stock options and nonvested share awards
|
0.4
|
|
|
0.4
|
|
|
0.2
|
|
|||
Weighted-average common shares outstanding, assuming dilution
|
22.3
|
|
|
22.1
|
|
|
21.6
|
|
|||
|
|
|
|
|
|
||||||
Anti-dilutive shares excluded from above
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|||
Net income attributable to Global Brass and Copper Holdings, Inc. per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.66
|
|
|
$
|
2.35
|
|
|
$
|
1.50
|
|
Diluted
|
$
|
2.61
|
|
|
$
|
2.31
|
|
|
$
|
1.49
|
|
•
|
unrealized gains and losses on derivative contracts in support of our balanced book approach;
|
•
|
unrealized gains and losses associated with derivative contracts related to energy and utility costs;
|
•
|
impact associated with lower of cost or market adjustments to inventory;
|
•
|
gains and losses due to the depletion of a LIFO layer of metal inventory;
|
•
|
share-based compensation expense;
|
•
|
refinancing costs;
|
•
|
restructuring and other business transformation charges;
|
•
|
inventory step-up costs related to acquisition accounting;
|
•
|
specified legal and professional expenses; and
|
•
|
certain other items.
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Net Sales, External Customers
|
|
|
|
|
|
||||||
Olin Brass
|
$
|
679.8
|
|
|
$
|
664.1
|
|
|
$
|
553.9
|
|
Chase Brass
|
612.1
|
|
|
591.0
|
|
|
501.7
|
|
|||
A.J. Oster
|
473.5
|
|
|
323.5
|
|
|
282.7
|
|
|||
Total net sales, external customers
|
$
|
1,765.4
|
|
|
$
|
1,578.6
|
|
|
$
|
1,338.3
|
|
Intersegment Net Sales
|
|
|
|
|
|
||||||
Olin Brass
|
$
|
87.5
|
|
|
$
|
79.0
|
|
|
$
|
75.5
|
|
Chase Brass
|
—
|
|
|
0.1
|
|
|
1.0
|
|
|||
A.J. Oster
|
0.2
|
|
|
0.1
|
|
|
—
|
|
|||
Total intersegment net sales
|
$
|
87.7
|
|
|
$
|
79.2
|
|
|
$
|
76.5
|
|
Adjusted EBITDA
|
|
|
|
|
|
||||||
Olin Brass
|
$
|
57.2
|
|
|
$
|
51.2
|
|
|
$
|
49.9
|
|
Chase Brass
|
66.3
|
|
|
73.2
|
|
|
68.0
|
|
|||
A.J. Oster
|
23.1
|
|
|
14.8
|
|
|
18.4
|
|
|||
Total adjusted EBITDA of operating segments
|
146.6
|
|
|
139.2
|
|
|
136.3
|
|
|||
Corporate (a)
|
(18.1
|
)
|
|
(8.7
|
)
|
|
(17.7
|
)
|
|||
Depreciation expense
|
(21.1
|
)
|
|
(18.5
|
)
|
|
(14.8
|
)
|
|||
Amortization of intangible assets
|
(0.4
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||
Interest expense, net
|
(16.8
|
)
|
|
(17.6
|
)
|
|
(26.2
|
)
|
|||
Net income attributable to noncontrolling interest
|
0.4
|
|
|
0.6
|
|
|
0.6
|
|
|||
Unrealized gain (loss) on derivative contracts (b)
|
(2.8
|
)
|
|
(0.8
|
)
|
|
3.1
|
|
|||
LIFO liquidation (loss) gain (c)
|
(0.1
|
)
|
|
(1.0
|
)
|
|
(1.9
|
)
|
|||
Refinancing costs (d)
|
(1.6
|
)
|
|
(0.9
|
)
|
|
(23.4
|
)
|
|||
Specified legal / professional expenses (e)
|
(0.4
|
)
|
|
(1.3
|
)
|
|
(1.2
|
)
|
|||
Lower of cost or market adjustment to inventory (f)
|
(2.9
|
)
|
|
3.6
|
|
|
1.7
|
|
|||
Share-based compensation expense (g)
|
(6.7
|
)
|
|
(8.2
|
)
|
|
(6.9
|
)
|
|||
Restructuring and other business transformation charges (h)
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|||
Inventory step-up costs from acquisition accounting
|
(0.2
|
)
|
|
(0.3
|
)
|
|
—
|
|
|||
Income before provision for income taxes
|
$
|
75.9
|
|
|
$
|
85.6
|
|
|
$
|
49.5
|
|
(a)
|
2017 includes
$7.4 million
of insurance proceeds recoveries relating to a production outage in 2016.
|
(b)
|
Represents unrealized gains / losses on derivative contracts.
|
(c)
|
Calculated based on the difference between the base year LIFO carrying value and the metal prices prevailing in the market at the time of inventory depletion.
|
(d)
|
Represents the loss on extinguishment of debt and other expenses associated with our refinancing activities.
|
(e)
|
Represents selected professional fees for accounting, tax, legal, and consulting services for merger and acquisition activity or incurred as a public company that exceed our expected long-term requirements.
|
(f)
|
Represents the impact of lower of cost or market adjustments to domestic metal inventory. This impact is included in the Corporate entity results.
|
(g)
|
Represents compensation expense resulting from stock compensation awards to certain employees and our Board of Directors.
|
(h)
|
Restructuring and other business transformation charges in
2017
represent severance charges at Olin Brass.
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Depreciation and amortization
|
|
|
|
|
|
||||||
Olin Brass
|
$
|
11.4
|
|
|
$
|
10.8
|
|
|
$
|
9.2
|
|
Chase Brass
|
6.2
|
|
|
5.7
|
|
|
4.9
|
|
|||
A.J. Oster
|
3.8
|
|
|
2.0
|
|
|
0.5
|
|
|||
Corporate
|
0.1
|
|
|
0.1
|
|
|
0.3
|
|
|||
Total depreciation and amortization
|
$
|
21.5
|
|
|
$
|
18.6
|
|
|
$
|
14.9
|
|
|
|
|
|
|
|
||||||
LIFO liquidation (loss)/gain
|
|
|
|
|
|
||||||
Olin Brass
|
$
|
(0.2
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
(1.6
|
)
|
Chase Brass
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|||
A.J. Oster
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Corporate
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||
Total LIFO liquidation (loss)/gain
|
$
|
(0.1
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
(1.9
|
)
|
|
|
|
|
|
|
||||||
Interest expense, net
|
|
|
|
|
|
||||||
Olin Brass
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
A.J. Oster
|
0.1
|
|
|
—
|
|
|
—
|
|
|||
Corporate
|
16.6
|
|
|
17.3
|
|
|
25.9
|
|
|||
Total interest expense, net
|
$
|
16.8
|
|
|
$
|
17.6
|
|
|
$
|
26.2
|
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
|
|
|
|
||||||
Olin Brass
|
$
|
12.3
|
|
|
$
|
13.5
|
|
|
$
|
15.1
|
|
Chase Brass
|
9.2
|
|
|
6.7
|
|
|
10.0
|
|
|||
A.J. Oster
|
3.6
|
|
|
4.3
|
|
|
9.3
|
|
|||
Corporate
|
1.1
|
|
|
0.2
|
|
|
—
|
|
|||
Total capital expenditures
|
$
|
26.2
|
|
|
$
|
24.7
|
|
|
$
|
34.4
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales:
|
|
|
|
|
|
||||||
United States
|
$
|
1,680.6
|
|
|
$
|
1,489.8
|
|
|
$
|
1,261.4
|
|
Asia Pacific
|
40.7
|
|
|
44.0
|
|
|
37.1
|
|
|||
Mexico
|
44.1
|
|
|
44.8
|
|
|
39.8
|
|
|||
Total net sales
|
$
|
1,765.4
|
|
|
$
|
1,578.6
|
|
|
$
|
1,338.3
|
|
|
As of December 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Raw materials and supplies
|
$
|
31.9
|
|
|
$
|
23.2
|
|
Work-in-process
|
72.9
|
|
|
73.5
|
|
||
Finished goods
|
113.4
|
|
|
111.4
|
|
||
Total inventories
|
$
|
218.2
|
|
|
$
|
208.1
|
|
|
As of December 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Market value
|
$
|
296.5
|
|
|
$
|
329.1
|
|
As reported
|
218.2
|
|
|
208.1
|
|
||
Excess of market over reported value
|
$
|
78.3
|
|
|
$
|
121.0
|
|
|
As of December 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Workers’ compensation plan deposits
|
$
|
2.9
|
|
|
$
|
3.8
|
|
Prepaid insurance
|
1.6
|
|
|
1.9
|
|
||
Derivative contract assets
|
—
|
|
|
2.0
|
|
||
Other
|
4.0
|
|
|
4.0
|
|
||
Total prepaid expenses and other current assets
|
$
|
8.5
|
|
|
$
|
11.7
|
|
|
As of December 31,
|
|
Useful Life
(in years)
|
||||||
(in millions)
|
2018
|
|
2017
|
|
|||||
Land improvements
|
$
|
4.4
|
|
|
$
|
3.6
|
|
|
12 - 20
|
Buildings and building improvements
|
32.6
|
|
|
29.9
|
|
|
20 - 50
|
||
Machinery and equipment
|
195.2
|
|
|
175.3
|
|
|
3 - 12
|
||
Leasehold improvements
|
2.1
|
|
|
1.7
|
|
|
|
||
Construction-in-process
|
11.3
|
|
|
11.4
|
|
|
|
||
Gross property, plant and equipment
|
245.6
|
|
|
221.9
|
|
|
|
||
Accumulated depreciation
|
(97.8
|
)
|
|
(79.0
|
)
|
|
|
||
Property, plant and equipment, net
|
$
|
147.8
|
|
|
$
|
142.9
|
|
|
|
|
As of December 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Compensation and benefits
|
$
|
23.4
|
|
|
$
|
21.1
|
|
Workers’ compensation
|
2.7
|
|
|
2.9
|
|
||
Utilities
|
2.7
|
|
|
2.4
|
|
||
Professional fees
|
1.8
|
|
|
1.6
|
|
||
Taxes
|
1.2
|
|
|
1.4
|
|
||
Derivative contract liabilities
|
0.9
|
|
|
0.2
|
|
||
Other
|
7.5
|
|
|
6.4
|
|
||
Total accrued liabilities
|
$
|
40.2
|
|
|
$
|
36.0
|
|
|
As of December 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Term Loan B Facility
|
$
|
312.8
|
|
|
$
|
316.0
|
|
Deferred financing fees and discount on debt
|
(5.1
|
)
|
|
(5.9
|
)
|
||
Obligations under capital lease
|
2.6
|
|
|
3.9
|
|
||
Total debt
|
310.3
|
|
|
314.0
|
|
||
Current portion of debt
|
(4.6
|
)
|
|
(5.0
|
)
|
||
Noncurrent portion of debt
|
$
|
305.7
|
|
|
$
|
309.0
|
|
(in millions)
|
|
||
2019
|
$
|
1.5
|
|
2020
|
0.5
|
|
|
2021
|
0.3
|
|
|
2022
|
0.3
|
|
|
2023
|
0.1
|
|
|
Thereafter
|
0.1
|
|
|
Total
|
$
|
2.8
|
|
Amount representing interest
|
(0.2
|
)
|
|
Present value of minimum lease payments
|
$
|
2.6
|
|
Current portion of capital lease obligations
|
(1.4
|
)
|
|
Noncurrent portion of capital lease obligations
|
$
|
1.2
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Current tax provision
|
|
|
|
|
|
||||||
U.S. federal
|
$
|
7.0
|
|
|
$
|
11.2
|
|
|
$
|
8.0
|
|
State and local
|
3.3
|
|
|
1.8
|
|
|
1.2
|
|
|||
Foreign
|
1.7
|
|
|
2.9
|
|
|
2.8
|
|
|||
Total current
|
12.0
|
|
|
15.9
|
|
|
12.0
|
|
|||
Deferred tax provision
|
|
|
|
|
|
||||||
U.S. federal
|
3.9
|
|
|
16.7
|
|
|
4.1
|
|
|||
State and local
|
1.3
|
|
|
1.6
|
|
|
0.8
|
|
|||
Foreign
|
0.1
|
|
|
(0.3
|
)
|
|
(0.2
|
)
|
|||
Total deferred
|
5.3
|
|
|
18.0
|
|
|
4.7
|
|
|||
Total provision
|
$
|
17.3
|
|
|
$
|
33.9
|
|
|
$
|
16.7
|
|
|
Year Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Statutory provision rate
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Permanent differences and other items
|
|
|
|
|
|
|||
State tax provision
|
4.3
|
%
|
|
2.6
|
%
|
|
2.4
|
%
|
Section 199 manufacturing credit
|
—
|
%
|
|
(2.6
|
)%
|
|
(2.0
|
)%
|
Incremental tax effects of foreign earnings
|
0.7
|
%
|
|
(0.4
|
)%
|
|
(0.2
|
)%
|
Valuation allowance
|
(0.8
|
)%
|
|
—
|
%
|
|
(2.0
|
)%
|
Stock compensation
|
0.4
|
%
|
|
(3.2
|
)%
|
|
—
|
%
|
Tax reform adjustment
|
—
|
%
|
|
8.6
|
%
|
|
—
|
%
|
Return-to-provision adjustment
|
(2.5
|
)%
|
|
0.6
|
%
|
|
0.3
|
%
|
Other
|
(0.3
|
)%
|
|
(1.0
|
)%
|
|
0.2
|
%
|
Effective income tax rate
|
22.8
|
%
|
|
39.6
|
%
|
|
33.7
|
%
|
|
As of December 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Deferred tax assets
|
|
|
|
||||
Inventory
|
$
|
26.2
|
|
|
$
|
27.9
|
|
Accounts receivable
|
1.0
|
|
|
1.4
|
|
||
UNICAP adjustment
|
2.0
|
|
|
1.9
|
|
||
Derivative contracts
|
1.5
|
|
|
0.3
|
|
||
Other
|
4.3
|
|
|
5.0
|
|
||
Valuation allowance
|
—
|
|
|
(0.6
|
)
|
||
Total deferred tax assets, net of valuation allowance
|
$
|
35.0
|
|
|
$
|
35.9
|
|
Deferred tax liabilities
|
|
|
|
||||
Fixed assets and intangibles
|
$
|
21.0
|
|
|
$
|
16.8
|
|
Accruals and other reserves
|
0.2
|
|
|
0.2
|
|
||
Investments in foreign entities
|
1.5
|
|
|
1.3
|
|
||
Financing fees
|
1.0
|
|
|
1.5
|
|
||
Total deferred tax liabilities
|
23.7
|
|
|
19.8
|
|
||
Net deferred tax asset
|
$
|
11.3
|
|
|
$
|
16.1
|
|
Pension Fund
|
|
IAM National Pension Fund
|
EIN/ Pension Plan Number
|
|
51-6031295 / 002
|
Pension Protection Act Zone Status (2018 and 2017)*
|
|
Green Zone
|
FIP/RP Status Pending/Implemented
|
|
No
|
Company Contributions (FY 2018)
|
|
$3.3 million
|
Company Contributions (FY 2017)
|
|
$3.3 million
|
Surcharge Imposed
|
|
No
|
Expiration Date of Collective-Bargaining Agreement
|
|
November 6, 2022
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
(in millions)
|
Net Notional Amount
|
|
Net Notional Amount
|
||||
Cash flow hedge:
|
|
|
|
||||
Interest rate swap
|
$
|
150.0
|
|
|
$
|
—
|
|
Commodity and energy derivative contracts:
|
|
|
|
||||
Metal
|
27.9
|
|
|
12.8
|
|
||
Energy and utilities
|
3.0
|
|
|
3.8
|
|
||
Total
|
$
|
180.9
|
|
|
$
|
16.6
|
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
(in millions)
|
Notional Position
|
|
Notional Position
|
||||
Commodity and energy derivative contracts:
|
|
|
|
||||
Notional amount - long
|
$
|
67.4
|
|
|
$
|
46.1
|
|
Notional amount - (short)
|
(36.5
|
)
|
|
(29.5
|
)
|
||
Net long / (short)
|
$
|
30.9
|
|
|
$
|
16.6
|
|
|
As of December 31, 2018
|
||||||||||
(in millions)
|
Gross Amounts of
Recognized Assets
|
|
Gross Amounts Offset in
Consolidated Balance
Sheet
|
|
Net Amounts of Assets
Presented in Consolidated
Balance Sheet
|
||||||
Commodity and energy derivative contracts:
|
|
|
|
|
|
||||||
Metal
|
$
|
3.3
|
|
|
$
|
(3.3
|
)
|
|
$
|
—
|
|
Energy and utilities
|
0.1
|
|
|
(0.1
|
)
|
|
—
|
|
|||
Collateral on deposit
|
0.1
|
|
|
(0.1
|
)
|
|
—
|
|
|||
Total
|
$
|
3.5
|
|
|
$
|
(3.5
|
)
|
|
$
|
—
|
|
|
As of December 31, 2018
|
||||||||||
(in millions)
|
Gross Amounts of
Recognized Liabilities
|
|
Gross Amounts Offset in
Consolidated Balance
Sheet
|
|
Net Amounts of Liabilities
Presented in Consolidated
Balance Sheet
|
||||||
Cash flow hedge:
|
|
|
|
|
|
||||||
Interest rate swap
|
$
|
2.0
|
|
|
$
|
—
|
|
|
$
|
2.0
|
|
Commodity and energy derivative contracts:
|
|
|
|
|
|
||||||
Metal
|
4.2
|
|
|
(3.4
|
)
|
|
0.8
|
|
|||
Energy and utilities
|
0.3
|
|
|
(0.1
|
)
|
|
0.2
|
|
|||
Total
|
$
|
6.5
|
|
|
$
|
(3.5
|
)
|
|
$
|
3.0
|
|
Consolidated balance sheet location:
|
|
|
|
|
|
||||||
Accrued liabilities
|
|
|
|
|
$
|
0.9
|
|
||||
Other noncurrent liabilities
|
|
|
|
|
$
|
2.1
|
|
|
As of December 31, 2017
|
||||||||||
(in millions)
|
Gross Amounts of
Recognized Assets
|
|
Gross Amounts Offset in
Consolidated Balance
Sheet
|
|
Net Amounts of Assets
Presented in Consolidated
Balance Sheet
|
||||||
Commodity and energy derivative contracts:
|
|
|
|
|
|
||||||
Metal
|
$
|
5.3
|
|
|
$
|
(3.2
|
)
|
|
$
|
2.1
|
|
Energy and utilities
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
5.3
|
|
|
$
|
(3.2
|
)
|
|
$
|
2.1
|
|
Consolidated balance sheet location:
|
|
|
|
|
|
||||||
Prepaid expenses and other current assets
|
|
|
|
|
$
|
2.0
|
|
||||
Other noncurrent assets
|
|
|
|
|
$
|
0.1
|
|
|
As of December 31, 2017
|
||||||||||
(in millions)
|
Gross Amounts of
Recognized Liabilities
|
|
Gross Amounts Offset in
Consolidated Balance
Sheet
|
|
Net Amounts of Liabilities
Presented in Consolidated
Balance Sheet
|
||||||
Commodity and energy derivative contracts:
|
|
|
|
|
|
||||||
Metal
|
$
|
3.3
|
|
|
$
|
(3.2
|
)
|
|
$
|
0.1
|
|
Energy and utilities
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|||
Total
|
$
|
3.6
|
|
|
$
|
(3.2
|
)
|
|
$
|
0.4
|
|
Consolidated balance sheet location:
|
|
|
|
|
|
||||||
Accrued liabilities
|
|
|
|
|
$
|
0.2
|
|
||||
Other noncurrent liabilities
|
|
|
|
|
$
|
0.2
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flow hedge gains (losses) in other comprehensive income (loss) for:
|
|
|
|
|
|
||||||
Interest rate swap
|
$
|
(2.0
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity and energy derivative contracts (gains) losses in cost of sales for:
|
|
|
|
|
|
||||||
Metal
|
$
|
0.3
|
|
|
$
|
(4.0
|
)
|
|
$
|
(3.6
|
)
|
Energy and utilities
|
(0.2
|
)
|
|
0.6
|
|
|
(0.1
|
)
|
|||
Total commodity derivative contract (gains) losses in cost of sales
|
$
|
0.1
|
|
|
$
|
(3.4
|
)
|
|
$
|
(3.7
|
)
|
•
|
Level 1
- Quoted prices for identical instruments in active markets.
|
•
|
Level 2
- Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.
|
•
|
Level 3
- Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.
|
(in millions)
|
Payment
|
||
2019
|
$
|
3.2
|
|
2020
|
2.1
|
|
|
2021
|
1.5
|
|
|
2022
|
0.6
|
|
|
2023
|
0.3
|
|
|
Thereafter
|
0.2
|
|
|
Total minimum lease payments
|
$
|
7.9
|
|
|
2017
|
|
2016
|
||
Expected volatility
|
36
|
%
|
|
41
|
%
|
Risk-free interest rate
|
2.2
|
%
|
|
1.6
|
%
|
Dividend yield
|
0.4
|
%
|
|
0.6
|
%
|
Expected term
|
6.0 years
|
|
|
6.0 years
|
|
|
|
Shares
|
|
Weighted Average Exercise Price of Shares
|
|
Average Remaining Contractual Term (in years)
|
|
Aggregate Intrinsic Value
(in millions)
|
|||||
Outstanding at December 31, 2015
|
|
374,685
|
|
|
$
|
13.90
|
|
|
8.5
|
|
$
|
2.8
|
|
Granted
|
|
140,740
|
|
|
26.99
|
|
|
|
|
|
|||
Exercised
|
|
(41,066
|
)
|
|
12.92
|
|
|
|
|
|
|||
Forfeited or expired
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding at December 31, 2016
|
|
474,359
|
|
|
$
|
17.87
|
|
|
8.1
|
|
$
|
7.8
|
|
Granted
|
|
92,879
|
|
|
33.93
|
|
|
|
|
|
|||
Exercised
|
|
(38,381
|
)
|
|
19.51
|
|
|
|
|
|
|||
Forfeited or expired
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding at December 31, 2017
|
|
528,857
|
|
|
$
|
20.57
|
|
|
7.4
|
|
$
|
6.7
|
|
Granted
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
|
(81,100
|
)
|
|
17.09
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(19,374
|
)
|
|
31.25
|
|
|
|
|
|
|||
Outstanding at December 31, 2018
|
|
428,383
|
|
|
$
|
20.74
|
|
|
6.4
|
|
$
|
2.8
|
|
Options exercisable at December 31, 2018
|
|
341,993
|
|
|
$
|
18.11
|
|
|
6.1
|
|
$
|
2.8
|
|
|
|
Shares
|
|
Weighted Average
Grant Date Fair
Value
|
|||
Nonvested restricted stock - December 31, 2015
|
|
203,258
|
|
|
$
|
14.53
|
|
Granted
|
|
119,601
|
|
|
27.00
|
|
|
Vested
|
|
(118,097
|
)
|
|
16.05
|
|
|
Forfeited
|
|
(7,438
|
)
|
|
17.59
|
|
|
Nonvested restricted stock - December 31, 2016
|
|
197,324
|
|
|
$
|
21.06
|
|
Granted
|
|
96,724
|
|
|
33.11
|
|
|
Vested
|
|
(117,852
|
)
|
|
21.47
|
|
|
Forfeited
|
|
(5,416
|
)
|
|
26.29
|
|
|
Nonvested restricted stock - December 31, 2017
|
|
170,780
|
|
|
$
|
27.43
|
|
Granted
|
|
122,978
|
|
|
29.70
|
|
|
Vested
|
|
(125,410
|
)
|
|
25.88
|
|
|
Forfeited
|
|
(17,871
|
)
|
|
30.22
|
|
|
Nonvested restricted stock - December 31, 2018
|
|
150,477
|
|
|
$
|
30.25
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Grant date fair value
|
$
|
29.25
|
|
|
$
|
33.92
|
|
|
$
|
20.05
|
|
Expected volatility
|
35
|
%
|
|
34
|
%
|
|
30
|
%
|
|||
Risk-free interest rate
|
2.1
|
%
|
|
1.1
|
%
|
|
0.9
|
%
|
|||
Dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
|
Shares
|
|
Weighted-Average
Grant-Date Fair
Value
|
|||
Nonvested performance shares - December 31, 2015
|
|
218,840
|
|
|
$
|
13.67
|
|
Granted (a)
|
|
146,916
|
|
|
26.97
|
|
|
Earned (b)
|
|
205,833
|
|
|
5.54
|
|
|
Vested
|
|
(5,104
|
)
|
|
11.00
|
|
|
Unearned or forfeited
|
|
(10,072
|
)
|
|
16.58
|
|
|
Nonvested performance shares - December 31, 2016
|
|
556,413
|
|
|
$
|
14.15
|
|
Granted (a)
|
|
98,518
|
|
|
33.92
|
|
|
Earned (b)
|
|
65,017
|
|
|
10.03
|
|
|
Vested
|
|
(291,859
|
)
|
|
9.88
|
|
|
Unearned or forfeited
|
|
(12,719
|
)
|
|
28.05
|
|
|
Nonvested performance shares - December 31, 2017
|
|
415,370
|
|
|
$
|
20.76
|
|
Granted (a)
|
|
152,261
|
|
|
29.25
|
|
|
Earned
|
|
—
|
|
|
—
|
|
|
Vested
|
|
(221,339
|
)
|
|
14.78
|
|
|
Unearned or forfeited
|
|
(82,793
|
)
|
|
30.80
|
|
|
Nonvested performance shares - December 31, 2018
|
|
263,499
|
|
|
$
|
27.54
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Stock options
|
$
|
0.5
|
|
|
$
|
1.2
|
|
|
$
|
1.3
|
|
Restricted stock
|
3.2
|
|
|
3.0
|
|
|
2.4
|
|
|||
Performance shares
|
3.0
|
|
|
4.0
|
|
|
3.2
|
|
|||
Total pre-tax share-based compensation expense
|
$
|
6.7
|
|
|
$
|
8.2
|
|
|
$
|
6.9
|
|
Net tax benefit related to share-based compensation expense
|
$
|
1.2
|
|
|
$
|
3.2
|
|
|
$
|
2.6
|
|
|
Year Ended December 31,
|
||||||
(in millions, except per share data)
|
2017
|
|
2016
|
||||
Net sales:
|
|
|
|
||||
As reported
|
$
|
1,578.6
|
|
|
$
|
1,338.3
|
|
Pro forma
|
1,709.7
|
|
|
1,466.4
|
|
||
Net income attributable to Global Brass and Copper Holdings, Inc.:
|
|
|
|
||||
As reported
|
$
|
51.1
|
|
|
$
|
32.2
|
|
Pro forma
|
55.5
|
|
|
37.2
|
|
||
Net income attributable to Global Brass and Copper Holdings, Inc. per common share - Basic:
|
|
|
|
||||
As reported
|
$
|
2.35
|
|
|
$
|
1.50
|
|
Pro forma
|
$
|
2.55
|
|
|
$
|
1.74
|
|
Net income attributable to Global Brass and Copper Holdings, Inc. per common share - Diluted:
|
|
|
|
||||
As reported
|
$
|
2.31
|
|
|
$
|
1.49
|
|
Pro forma
|
$
|
2.51
|
|
|
$
|
1.72
|
|
|
2018
|
|
||||||||||||||
(in millions, except per share data)
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
|
||||||||
Net sales
|
$
|
471.8
|
|
|
$
|
459.4
|
|
|
$
|
429.9
|
|
|
$
|
404.3
|
|
|
Gross profit
|
49.0
|
|
(a)
|
57.9
|
|
(a)
|
42.9
|
|
(a)
|
36.9
|
|
(a)
|
||||
Income before provision for income taxes
|
21.2
|
|
|
29.1
|
|
(b)
|
16.8
|
|
|
8.8
|
|
|
||||
Net income
|
15.9
|
|
|
21.1
|
|
|
14.9
|
|
|
6.7
|
|
|
||||
Net income attributable to Global Brass and Copper Holdings, Inc.
|
15.8
|
|
|
21.0
|
|
|
14.8
|
|
|
6.6
|
|
|
||||
Net income attributable to Global Brass and Copper Holdings, Inc. per common share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.72
|
|
|
$
|
0.95
|
|
|
$
|
0.67
|
|
|
$
|
0.30
|
|
|
Diluted
|
$
|
0.71
|
|
|
$
|
0.94
|
|
|
$
|
0.66
|
|
|
$
|
0.29
|
|
|
|
2017
|
|
||||||||||||||
(in millions, except per share data)
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
|
||||||||
Net sales
|
$
|
419.5
|
|
|
$
|
374.8
|
|
|
$
|
359.4
|
|
|
$
|
424.9
|
|
|
Gross profit
|
50.6
|
|
(c)
|
44.2
|
|
(c)
|
43.6
|
|
(c)
|
45.8
|
|
(c)
|
||||
Income before provision for income taxes
|
22.7
|
|
|
24.6
|
|
|
19.0
|
|
(d)
|
19.3
|
|
|
||||
Net income
|
17.7
|
|
|
15.8
|
|
|
12.4
|
|
|
5.8
|
|
|
||||
Net income attributable to Global Brass and Copper Holdings, Inc.
|
17.5
|
|
|
15.7
|
|
|
12.3
|
|
|
5.6
|
|
|
||||
Net income attributable to Global Brass and Copper Holdings, Inc. per common share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.81
|
|
|
$
|
0.72
|
|
|
$
|
0.56
|
|
|
$
|
0.26
|
|
|
Diluted
|
$
|
0.79
|
|
|
$
|
0.71
|
|
|
$
|
0.56
|
|
|
$
|
0.25
|
|
|
(a)
|
Includes lower of cost or market adjustments for certain domestic, non-copper metal inventory, which increased gross profit by
$0.9 million
and
$0.2 million
in the first and second quarters, respectively, and decreased gross profit by
$1.2 million
and
$2.8 million
in the third and fourth quarters, respectively. Includes
$0.1 million
loss from liquidation of LIFO inventory layers in the fourth quarter.
|
(b)
|
Includes
$0.5 million
loss from extinguishment of debt in the second quarter.
|
(c)
|
Includes lower of cost or market adjustments for certain domestic, non-copper metal inventory, which increased gross profit by
$0.8 million
,
$0.7 million
, and
$2.8 million
in the first, third, and fourth quarters, respectively, and decreased gross profit by
$0.7 million
in the second quarter. Includes
$1.0 million
loss from liquidation of LIFO inventory layers in the fourth quarter.
|
(d)
|
Includes
$0.2 million
loss from extinguishment of debt in the third quarter.
|
(a)
|
The following documents are filed as part of this Annual Report on Form 10-K:
|
1.
|
Financial Statements: the report of independent registered public accounting firm, financial statements and notes are contained in Item 8 of this Annual Report.
|
2.
|
Financial statement schedules are omitted because they are not applicable or the required information is presented in the financial statements or related notes.
|
3.
|
Exhibits
|
Exhibit
Number
|
|
Description
|
2.1
*
|
|
Purchase Agreement, between Global Brass and Copper Acquisition Co. and Olin Corporation, dated as of October 15, 2007.
|
|
|
|
3.1
****
|
|
Amended and Restated Certificate of Incorporation of Global Brass and Copper Holdings, Inc.
|
|
|
|
3.2
*********
|
|
Amended and Restated Bylaws of Global Brass and Copper Holdings, Inc.
|
|
|
|
4.1
****
|
|
Form of Certificate of Common Stock of Global Brass and Copper Holdings, Inc.
|
|
|
|
10.1
***************
|
|
Global Brass and Copper Holdings, Inc. 2013 Omnibus Equity Incentive Plan, as amended and restated May 26, 2016.
|
|
|
|
10.2
*
|
|
Severance Agreement, by and between John J. Wasz and Global Brass and Copper, Inc., dated August 31, 2011.
|
|
|
|
10.3
******
|
|
Employment Agreement between Global Brass and Copper, Inc. and John J. Wasz, dated May 8, 2014.
|
|
|
|
10.4
*******
|
|
Severance Agreement, by and between Robert T. Micchelli and Global Brass and Copper, Inc., dated March 17, 2014.
|
|
|
|
10.5
***********
|
|
Severance Agreement, by and among Christopher J. Kodosky, Global Brass and Copper Holdings, Inc., and Global Brass and Copper, Inc., dated July 11, 2016.
|
|
|
|
10.6
*
|
|
Severance Agreement, by and between Devin K. Denner and Global Brass and Copper, Inc., dated July 29, 2011.
|
|
|
|
10.7
**
|
|
Amendment No. 1 to Severance Agreement, by and between Devin K. Denner and Global Brass and Copper, Inc., dated February 9, 2012.
|
|
|
|
10.8
**********
|
|
Severance Agreement, by and between Scott B. Hamilton and Global Brass and Copper, Inc., dated October 10, 2011.
|
|
|
|
10.9
**********
|
|
Severance Agreement, by and between Kevin W. Bense and Global Brass and Copper, Inc., dated September 20, 2013.
|
|
|
|
10.10
**********
|
|
Severance Agreement, by and between William G. Toler and Global Brass and Copper, Inc., dated September 9, 2013.
|
|
|
|
10.11
**************
|
|
Agreement, Waiver and Release of Claims dated December 12, 2017 between the Company and Scott B. Hamilton.
|
|
|
|
10.12
***
|
|
ABL Credit Agreement, dated as of July 18, 2016, among the Company, Global Brass and Copper, Inc., as Borrower, the loan guarantors party thereto, the lenders party thereto, Bank of America, N.A. and Wells Fargo Bank, National Association, as Co-Syndication Agents, and JPMorgan Chase Bank, N.A., as Administrative Agent.
|
|
|
|
10.13
***
|
|
Term Loan B Credit Agreement, dated as of July 18, 2016, among the Company, Global Brass and Copper, Inc., as Borrower, the loan guarantors party thereto, the lenders party thereto, Bank of America, N.A. Wells Fargo Bank, National Association, and Deutsche Bank Securities Inc., as Co-Syndication Agents, Branch Banking and Trust Company, Keybank National Association and William Blair & Company, L.L.C. as Co-Documentation Agents, and JPMorgan Chase Bank, N.A., as Administrative Agent.
|
|
|
|
Exhibit
Number
|
|
Description
|
10.14
************
|
|
Intercreditor Agreement, dated as of July 18, 2016, by and among JPMorgan Chase Bank, N.A., as Administrative Agent for the ABL Secured Parties (as defined below), JPMorgan Chase Bank, N.A., as Administrative Agent for the Term Loan Secured Parties and each of the Loan Parties party thereto.
|
|
|
|
10.15
************
|
|
Term Loan Pledge and Security Agreement, dated as of July 18, 2016, by and among Global Brass and Copper, Inc., as Borrower, each grantor party thereto and JPMorgan Chase Bank, N.A., as administrative agent.
|
|
|
|
10.16
************
|
|
ABL Pledge and Security Agreement, dated as of July 18, 2016, by and among Global Brass and Copper, Inc., as Borrower, each grantor party thereto and JPMorgan Chase Bank, N.A., as administrative agent.
|
|
|
|
10.17
*************
|
|
Amendment No. 1 to Term Loan B Credit Agreement, dated as of July 18, 2017, among the Company, Global Brass and Copper, Inc., as Borrower, the loan guarantors party thereto, the lenders party thereto, Bank of America, N.A. Wells Fargo Bank, National Association, and Deutsche Bank Securities Inc., as Co-Syndication Agents, Branch Banking and Trust Company, Keybank National Association and William Blair & Company, L.L.C. as Co-Documentation Agents, and JPMorgan Chase Bank, N.A., as Administrative Agent.
|
|
|
|
10.18
****************
|
|
Amendment No. 2 to Term Loan Credit Agreement, dated May 29, 2018, among Global Brass and Copper, Inc., as Borrower, the other Loan Parties party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent.
|
|
|
|
10.19
*************
|
|
Amendment No. 1 to ABL Credit Agreement, dated as of July 18, 2017, among the Company, Global Brass and Copper, Inc., as Borrower, the loan guarantors party thereto, the lenders party thereto, Bank of America, N.A. and Wells Fargo Bank, National Association, as Co-Syndication Agents, and JPMorgan Chase Bank, N.A., as Administrative Agent.
|
|
|
|
10.20
*
|
|
Indenture of Lease, between The Lares Group II and A.J. Oster Company, dated March 1, 1995, as amended.
|
|
|
|
10.21
************
|
|
Fourth Amendment to Lease between The Lares Group II and A.J. Oster Company, dated March 1, 2014.
|
|
|
|
10.22
*
|
|
Single Tenant Lease, between La Palmea Flex, L.P. and A.J. Oster West LLC, dated February 1, 2009.
|
|
|
|
10.23
************
|
|
First Amendment to Single Tenant Lease, between La Palmea Flex, L.P. and A.J. Oster West LLC, dated December 10, 2013.
|
|
|
|
10.24
****
|
|
Form of Indemnity Agreement.
|
|
|
|
10.25
*****
|
|
Investor Rights Agreement, dated as of May 29, 2013, by and between Global Brass and Copper Holdings, Inc. and Halkos Holdings, LLC.
|
|
|
|
^
10.26
********
|
|
Form of Performance Share Award Agreement under the Global Brass and Copper Holdings, Inc. 2013 Omnibus Equity Incentive Plan.
|
|
|
|
^
10.27
***********
|
|
Form of Performance Share Award Agreement under the Global Brass and Copper Holdings, Inc. 2013 Omnibus Equity Incentive Plan, as amended.
|
|
|
|
^
10.28
********
|
|
Form of Nonqualified Option Award Agreement under the Global Brass and Copper Holdings, Inc. 2013 Omnibus Equity Incentive Plan.
|
|
|
|
^
10.29
********
|
|
Form of Employee Restricted Stock Award Agreement under the Global Brass and Copper Holdings, Inc. 2013 Omnibus Equity Incentive Plan.
|
|
|
|
^
10.30
********
|
|
Form of Director Restricted Stock Award Agreement under the Global Brass and Copper Holdings, Inc. 2013 Omnibus Equity Incentive Plan.
|
|
|
|
|
List of Subsidiaries of Global Brass and Copper Holdings, Inc.
|
|
|
|
|
|
Consent of PricewaterhouseCoopers LLP.
|
|
|
|
|
|
Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
Exhibit
Number
|
|
Description
|
32.1
†
|
|
Certification of Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
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.
|
*
|
Filed with Amendment No. 1 to Form S-1 (No. 333-177594) of Global Brass and Copper Holdings, Inc. on January 6, 2012 and incorporated by reference herein.
|
**
|
Filed with Amendment No. 2 to Form S-1 (No. 333-177594) of Global Brass and Copper Holdings, Inc. on February 10, 2012 and incorporated by reference herein.
|
***
|
Filed on Form 8-K of Global Brass and Copper Holdings, Inc. on July 22, 2016 and incorporated by reference herein.
|
****
|
Filed with Amendment No. 6 to Form S-1 (No. 333-177594) of Global Brass and Copper Holdings, Inc. on May 8, 2013 and incorporated by reference herein.
|
*****
|
Filed on Form 8-K of Global Brass and Copper Holdings, Inc. on May 29, 2013 and incorporated by reference herein.
|
******
|
Filed on Form 8-K of Global Brass and Copper Holdings, Inc. on May 14, 2014 and incorporated by reference herein.
|
*******
|
Filed on Form 8-K of Global Brass and Copper Holdings, Inc. on March 19, 2014 and incorporated by reference herein.
|
********
|
Filed on Form 10-K of Global Brass and Copper Holdings, Inc. on March 19, 2014 and incorporated by reference herein.
|
*********
|
Filed on Form 8-K of Global Brass and Copper Holdings, Inc. on March 10, 2015 and incorporated by reference herein.
|
**********
|
Filed on Form 10-K of Global Brass and Copper Holdings, Inc. on March 16, 2015 and incorporated by reference herein.
|
***********
|
Filed on Form 10-Q of Global Brass and Copper Holdings, Inc. on August 5, 2016 and incorporated by reference herein.
|
************
|
Filed on Form 10-K of Global Brass and Copper Holdings, Inc. on March 7, 2017 and incorporated by reference herein.
|
*************
|
Filed on Form 8-K of Global Brass and Copper Holdings, Inc. on July 18, 2017 and incorporated by reference herein.
|
**************
|
Filed on Form 8-K of Global Brass and Copper Holdings, Inc. on December 19, 2017 and incorporated by reference herein.
|
***************
|
Incorporated by reference to Appendix A to the Definitive Proxy Statement on Schedule 14A of Global Brass and Copper Holdings, Inc. for its 2016 Annual Meeting of Stockholders filed on April 8, 2016.
|
****************
|
Filed on Form 10-Q of Global Brass and Copper Holdings, Inc. on August 3, 2018 and incorporated by reference herein.
|
^
|
Compensatory plan or arrangement
|
†
|
This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (Securities Act) or the Exchange Act.
|
|
|
|
GLOBAL BRASS AND COPPER HOLDINGS, INC
|
||
|
|
|
By:
|
|
/s/ Christopher J. Kodosky
|
|
|
Christopher J. Kodosky
|
|
|
Chief Financial Officer
|
Name
|
|
|
|
Position
|
|
|
|
||
/s/ John J. Wasz
|
|
|
|
Chief Executive Officer and President
(principal executive officer) and Director
|
John J. Wasz
|
|
|
|
|
|
|
|
||
/s/ Christopher J. Kodosky
|
|
|
|
Chief Financial Officer (principal financial officer and principal accounting officer)
|
Christopher J. Kodosky
|
|
|
|
|
|
|
|
||
/s/ John H. Walker
|
|
|
|
Chairman of the Board
|
John H. Walker
|
|
|
|
|
|
|
|
||
/s/ Vicki L. Avril
|
|
|
|
Director
|
Vicki L. Avril
|
|
|
|
|
|
|
|
||
/s/ Donald L. Marsh
|
|
|
|
Director
|
Donald L. Marsh
|
|
|
|
|
|
|
|
||
/s/ Bradford T. Ray
|
|
|
|
Director
|
Bradford T. Ray
|
|
|
|
|
|
|
|
||
/s/ Martin E. Welch, III
|
|
|
|
Director
|
Martin E. Welch, III
|
|
|
|
|
|
|
|
||
/s/ Ronald C. Whitaker
|
|
|
|
Director
|
Ronald C. Whitaker
|
|
|
|
|
Name
|
State or Jurisdiction Under Which Organized
|
Global Brass and Copper, Inc
|
Delaware
|
GBC Metals, LLC*
|
Delaware
|
GBC Metals Asia Pacific PTE Ltd.
|
Singapore
|
Olin Industrial (Hong Kong) Limited
|
China
|
Olin Luotong Metals (GZ) Co., Ltd.
|
China
|
Chase Brass and Copper Company, LLC
|
Delaware
|
A.J. Oster, LLC
|
Delaware
|
A.J. Oster Foils, LLC
|
Delaware
|
A.J. Oster Caribe, LLC
|
Delaware
|
A.J. Oster West, LLC
|
Delaware
|
A.J.O. Mexico S.A. de C.V.
|
Mexico
|
A.J.O. Global Services Mexico S.A. de C.V.
|
Mexico
|
1.
|
I have reviewed this annual report on Form 10-K of Global Brass and Copper Holdings, Inc.;
|
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 circumstance 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 represent 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 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 controls 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 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.
|
/s/ John J. Wasz
|
John J. Wasz
|
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Global Brass and Copper Holdings, Inc.;
|
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 circumstance 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 represent 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 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 controls 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 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.
|
/s/ Christopher J. Kodosky
|
Christopher J. Kodosky
|
Chief Financial Officer
|
1.
|
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 J. Wasz
|
John J. Wasz
|
Chief Executive Officer
|
/s/ Christopher J. Kodosky
|
Christopher J. Kodosky
|
Chief Financial Officer
|