ý
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
¨
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
|
|
Delaware
|
|
20-3594554
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
601 West Riverside, Suite 1100
Spokane, Washington
|
|
99201
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
|
ý
|
|
Accelerated filer
|
|
¨
|
Non-accelerated filer
|
|
¨
|
|
Smaller reporting company
|
|
¨
|
|
|
|
|
Emerging growth company
|
|
¨
|
|
|
|
|
|
Page Number
|
|
|
|
PART I.
|
|
|
|
|
|
ITEM 1.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ITEM 2.
|
||
|
|
|
ITEM 3.
|
||
|
|
|
ITEM 4.
|
||
|
|
|
PART II.
|
|
|
|
|
|
ITEM 1.
|
||
|
|
|
ITEM 1A.
|
||
|
|
|
ITEM 5.
|
||
|
|
|
ITEM 6.
|
||
|
|
|
ITEM 1.
|
|
Consolidated Financial Statements
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net sales
|
$
|
426,460
|
|
|
$
|
426,504
|
|
|
$
|
1,295,511
|
|
|
$
|
1,293,692
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
(376,221
|
)
|
|
(386,762
|
)
|
|
(1,155,808
|
)
|
|
(1,154,883
|
)
|
||||
Selling, general and administrative expenses
|
(26,283
|
)
|
|
(34,582
|
)
|
|
(85,827
|
)
|
|
(93,991
|
)
|
||||
Gain on divested assets
|
22,944
|
|
|
—
|
|
|
22,944
|
|
|
—
|
|
||||
Total operating costs and expenses
|
(379,560
|
)
|
|
(421,344
|
)
|
|
(1,218,691
|
)
|
|
(1,248,874
|
)
|
||||
Income from operations
|
46,900
|
|
|
5,160
|
|
|
76,820
|
|
|
44,818
|
|
||||
Interest expense, net
|
(7,547
|
)
|
|
(7,683
|
)
|
|
(23,290
|
)
|
|
(23,399
|
)
|
||||
Non-operating pension and other postretirement benefit (costs) income
|
(1,234
|
)
|
|
291
|
|
|
(3,700
|
)
|
|
856
|
|
||||
Earnings (loss) before income taxes
|
38,119
|
|
|
(2,232
|
)
|
|
49,830
|
|
|
22,275
|
|
||||
Income tax (provision) benefit
|
(3,675
|
)
|
|
3,095
|
|
|
(5,825
|
)
|
|
(5,860
|
)
|
||||
Net earnings
|
$
|
34,444
|
|
|
$
|
863
|
|
|
$
|
44,005
|
|
|
$
|
16,415
|
|
Net earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
2.09
|
|
|
$
|
0.05
|
|
|
$
|
2.67
|
|
|
$
|
1.00
|
|
Diluted
|
2.08
|
|
|
0.05
|
|
|
2.66
|
|
|
0.99
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net earnings
|
$
|
34,444
|
|
|
$
|
863
|
|
|
$
|
44,005
|
|
|
$
|
16,415
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Defined benefit pension and other postretirement employee benefits:
|
|
|
|
|
|
|
|
||||||||
Amortization of actuarial loss included in net periodic cost, net of tax of $602, $319, $1,807 and $967
|
1,687
|
|
|
487
|
|
|
5,059
|
|
|
1,475
|
|
||||
Amortization of prior service credit included in net periodic cost, net of tax of $(110), $(152), $(331) and $(454)
|
(309
|
)
|
|
(230
|
)
|
|
(926
|
)
|
|
(691
|
)
|
||||
Other comprehensive income, net of tax
|
1,378
|
|
|
257
|
|
|
4,133
|
|
|
784
|
|
||||
Comprehensive income
|
$
|
35,822
|
|
|
$
|
1,120
|
|
|
$
|
48,138
|
|
|
$
|
17,199
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
76,150
|
|
|
$
|
15,738
|
|
Restricted cash
|
1,080
|
|
|
—
|
|
||
Receivables, net
|
139,170
|
|
|
142,065
|
|
||
Taxes receivable
|
6,748
|
|
|
20,282
|
|
||
Inventories
|
263,274
|
|
|
266,043
|
|
||
Other current assets
|
6,105
|
|
|
8,661
|
|
||
Total current assets
|
492,527
|
|
|
452,789
|
|
||
Property, plant and equipment, net
|
1,206,168
|
|
|
1,050,982
|
|
||
Goodwill
|
230,153
|
|
|
244,161
|
|
||
Intangible assets, net
|
25,865
|
|
|
32,542
|
|
||
Other assets, net
|
25,382
|
|
|
21,778
|
|
||
TOTAL ASSETS
|
$
|
1,980,095
|
|
|
$
|
1,802,252
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Borrowings under revolving credit facilities
|
$
|
100,000
|
|
|
$
|
155,000
|
|
Accounts payable and accrued liabilities
|
341,075
|
|
|
256,621
|
|
||
Current liability for pensions and other postretirement employee benefits
|
7,631
|
|
|
7,631
|
|
||
Total current liabilities
|
448,706
|
|
|
419,252
|
|
||
Long-term debt
|
671,100
|
|
|
570,524
|
|
||
Liability for pensions and other postretirement employee benefits
|
67,759
|
|
|
72,469
|
|
||
Other long-term obligations
|
37,788
|
|
|
43,275
|
|
||
Accrued taxes
|
2,839
|
|
|
2,770
|
|
||
Deferred tax liabilities
|
123,778
|
|
|
118,528
|
|
||
TOTAL LIABILITIES
|
1,351,970
|
|
|
1,226,818
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, par value $0.0001 per share, 5,000,000 authorized shares, no shares
issued
|
—
|
|
|
—
|
|
||
Common stock, par value $0.0001 per share, 100,000,000 authorized
shares-16,461,119 and 16,447,898 shares issued
|
2
|
|
|
2
|
|
||
Additional paid-in capital
|
5,714
|
|
|
1,161
|
|
||
Retained earnings
|
675,111
|
|
|
618,254
|
|
||
Accumulated other comprehensive loss, net of tax
|
(52,702
|
)
|
|
(43,983
|
)
|
||
TOTAL STOCKHOLDERS' EQUITY
|
628,125
|
|
|
575,434
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
1,980,095
|
|
|
$
|
1,802,252
|
|
(In thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Cash and cash equivalents
|
$
|
76,150
|
|
|
$
|
15,738
|
|
Restricted cash
|
1,080
|
|
|
—
|
|
||
Restricted cash included in other assets, net
|
2,457
|
|
|
1,000
|
|
||
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows
|
$
|
79,687
|
|
|
$
|
16,738
|
|
(In thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Pulp, paperboard and tissue products
|
$
|
160,645
|
|
|
$
|
165,281
|
|
Materials and supplies
|
85,260
|
|
|
85,987
|
|
||
Logs, pulpwood, chips and sawdust
|
17,369
|
|
|
14,775
|
|
||
|
$
|
263,274
|
|
|
$
|
266,043
|
|
|
September 30, 2018
|
||||||||||||
(Dollars in thousands, lives in years)
|
Weighted Average Useful
Life
|
|
Historical
Cost
|
|
Accumulated
Amortization
|
|
Net
Balance
|
||||||
Customer relationships
|
9.4
|
|
$
|
56,453
|
|
|
$
|
(33,961
|
)
|
|
$
|
22,492
|
|
Trade names and trademarks
|
7.4
|
|
6,786
|
|
|
(3,772
|
)
|
|
3,014
|
|
|||
Other intangibles
|
6.0
|
|
572
|
|
|
(213
|
)
|
|
359
|
|
|||
|
|
|
$
|
63,811
|
|
|
$
|
(37,946
|
)
|
|
$
|
25,865
|
|
|
|
|
|
|
|
|
|
||||||
|
December 31, 2017
|
||||||||||||
(Dollars in thousands, lives in years)
|
Weighted Average Useful
Life
|
|
Historical
Cost
|
|
Accumulated
Amortization
|
|
Net
Balance
|
||||||
Customer relationships
|
9.3
|
|
$
|
62,401
|
|
|
$
|
(34,061
|
)
|
|
$
|
28,340
|
|
Trade names and trademarks
|
7.4
|
|
6,786
|
|
|
(3,000
|
)
|
|
3,786
|
|
|||
Non compete agreements
|
5.0
|
|
574
|
|
|
(574
|
)
|
|
—
|
|
|||
Other intangibles
|
6.0
|
|
572
|
|
|
(156
|
)
|
|
416
|
|
|||
|
|
|
$
|
70,333
|
|
|
$
|
(37,791
|
)
|
|
$
|
32,542
|
|
(In thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Trade accounts payable
|
$
|
264,811
|
|
|
$
|
169,293
|
|
Accrued wages, salaries and employee benefits
|
36,813
|
|
|
41,979
|
|
||
Accrued discounts and allowances
|
9,395
|
|
|
7,283
|
|
||
Accrued interest
|
6,392
|
|
|
12,723
|
|
||
Accrued utilities
|
6,271
|
|
|
6,759
|
|
||
Accrued taxes other than income taxes payable
|
6,220
|
|
|
6,907
|
|
||
Other
|
11,173
|
|
|
11,677
|
|
||
|
$
|
341,075
|
|
|
$
|
256,621
|
|
•
|
maximum consolidated secured leverage ratio of
2.00
to 1.00 through December 31, 2019 and of
1.50
to 1.00 from March 31, 2020 and thereafter, in lieu of being required to maintain a maximum consolidated leverage ratio which was in effect prior to the amendments;
|
•
|
minimum consolidated interest coverage ratio of
1.25
to 1.00; and
|
•
|
minimum consolidated asset coverage ratio of
1.00
to 1.00 which was not in effect prior to the Amendments.
|
(In thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Long-term lease obligations, net of current portion
|
$
|
25,330
|
|
|
$
|
26,460
|
|
Deferred proceeds
|
4,677
|
|
|
5,576
|
|
||
Deferred compensation
|
2,867
|
|
|
5,023
|
|
||
Other
|
4,914
|
|
|
6,216
|
|
||
|
$
|
37,788
|
|
|
$
|
43,275
|
|
(In thousands)
|
Pension and Other Post Retirement Employee Benefit Plan Adjustments
|
||
Balance at December 31, 2016
|
$
|
(51,753
|
)
|
Other comprehensive income, net of tax
1
|
784
|
|
|
Balance at September 30, 2017
|
$
|
(50,969
|
)
|
|
|
||
Balance at December 31, 2017
|
$
|
(43,983
|
)
|
Other comprehensive income, net of tax
1
|
4,133
|
|
|
Reclassification of the income tax effects of the Tax Cuts and Jobs Act
|
(12,852
|
)
|
|
Balance at September 30, 2018
|
$
|
(52,702
|
)
|
1
|
Included in other comprehensive income are net periodic costs associated with our pension and other postretirement employee benefit (OPEB) plans that were reclassified from accumulated other comprehensive loss. For the
nine months ended September 30, 2018
and
2017
, actuarial loss amortization of
$5.1 million
and
$1.5 million
, respectively, as well as
$0.9 million
and
$0.7 million
, respectively, of prior service credit amortization were reclassified. These amounts are net of tax totaling
$1.5 million
and
$0.5 million
for each respective period. These accumulated other comprehensive loss components are included in the computation of net periodic pension and OPEB costs in Note 11, “Pension and Other Postretirement Employee Benefit Plans.”
|
|
Three Months Ended September 30,
|
||||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
Pension Benefit Plans
|
|
Other Postretirement
Employee Benefit Plans
|
||||||||||||
Service cost
|
$
|
447
|
|
|
$
|
518
|
|
|
$
|
34
|
|
|
$
|
41
|
|
Interest cost
|
3,005
|
|
|
3,288
|
|
|
609
|
|
|
688
|
|
||||
Expected return on plan assets
|
(4,250
|
)
|
|
(4,691
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost (credit)
|
—
|
|
|
2
|
|
|
(419
|
)
|
|
(384
|
)
|
||||
Amortization of actuarial loss (gain)
|
2,515
|
|
|
2,468
|
|
|
(226
|
)
|
|
(1,662
|
)
|
||||
Net periodic cost (benefit)
|
$
|
1,717
|
|
|
$
|
1,585
|
|
|
$
|
(2
|
)
|
|
$
|
(1,317
|
)
|
|
Nine Months Ended September 30,
|
||||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
Pension Benefit Plans
|
|
Other Postretirement
Employee Benefit Plans
|
||||||||||||
Service cost
|
$
|
1,342
|
|
|
$
|
1,552
|
|
|
$
|
102
|
|
|
$
|
122
|
|
Interest cost
|
9,015
|
|
|
9,862
|
|
|
1,827
|
|
|
2,059
|
|
||||
Expected return on plan assets
|
(12,751
|
)
|
|
(14,073
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Amortization of prior service cost (credit)
|
—
|
|
|
6
|
|
|
(1,257
|
)
|
|
(1,151
|
)
|
||||
Amortization of actuarial loss (gain)
|
7,543
|
|
|
7,405
|
|
|
(677
|
)
|
|
(4,963
|
)
|
||||
Net periodic cost (benefit)
|
$
|
5,149
|
|
|
$
|
4,752
|
|
|
$
|
(5
|
)
|
|
$
|
(3,934
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Basic weighted-average common shares outstanding
1
|
16,486,935
|
|
|
16,457,991
|
|
|
16,492,843
|
|
|
16,466,325
|
|
||||
Incremental shares due to:
|
|
|
|
|
|
|
|
||||||||
Restricted stock units
|
22,461
|
|
|
42,122
|
|
|
27,893
|
|
|
37,021
|
|
||||
Performance shares
|
54,253
|
|
|
50,506
|
|
|
52,508
|
|
|
42,914
|
|
||||
Stock options
|
—
|
|
|
16,265
|
|
|
60
|
|
|
26,347
|
|
||||
Diluted weighted-average common shares outstanding
|
16,563,649
|
|
|
16,566,884
|
|
|
16,573,304
|
|
|
16,572,607
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic net earnings per common share
|
$
|
2.09
|
|
|
$
|
0.05
|
|
|
$
|
2.67
|
|
|
$
|
1.00
|
|
Diluted net earnings per common share
|
2.08
|
|
|
0.05
|
|
|
2.66
|
|
|
0.99
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive shares excluded from calculation
|
985,312
|
|
|
468,624
|
|
|
935,037
|
|
|
525,655
|
|
1
|
Basic average common shares outstanding include restricted stock awards that are fully vested, but are deferred for future issuance.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Restricted stock units
|
$
|
595
|
|
|
$
|
429
|
|
|
$
|
1,599
|
|
|
$
|
1,224
|
|
Performance shares
|
499
|
|
|
567
|
|
|
1,409
|
|
|
1,793
|
|
||||
Stock options
|
639
|
|
|
659
|
|
|
1,767
|
|
|
1,974
|
|
||||
Total employee equity-based compensation expense
|
$
|
1,733
|
|
|
$
|
1,655
|
|
|
$
|
4,775
|
|
|
$
|
4,991
|
|
•
|
For performance shares granted in 2017, the performance measure used for
40%
of the grant is a comparison of the percentile ranking of our total stockholder return, or TSR, compared to the TSR of a selected index, and for
60%
of the performance share awards granted the performance measure used is a return on invested capital, or ROIC, performance measure.
|
•
|
For performance shares granted in 2018, the performance measure used for
40%
of the performance share awards granted is an ROIC performance measure. For the remaining
60%
of the grants, a free cash flow performance measure is used. The combined performance of these measures is then subject to an adjustment (increase or decrease) of up to
25%
based on our TSR compared to the TSR performance of a selected index.
|
|
Nine Months Ended
|
|||||
|
September 30, 2018
|
|||||
|
Number of
Shares Subject to Award |
|
Average Fair
Value of Award Per Share |
|||
Restricted stock units
|
111,054
|
|
|
$
|
37.31
|
|
Performance shares
|
49,040
|
|
|
37.45
|
|
|
Stock options
|
198,426
|
|
|
14.51
|
|
|
September 30,
|
|
December 31,
|
||||||||||||
|
2018
|
|
2017
|
||||||||||||
|
Carrying
|
|
Fair
|
|
Carrying
|
|
Fair
|
||||||||
(In thousands)
|
Amount
|
|
Value
|
|
Amount
|
|
Value
|
||||||||
Cash, cash equivalents, and restricted cash (Level 1)
|
$
|
79,687
|
|
|
$
|
79,687
|
|
|
$
|
16,738
|
|
|
$
|
16,738
|
|
Borrowings under revolving credit facilities (Level 2)
|
100,000
|
|
|
99,889
|
|
|
155,000
|
|
|
154,882
|
|
||||
Long-term debt (Level 2)
|
675,000
|
|
|
635,888
|
|
|
575,000
|
|
|
569,250
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Segment net sales:
|
|
|
|
|
|
|
|
||||||||
Consumer Products
|
$
|
211,642
|
|
|
$
|
232,916
|
|
|
$
|
672,069
|
|
|
$
|
707,251
|
|
Pulp and Paperboard
|
214,818
|
|
|
193,588
|
|
|
623,442
|
|
|
586,441
|
|
||||
Total segment net sales
|
$
|
426,460
|
|
|
$
|
426,504
|
|
|
$
|
1,295,511
|
|
|
$
|
1,293,692
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) before income taxes:
|
|
|
|
|
|
|
|
||||||||
Consumer Products
1,2,3
|
$
|
(1,269
|
)
|
|
$
|
4,525
|
|
|
$
|
(3,244
|
)
|
|
$
|
21,427
|
|
Gain on divested assets
4
|
22,944
|
|
|
—
|
|
|
22,944
|
|
|
—
|
|
||||
Pulp and Paperboard
2,3
|
38,280
|
|
|
14,735
|
|
|
98,626
|
|
|
63,006
|
|
||||
|
59,955
|
|
|
19,260
|
|
|
118,326
|
|
|
84,433
|
|
||||
Corporate
2,3
|
(13,055
|
)
|
|
(14,100
|
)
|
|
(41,506
|
)
|
|
(39,615
|
)
|
||||
Income from operations
|
46,900
|
|
|
5,160
|
|
|
76,820
|
|
|
44,818
|
|
||||
Interest expense, net
|
(7,547
|
)
|
|
(7,683
|
)
|
|
(23,290
|
)
|
|
(23,399
|
)
|
||||
Non-operating pension and other postretirement benefit (costs) income
2
|
(1,234
|
)
|
|
291
|
|
|
(3,700
|
)
|
|
856
|
|
||||
Earnings (loss) before income taxes
|
$
|
38,119
|
|
|
$
|
(2,232
|
)
|
|
$
|
49,830
|
|
|
$
|
22,275
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
||||||||
Consumer Products
1
|
$
|
14,447
|
|
|
$
|
16,073
|
|
|
$
|
42,964
|
|
|
$
|
50,607
|
|
Pulp and Paperboard
|
9,316
|
|
|
8,328
|
|
|
28,106
|
|
|
24,789
|
|
||||
Corporate
|
1,579
|
|
|
1,455
|
|
|
4,616
|
|
|
4,072
|
|
||||
Total depreciation and amortization
|
$
|
25,342
|
|
|
$
|
25,856
|
|
|
$
|
75,686
|
|
|
$
|
79,468
|
|
1
|
Operating income for the Consumer Products segment for the three and nine months ended September 30, 2017 includes
$5.1 million
and
$11.1 million
, respectively, of costs associated with the closure of the Oklahoma City facility. These costs include
$4.3 million
on the write down of assets to their held for sale value and
$3.7 million
of accelerated depreciation.
|
2
|
As a result of the adoption of ASU 2017-07, certain pension and OPEB (costs) income have been reclassified from operating to non-operating income. The service cost component of pension and OPEB costs remains within segment operating income. Refer to Note 2, "Recently Adopted and New Accounting Standards," and Note 11, "Pension and Other Postretirement Benefit Plans," for additional detail.
|
3
|
Income (loss) from operations for the Consumer Products, Pulp and Paperboard and Corporate segments for the nine months ended September 30, 2018 include
$1.7 million
,
$0.5 million
and
$4.2 million
, respectively, of expenses associated with our selling, general and administrative cost control measures.
|
4
|
Gain on divested assets for the three and nine months ended September 30, 2018 relates to the sale of our Ladysmith, Wisconsin facility, For additional discussion, see Note 4 "Asset Divestiture".
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Primary geographical markets:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
404,593
|
|
|
$
|
405,303
|
|
|
$
|
1,237,644
|
|
|
$
|
1,237,146
|
|
Other countries
|
21,867
|
|
|
21,201
|
|
|
57,867
|
|
|
56,546
|
|
||||
Total net sales
|
$
|
426,460
|
|
|
$
|
426,504
|
|
|
$
|
1,295,511
|
|
|
$
|
1,293,692
|
|
|
|
|
|
|
|
|
|
||||||||
Major products:
|
|
|
|
|
|
|
|
||||||||
Retail tissue
|
$
|
182,869
|
|
|
$
|
213,466
|
|
|
$
|
601,521
|
|
|
$
|
643,192
|
|
Paperboard
|
214,818
|
|
|
193,588
|
|
|
623,442
|
|
|
586,441
|
|
||||
Non-retail tissue
|
27,660
|
|
|
19,029
|
|
|
68,384
|
|
|
62,988
|
|
||||
Other
|
1,113
|
|
|
421
|
|
|
2,164
|
|
|
1,071
|
|
||||
Total net sales
|
$
|
426,460
|
|
|
$
|
426,504
|
|
|
$
|
1,295,511
|
|
|
$
|
1,293,692
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Guarantor
|
|
|
|
|
||||||||
(In thousands)
|
Issuer
|
|
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||
Net sales
|
$
|
426,816
|
|
|
$
|
50,340
|
|
|
$
|
(50,696
|
)
|
|
$
|
426,460
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
(383,737
|
)
|
|
(45,693
|
)
|
|
53,209
|
|
|
(376,221
|
)
|
||||
Selling, general and administrative expenses
|
(20,721
|
)
|
|
(5,562
|
)
|
|
—
|
|
|
(26,283
|
)
|
||||
Gain on divested assets
|
—
|
|
|
22,944
|
|
|
—
|
|
|
22,944
|
|
||||
Total operating costs and expenses
|
(404,458
|
)
|
|
(28,311
|
)
|
|
53,209
|
|
|
(379,560
|
)
|
||||
Income from operations
|
22,358
|
|
|
22,029
|
|
|
2,513
|
|
|
46,900
|
|
||||
Interest expense, net
|
(7,366
|
)
|
|
(181
|
)
|
|
—
|
|
|
(7,547
|
)
|
||||
Non-operating pension and other postretirement benefit costs
|
(1,234
|
)
|
|
—
|
|
|
—
|
|
|
(1,234
|
)
|
||||
Earnings before income taxes
|
13,758
|
|
|
21,848
|
|
|
2,513
|
|
|
38,119
|
|
||||
Income tax benefit (provision)
|
1,748
|
|
|
(5,043
|
)
|
|
(380
|
)
|
|
(3,675
|
)
|
||||
Equity in income of subsidiary
|
16,805
|
|
|
—
|
|
|
(16,805
|
)
|
|
—
|
|
||||
Net earnings
|
$
|
32,311
|
|
|
$
|
16,805
|
|
|
$
|
(14,672
|
)
|
|
$
|
34,444
|
|
Other comprehensive income, net of tax
|
1,378
|
|
|
—
|
|
|
—
|
|
|
1,378
|
|
||||
Comprehensive income
|
$
|
33,689
|
|
|
$
|
16,805
|
|
|
$
|
(14,672
|
)
|
|
$
|
35,822
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Guarantor
|
|
|
|
|
||||||||
(In thousands)
|
Issuer
|
|
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||
Net sales
|
$
|
1,315,819
|
|
|
$
|
150,866
|
|
|
$
|
(171,174
|
)
|
|
$
|
1,295,511
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
(1,190,954
|
)
|
|
(133,971
|
)
|
|
169,117
|
|
|
(1,155,808
|
)
|
||||
Selling, general and administrative expenses
|
(69,579
|
)
|
|
(16,248
|
)
|
|
—
|
|
|
(85,827
|
)
|
||||
Gain on divested assets
|
—
|
|
|
22,944
|
|
|
—
|
|
|
22,944
|
|
||||
Total operating costs and expenses
|
(1,260,533
|
)
|
|
(127,275
|
)
|
|
169,117
|
|
|
(1,218,691
|
)
|
||||
Income from operations
|
55,286
|
|
|
23,591
|
|
|
(2,057
|
)
|
|
76,820
|
|
||||
Interest expense, net
|
(22,922
|
)
|
|
(368
|
)
|
|
—
|
|
|
(23,290
|
)
|
||||
Non-operating pension and other postretirement benefit costs
|
(3,700
|
)
|
|
—
|
|
|
—
|
|
|
(3,700
|
)
|
||||
Earnings before income taxes
|
28,664
|
|
|
23,223
|
|
|
(2,057
|
)
|
|
49,830
|
|
||||
Income tax provision
|
(1,208
|
)
|
|
(5,242
|
)
|
|
625
|
|
|
(5,825
|
)
|
||||
Equity in income of subsidiary
|
17,981
|
|
|
—
|
|
|
(17,981
|
)
|
|
—
|
|
||||
Net earnings
|
$
|
45,437
|
|
|
$
|
17,981
|
|
|
$
|
(19,413
|
)
|
|
$
|
44,005
|
|
Other comprehensive income, net of tax
|
4,133
|
|
|
—
|
|
|
—
|
|
|
4,133
|
|
||||
Comprehensive income
|
$
|
49,570
|
|
|
$
|
17,981
|
|
|
$
|
(19,413
|
)
|
|
$
|
48,138
|
|
|
|
|
|
|
|
|
|
||||||||
(In thousands)
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||
Net sales
|
$
|
423,712
|
|
|
$
|
55,894
|
|
|
$
|
(53,102
|
)
|
|
$
|
426,504
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
(387,877
|
)
|
|
(51,052
|
)
|
|
52,167
|
|
|
(386,762
|
)
|
||||
Selling, general and administrative expenses
|
(24,786
|
)
|
|
(9,796
|
)
|
|
—
|
|
|
(34,582
|
)
|
||||
Total operating costs and expenses
|
(412,663
|
)
|
|
(60,848
|
)
|
|
52,167
|
|
|
(421,344
|
)
|
||||
Income (loss) from operations
|
11,049
|
|
|
(4,954
|
)
|
|
(935
|
)
|
|
5,160
|
|
||||
Interest expense, net
|
(7,407
|
)
|
|
(276
|
)
|
|
—
|
|
|
(7,683
|
)
|
||||
Non-operating pension and other postretirement benefit income
|
291
|
|
|
—
|
|
|
—
|
|
|
291
|
|
||||
Earnings (loss) before income taxes
|
3,933
|
|
|
(5,230
|
)
|
|
(935
|
)
|
|
(2,232
|
)
|
||||
Income tax (provision) benefit
|
(1,847
|
)
|
|
4,589
|
|
|
353
|
|
|
3,095
|
|
||||
Equity in loss of subsidiary
|
(641
|
)
|
|
—
|
|
|
641
|
|
|
—
|
|
||||
Net earnings (loss)
|
$
|
1,445
|
|
|
$
|
(641
|
)
|
|
$
|
59
|
|
|
$
|
863
|
|
Other comprehensive income, net of tax
|
257
|
|
|
—
|
|
|
—
|
|
|
257
|
|
||||
Comprehensive income (loss)
|
$
|
1,702
|
|
|
$
|
(641
|
)
|
|
$
|
59
|
|
|
$
|
1,120
|
|
|
|
|
|
|
|
|
|
||||||||
(In thousands)
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||
Net sales
|
$
|
1,263,467
|
|
|
$
|
196,399
|
|
|
$
|
(166,174
|
)
|
|
$
|
1,293,692
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
(1,138,470
|
)
|
|
(178,732
|
)
|
|
162,319
|
|
|
(1,154,883
|
)
|
||||
Selling, general and administrative expenses
|
(71,762
|
)
|
|
(22,229
|
)
|
|
—
|
|
|
(93,991
|
)
|
||||
Total operating costs and expenses
|
(1,210,232
|
)
|
|
(200,961
|
)
|
|
162,319
|
|
|
(1,248,874
|
)
|
||||
Income (loss) from operations
|
53,235
|
|
|
(4,562
|
)
|
|
(3,855
|
)
|
|
44,818
|
|
||||
Interest expense, net
|
(22,981
|
)
|
|
(418
|
)
|
|
—
|
|
|
(23,399
|
)
|
||||
Non-operating pension and other postretirement benefit income
|
856
|
|
|
—
|
|
|
—
|
|
|
856
|
|
||||
Earnings (loss) before income taxes
|
31,110
|
|
|
(4,980
|
)
|
|
(3,855
|
)
|
|
22,275
|
|
||||
Income tax (provision) benefit
|
(11,857
|
)
|
|
4,582
|
|
|
1,415
|
|
|
(5,860
|
)
|
||||
Equity in loss of subsidiary
|
(398
|
)
|
|
—
|
|
|
398
|
|
|
—
|
|
||||
Net earnings (loss)
|
$
|
18,855
|
|
|
$
|
(398
|
)
|
|
$
|
(2,042
|
)
|
|
$
|
16,415
|
|
Other comprehensive income, net of tax
|
784
|
|
|
—
|
|
|
—
|
|
|
784
|
|
||||
Comprehensive income (loss)
|
$
|
19,639
|
|
|
$
|
(398
|
)
|
|
$
|
(2,042
|
)
|
|
$
|
17,199
|
|
|
|
|
|
|
|
|
|
||||||||
(In thousands)
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Current assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
76,150
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
76,150
|
|
Restricted cash
|
1,080
|
|
|
—
|
|
|
—
|
|
|
1,080
|
|
||||
Receivables, net
|
118,405
|
|
|
20,765
|
|
|
—
|
|
|
139,170
|
|
||||
Taxes receivable
|
12,189
|
|
|
14
|
|
|
(5,455
|
)
|
|
6,748
|
|
||||
Inventories
|
223,595
|
|
|
41,736
|
|
|
(2,057
|
)
|
|
263,274
|
|
||||
Other current assets
|
5,837
|
|
|
268
|
|
|
—
|
|
|
6,105
|
|
||||
Total current assets
|
437,256
|
|
|
62,783
|
|
|
(7,512
|
)
|
|
492,527
|
|
||||
Property, plant and equipment, net
|
1,127,534
|
|
|
78,634
|
|
|
—
|
|
|
1,206,168
|
|
||||
Goodwill
|
230,153
|
|
|
—
|
|
|
—
|
|
|
230,153
|
|
||||
Intangible assets, net
|
1,306
|
|
|
24,559
|
|
|
—
|
|
|
25,865
|
|
||||
Intercompany (payable) receivable
|
(48,326
|
)
|
|
46,269
|
|
|
2,057
|
|
|
—
|
|
||||
Investment in subsidiary
|
174,981
|
|
|
—
|
|
|
(174,981
|
)
|
|
—
|
|
||||
Other assets, net
|
24,340
|
|
|
2,867
|
|
|
(1,825
|
)
|
|
25,382
|
|
||||
TOTAL ASSETS
|
$
|
1,947,244
|
|
|
$
|
215,112
|
|
|
$
|
(182,261
|
)
|
|
$
|
1,980,095
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
||||||||
Current liabilities:
|
|
|
|
|
|
|
|
||||||||
Borrowings under revolving credit facilities
|
$
|
100,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
100,000
|
|
Accounts payable and accrued liabilities
|
326,573
|
|
|
19,957
|
|
|
(5,455
|
)
|
|
341,075
|
|
||||
Current liability for pensions and
other postretirement employee benefits
|
7,631
|
|
|
—
|
|
|
—
|
|
|
7,631
|
|
||||
Total current liabilities
|
434,204
|
|
|
19,957
|
|
|
(5,455
|
)
|
|
448,706
|
|
||||
Long-term debt
|
671,100
|
|
|
—
|
|
|
—
|
|
|
671,100
|
|
||||
Liability for pensions and
other postretirement employee benefits
|
67,759
|
|
|
—
|
|
|
—
|
|
|
67,759
|
|
||||
Other long-term obligations
|
37,788
|
|
|
—
|
|
|
—
|
|
|
37,788
|
|
||||
Accrued taxes
|
1,979
|
|
|
860
|
|
|
—
|
|
|
2,839
|
|
||||
Deferred tax liabilities
|
106,289
|
|
|
19,314
|
|
|
(1,825
|
)
|
|
123,778
|
|
||||
TOTAL LIABILITIES
|
1,319,119
|
|
|
40,131
|
|
|
(7,280
|
)
|
|
1,351,970
|
|
||||
Stockholders’ equity excluding
accumulated other comprehensive loss |
680,827
|
|
|
174,981
|
|
|
(174,981
|
)
|
|
680,827
|
|
||||
Accumulated other comprehensive loss, net of tax
|
(52,702
|
)
|
|
—
|
|
|
—
|
|
|
(52,702
|
)
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
1,947,244
|
|
|
$
|
215,112
|
|
|
$
|
(182,261
|
)
|
|
$
|
1,980,095
|
|
|
|
|
|
|
|
|
|
||||||||
(In thousands)
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Current assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
15,738
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,738
|
|
Receivables, net
|
125,001
|
|
|
17,064
|
|
|
—
|
|
|
142,065
|
|
||||
Taxes receivable
|
20,242
|
|
|
40
|
|
|
—
|
|
|
20,282
|
|
||||
Inventories
|
228,311
|
|
|
41,594
|
|
|
(3,862
|
)
|
|
266,043
|
|
||||
Other current assets
|
8,587
|
|
|
74
|
|
|
—
|
|
|
8,661
|
|
||||
Total current assets
|
397,879
|
|
|
58,772
|
|
|
(3,862
|
)
|
|
452,789
|
|
||||
Property, plant and equipment, net
|
936,659
|
|
|
114,323
|
|
|
—
|
|
|
1,050,982
|
|
||||
Goodwill
|
244,161
|
|
|
—
|
|
|
—
|
|
|
244,161
|
|
||||
Intangible assets, net
|
2,089
|
|
|
30,453
|
|
|
—
|
|
|
32,542
|
|
||||
Intercompany payable
|
(2,807
|
)
|
|
(1,055
|
)
|
|
3,862
|
|
|
—
|
|
||||
Investment in subsidiary
|
157,000
|
|
|
—
|
|
|
(157,000
|
)
|
|
—
|
|
||||
Other assets, net
|
21,413
|
|
|
2,696
|
|
|
(2,331
|
)
|
|
21,778
|
|
||||
TOTAL ASSETS
|
$
|
1,756,394
|
|
|
$
|
205,189
|
|
|
$
|
(159,331
|
)
|
|
$
|
1,802,252
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
||||||||
Current liabilities:
|
|
|
|
|
|
|
|
||||||||
Borrowings under revolving credit facilities
|
$
|
155,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
155,000
|
|
Accounts payable and accrued liabilities
|
235,439
|
|
|
21,182
|
|
|
—
|
|
|
256,621
|
|
||||
Current liability for pensions and
other postretirement employee benefits
|
7,631
|
|
|
—
|
|
|
—
|
|
|
7,631
|
|
||||
Total current liabilities
|
398,070
|
|
|
21,182
|
|
|
—
|
|
|
419,252
|
|
||||
Long-term debt
|
570,524
|
|
|
—
|
|
|
—
|
|
|
570,524
|
|
||||
Liability for pensions and
other postretirement employee benefits
|
72,469
|
|
|
—
|
|
|
—
|
|
|
72,469
|
|
||||
Other long-term obligations
|
43,275
|
|
|
—
|
|
|
—
|
|
|
43,275
|
|
||||
Accrued taxes
|
1,928
|
|
|
842
|
|
|
—
|
|
|
2,770
|
|
||||
Deferred tax liabilities
|
94,694
|
|
|
26,165
|
|
|
(2,331
|
)
|
|
118,528
|
|
||||
TOTAL LIABILITIES
|
1,180,960
|
|
|
48,189
|
|
|
(2,331
|
)
|
|
1,226,818
|
|
||||
Stockholders’ equity excluding
accumulated other comprehensive loss |
619,417
|
|
|
157,000
|
|
|
(157,000
|
)
|
|
619,417
|
|
||||
Accumulated other comprehensive loss, net of tax
|
(43,983
|
)
|
|
—
|
|
|
—
|
|
|
(43,983
|
)
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
1,756,394
|
|
|
$
|
205,189
|
|
|
$
|
(159,331
|
)
|
|
$
|
1,802,252
|
|
|
|
|
|
|
|
|
|
||||||||
(In thousands)
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
$
|
45,437
|
|
|
$
|
17,981
|
|
|
$
|
(19,413
|
)
|
|
$
|
44,005
|
|
Adjustments to reconcile net earnings to net
cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
59,632
|
|
|
16,054
|
|
|
—
|
|
|
75,686
|
|
||||
Equity-based compensation expense
|
2,845
|
|
|
—
|
|
|
—
|
|
|
2,845
|
|
||||
Deferred taxes
|
10,662
|
|
|
(6,732
|
)
|
|
—
|
|
|
3,930
|
|
||||
Employee benefit plans
|
102
|
|
|
—
|
|
|
—
|
|
|
102
|
|
||||
Disposal of plant and equipment, net
|
128
|
|
|
—
|
|
|
—
|
|
|
128
|
|
||||
Gain on divested assets
|
—
|
|
|
(25,510
|
)
|
|
—
|
|
|
(25,510
|
)
|
||||
Other non-cash adjustments, net
|
899
|
|
|
—
|
|
|
—
|
|
|
899
|
|
||||
Changes in working capital, net
|
22,045
|
|
|
(7,383
|
)
|
|
(7,260
|
)
|
|
7,402
|
|
||||
Changes in taxes receivable, net
|
8,053
|
|
|
26
|
|
|
5,455
|
|
|
13,534
|
|
||||
Other, net
|
(1,800
|
)
|
|
(122
|
)
|
|
—
|
|
|
(1,922
|
)
|
||||
Net cash flows from operating activities
|
148,003
|
|
|
(5,686
|
)
|
|
(21,218
|
)
|
|
121,099
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Additions to property, plant and equipment
|
(172,434
|
)
|
|
(1,600
|
)
|
|
—
|
|
|
(174,034
|
)
|
||||
Net proceeds from divested assets
|
70,930
|
|
|
—
|
|
|
—
|
|
|
70,930
|
|
||||
Other, net
|
793
|
|
|
14
|
|
|
—
|
|
|
807
|
|
||||
Net cash flows from investing activities
|
(100,711
|
)
|
|
(1,586
|
)
|
|
—
|
|
|
(102,297
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Borrowings on revolving credit facilities
|
322,454
|
|
|
—
|
|
|
—
|
|
|
322,454
|
|
||||
Repayments of borrowings on revolving credit facilities
|
(277,454
|
)
|
|
—
|
|
|
—
|
|
|
(277,454
|
)
|
||||
Investment (to) from parent
|
(28,490
|
)
|
|
7,272
|
|
|
21,218
|
|
|
—
|
|
||||
Other, net
|
(853
|
)
|
|
—
|
|
|
—
|
|
|
(853
|
)
|
||||
Net cash flows from financing activities
|
15,657
|
|
|
7,272
|
|
|
21,218
|
|
|
44,147
|
|
||||
Increase in cash, cash equivalents, and restricted cash
|
62,949
|
|
|
—
|
|
|
—
|
|
|
62,949
|
|
||||
Cash, cash equivalents, and restricted cash at beginning of period
|
16,738
|
|
|
—
|
|
|
—
|
|
|
16,738
|
|
||||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
79,687
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
79,687
|
|
|
|
|
|
|
|
|
|
||||||||
(In thousands)
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Net earnings (loss)
|
$
|
18,855
|
|
|
$
|
(398
|
)
|
|
$
|
(2,042
|
)
|
|
$
|
16,415
|
|
Adjustments to reconcile net earnings (loss) to net
cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
56,642
|
|
|
22,826
|
|
|
—
|
|
|
79,468
|
|
||||
Equity-based compensation expense
|
2,523
|
|
|
—
|
|
|
—
|
|
|
2,523
|
|
||||
Deferred taxes
|
19,531
|
|
|
(4,929
|
)
|
|
—
|
|
|
14,602
|
|
||||
Employee benefit plans
|
(2,999
|
)
|
|
—
|
|
|
—
|
|
|
(2,999
|
)
|
||||
Disposal of plant and equipment, net
|
481
|
|
|
3,274
|
|
|
—
|
|
|
3,755
|
|
||||
Other non-cash adjustments, net
|
874
|
|
|
—
|
|
|
—
|
|
|
874
|
|
||||
Changes in working capital, net
|
32,501
|
|
|
3,896
|
|
|
7,449
|
|
|
43,846
|
|
||||
Changes in taxes receivable, net
|
600
|
|
|
—
|
|
|
(5,469
|
)
|
|
(4,869
|
)
|
||||
Other, net
|
(413
|
)
|
|
(1,026
|
)
|
|
—
|
|
|
(1,439
|
)
|
||||
Net cash flows from operating activities
|
128,595
|
|
|
23,643
|
|
|
(62
|
)
|
|
152,176
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Additions to property, plant and equipment
|
(132,725
|
)
|
|
(3,925
|
)
|
|
—
|
|
|
(136,650
|
)
|
||||
Other, net
|
283
|
|
|
470
|
|
|
—
|
|
|
753
|
|
||||
Net cash flows from investing activities
|
(132,442
|
)
|
|
(3,455
|
)
|
|
—
|
|
|
(135,897
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Purchase of treasury stock
|
(4,875
|
)
|
|
—
|
|
|
—
|
|
|
(4,875
|
)
|
||||
Borrowings on revolving credit facilities
|
185,000
|
|
|
—
|
|
|
—
|
|
|
185,000
|
|
||||
Repayments of borrowings on revolving credit facilities
|
(210,000
|
)
|
|
—
|
|
|
—
|
|
|
(210,000
|
)
|
||||
Investment from (to) parent
|
23,541
|
|
|
(23,603
|
)
|
|
62
|
|
|
—
|
|
||||
Other, net
|
(927
|
)
|
|
—
|
|
|
—
|
|
|
(927
|
)
|
||||
Net cash flows from financing activities
|
(7,261
|
)
|
|
(23,603
|
)
|
|
62
|
|
|
(30,802
|
)
|
||||
Decrease in cash, cash equivalents, and restricted cash
|
(11,108
|
)
|
|
(3,415
|
)
|
|
—
|
|
|
(14,523
|
)
|
||||
Cash, cash equivalents, and restricted cash
at beginning of period
|
19,586
|
|
|
3,415
|
|
|
—
|
|
|
23,001
|
|
||||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
8,478
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,478
|
|
•
|
competitive pricing pressures for our products, including as a result of increased capacity as additional manufacturing facilities are operated by our competitors;
|
•
|
the loss of, changes in prices in regards to, or reduction in orders from a significant customer;
|
•
|
changes in customer product preferences and competitors' product offerings;
|
•
|
our ability to successfully implement our operational efficiencies and cost savings strategies, including related capital projects, and achieve the expected operational or financial results of those projects, including from the continuous digester at our Lewiston facility;
|
•
|
our ability to complete construction of our new tissue manufacturing operations in Shelby, North Carolina on time and within current cost expectations.
|
•
|
customer acceptance and timing and quantity of purchases of our tissue products, including the existence of sufficient demand for the quality of tissue produced by our expanded Shelby, North Carolina operations when completed;
|
•
|
changes in the U.S. and international economies and in general economic conditions in the regions and industries in which we operate;
|
•
|
labor disruptions;
|
•
|
changes in transportation costs and disruptions in transportation services;
|
•
|
changes in the cost and availability of wood fiber and wood pulp;
|
•
|
manufacturing or operating disruptions, including IT system and IT system implementation failures, equipment malfunctions and damage to our manufacturing facilities;
|
•
|
changes in costs for and availability of packaging supplies, chemicals, energy and maintenance and repairs;
|
•
|
cyclical industry conditions;
|
•
|
changes in expenses and required contributions associated with our pension plans;
|
•
|
environmental liabilities or expenditures;
|
•
|
cyber-security risks;
|
•
|
reliance on a limited number of third-party suppliers for raw materials;
|
•
|
our ability to service our debt obligations;
|
•
|
restrictions on our business from debt covenants and terms; and
|
•
|
changes in laws, regulations or industry standards affecting our business.
|
Cost of sales
|
|
|
|||||||||||||||
|
Three Months Ended September 30,
|
|
|
||||||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
|
||||||||||||
|
Cost
|
|
Percentage of
Sales
|
|
Cost
|
|
Percentage of
Sales
|
|
Cost Variance
|
||||||||
Wages and benefits
|
$
|
70,143
|
|
|
16.4
|
%
|
|
$
|
68,189
|
|
|
16.0
|
%
|
|
$
|
1,954
|
|
Transportation
1
|
44,264
|
|
|
10.4
|
|
|
50,243
|
|
|
11.8
|
|
|
(5,979
|
)
|
|||
Purchased pulp
|
45,347
|
|
|
10.7
|
|
|
53,411
|
|
|
12.5
|
|
|
(8,064
|
)
|
|||
Chemicals
|
43,096
|
|
|
10.1
|
|
|
39,768
|
|
|
9.3
|
|
|
3,328
|
|
|||
Chips, sawdust and logs
|
41,535
|
|
|
9.7
|
|
|
29,801
|
|
|
7.0
|
|
|
11,734
|
|
|||
Packaging supplies
|
21,326
|
|
|
5.0
|
|
|
21,977
|
|
|
5.2
|
|
|
(651
|
)
|
|||
Depreciation
|
21,790
|
|
|
5.1
|
|
|
22,359
|
|
|
5.2
|
|
|
(569
|
)
|
|||
Energy
|
21,645
|
|
|
5.1
|
|
|
22,408
|
|
|
5.3
|
|
|
(763
|
)
|
|||
Maintenance and repairs
2
|
19,968
|
|
|
4.7
|
|
|
29,078
|
|
|
6.8
|
|
|
(9,110
|
)
|
|||
|
329,114
|
|
|
77.2
|
|
|
337,234
|
|
|
79.1
|
|
|
(8,120
|
)
|
|||
Other operating costs
|
47,107
|
|
|
11.0
|
|
|
49,528
|
|
|
11.6
|
|
|
(2,421
|
)
|
|||
Total cost of sales
|
$
|
376,221
|
|
|
88.2
|
%
|
|
$
|
386,762
|
|
|
90.7
|
%
|
|
$
|
(10,541
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Nine Months Ended September 30,
|
|
|
||||||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
|
||||||||||||
|
Cost
|
|
Percentage of
Sales |
|
Cost
|
|
Percentage of
Sales |
|
Cost Variance
|
||||||||
Wages and benefits
|
$
|
213,316
|
|
|
16.4
|
%
|
|
$
|
209,720
|
|
|
16.2
|
%
|
|
$
|
3,596
|
|
Transportation
1
|
155,131
|
|
|
12.0
|
|
|
146,646
|
|
|
11.3
|
|
|
8,485
|
|
|||
Purchased pulp
|
138,614
|
|
|
10.7
|
|
|
144,869
|
|
|
11.2
|
|
|
(6,255
|
)
|
|||
Chemicals
|
130,719
|
|
|
10.0
|
|
|
122,407
|
|
|
9.4
|
|
|
8,312
|
|
|||
Chips, sawdust and logs
|
123,902
|
|
|
9.6
|
|
|
99,887
|
|
|
7.7
|
|
|
24,015
|
|
|||
Packaging supplies
|
65,530
|
|
|
5.1
|
|
|
65,867
|
|
|
5.1
|
|
|
(337
|
)
|
|||
Depreciation
|
65,086
|
|
|
5.0
|
|
|
69,266
|
|
|
5.4
|
|
|
(4,180
|
)
|
|||
Energy
|
61,671
|
|
|
4.8
|
|
|
66,710
|
|
|
5.2
|
|
|
(5,039
|
)
|
|||
Maintenance and repairs
2
|
55,425
|
|
|
4.3
|
|
|
74,244
|
|
|
5.7
|
|
|
(18,819
|
)
|
|||
|
1,009,394
|
|
|
77.9
|
|
|
999,616
|
|
|
77.3
|
|
|
9,778
|
|
|||
Other operating costs
|
146,414
|
|
|
11.3
|
|
|
155,267
|
|
|
12.0
|
|
|
(8,853
|
)
|
|||
Total cost of sales
|
$
|
1,155,808
|
|
|
89.2
|
%
|
|
$
|
1,154,883
|
|
|
89.3
|
%
|
|
$
|
925
|
|
1
|
Includes internal and external transportation costs.
|
2
|
Excludes related internal labor costs.
|
|
Three Months Ended September 30,
|
||||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
||||||||||
Net sales
|
$
|
426,460
|
|
|
100.0
|
%
|
|
$
|
426,504
|
|
|
100.0
|
%
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||
Cost of sales
|
(376,221
|
)
|
|
88.2
|
|
|
(386,762
|
)
|
|
90.7
|
|
||
Selling, general and administrative expenses
|
(26,283
|
)
|
|
6.2
|
|
|
(34,582
|
)
|
|
8.1
|
|
||
Gain on divested assets
|
22,944
|
|
|
5.4
|
|
|
—
|
|
|
—
|
|
||
Total operating costs and expenses
|
(379,560
|
)
|
|
89.0
|
|
|
(421,344
|
)
|
|
98.8
|
|
||
Income from operations
|
46,900
|
|
|
11.0
|
|
|
5,160
|
|
|
1.2
|
|
||
Interest expense, net
|
(7,547
|
)
|
|
1.8
|
|
|
(7,683
|
)
|
|
1.8
|
|
||
Non-operating pension and other postretirement benefit (costs) income
|
(1,234
|
)
|
|
0.3
|
|
|
291
|
|
|
0.1
|
|
||
Earnings (loss) before income taxes
|
38,119
|
|
|
8.9
|
|
|
(2,232
|
)
|
|
0.5
|
|
||
Income tax (provision) benefit
|
(3,675
|
)
|
|
0.9
|
|
|
3,095
|
|
|
0.7
|
|
||
Net earnings
|
$
|
34,444
|
|
|
8.1
|
%
|
|
$
|
863
|
|
|
0.2
|
%
|
|
|
|
|
|
Three Months Ended
|
||||||
|
September 30,
|
||||||
(Dollars in thousands - except per ton amounts)
|
2018
|
|
2017
|
||||
Net sales
|
$
|
211,642
|
|
|
$
|
232,916
|
|
Operating income
|
21,675
|
|
|
4,525
|
|
||
Percent of net sales
|
10.2
|
%
|
|
1.9
|
%
|
||
|
|
|
|
||||
Shipments (short tons)
|
|
|
|
||||
Retail
|
70,335
|
|
|
77,544
|
|
||
Non-retail
|
18,525
|
|
|
12,958
|
|
||
Total tissue tons
|
88,860
|
|
|
90,502
|
|
||
Converted products cases (in thousands)
|
11,789
|
|
|
12,727
|
|
||
|
|
|
|
||||
Sales price (per short ton)
|
|
|
|
||||
Retail
|
$
|
2,615
|
|
|
$
|
2,754
|
|
Non-retail
|
1,491
|
|
|
1,468
|
|
||
Total tissue
|
$
|
2,381
|
|
|
$
|
2,574
|
|
|
Three Months Ended
|
||||||
|
September 30,
|
||||||
(Dollars in thousands - except per ton amounts)
|
2018
|
|
2017
|
||||
Net sales
|
$
|
214,818
|
|
|
$
|
193,588
|
|
Operating income
|
38,280
|
|
|
14,735
|
|
||
Percent of net sales
|
17.8
|
%
|
|
7.6
|
%
|
||
|
|
|
|
||||
Paperboard shipments (short tons)
|
218,135
|
|
|
200,569
|
|
||
Paperboard sales price (per short ton)
|
$
|
985
|
|
|
$
|
965
|
|
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
||||||||||
Net sales
|
$
|
1,295,511
|
|
|
100.0
|
%
|
|
$
|
1,293,692
|
|
|
100.0
|
%
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||
Cost of sales
|
(1,155,808
|
)
|
|
89.2
|
|
|
(1,154,883
|
)
|
|
89.3
|
|
||
Selling, general and administrative expenses
|
(85,827
|
)
|
|
6.6
|
|
|
(93,991
|
)
|
|
7.3
|
|
||
Gain on divested assets
|
22,944
|
|
|
1.8
|
|
|
—
|
|
|
—
|
|
||
Total operating costs and expenses
|
(1,218,691
|
)
|
|
94.1
|
|
|
(1,248,874
|
)
|
|
96.5
|
|
||
Income from operations
|
76,820
|
|
|
5.9
|
|
|
44,818
|
|
|
3.5
|
|
||
Interest expense, net
|
(23,290
|
)
|
|
1.8
|
|
|
(23,399
|
)
|
|
1.8
|
|
||
Non-operating pension and other postretirement benefit (costs) income
|
(3,700
|
)
|
|
0.3
|
|
|
856
|
|
|
(0.1
|
)
|
||
Earnings before income taxes
|
49,830
|
|
|
3.8
|
|
|
22,275
|
|
|
1.7
|
|
||
Income tax provision
|
(5,825
|
)
|
|
0.4
|
|
|
(5,860
|
)
|
|
0.5
|
|
||
Net earnings
|
$
|
44,005
|
|
|
3.4
|
|
|
$
|
16,415
|
|
|
1.3
|
|
|
|
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
(Dollars in thousands - except per ton amounts)
|
2018
|
|
2017
|
||||
Net sales
|
$
|
672,069
|
|
|
$
|
707,251
|
|
Operating income
|
19,700
|
|
|
21,427
|
|
||
Percent of net sales
|
2.9
|
%
|
|
3.0
|
%
|
||
|
|
|
|
||||
Shipments (short tons)
|
|
|
|
||||
Retail
|
224,376
|
|
|
233,944
|
|
||
Non-retail
|
47,077
|
|
|
43,372
|
|
||
Total tissue tons
|
271,453
|
|
|
277,316
|
|
||
Converted products cases (in thousands)
|
37,078
|
|
|
38,559
|
|
||
|
|
|
|
||||
Sales price (per short ton)
|
|
|
|
||||
Retail
|
$
|
2,681
|
|
|
$
|
2,750
|
|
Non-retail
|
1,452
|
|
|
1,452
|
|
||
Total tissue
|
$
|
2,468
|
|
|
$
|
2,547
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
(Dollars in thousands - except per ton amounts)
|
2018
|
|
2017
|
||||
Net sales
|
$
|
623,442
|
|
|
$
|
586,441
|
|
Operating income
|
98,626
|
|
|
63,006
|
|
||
Percent of net sales
|
15.8
|
%
|
|
10.7
|
%
|
||
|
|
|
|
||||
Paperboard shipments (short tons)
|
641,026
|
|
|
618,103
|
|
||
Paperboard sales price (per short ton)
|
$
|
973
|
|
|
$
|
949
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net earnings
|
$
|
34,444
|
|
|
$
|
863
|
|
|
$
|
44,005
|
|
|
$
|
16,415
|
|
Interest expense, net
|
7,547
|
|
|
7,683
|
|
|
23,290
|
|
|
23,399
|
|
||||
Income tax provision (benefit)
|
3,675
|
|
|
(3,095
|
)
|
|
5,825
|
|
|
5,860
|
|
||||
Depreciation and amortization expense
1
|
25,342
|
|
|
25,856
|
|
|
75,686
|
|
|
79,468
|
|
||||
EBITDA
|
$
|
71,008
|
|
|
$
|
31,307
|
|
|
$
|
148,806
|
|
|
$
|
125,142
|
|
Gain on divested assets, net
|
(22,944
|
)
|
|
—
|
|
|
(22,944
|
)
|
|
—
|
|
||||
Directors' equity-based compensation expense (benefit)
|
769
|
|
|
463
|
|
|
(1,930
|
)
|
|
(2,470
|
)
|
||||
Reorganization related expenses associated with SG&A cost control measures
|
210
|
|
|
480
|
|
|
6,390
|
|
|
480
|
|
||||
Consumer products reorganization related expenses
|
158
|
|
|
—
|
|
|
950
|
|
|
—
|
|
||||
Other
|
(338
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Costs associated with Oklahoma City facility closure
2
|
—
|
|
|
5,057
|
|
|
—
|
|
|
7,406
|
|
||||
Costs associated with Long Island facility closure
|
—
|
|
|
314
|
|
|
—
|
|
|
1,145
|
|
||||
Manchester Industries acquisition related expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
220
|
|
||||
Write-off of assets as a result of Warehouse Automation project
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
||||
Adjusted EBITDA
|
$
|
48,863
|
|
|
$
|
37,621
|
|
|
$
|
131,272
|
|
|
$
|
131,964
|
|
1
|
Depreciation and amortization expense for the three months ended September 30, 2017 includes accelerated depreciation of $0.3 million associated with the closure of our Long Island facility and $0.1 million as a result of our warehouse automation project. In addition, depreciation and amortization for the nine months ended September 30, 2017 includes $3.7 million of accelerated depreciation associated with the closure of our Oklahoma City facility, $0.6 million associated with the Long Island facility closure and $0.4 million as a result of the warehouse automation project.
|
2
|
Costs associated with the Oklahoma City facility closure for both the three and nine months ended September 30, 2017 include $4.3 million of loss on the writedown of assets to their held for sale value.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
GAAP Income tax (provision) benefit
|
$
|
(3,675
|
)
|
|
$
|
3,095
|
|
|
$
|
(5,825
|
)
|
|
$
|
(5,860
|
)
|
Special items, tax impact:
|
|
|
|
|
|
|
|
||||||||
Gain on divested assets
|
10,264
|
|
|
—
|
|
|
10,264
|
|
|
—
|
|
||||
Reorganization related expenses associated with SG&A cost control measures
|
(67
|
)
|
|
(163
|
)
|
|
(1,623
|
)
|
|
(163
|
)
|
||||
Directors' equity-based compensation (expense) benefit
|
(245
|
)
|
|
(157
|
)
|
|
450
|
|
|
831
|
|
||||
Consumer products reorganization related expenses
|
(50
|
)
|
|
—
|
|
|
(256
|
)
|
|
—
|
|
||||
Other
|
88
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Impact of state tax reform
|
—
|
|
|
—
|
|
|
(676
|
)
|
|
—
|
|
||||
Costs associated with Oklahoma City facility closure
|
—
|
|
|
(1,719
|
)
|
|
—
|
|
|
(3,762
|
)
|
||||
Manchester Industries acquisition related expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
||||
Costs associated with Long Island facility closure
|
—
|
|
|
(208
|
)
|
|
—
|
|
|
(586
|
)
|
||||
Write off of assets as a result of Warehouse Automation project
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
||||
Accelerated depreciation of assets as a result of Warehouse Automation project
|
—
|
|
|
(41
|
)
|
|
—
|
|
|
(121
|
)
|
||||
Adjusted income tax benefit (provision)
|
$
|
6,315
|
|
|
$
|
807
|
|
|
$
|
2,334
|
|
|
$
|
(9,749
|
)
|
|
|
|
|
(In thousands)
|
2018
|
|
2017
|
||||
Net cash flows from operating activities
|
$
|
121,099
|
|
|
$
|
152,176
|
|
Net cash flows from investing activities
|
(102,297
|
)
|
|
(135,897
|
)
|
||
Net cash flows from financing activities
|
44,147
|
|
|
(30,802
|
)
|
•
|
maximum consolidated secured leverage ratio of
2.00
to 1.00 through December 31, 2019 and of
1.50
to 1.00 from March 31, 2020 and thereafter, in lieu of being required to maintain a maximum consolidated leverage ratio which was in effect prior to the amendments;
|
•
|
minimum consolidated interest coverage ratio of
1.25
to 1.00; and
|
•
|
minimum consolidated asset coverage ratio of
1.00
to 1.00 which was not in effect prior to the Amendments.
|
ITEM 4.
|
|
Controls and Procedures
|
ITEM 1.
|
|
Legal Proceedings
|
ITEM 1A.
|
|
Risk Factors
|
ITEM 5.
|
|
Other Information
|
•
|
maximum consolidated secured leverage ratio of
2.00
to 1.00 through December 31, 2019 and of
1.50
to 1.00 from March 31, 2020 and thereafter, in lieu of being required to maintain a maximum consolidated leverage ratio which was in effect prior to the amendments;
|
•
|
minimum consolidated interest coverage ratio of
1.25
to 1.00; and
|
•
|
minimum consolidated asset coverage ratio of
1.00
to 1.00 which was not in effect prior to the Amendments.
|
EXHIBIT
NUMBER
|
|
DESCRIPTION
|
(31)
|
|
|
|
|
|
(32)**
|
|
|
|
|
|
10(i)
|
|
|
|
|
|
10(ii)
|
|
|
|
|
|
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.
|
**
|
In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibit 32 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act.
|
|
|
1
|
Management contract or compensatory plan, contract or arrangement.
|
|
|
|
|
|
|
|
|
CLEARWATER PAPER CORPORATION
|
|
|
|
|
(Registrant)
|
|
|
|
|
||
|
|
|
|
|
November 9, 2018
|
|
By
|
/s/ JOHN D. HERTZ
|
|
|
|
|
|
John D. Hertz
|
|
|
|
|
Senior Vice President, Finance and
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Duly Authorized Officer; Principal
|
|
|
|
|
Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
November 9, 2018
|
|
By
|
/s/ ROBERT N. DAMMARELL
|
|
|
|
|
|
Robert N. Dammarell
|
|
|
|
|
Vice President, Corporate Controller
|
|
|
|
|
(Duly Authorized Officer; Principal
|
|
|
|
|
Accounting Officer)
|
|
|
|
|
|
|
|
|
|
|
1.
|
I have reviewed this report on Form 10-Q of Clearwater Paper Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
Date: November 9, 2018
|
|
|
|
/S/ LINDA K. MASSMAN
|
|
|
|
|
Linda K. Massman
|
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q of Clearwater Paper Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
Date: November 9, 2018
|
|
|
|
/S/ JOHN D. HERTZ
|
|
|
|
|
John D. Hertz
|
|
|
|
|
Senior Vice President, Finance and Chief Financial Officer
|
(1)
|
the Quarterly Report of the Company on Form 10-Q for the period ended
September 30, 2018
, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/S/ LINDA K. MASSMAN
|
Linda K. Massman
|
President and Chief Executive Officer
|
November 9, 2018
|
(1)
|
the Quarterly Report of the Company on Form 10-Q for the period ended
September 30, 2018
, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/S/ JOHN D. HERTZ
|
John D. Hertz
|
Senior Vice President, Finance and Chief Financial Officer
|
November 9, 2018
|