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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Large accelerated filer
ý
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Accelerated filer
¨
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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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Page
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PART I
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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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PART II
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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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PART III
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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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PART IV
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ITEM 15.
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Name
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Age
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Position
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Thomas Goeke
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59
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President, Chief Executive Officer and Director
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Bruce Chalmers
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52
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Chief Financial Officer
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Ling An-Heid
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58
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President, Mold-Masters
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Gerrit Jue
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60
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President, Cimcool
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Mark Miller
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56
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Vice President, Chief Human Resources Officer
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Hugh O'Donnell
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67
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Vice President, General Counsel and Secretary
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•
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The relative cost of plastic compared with other materials, such as glass, metal and paper. The principal cost of plastic is petroleum-based resins and fluctuations in the price of crude oil and natural gas typically impact the price of these resins. If the price of plastic resins were to increase substantially or the cost associated with other competing materials such as glass, metal and paper, were to materially decrease, the plastic products of our customers may no longer be economically competitive relative to other alternatives.
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•
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The environmental impact of plastic may be perceived negatively by environmental groups, customers and government regulators. A number of governmental authorities and advocacy groups have lobbied for and considered, or are expected to consider, legislation aimed at addressing the environmental impacts of plastic. These proposals have included mandating certain rates of recycling and/or the use of recycled materials, imposing deposits or taxes on plastic packaging material, requiring retailers or manufacturers to develop a recycling infrastructure and increased scrutiny on the use of plastic. Legislative and other changes aimed at reducing the environmental impact of plastic may result in increased costs associated with plastic and/or reduced demand for plastic.
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•
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agreements may be difficult to enforce and receivables difficult to collect through a foreign country’s legal system;
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•
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foreign countries may impose additional withholding taxes or otherwise tax our foreign income, attempt to impose transfer taxes on past or future corporate level transactions, impose tariffs or adopt other restrictions on foreign trade or investment, including currency exchange controls;
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•
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general economic and political conditions or instability in the countries in which we operate could have an adverse effect on our earnings from operations in those countries;
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•
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restrictions on or costs relating to the repatriation of foreign profits to the United States, including possible taxes or withholding obligations;
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•
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differing, and possibly more stringent, labor regulations;
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•
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natural disasters, pandemics or international conflict, including terrorist acts, could interrupt the manufacturing of our products or performance of services, endanger our personnel or cause delays;
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•
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enforcement of anti-bribery laws, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, (the “FCPA”), the U.K. Bribery Act (the “UKBA”) and similar laws, economic sanctions laws, regulations and regimes (including those administered by the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury), and other international laws and regulations;
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•
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the difficulties of staffing and managing dispersed international operations;
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•
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less protective foreign intellectual property laws;
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•
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unexpected adverse changes in foreign laws or regulatory requirements may occur;
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•
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longer customer payment cycles; and
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•
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legal systems that may be less developed and less predictable than those in the United States.
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•
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any of our patents could be invalidated, circumvented or challenged;
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•
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any of our pending or future patent applications could fail to be issued within the scope of the claims sought by us, if at all, and patents issued from such applications may not be of sufficient scope or strength to provide us with any meaningful protection or commercial advantage;
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•
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others may develop technologies that are similar or superior to our technologies, duplicate our technologies or design around our patents; or
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•
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steps taken by us to protect our technologies may not prevent misappropriation of such technologies.
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•
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the diversion of management’s time and attention from other business concerns to the assimilation of the acquired companies and their employees and on the management of expanding operations;
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•
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the use of debt to finance acquisitions, increasing the risk that we may be unable to satisfy our financial obligations;
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•
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the incorporation of acquired products into our product line;
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•
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the disruption of existing supplier or customer relationships and the difficulty of presenting a unified corporate image;
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•
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the increasing demands on our operational systems and integration costs, which may be greater than expectations;
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•
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difficulties in maintaining uniform standards, controls, procedures and policies throughout acquired companies;
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•
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increased regulatory scrutiny as a result of perceived concentration in certain markets;
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•
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the impact of accounting requirements relating to business combinations, including the requirement to expense certain acquisition costs as incurred, which may cause us to experience greater earnings volatility and generally lower earnings during period in which we acquire new businesses; and
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•
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difficulties in retaining key employees, customers or suppliers of the acquired business.
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•
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make it more difficult for us to satisfy our obligations under the ABL Facility or the 2017 Term Loan Facility;
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•
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increase our vulnerability to adverse economic and general industry conditions, including interest rate fluctuations, because a portion of our borrowings are and will continue to be at variable rates of interest;
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•
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require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, which would reduce the availability of our cash flow from operations to fund working capital, capital expenditures, acquisitions, or other general corporate purposes;
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•
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limit our flexibility in planning for, or reacting to, changes in general economic conditions or in our business and industry;
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•
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place us at a disadvantage compared to competitors that may have proportionately less debt;
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•
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limit our ability to obtain additional debt or equity financing due to applicable financial and restrictive covenants in our debt agreements; and
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•
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increase our cost of borrowing.
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•
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incur, assume or permit to exist additional indebtedness (including guarantees thereof);
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•
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pay dividends or certain other distributions on their capital stock or repurchase our capital stock or prepay subordinated indebtedness;
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•
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incur liens on assets;
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•
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make certain investments or other restricted payments;
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•
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allow to exist certain restrictions on the ability of the restricted subsidiaries to pay dividends or make other payments to the issuers of such indebtedness;
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•
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engage in transactions with affiliates;
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•
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sell certain assets or merge or consolidate with or into other companies;
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•
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guarantee indebtedness; and
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•
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alter the business that we conduct.
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Location
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Square
Footage
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Type
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Own/
Lease
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APPT
|
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MDCS
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Fluids
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Americas
|
|
|
|
|
|
|
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|
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Atlanta, Georgia
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39,000
|
|
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Manufacturing
|
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Lease
|
|
|
|
|
|
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Batavia, Ohio
|
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490,000
|
|
|
Manufacturing
|
|
Own
|
|
|
|
|
|
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McPherson, Kansas
|
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93,000
|
|
|
Manufacturing
|
|
Lease
|
|
|
|
|
|
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Mt. Orab, Ohio
|
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213,000
|
|
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Manufacturing
|
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Own
|
|
|
|
|
|
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Rowley, Massachusetts
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22,000
|
|
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Office/R&D
|
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Lease
|
|
|
|
|
|
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Querétaro, Mexico
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31,000
|
|
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Distribution and Service
|
|
Lease
|
|
|
|
|
|
|
Southlake, Texas
|
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24,000
|
|
|
Distribution and Service
|
|
Lease
|
|
|
|
|
|
|
Tecumseh, Michigan
|
|
262,000
|
|
|
Manufacturing
|
|
Lease
|
|
|
|
|
|
|
Georgetown, Ontario, Canada
|
|
122,000
|
|
|
Manufacturing
|
|
Lease
|
|
|
|
|
|
|
Georgetown, Ontario, Canada
|
|
54,000
|
|
|
R&D
|
|
Lease
|
|
|
|
|
|
|
Brantford, Ontario, Canada
|
|
18,000
|
|
|
Manufacturing
|
|
Lease
|
|
|
|
|
|
|
Campinas, Brazil
|
|
12,000
|
|
|
Manufacturing
|
|
Lease
|
|
|
|
|
|
|
Madison Heights, Michigan
|
|
71,000
|
|
|
Distribution
|
|
Own
|
|
|
|
|
|
|
Greenville, Michigan
|
|
65,000
|
|
|
Manufacturing
|
|
Lease
|
|
|
|
|
|
|
Windsor, Ontario, Canada
|
|
24,000
|
|
|
Manufacturing
|
|
Own
|
|
|
|
|
|
|
Cincinnati, Ohio
|
|
76,000
|
|
|
Manufacturing
|
|
Own
|
|
|
|
|
|
|
Querétaro, Mexico
|
|
14,000
|
|
|
Distribution and Service
|
|
Lease
|
|
|
|
|
|
|
Europe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Magenta, Italy
|
|
97,000
|
|
|
Manufacturing
|
|
Own
|
|
|
|
|
|
|
Malterdingen, Germany
|
|
420,000
|
|
|
Manufacturing
|
|
Own
|
|
|
|
|
|
|
Policka, Czech Republic
|
|
191,000
|
|
|
Manufacturing
|
|
Own
|
|
|
|
|
|
|
Baden-Baden, Germany
|
|
36,000
|
|
|
Manufacturing
|
|
Lease
|
|
|
|
|
|
|
Hereford, United Kingdom
|
|
16,000
|
|
|
Manufacturing
|
|
Lease
|
|
|
|
|
|
|
Zeletava, Czech Republic
|
|
110,000
|
|
|
Manufacturing
|
|
Own
|
|
|
|
|
|
|
Vlaardingen, Netherlands
|
|
74,000
|
|
|
Manufacturing
|
|
Own
|
|
|
|
|
|
|
Asia Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ahmedabad, India
|
|
201,000
|
|
|
Manufacturing
|
|
Own
|
|
|
|
|
|
|
Jiangyin, China
|
|
87,000
|
|
|
Manufacturing
|
|
Lease
|
|
|
|
|
|
|
Kawasaki, Japan
|
|
8,000
|
|
|
Distribution
|
|
Own
|
|
|
|
|
|
|
Kunshan, China
|
|
176,000
|
|
|
Manufacturing
|
|
Own
|
|
|
|
|
|
|
Coimbatore, India
|
|
48,000
|
|
|
Office
|
|
Lease
|
|
|
|
|
|
|
Coimbatore, India
|
|
31,000
|
|
|
Manufacturing
|
|
Lease
|
|
|
|
|
|
|
Shenzhen, China
|
|
19,000
|
|
|
Distribution
|
|
Lease
|
|
|
|
|
|
|
Shinoli, India
|
|
22,000
|
|
|
Manufacturing
|
|
Own
|
|
|
|
|
|
|
Shanghai, China
|
|
59,000
|
|
|
Manufacturing
|
|
Lease
|
|
|
|
|
|
|
Ulsan, South Korea
|
|
100,000
|
|
|
Manufacturing
|
|
Own
|
|
|
|
|
|
|
Total
|
|
3,325,000
|
|
|
|
|
|
|
|
|
|
|
|
ITEM 5.
|
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
|
|||
|
ISSUER PURCHASES OF EQUITY SECURITIES
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
|
||||||
|
|
(in millions, except share and per share data)
|
||||||||||||
October 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
||
November 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
||
December 2018
|
|
272,662
|
|
|
$
|
12.82
|
|
|
272,662
|
|
|
|
||
Total
|
|
272,662
|
|
|
$
|
12.82
|
|
|
272,662
|
|
|
$
|
121.5
|
|
|
June 25, 2015
|
|
December 31, 2015
|
|
December 31, 2016
|
|
December 31, 2017
|
|
December 31, 2018
|
MCRN
|
$100
|
|
$63.89
|
|
$95.15
|
|
$97.75
|
|
$60.73
|
S&P 500 Index
|
$100
|
|
$97.22
|
|
$106.49
|
|
$127.17
|
|
$119.24
|
Dow Jones U.S. Industrial Machinery Index
|
$100
|
|
$86.29
|
|
$114.89
|
|
$150.49
|
|
$126.68
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
|
Year Ended December 31, 2014
|
||||||||||
|
(in millions, except per share data)
|
||||||||||||||||||
Balance sheet data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
184.0
|
|
|
$
|
187.9
|
|
|
$
|
130.2
|
|
|
$
|
67.5
|
|
|
$
|
81.5
|
|
Accounts receivable, net
|
152.8
|
|
|
186.3
|
|
|
182.3
|
|
|
204.4
|
|
|
183.3
|
|
|||||
Inventories, net
|
257.8
|
|
|
267.9
|
|
|
249.5
|
|
|
238.9
|
|
|
238.1
|
|
|||||
Property and equipment, net
|
241.0
|
|
|
260.8
|
|
|
243.7
|
|
|
221.8
|
|
|
216.9
|
|
|||||
Total assets
|
1,732.5
|
|
|
1,858.8
|
|
|
1,722.0
|
|
|
1,696.3
|
|
|
1,769.8
|
|
|||||
Accounts payable
|
122.9
|
|
|
121.6
|
|
|
92.5
|
|
|
79.2
|
|
|
89.9
|
|
|||||
Advanced billings and deposits
|
44.5
|
|
|
62.8
|
|
|
52.7
|
|
|
39.7
|
|
|
58.5
|
|
|||||
Total debt and capital lease obligations, including current portion
|
834.9
|
|
|
933.2
|
|
|
941.4
|
|
|
939.7
|
|
|
1,013.7
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Statements of operations data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
1,258.2
|
|
|
$
|
1,234.2
|
|
|
$
|
1,166.7
|
|
|
$
|
1,179.5
|
|
|
$
|
1,211.3
|
|
Operating earnings (a)
|
106.6
|
|
|
89.1
|
|
|
106.3
|
|
|
72.6
|
|
|
86.0
|
|
|||||
Net earnings (loss) attributable to Milacron Holdings Corp.
|
41.5
|
|
|
1.1
|
|
|
30.5
|
|
|
(38.8
|
)
|
|
(14.8
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings (loss) per share
|
$
|
0.60
|
|
|
$
|
0.02
|
|
|
$
|
0.45
|
|
|
$
|
(0.65
|
)
|
|
$
|
(0.28
|
)
|
Diluted earnings (loss) per share
|
$
|
0.58
|
|
|
$
|
0.02
|
|
|
$
|
0.43
|
|
|
$
|
(0.65
|
)
|
|
$
|
(0.28
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Statements of cash flows data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
124.3
|
|
|
$
|
110.4
|
|
|
$
|
116.2
|
|
|
$
|
36.8
|
|
|
$
|
37.6
|
|
Net cash used in investing activities
|
(22.2
|
)
|
|
(38.1
|
)
|
|
(56.4
|
)
|
|
(73.3
|
)
|
|
(94.3
|
)
|
|||||
Net cash (used in) provided by financing activities
|
(99.4
|
)
|
|
(21.9
|
)
|
|
6.2
|
|
|
27.8
|
|
|
41.2
|
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
|
Year Ended December 31, 2014
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Adjusted EBITDA
|
$
|
228.6
|
|
|
$
|
227.3
|
|
|
$
|
212.8
|
|
|
$
|
213.4
|
|
|
$
|
198.5
|
|
Adjusted Net Income
|
127.4
|
|
|
128.2
|
|
|
105.7
|
|
|
98.2
|
|
|
74.5
|
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
|
|||
|
OPERATIONS
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
(in millions)
|
||||||||||
Net sales
|
|
$
|
1,258.2
|
|
|
$
|
1,234.2
|
|
|
$
|
1,166.7
|
|
Cost of sales
|
|
855.6
|
|
|
852.3
|
|
|
770.9
|
|
|||
Manufacturing margins
|
|
402.6
|
|
|
381.9
|
|
|
395.8
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
||||||
Selling, general and administrative expenses
|
|
245.0
|
|
|
252.9
|
|
|
251.7
|
|
|||
Amortization expense
|
|
26.5
|
|
|
28.7
|
|
|
31.3
|
|
|||
Loss (gain) on currency translation
|
|
2.8
|
|
|
(7.3
|
)
|
|
(3.3
|
)
|
|||
Other expense, net
|
|
21.7
|
|
|
18.5
|
|
|
9.8
|
|
|||
Total operating expenses
|
|
296.0
|
|
|
292.8
|
|
|
289.5
|
|
|||
Operating earnings
|
|
106.6
|
|
|
89.1
|
|
|
106.3
|
|
|||
Interest expense, net
|
|
43.0
|
|
|
44.5
|
|
|
60.9
|
|
|||
Loss on debt extinguishment
|
|
1.2
|
|
|
25.2
|
|
|
—
|
|
|||
Other non-operating expenses
|
|
0.9
|
|
|
1.1
|
|
|
0.7
|
|
|||
Earnings before income taxes
|
|
61.5
|
|
|
18.3
|
|
|
44.7
|
|
|||
Income tax expense
|
|
20.0
|
|
|
17.2
|
|
|
14.2
|
|
|||
Net earnings
|
|
$
|
41.5
|
|
|
$
|
1.1
|
|
|
$
|
30.5
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
(in millions)
|
||||||||||
Net sales by segment:
|
|
|
|
|
|
|
||||||
Advanced Plastic Processing Technologies
|
|
$
|
677.2
|
|
|
$
|
689.1
|
|
|
$
|
663.9
|
|
Melt Delivery and Control Systems
|
|
451.7
|
|
|
423.9
|
|
|
389.9
|
|
|||
Fluid Technologies
|
|
129.3
|
|
|
121.2
|
|
|
112.9
|
|
|||
Total
|
|
$
|
1,258.2
|
|
|
$
|
1,234.2
|
|
|
$
|
1,166.7
|
|
•
|
as a measurement used in evaluating our consolidated and segment-level operating performance on a consistent basis;
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Net earnings
|
$
|
41.5
|
|
|
$
|
1.1
|
|
|
$
|
30.5
|
|
Amortization expense
|
26.5
|
|
|
28.7
|
|
|
31.3
|
|
|||
Currency effect on intercompany advances (a)
|
3.6
|
|
|
(8.7
|
)
|
|
(1.6
|
)
|
|||
Organizational redesign costs (b)
|
43.6
|
|
|
58.6
|
|
|
32.9
|
|
|||
Long-term equity awards (c)
|
10.1
|
|
|
9.4
|
|
|
7.1
|
|
|||
Debt costs (d)
|
1.2
|
|
|
27.1
|
|
|
—
|
|
|||
Professional services (e)
|
4.1
|
|
|
6.5
|
|
|
4.7
|
|
|||
Fair market value adjustments (f)
|
—
|
|
|
—
|
|
|
0.2
|
|
|||
Tax adjustments (g)
|
(8.6
|
)
|
|
(7.5
|
)
|
|
(3.4
|
)
|
|||
Other (h)
|
5.4
|
|
|
13.0
|
|
|
4.0
|
|
|||
Adjusted Net Income
|
127.4
|
|
|
128.2
|
|
|
105.7
|
|
|||
Income tax expense
|
28.6
|
|
|
24.7
|
|
|
17.6
|
|
|||
Interest expense, net
|
43.0
|
|
|
44.5
|
|
|
60.9
|
|
|||
Depreciation expense
|
29.6
|
|
|
29.9
|
|
|
28.6
|
|
|||
Adjusted EBITDA
|
$
|
228.6
|
|
|
$
|
227.3
|
|
|
$
|
212.8
|
|
(a)
|
Non-cash currency effect on intercompany advances primarily relates to advances denominated in foreign currencies. The most significant exposure relates to the Canadian dollar and the Czech koruna pursuant to intercompany advances within the MDCS and Corporate segments, respectively.
|
(b)
|
Organizational redesign costs for the year ended December 31, 2018 primarily include $20.9 million for termination costs as a result of eliminated positions. Organizational redesign costs for the year ended December 31, 2017 primarily include $17.6 million for termination costs as a result of eliminated positions, $21.7 million of costs related to relocating our facilities in Belgium, Italy and Germany to the Czech Republic and $4.0 million of costs related to our facility consolidation in North America. Organizational redesign costs for the year ended December 31, 2016 primarily include $13.3 million for termination costs as a result of eliminated positions, $4.4 million of costs related to the shutdown of facilities, $5.2 million of costs related to relocating our facilities in Belgium, Italy and Germany to the Czech Republic and $0.5 million of costs related to the restructuring of Fluids in Europe.
|
(c)
|
Long-term equity awards include the charges associated with stock-based compensation awards granted to certain executives and independent directors in the years ended December 31,
2018
,
2017
and
2016
.
|
(d)
|
Debt costs incurred during the year ended December 31, 2017 included $25.2 million of debt extinguishment costs and $1.9 million of fees related to the 2017 Term Loan Facility.
|
(e)
|
Professional fees in the years ended December 31, 2018, 2017 and 2016 included $4.1 million, $6.5 million and $4.7 million, respectively, of strategic organizational initiatives.
|
(f)
|
Non-cash fair market value adjustments in the year ended December 31, 2016 relate to acquisition accounting for the fair market value of inventory as part of our acquisition of CanGen Holdings Inc. ("CanGen") in the fourth quarter of 2015.
|
(g)
|
Tax adjustments primarily includes the tax benefit associated with reconciling net earnings to Adjusted Net Income.
|
(h)
|
Other costs for the year ended December 31, 2018 primarily include $4.0 million of costs to write-down the inventory of a discontinued product line. Other costs for the year ended December 31, 2017 primarily include $7.7 million of costs to write-down the inventory of a discontinued product line and $1.4 million of goodwill impairment. Other costs for the year ended December 31, 2016 include $1.4 million related to the impairment of certain software leases and the write-off of a $0.5 million non-trade receivable.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Operating earnings (loss):
|
|
|
|
|
|
||||||
APPT
|
$
|
28.6
|
|
|
$
|
11.7
|
|
|
$
|
35.6
|
|
MDCS
|
95.8
|
|
|
102.5
|
|
|
91.4
|
|
|||
Fluids
|
24.6
|
|
|
20.7
|
|
|
17.4
|
|
|||
Corporate
|
(42.4
|
)
|
|
(45.8
|
)
|
|
(38.1
|
)
|
|||
Total operating earnings
|
106.6
|
|
|
89.1
|
|
|
106.3
|
|
|||
Other non-operating expense
|
(0.9
|
)
|
|
(1.1
|
)
|
|
(0.7
|
)
|
|||
Adjustments to operating earnings:
|
|
|
|
|
|
||||||
APPT Adjustments:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
16.9
|
|
|
19.1
|
|
|
20.3
|
|
|||
Currency effect on intercompany advances (a)
|
0.7
|
|
|
(2.0
|
)
|
|
(0.1
|
)
|
|||
Organizational redesign costs (b)
|
38.8
|
|
|
45.9
|
|
|
22.6
|
|
|||
Professional services
|
0.3
|
|
|
0.8
|
|
|
0.6
|
|
|||
Fair market value adjustments (f)
|
—
|
|
|
—
|
|
|
0.3
|
|
|||
Other (g)
|
4.7
|
|
|
11.9
|
|
|
3.0
|
|
|||
Total APPT Adjustments
|
61.4
|
|
|
75.7
|
|
|
46.7
|
|
|||
MDCS Adjustments:
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
33.4
|
|
|
33.5
|
|
|
33.2
|
|
|||
Currency effect on intercompany advances (a)
|
4.5
|
|
|
(6.9
|
)
|
|
(3.0
|
)
|
|||
Organizational redesign costs (b)
|
3.1
|
|
|
8.3
|
|
|
5.2
|
|
|||
Professional services
|
0.1
|
|
|
0.4
|
|
|
0.1
|
|
|||
Fair market value adjustments
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||
Other (g)
|
0.1
|
|
|
0.4
|
|
|
0.4
|
|
|||
Total MDCS Adjustments
|
41.2
|
|
|
35.7
|
|
|
35.8
|
|
|||
Fluids Adjustments:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
4.4
|
|
|
4.9
|
|
|
5.5
|
|
|||
Organizational redesign costs (b)
|
—
|
|
|
1.4
|
|
|
1.0
|
|
|||
Other (g)
|
0.3
|
|
|
(0.1
|
)
|
|
0.5
|
|
|||
Total Fluids Adjustments
|
4.7
|
|
|
6.2
|
|
|
7.0
|
|
|||
Corporate Adjustments:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
1.4
|
|
|
1.1
|
|
|
0.9
|
|
|||
Currency effect on intercompany advances (a)
|
(1.6
|
)
|
|
0.2
|
|
|
1.5
|
|
|||
Organizational redesign costs (b)
|
1.7
|
|
|
3.0
|
|
|
4.1
|
|
|||
Long-term equity awards (c)
|
10.1
|
|
|
9.4
|
|
|
7.1
|
|
|||
Debt costs (d)
|
—
|
|
|
1.9
|
|
|
—
|
|
|||
Professional services (e)
|
3.7
|
|
|
5.3
|
|
|
4.0
|
|
|||
Other (g)
|
0.3
|
|
|
0.8
|
|
|
0.1
|
|
|||
Total Corporate Adjustments
|
15.6
|
|
|
21.7
|
|
|
17.7
|
|
|||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||
APPT
|
89.1
|
|
|
86.3
|
|
|
81.6
|
|
|||
MDCS
|
137.0
|
|
|
138.2
|
|
|
127.2
|
|
|||
Fluids
|
29.3
|
|
|
26.9
|
|
|
24.4
|
|
|||
Corporate
|
(26.8
|
)
|
|
(24.1
|
)
|
|
(20.4
|
)
|
|||
Total Adjusted EBITDA
|
$
|
228.6
|
|
|
$
|
227.3
|
|
|
$
|
212.8
|
|
(a)
|
Non-cash currency effect on intercompany advances primarily relates to advances denominated in foreign currencies. The most significant exposure relates to the Canadian and the Czech koruna dollar pursuant to intercompany advances within the MDCS and Corporate segments, respectively.
|
(b)
|
Organizational redesign costs for the year ended December 31, 2018 primarily include $18.6 million for termination costs as a result of eliminated positions in APPT. Organizational redesign costs in the year ended December 31, 2017 included $13.0 million for termination costs as a result of eliminated positions and $20.8 million of costs related to relocating our facilities in Italy and Germany to the Czech Republic in APPT. Organizational redesign costs in the year ended December 31, 2017 also included $1.8 million of termination costs as a result of eliminated positions and $4.0 million of costs related to our facility consolidation in North America within MDCS. Organizational redesign costs in the year ended December 31, 2016 included $4.4 million of costs related to the shutdown of facilities in APPT, $5.1 million of costs related to relocating our facilities in Belgium, Italy and Germany to the Czech Republic in APPT and MDCS and $0.5 million of costs related to the restructuring of Fluids in Europe. In the year ended December 31, 2016, organizational redesign costs across all segments included $13.3 million for termination costs as a result of eliminated positions.
|
(c)
|
Long-term equity awards in Corporate include the charges associated with stock-based compensation awards granted to certain executives and independent directors in the years ended December 31,
2018
,
2017
and
2016
.
|
(d)
|
Debt costs incurred during the year ended December 31, 2017 included $1.9 million of fees related to the 2017 Term Loan Facility.
|
(e)
|
Professional fees incurred by Corporate in the years ended December 31, 2018, 2017 and 2016 included $3.7 million, $5.3 million and $4.0 million, respectively, of costs for strategic organizational initiatives.
|
(f)
|
Non-cash fair market value adjustments relate to acquisition accounting for the fair market value of inventory as part of our acquisition of CanGen in the fourth quarter of 2015.
|
(g)
|
Other costs in APPT for the year ended December 31, 2018 primarily include $4.0 million of costs to write-down the inventory of a discontinued product line. Other costs in APPT for the year ended December 31, 2017 primarily include $7.7 million of costs to write-down the inventory of a discontinued product line and $1.4 million of goodwill impairment. Other costs in APPT for the year ended December 31, 2016 includes $1.4 million related to the impairment of certain software licenses. Other costs in Fluids in the year ended December 31, 2016 includes the write-off of a $0.5 million non-trade receivable.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Net sales
|
$
|
1,258.2
|
|
|
$
|
1,234.2
|
|
|
$
|
1,166.7
|
|
Adjustments to net sales (a)
|
(43.9
|
)
|
|
(76.0
|
)
|
|
(84.7
|
)
|
|||
Pro forma Net Sales
|
$
|
1,214.3
|
|
|
$
|
1,158.2
|
|
|
$
|
1,082.0
|
|
(a)
|
Adjustments to net sales include net sales directly attributable to certain product lines which have been discontinued or eliminated through plant closures. Adjustments for the periods presented include European Injection equipment, Systems and net impact of North American large tonnage automotive market.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Net sales - APPT segment
|
$
|
677.2
|
|
|
$
|
689.1
|
|
|
$
|
663.9
|
|
Adjustments to net sales (a)
|
(43.9
|
)
|
|
(76.0
|
)
|
|
(84.7
|
)
|
|||
Pro forma Net Sales - APPT segment
|
$
|
633.3
|
|
|
$
|
613.1
|
|
|
$
|
579.2
|
|
(a)
|
Adjustments to net sales include net sales directly attributable to certain product lines which have been discontinued or eliminated through plant closures. Adjustments for the periods presented include European Injection equipment, Systems and net impact of North American large tonnage automotive market.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
New orders
|
$
|
1,211.2
|
|
|
$
|
1,299.9
|
|
|
$
|
1,191.3
|
|
Adjustments to new orders (a)
|
(26.3
|
)
|
|
(69.7
|
)
|
|
(86.5
|
)
|
|||
Pro forma New Orders
|
$
|
1,184.9
|
|
|
$
|
1,230.2
|
|
|
$
|
1,104.8
|
|
(a)
|
Adjustments to new orders include new orders directly attributable to certain product lines which have been discontinued or eliminated through plant closures. Adjustments for the periods presented include European Injection equipment, Systems and net impact of North American large tonnage automotive market.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Statements of cash flow data
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
124.3
|
|
|
$
|
110.4
|
|
|
$
|
116.2
|
|
Net cash used in investing activities
|
(22.2
|
)
|
|
(38.1
|
)
|
|
(56.4
|
)
|
|||
Net cash (used in) provided by financing activities
|
(99.4
|
)
|
|
(21.9
|
)
|
|
6.2
|
|
|
|
Total
|
|
2019
|
|
2020 - 2021
|
|
2022 - 2023
|
|
Beyond
2023
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
2017 Term Loan Facility
|
|
$
|
837.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
837.5
|
|
|
$
|
—
|
|
Interest on long term debt (a)
|
|
202.3
|
|
|
42.6
|
|
|
85.2
|
|
|
74.5
|
|
|
—
|
|
|||||
Capital lease obligations and other
|
|
0.3
|
|
|
0.1
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|||||
Estimated pension benefit payments (b)
|
|
12.7
|
|
|
1.0
|
|
|
2.2
|
|
|
2.4
|
|
|
7.1
|
|
|||||
Operating leases
|
|
28.4
|
|
|
8.9
|
|
|
10.6
|
|
|
6.0
|
|
|
2.9
|
|
|||||
Total (c)
|
|
$
|
1,081.2
|
|
|
$
|
52.6
|
|
|
$
|
98.2
|
|
|
$
|
920.4
|
|
|
$
|
10.0
|
|
|
Index to Consolidated Financial Statements
|
|
|
|
Page
|
Consolidated Financial Statements:
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions, except share data)
|
||||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
184.0
|
|
|
$
|
187.9
|
|
Accounts receivable, less allowance for doubtful accounts of $5.5 and $6.5 at December 31, 2018 and 2017, respectively
|
152.8
|
|
|
186.3
|
|
||
Inventories, net:
|
|
|
|
||||
Raw materials
|
81.2
|
|
|
90.2
|
|
||
Work-in-process
|
50.5
|
|
|
56.0
|
|
||
Finished products
|
126.1
|
|
|
121.7
|
|
||
Total inventories
|
257.8
|
|
|
267.9
|
|
||
Prepaid and other current assets
|
60.2
|
|
|
62.8
|
|
||
Total current assets
|
654.8
|
|
|
704.9
|
|
||
Property and equipment, net
|
241.0
|
|
|
260.8
|
|
||
Goodwill
|
513.8
|
|
|
535.1
|
|
||
Intangible assets, net
|
293.8
|
|
|
332.4
|
|
||
Other noncurrent assets
|
29.1
|
|
|
25.6
|
|
||
Total assets
|
$
|
1,732.5
|
|
|
$
|
1,858.8
|
|
Liabilities and shareholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term borrowings
|
$
|
5.8
|
|
|
$
|
7.4
|
|
Long-term debt and capital lease obligations due within one year
|
0.1
|
|
|
9.4
|
|
||
Accounts payable
|
122.9
|
|
|
121.6
|
|
||
Advanced billings and deposits
|
44.5
|
|
|
62.8
|
|
||
Accrued salaries, wages and other compensation
|
25.9
|
|
|
29.7
|
|
||
Other current liabilities
|
67.2
|
|
|
75.7
|
|
||
Total current liabilities
|
266.4
|
|
|
306.6
|
|
||
Long-term debt and capital lease obligations, less unamortized discount and debt issuance costs
|
829.0
|
|
|
916.4
|
|
||
Deferred income tax liabilities
|
57.5
|
|
|
60.4
|
|
||
Accrued pension liabilities
|
27.6
|
|
|
30.9
|
|
||
Other noncurrent accrued liabilities
|
25.2
|
|
|
23.8
|
|
||
Total liabilities
|
1,205.7
|
|
|
1,338.1
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock - $0.01 par value, 50,000,000 shares authorized, none outstanding
|
—
|
|
|
—
|
|
||
Common stock - $0.01 par value, 500,000,000 shares authorized; 70,726,800 issued and 70,454,138 outstanding as of December 31, 2018; 69,644,918 issued and outstanding as of December 31, 2017
|
0.7
|
|
|
0.7
|
|
||
Capital in excess of par value
|
693.5
|
|
|
675.9
|
|
||
Treasury stock - at cost; 272,662 shares as of December 31, 2018; none as of December 31, 2017
|
(3.5
|
)
|
|
—
|
|
||
Retained deficit
|
(29.0
|
)
|
|
(70.5
|
)
|
||
Accumulated other comprehensive loss
|
(134.9
|
)
|
|
(85.4
|
)
|
||
Total shareholders’ equity
|
526.8
|
|
|
520.7
|
|
||
Total liabilities and shareholders’ equity
|
$
|
1,732.5
|
|
|
$
|
1,858.8
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions, except per share data)
|
||||||||||
Net sales
|
$
|
1,258.2
|
|
|
$
|
1,234.2
|
|
|
$
|
1,166.7
|
|
Cost of sales
|
855.6
|
|
|
852.3
|
|
|
770.9
|
|
|||
Manufacturing margins
|
402.6
|
|
|
381.9
|
|
|
395.8
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Selling, general and administrative expenses
|
245.0
|
|
|
252.9
|
|
|
251.7
|
|
|||
Amortization expense
|
26.5
|
|
|
28.7
|
|
|
31.3
|
|
|||
Loss (gain) on currency translation
|
2.8
|
|
|
(7.3
|
)
|
|
(3.3
|
)
|
|||
Other expense, net
|
21.7
|
|
|
18.5
|
|
|
9.8
|
|
|||
Total operating expenses
|
296.0
|
|
|
292.8
|
|
|
289.5
|
|
|||
Operating earnings
|
106.6
|
|
|
89.1
|
|
|
106.3
|
|
|||
Interest expense, net
|
43.0
|
|
|
44.5
|
|
|
60.9
|
|
|||
Loss on debt extinguishment
|
1.2
|
|
|
25.2
|
|
|
—
|
|
|||
Other non-operating expenses
|
0.9
|
|
|
1.1
|
|
|
0.7
|
|
|||
Earnings before income taxes
|
61.5
|
|
|
18.3
|
|
|
44.7
|
|
|||
Income tax expense
|
20.0
|
|
|
17.2
|
|
|
14.2
|
|
|||
Net earnings
|
$
|
41.5
|
|
|
$
|
1.1
|
|
|
$
|
30.5
|
|
Earnings per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.60
|
|
|
$
|
0.02
|
|
|
$
|
0.45
|
|
Diluted
|
$
|
0.58
|
|
|
$
|
0.02
|
|
|
$
|
0.43
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Net earnings
|
$
|
41.5
|
|
|
$
|
1.1
|
|
|
$
|
30.5
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(54.2
|
)
|
|
71.7
|
|
|
(45.5
|
)
|
|||
Unrecognized pension plan gain (loss)
|
2.0
|
|
|
0.1
|
|
|
(2.7
|
)
|
|||
Unrealized gain (loss) on hedging activities
|
2.7
|
|
|
0.7
|
|
|
(0.6
|
)
|
|||
Total other comprehensive (loss) income, net of tax
|
(49.5
|
)
|
|
72.5
|
|
|
(48.8
|
)
|
|||
Comprehensive (loss) income
|
$
|
(8.0
|
)
|
|
$
|
73.6
|
|
|
$
|
(18.3
|
)
|
|
|
Common
Stock
(Shares)
|
|
Common
Stock
|
|
Capital In
Excess of
Par Value
|
|
Treasury Stock (Shares)
|
|
Treasury Stock
|
|
Retained
Deficit
|
|
Accumulated
Other
Comprehensive Loss
|
|
Totals
|
||||||||||||||
|
|
(in millions, except share data)
|
||||||||||||||||||||||||||||
Balance at December 31, 2015
|
|
67,296,678
|
|
|
$
|
0.7
|
|
|
$
|
648.7
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(99.4
|
)
|
|
$
|
(109.1
|
)
|
|
$
|
440.9
|
|
Stock-based compensation activity
|
|
1,176,883
|
|
|
—
|
|
|
12.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.3
|
|
||||||
Net earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30.5
|
|
|
—
|
|
|
30.5
|
|
||||||
Other comprehensive loss, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48.8
|
)
|
|
(48.8
|
)
|
||||||
Balance at December 31, 2016
|
|
68,473,561
|
|
|
0.7
|
|
|
661.0
|
|
|
—
|
|
|
—
|
|
|
(68.9
|
)
|
|
(157.9
|
)
|
|
434.9
|
|
||||||
Adjustment to adopt new accounting standards
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
(2.7
|
)
|
|
—
|
|
|
(1.9
|
)
|
||||||
Balance at January 1, 2017
|
|
68,473,561
|
|
|
0.7
|
|
|
661.8
|
|
|
—
|
|
|
—
|
|
|
(71.6
|
)
|
|
(157.9
|
)
|
|
433.0
|
|
||||||
Stock-based compensation activity
|
|
1,171,357
|
|
|
—
|
|
|
14.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14.1
|
|
||||||
Net earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
||||||
Other comprehensive income, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72.5
|
|
|
72.5
|
|
||||||
Balance at December 31, 2017
|
|
69,644,918
|
|
|
0.7
|
|
|
675.9
|
|
|
—
|
|
|
—
|
|
|
(70.5
|
)
|
|
(85.4
|
)
|
|
520.7
|
|
||||||
Stock-based compensation activity
|
|
1,081,882
|
|
|
—
|
|
|
17.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17.6
|
|
||||||
Purchase of treasury stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(272,662
|
)
|
|
(3.5
|
)
|
|
—
|
|
|
—
|
|
|
(3.5
|
)
|
||||||
Net earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41.5
|
|
|
—
|
|
|
41.5
|
|
||||||
Other comprehensive loss, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49.5
|
)
|
|
(49.5
|
)
|
||||||
Balance at December 31, 2018
|
|
70,726,800
|
|
|
$
|
0.7
|
|
|
$
|
693.5
|
|
|
(272,662
|
)
|
|
$
|
(3.5
|
)
|
|
$
|
(29.0
|
)
|
|
$
|
(134.9
|
)
|
|
$
|
526.8
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Operating activities
|
|
|
|
|
|
||||||
Net earnings
|
$
|
41.5
|
|
|
$
|
1.1
|
|
|
$
|
30.5
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
56.1
|
|
|
58.6
|
|
|
59.9
|
|
|||
Unrealized loss (gain) on currency translation of intercompany advances
|
3.6
|
|
|
(8.7
|
)
|
|
(1.6
|
)
|
|||
Amortization of debt issuance costs and discount
|
2.9
|
|
|
3.0
|
|
|
3.8
|
|
|||
Loss on debt extinguishment
|
1.2
|
|
|
25.2
|
|
|
—
|
|
|||
Other non-cash asset impairment
|
—
|
|
|
—
|
|
|
1.6
|
|
|||
Goodwill impairment
|
—
|
|
|
1.4
|
|
|
—
|
|
|||
Property and equipment impairment
|
3.6
|
|
|
—
|
|
|
—
|
|
|||
Inventory write-down
|
8.8
|
|
|
7.7
|
|
|
—
|
|
|||
Non-cash stock-based compensation expense
|
11.5
|
|
|
8.8
|
|
|
5.3
|
|
|||
Deferred income taxes
|
(7.5
|
)
|
|
(8.4
|
)
|
|
(8.6
|
)
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
26.9
|
|
|
8.0
|
|
|
16.2
|
|
|||
Inventories
|
(6.7
|
)
|
|
(11.9
|
)
|
|
(16.0
|
)
|
|||
Prepaid and other current assets
|
4.2
|
|
|
(9.9
|
)
|
|
(8.9
|
)
|
|||
Accounts payable
|
4.5
|
|
|
24.6
|
|
|
12.5
|
|
|||
Advanced billings and deposits
|
(17.0
|
)
|
|
7.8
|
|
|
13.9
|
|
|||
Other current liabilities
|
(9.7
|
)
|
|
(2.7
|
)
|
|
1.8
|
|
|||
Other noncurrent assets
|
0.4
|
|
|
1.3
|
|
|
5.0
|
|
|||
Other noncurrent accrued liabilities
|
—
|
|
|
4.5
|
|
|
0.8
|
|
|||
Net cash provided by operating activities
|
124.3
|
|
|
110.4
|
|
|
116.2
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(31.3
|
)
|
|
(39.8
|
)
|
|
(57.3
|
)
|
|||
Proceeds from disposals of property and equipment
|
9.1
|
|
|
3.8
|
|
|
0.9
|
|
|||
Acquisitions, net of cash acquired
|
—
|
|
|
(2.1
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(22.2
|
)
|
|
(38.1
|
)
|
|
(56.4
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Proceeds from issuance of long-term debt (original maturities longer than 90 days)
|
—
|
|
|
1,016.3
|
|
|
—
|
|
|||
Payments on long-term debt and capital lease obligations (original maturities longer than 90 days)
|
(100.0
|
)
|
|
(1,025.6
|
)
|
|
(0.8
|
)
|
|||
Net decrease in short-term borrowings (original maturities of 90 days or less)
|
(1.2
|
)
|
|
(0.1
|
)
|
|
—
|
|
|||
Debt extinguishment costs
|
—
|
|
|
(18.0
|
)
|
|
—
|
|
|||
Proceeds from exercise of stock options
|
6.1
|
|
|
5.3
|
|
|
7.0
|
|
|||
Purchase of treasury stock
|
(3.5
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from lease financing transaction
|
—
|
|
|
10.9
|
|
|
—
|
|
|||
Debt issuance costs
|
(0.8
|
)
|
|
(10.7
|
)
|
|
—
|
|
|||
Net cash (used in) provided by financing activities
|
(99.4
|
)
|
|
(21.9
|
)
|
|
6.2
|
|
|||
Effect of exchange rate changes on cash
|
(6.6
|
)
|
|
7.3
|
|
|
(3.3
|
)
|
|||
(Decrease) increase in cash and cash equivalents
|
(3.9
|
)
|
|
57.7
|
|
|
62.7
|
|
|||
Cash and cash equivalents at beginning of year
|
187.9
|
|
|
130.2
|
|
|
67.5
|
|
|||
Cash and cash equivalents at end of year
|
$
|
184.0
|
|
|
$
|
187.9
|
|
|
$
|
130.2
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Supplemental cash flow information:
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Interest
|
$
|
43.1
|
|
|
$
|
56.3
|
|
|
$
|
58.6
|
|
Income taxes, net
|
$
|
29.7
|
|
|
$
|
26.2
|
|
|
$
|
24.6
|
|
Significant non-cash transactions:
|
|
|
|
|
|
||||||
Accrued expenditures for property and equipment at December 31
|
$
|
3.4
|
|
|
$
|
2.5
|
|
|
$
|
5.2
|
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(in millions)
|
||||||
Land
|
|
$
|
24.6
|
|
|
$
|
30.2
|
|
Buildings
|
|
112.7
|
|
|
117.0
|
|
||
Machinery and equipment
|
|
260.3
|
|
|
249.9
|
|
||
|
|
397.6
|
|
|
397.1
|
|
||
Accumulated depreciation
|
|
(156.6
|
)
|
|
(136.3
|
)
|
||
|
|
$
|
241.0
|
|
|
$
|
260.8
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Balance at the beginning of year
|
$
|
9.9
|
|
|
$
|
8.7
|
|
|
$
|
8.3
|
|
Warranty expense
|
13.2
|
|
|
16.6
|
|
|
13.0
|
|
|||
Warranty claims paid
|
(13.8
|
)
|
|
(16.0
|
)
|
|
(12.5
|
)
|
|||
Foreign currency translation adjustments
|
(0.5
|
)
|
|
0.6
|
|
|
(0.1
|
)
|
|||
Balance at the end of year
|
$
|
8.8
|
|
|
$
|
9.9
|
|
|
$
|
8.7
|
|
•
|
Level 1–Valuation is based upon unadjusted quoted prices for identical assets or liabilities in active markets.
|
•
|
Level 2–Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial statements.
|
•
|
Level 3–Valuation is based upon other unobservable inputs that are significant to the fair value measurements.
|
•
|
The Company recorded
$1.1 million
of previously unrecognized deferred tax assets that arose from tax deductions for share-based compensation in excess of compensation expense recognized for financial reporting during years when net operating losses were created. A corresponding increase in the valuation allowance was also recorded and, as a result, there was no impact to the Company's Consolidated Statements of Operations.
|
•
|
The Company elected to change its policy on accounting for forfeitures and now will account for forfeitures as they occur. This policy election resulted in a cumulative-effect adjustment to retained earnings of
$0.8 million
as of January 1, 2017.
|
•
|
The Company will no longer reclassify any excess tax benefits from operating activities to financing activities in the statement of cash flows. The Company elected to apply this change in presentation prospectively and thus prior periods have not been adjusted.
|
•
|
The Company excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of diluted earnings per share for the year ended December 31, 2017. This did not have an impact on our computation of diluted weighted-average common shares outstanding.
|
|
Year Ended December 31, 2018
|
||||||||||||||
|
Advanced
Plastic
Processing
Technologies
|
|
Melt
Delivery
and Control
Systems
|
|
Fluid
Technologies
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Primary geographical markets:
|
|
|
|
|
|
|
|
||||||||
North America
|
$
|
429.6
|
|
|
$
|
142.8
|
|
|
$
|
51.8
|
|
|
$
|
624.2
|
|
Europe
|
67.9
|
|
|
124.1
|
|
|
50.3
|
|
|
242.3
|
|
||||
China
|
17.3
|
|
|
121.2
|
|
|
14.0
|
|
|
152.5
|
|
||||
India
|
114.3
|
|
|
15.1
|
|
|
1.3
|
|
|
130.7
|
|
||||
Other
|
48.1
|
|
|
48.5
|
|
|
11.9
|
|
|
108.5
|
|
||||
Total
|
$
|
677.2
|
|
|
$
|
451.7
|
|
|
$
|
129.3
|
|
|
$
|
1,258.2
|
|
|
|
|
|
|
|
|
|
||||||||
End markets:
|
|
|
|
|
|
|
|
||||||||
Automotive
|
$
|
88.6
|
|
|
$
|
83.2
|
|
|
$
|
29.4
|
|
|
$
|
201.2
|
|
Packaging
|
146.4
|
|
|
43.3
|
|
|
0.2
|
|
|
189.9
|
|
||||
Consumer goods
|
85.2
|
|
|
72.6
|
|
|
5.9
|
|
|
163.7
|
|
||||
Electronics
|
44.6
|
|
|
48.6
|
|
|
6.4
|
|
|
99.6
|
|
||||
Medical
|
25.1
|
|
|
30.3
|
|
|
0.8
|
|
|
56.2
|
|
||||
Construction
|
91.9
|
|
|
1.6
|
|
|
—
|
|
|
93.5
|
|
||||
Custom molders
|
80.2
|
|
|
36.6
|
|
|
—
|
|
|
116.8
|
|
||||
Industrial machinery and other
|
115.2
|
|
|
135.5
|
|
|
86.6
|
|
|
337.3
|
|
||||
Total
|
$
|
677.2
|
|
|
$
|
451.7
|
|
|
$
|
129.3
|
|
|
$
|
1,258.2
|
|
|
Year Ended December 31, 2018
|
||
|
(in millions)
|
||
Balance at beginning of period
|
$
|
62.8
|
|
Additional advanced billings and deposits received
|
368.3
|
|
|
Revenue recognized
|
(381.1
|
)
|
|
Foreign currency translation adjustments and other
|
(5.5
|
)
|
|
Balance at end of period
|
$
|
44.5
|
|
|
Advanced
Plastic
Processing
Technologies
|
|
Melt
Delivery
and Control
Systems
|
|
Fluid
Technologies
|
|
Corporate
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Balance at December 31, 2016
|
$
|
37.0
|
|
|
$
|
424.0
|
|
|
$
|
46.9
|
|
|
$
|
—
|
|
|
$
|
507.9
|
|
Goodwill impairment
|
(1.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
|||||
Foreign currency translation adjustments
|
—
|
|
|
28.6
|
|
|
—
|
|
|
—
|
|
|
28.6
|
|
|||||
Balance at December 31, 2017
|
35.6
|
|
|
452.6
|
|
|
46.9
|
|
|
—
|
|
|
535.1
|
|
|||||
Foreign currency translation adjustments
|
—
|
|
|
(21.3
|
)
|
|
—
|
|
|
—
|
|
|
(21.3
|
)
|
|||||
Balance at December 31, 2018
|
$
|
35.6
|
|
|
$
|
431.3
|
|
|
$
|
46.9
|
|
|
$
|
—
|
|
|
$
|
513.8
|
|
|
Gross
Amount
|
|
Accumulated
Amortization
|
|
Net
Amount
|
||||||
|
(in millions)
|
||||||||||
Intangible assets subject to amortization:
|
|
|
|
|
|
||||||
Trademarks
|
$
|
41.8
|
|
|
$
|
25.4
|
|
|
$
|
16.4
|
|
Technology
|
112.4
|
|
|
54.5
|
|
|
57.9
|
|
|||
Customer relationships
|
227.8
|
|
|
144.0
|
|
|
83.8
|
|
|||
Total intangible assets subject to amortization
|
382.0
|
|
|
223.9
|
|
|
158.1
|
|
|||
Trademarks, not subject to amortization
|
135.7
|
|
|
—
|
|
|
135.7
|
|
|||
Total
|
$
|
517.7
|
|
|
$
|
223.9
|
|
|
$
|
293.8
|
|
|
Gross
Amount
|
|
Accumulated
Amortization
|
|
Net
Amount
|
||||||
|
(in millions)
|
||||||||||
Intangible assets subject to amortization:
|
|
|
|
|
|
||||||
Trademarks
|
$
|
43.3
|
|
|
$
|
22.5
|
|
|
$
|
20.8
|
|
Technology
|
119.7
|
|
|
48.1
|
|
|
71.6
|
|
|||
Customer relationships
|
232.5
|
|
|
134.1
|
|
|
98.4
|
|
|||
Total intangible assets subject to amortization
|
395.5
|
|
|
204.7
|
|
|
190.8
|
|
|||
Trademarks, not subject to amortization
|
141.6
|
|
|
—
|
|
|
141.6
|
|
|||
Total
|
$
|
537.1
|
|
|
$
|
204.7
|
|
|
$
|
332.4
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
United States
|
$
|
(2.7
|
)
|
|
$
|
(0.4
|
)
|
|
$
|
—
|
|
State and local
|
0.3
|
|
|
0.3
|
|
|
0.4
|
|
|||
Foreign
|
29.9
|
|
|
25.7
|
|
|
22.4
|
|
|||
Total current
|
27.5
|
|
|
25.6
|
|
|
22.8
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
United States
|
(3.5
|
)
|
|
(10.9
|
)
|
|
0.5
|
|
|||
State and local
|
(0.3
|
)
|
|
0.1
|
|
|
(0.1
|
)
|
|||
Foreign
|
(3.7
|
)
|
|
2.4
|
|
|
(9.0
|
)
|
|||
Total deferred
|
(7.5
|
)
|
|
(8.4
|
)
|
|
(8.6
|
)
|
|||
Total income tax expense
|
$
|
20.0
|
|
|
$
|
17.2
|
|
|
$
|
14.2
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Earnings (loss) before income taxes:
|
|
|
|
|
|
||||||
United States
|
$
|
(25.5
|
)
|
|
$
|
(62.5
|
)
|
|
$
|
(30.7
|
)
|
Rest of the world
|
87.0
|
|
|
80.8
|
|
|
75.4
|
|
|||
|
$
|
61.5
|
|
|
$
|
18.3
|
|
|
$
|
44.7
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Income tax expense computed at U.S. federal statutory rate
|
$
|
12.9
|
|
|
$
|
6.4
|
|
|
$
|
15.7
|
|
Foreign withholding tax
|
5.4
|
|
|
8.3
|
|
|
3.9
|
|
|||
State and local income taxes, net of federal benefit
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|||
Foreign tax differential
|
2.0
|
|
|
(9.8
|
)
|
|
(9.1
|
)
|
|||
Change in tax rates
|
0.2
|
|
|
(4.6
|
)
|
|
(1.9
|
)
|
|||
Change in valuation allowances
|
(5.3
|
)
|
|
11.2
|
|
|
0.2
|
|
|||
Uncertain tax positions
|
0.8
|
|
|
0.2
|
|
|
0.7
|
|
|||
Dividend elimination, subpart F and special charges
|
6.3
|
|
|
0.4
|
|
|
3.1
|
|
|||
Other permanent differences
|
(0.6
|
)
|
|
(0.6
|
)
|
|
1.5
|
|
|||
Tax credits
|
(1.2
|
)
|
|
(2.5
|
)
|
|
(2.1
|
)
|
|||
Adjust deferred taxes
|
0.1
|
|
|
0.5
|
|
|
0.2
|
|
|||
Share-based compensation
|
(0.1
|
)
|
|
(0.1
|
)
|
|
0.9
|
|
|||
Deferred transition tax
|
—
|
|
|
6.5
|
|
|
—
|
|
|||
Other
|
(0.5
|
)
|
|
1.1
|
|
|
0.9
|
|
|||
Income tax expense
|
$
|
20.0
|
|
|
$
|
17.2
|
|
|
$
|
14.2
|
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(in millions)
|
||||||
Deferred tax assets:
|
|
|
|
|
||||
Net operating loss and other deferred carryforwards
|
|
$
|
73.7
|
|
|
$
|
81.6
|
|
Tax credit carryforwards
|
|
7.9
|
|
|
15.9
|
|
||
Inventories
|
|
6.4
|
|
|
6.3
|
|
||
Employee benefits
|
|
10.9
|
|
|
12.0
|
|
||
Accrued liabilities and other
|
|
11.4
|
|
|
6.4
|
|
||
Total deferred tax assets
|
|
110.3
|
|
|
122.2
|
|
||
Less valuation allowances
|
|
(64.3
|
)
|
|
(79.8
|
)
|
||
Deferred tax assets, net of valuation allowances
|
|
46.0
|
|
|
42.4
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Goodwill and other intangible assets
|
|
62.8
|
|
|
68.1
|
|
||
Property and equipment
|
|
12.8
|
|
|
11.3
|
|
||
Withholdings taxes / undistributed non-U.S. earnings
|
|
7.8
|
|
|
8.4
|
|
||
Total deferred tax liabilities
|
|
83.4
|
|
|
87.8
|
|
||
Net deferred tax liabilities
|
|
$
|
(37.4
|
)
|
|
$
|
(45.4
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Balance as of beginning of year
|
$
|
11.0
|
|
|
$
|
3.2
|
|
|
$
|
18.1
|
|
Additions for tax positions of prior years
|
2.6
|
|
|
—
|
|
|
—
|
|
|||
Additions for tax positions of current year
|
0.6
|
|
|
7.9
|
|
|
0.8
|
|
|||
Reductions due to lapse of statutes and settlements
|
—
|
|
|
(0.1
|
)
|
|
(15.7
|
)
|
|||
Balance as of the end of year
|
$
|
14.2
|
|
|
$
|
11.0
|
|
|
$
|
3.2
|
|
|
|
Tax Years
|
|
|
Tax Jurisdiction:
|
|
|
|
|
United States
|
|
2015 - current
|
|
|
Germany
|
|
2012 - current
|
|
|
China
|
|
2015 - current
|
|
|
The Netherlands
|
|
2015 - current
|
|
|
Canada
|
|
2014 - current
|
|
|
India
|
|
2015 - current
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Principal
|
|
Unamortized Discount and Debt Issuance Costs
|
|
Net
|
|
Principal
|
|
Unamortized Discount and Debt Issuance Costs
|
|
Net
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Senior secured term loan facility due September 2023
|
$
|
837.5
|
|
|
$
|
8.7
|
|
|
$
|
828.8
|
|
|
$
|
937.5
|
|
|
$
|
11.9
|
|
|
$
|
925.6
|
|
Borrowings under other lines of credit
|
5.8
|
|
|
—
|
|
|
5.8
|
|
|
7.4
|
|
|
—
|
|
|
7.4
|
|
||||||
Capital lease obligations and other
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||||
|
843.6
|
|
|
8.7
|
|
|
834.9
|
|
|
945.1
|
|
|
11.9
|
|
|
933.2
|
|
||||||
Less current portion
|
(5.9
|
)
|
|
—
|
|
|
(5.9
|
)
|
|
(16.9
|
)
|
|
(0.1
|
)
|
|
(16.8
|
)
|
||||||
|
$
|
837.7
|
|
|
$
|
8.7
|
|
|
$
|
829.0
|
|
|
$
|
928.2
|
|
|
$
|
11.8
|
|
|
$
|
916.4
|
|
2019
|
$
|
0.1
|
|
2020
|
0.1
|
|
|
2021
|
0.1
|
|
|
2022
|
—
|
|
|
2023
|
837.5
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Service costs
|
$
|
0.4
|
|
|
$
|
0.4
|
|
|
$
|
0.4
|
|
Interest cost
|
0.7
|
|
|
0.7
|
|
|
0.8
|
|
|||
Expected return on plan assets
|
(0.3
|
)
|
|
(0.2
|
)
|
|
(0.3
|
)
|
|||
Amortization of unrecognized losses
|
0.5
|
|
|
0.6
|
|
|
0.2
|
|
|||
Pension expense
|
$
|
1.3
|
|
|
$
|
1.5
|
|
|
$
|
1.1
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Change in benefit obligation:
|
|
|
|
|
|
||||||
Projected benefit obligation at beginning of year
|
$
|
38.6
|
|
|
$
|
34.4
|
|
|
$
|
31.6
|
|
Service cost
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
|||
Interest cost
|
0.7
|
|
|
0.7
|
|
|
0.8
|
|
|||
Benefits paid
|
(1.2
|
)
|
|
(1.0
|
)
|
|
(0.8
|
)
|
|||
Actuarial (gain) loss
|
(2.0
|
)
|
|
(0.4
|
)
|
|
5.3
|
|
|||
Effect of pension plan curtailment
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|||
Foreign currency translation adjustments
|
(1.6
|
)
|
|
4.5
|
|
|
(2.9
|
)
|
|||
Projected benefit obligation at end of year
|
$
|
34.5
|
|
|
$
|
38.6
|
|
|
$
|
34.4
|
|
Change in plans assets:
|
|
|
|
|
|
||||||
Fair value of plan assets at beginning of year
|
$
|
6.9
|
|
|
$
|
5.9
|
|
|
$
|
5.7
|
|
Employer contributions
|
0.1
|
|
|
0.2
|
|
|
0.5
|
|
|||
Actual return on plan assets
|
(0.2
|
)
|
|
0.5
|
|
|
1.0
|
|
|||
Benefits paid
|
(0.4
|
)
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|||
Foreign currency translation adjustments
|
(0.3
|
)
|
|
0.6
|
|
|
(1.2
|
)
|
|||
Fair value of plan assets at end of year
|
$
|
6.1
|
|
|
$
|
6.9
|
|
|
$
|
5.9
|
|
Underfunded status
|
$
|
28.4
|
|
|
$
|
31.7
|
|
|
$
|
28.5
|
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(in millions)
|
||||||
Current accrued pension liabilities
|
|
$
|
0.8
|
|
|
$
|
0.8
|
|
Noncurrent accrued pension liabilities
|
|
27.6
|
|
|
30.9
|
|
||
Accumulated other comprehensive loss
|
|
(5.2
|
)
|
|
(7.2
|
)
|
2019
|
$
|
1.0
|
|
2020
|
1.1
|
|
|
2021
|
1.1
|
|
|
2022
|
1.2
|
|
|
2023
|
1.2
|
|
|
2024 – 2028
|
7.1
|
|
|
Year Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Discount rate
|
1.87
|
%
|
|
1.80
|
%
|
|
2.71
|
%
|
Expected long-term rate of return on plan assets
|
3.68
|
%
|
|
3.69
|
%
|
|
4.72
|
%
|
Rate of expected increase in future compensation levels
|
3.56
|
%
|
|
3.49
|
%
|
|
3.45
|
%
|
|
|
December 31,
|
||||
|
|
2018
|
|
2017
|
||
Discount rate
|
|
1.94
|
%
|
|
1.75
|
%
|
Rate of expected increase in future compensation levels
|
|
3.50
|
%
|
|
3.43
|
%
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(in millions)
|
||||||
Investments with fair values measured at net asset value:
|
|
|
|
|
||||
Common/Collective trusts:
|
|
|
|
|
||||
Equity
|
|
$
|
2.9
|
|
|
$
|
3.4
|
|
Corporate and government bonds
|
|
3.0
|
|
|
3.3
|
|
||
Cash equivalents and other
|
|
0.2
|
|
|
0.2
|
|
||
Total pension assets at fair value
|
|
$
|
6.1
|
|
|
$
|
6.9
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions, except share and per share amounts)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Net earnings applicable to common shareholders
|
$
|
41.5
|
|
|
$
|
1.1
|
|
|
$
|
30.5
|
|
Denominator:
|
|
|
|
|
|
||||||
Denominator for basic EPS—weighted-average common shares
|
69,726,528
|
|
|
68,574,631
|
|
|
67,504,065
|
|
|||
Dilutive effect of stock-based compensation arrangements
|
2,017,119
|
|
|
2,427,276
|
|
|
2,625,997
|
|
|||
Denominator for diluted EPS—adjusted weighted-average common shares
|
71,743,647
|
|
|
71,001,907
|
|
|
70,130,062
|
|
|||
|
|
|
|
|
|
||||||
Basic EPS
|
$
|
0.60
|
|
|
$
|
0.02
|
|
|
$
|
0.45
|
|
Diluted EPS
|
$
|
0.58
|
|
|
$
|
0.02
|
|
|
$
|
0.43
|
|
|
|
Time-Based Options
|
||
|
|
Year Ended December 31,
|
||
|
|
2017
|
|
2016
|
Assumptions:
|
|
|
|
|
Expected term (years)
|
|
6.25
|
|
6.25
|
Expected volatility
|
|
39.50%
|
|
42.00%
|
Risk-free interest rate
|
|
2.17%
|
|
1.59%
|
Expected dividend yield
|
|
—%
|
|
—%
|
|
|
Outstanding
|
|
Exercisable
|
||||||||||||
Exercise Price
|
|
Options
|
|
Weighted-
Average
Remaining
Contractual
Term
(In years)
|
|
Weighted-
Average
Exercise
Price
|
|
Options
|
|
Weighted-
Average
Exercise
Price
|
||||||
$6.64
|
|
2,536,104
|
|
|
4.1
|
|
$
|
6.64
|
|
|
2,512,122
|
|
|
$
|
6.64
|
|
$16.00 - $20.00
|
|
1,128,920
|
|
|
6.5
|
|
19.52
|
|
|
736,324
|
|
|
19.81
|
|
||
Total
|
|
3,665,024
|
|
|
4.8
|
|
$
|
10.61
|
|
|
3,248,446
|
|
|
$
|
9.63
|
|
|
|
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
(In years)
|
|
Aggregate
Intrinsic
Value
(In millions)
|
|||||
Outstanding at December 31, 2017
|
|
4,670,897
|
|
|
$
|
10.76
|
|
|
|
|
|
||
Exercised
|
|
(725,816
|
)
|
|
8.34
|
|
|
|
|
|
|||
Expired
|
|
(74,390
|
)
|
|
19.41
|
|
|
|
|
|
|||
Forfeited
|
|
(205,667
|
)
|
|
18.87
|
|
|
|
|
|
|||
Outstanding at December 31, 2018
|
|
3,665,024
|
|
|
$
|
10.61
|
|
|
4.8
|
|
$
|
13.3
|
|
Exercisable at December 31, 2018
|
|
3,248,446
|
|
|
$
|
9.63
|
|
|
4.5
|
|
$
|
13.2
|
|
Type of instrument:
|
Gain (Loss)
Recognized in OCI
on Derivative
(Effective Portion)
|
|
Gain (Loss)
Reclassified from
Accumulated OCI
into Income
(Effective Portion)
|
||||
|
(in millions)
|
||||||
2018
|
|
|
|
||||
Foreign exchange contract
|
$
|
0.8
|
|
|
$
|
0.6
|
|
Interest rate swaps
|
$
|
3.5
|
|
|
$
|
(0.2
|
)
|
Cross-currency interest rate swaps
|
$
|
(0.3
|
)
|
|
$
|
0.3
|
|
2017:
|
|
|
|
||||
Foreign exchange contract
|
$
|
(0.5
|
)
|
|
$
|
(1.1
|
)
|
Interest rate swaps
|
$
|
0.4
|
|
|
$
|
—
|
|
2016:
|
|
|
|
||||
Foreign exchange contract
|
$
|
0.5
|
|
|
$
|
1.1
|
|
•
|
Level 1–Valuation is based upon unadjusted quoted prices for identical assets or liabilities in active markets.
|
•
|
Level 2–Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial statements.
|
•
|
Level 3–Valuation is based upon other unobservable inputs that are significant to the fair value measurements.
|
|
Balance Sheet Location
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
|
(in millions)
|
||||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps (asset position)
|
Prepaid and other current assets
|
$
|
1.9
|
|
|
$
|
—
|
|
|
$
|
1.9
|
|
|
$
|
—
|
|
Cross-currency interest rate swap (asset position)
|
Prepaid and other current assets
|
$
|
1.9
|
|
|
$
|
—
|
|
|
$
|
1.9
|
|
|
$
|
—
|
|
Interest rate swaps (asset position)
|
Other noncurrent assets
|
$
|
2.5
|
|
|
$
|
—
|
|
|
$
|
2.5
|
|
|
$
|
—
|
|
Cross-currency interest rate swaps (liability position)
|
Other current liabilities
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
Cross-currency interest rate swaps (liability position)
|
Other noncurrent accrued liabilities
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps (asset position)
|
Other noncurrent assets
|
$
|
1.7
|
|
|
$
|
—
|
|
|
$
|
1.7
|
|
|
$
|
—
|
|
Interest rate swaps (liability position)
|
Other current liabilities
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
Foreign
Currency
Translation
|
|
Unrecognized
Pension
Plan Losses
|
|
Derivative
Financial
Instruments
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Balance at December 31, 2015
|
$
|
(104.5
|
)
|
|
$
|
(4.6
|
)
|
|
$
|
—
|
|
|
$
|
(109.1
|
)
|
Other comprehensive (loss) income before reclassifications
|
(45.5
|
)
|
|
(2.9
|
)
|
|
0.5
|
|
|
(47.9
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
0.2
|
|
|
(1.1
|
)
|
|
(0.9
|
)
|
||||
Other comprehensive (loss) income
|
(45.5
|
)
|
|
(2.7
|
)
|
|
(0.6
|
)
|
|
(48.8
|
)
|
||||
Balance at December 31, 2016
|
(150.0
|
)
|
|
(7.3
|
)
|
|
(0.6
|
)
|
|
(157.9
|
)
|
||||
Other comprehensive (loss) income before reclassifications
|
71.7
|
|
|
(0.5
|
)
|
|
(0.2
|
)
|
|
71.0
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
0.6
|
|
|
0.9
|
|
|
1.5
|
|
||||
Other comprehensive income
|
71.7
|
|
|
0.1
|
|
|
0.7
|
|
|
72.5
|
|
||||
Balance at December 31, 2017
|
(78.3
|
)
|
|
(7.2
|
)
|
|
0.1
|
|
|
(85.4
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
(54.2
|
)
|
|
1.2
|
|
|
3.2
|
|
|
(49.8
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
0.8
|
|
|
(0.5
|
)
|
|
0.3
|
|
||||
Other comprehensive (loss) income
|
(54.2
|
)
|
|
2.0
|
|
|
2.7
|
|
|
(49.5
|
)
|
||||
Balance at December 31, 2018
|
$
|
(132.5
|
)
|
|
$
|
(5.2
|
)
|
|
$
|
2.8
|
|
|
$
|
(134.9
|
)
|
|
Classification
|
|
Year Ended December 31,
|
||||||||||
|
of Expense
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
(in millions)
|
||||||||||
Unrealized pension plan obligations:
|
|
|
|
|
|
|
|
||||||
Adjustment of pension plan obligations
|
(a)
|
|
$
|
(0.9
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(0.2
|
)
|
Tax benefit
|
(c)
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|||
Adjustment of pension plan obligations, net of tax
|
|
|
(0.8
|
)
|
|
(0.6
|
)
|
|
(0.2
|
)
|
|||
Derivative financial instruments:
|
|
|
|
|
|
|
|
||||||
Gain (loss) on derivative financial instruments
|
(b)
|
|
0.7
|
|
|
(1.1
|
)
|
|
1.1
|
|
|||
Tax benefit
|
(c)
|
|
(0.2
|
)
|
|
0.2
|
|
|
—
|
|
|||
Gain (loss) on derivative financial instruments, net of tax
|
|
|
0.5
|
|
|
(0.9
|
)
|
|
1.1
|
|
|||
Total reclassifications from accumulated other comprehensive income (loss)
|
|
|
$
|
(0.3
|
)
|
|
$
|
(1.5
|
)
|
|
$
|
0.9
|
|
(a)
|
Amount is included in the calculation of pension cost within other non-operating expenses in the Company's Consolidated Statements of Operations.
|
(b)
|
Amount is included in cost of sales and loss (gain) on currency translation in the Company's Consolidated Statements of Operations.
|
(c)
|
These amounts are included in income tax expense in the Company's Consolidated Statements of Operations.
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(in millions)
|
||||||
Advanced Plastic Processing Technologies
|
$
|
482.3
|
|
|
$
|
524.8
|
|
Melt Delivery and Control Systems
|
1,030.6
|
|
|
1,104.5
|
|
||
Fluid Technologies
|
145.3
|
|
|
149.0
|
|
||
Corporate
|
74.3
|
|
|
80.5
|
|
||
Total assets
|
$
|
1,732.5
|
|
|
$
|
1,858.8
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(in millions)
|
||||||
Advanced Plastic Processing Technologies
|
$
|
107.4
|
|
|
$
|
123.5
|
|
Melt Delivery and Control Systems
|
109.6
|
|
|
113.3
|
|
||
Fluid Technologies
|
17.7
|
|
|
17.8
|
|
||
Corporate
|
6.3
|
|
|
6.2
|
|
||
Total long-lived assets
|
$
|
241.0
|
|
|
$
|
260.8
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Net sales to external customers:
|
|
|
|
|
|
||||||
Advanced Plastic Processing Technologies
|
$
|
677.2
|
|
|
$
|
689.1
|
|
|
$
|
663.9
|
|
Melt Delivery and Control Systems
|
451.7
|
|
|
423.9
|
|
|
389.9
|
|
|||
Fluid Technologies
|
129.3
|
|
|
121.2
|
|
|
112.9
|
|
|||
Total net sales to external customers
|
$
|
1,258.2
|
|
|
$
|
1,234.2
|
|
|
$
|
1,166.7
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Operating earnings (loss):
|
|
|
|
|
|
||||||
Advanced Plastic Processing Technologies
|
$
|
28.6
|
|
|
$
|
11.7
|
|
|
$
|
35.6
|
|
Melt Delivery and Control Systems
|
95.8
|
|
|
102.5
|
|
|
91.4
|
|
|||
Fluid Technologies
|
24.6
|
|
|
20.7
|
|
|
17.4
|
|
|||
Corporate
|
(42.4
|
)
|
|
(45.8
|
)
|
|
(38.1
|
)
|
|||
Total operating earnings
|
$
|
106.6
|
|
|
$
|
89.1
|
|
|
$
|
106.3
|
|
Capital expenditures:
|
|
|
|
|
|
||||||
Advanced Plastic Processing Technologies
|
$
|
11.8
|
|
|
$
|
14.1
|
|
|
$
|
30.4
|
|
Melt Delivery and Control Systems
|
15.5
|
|
|
23.0
|
|
|
24.4
|
|
|||
Fluid Technologies
|
2.1
|
|
|
2.1
|
|
|
1.8
|
|
|||
Corporate
|
1.9
|
|
|
0.6
|
|
|
0.7
|
|
|||
Total capital expenditures
|
$
|
31.3
|
|
|
$
|
39.8
|
|
|
$
|
57.3
|
|
Depreciation and amortization:
|
|
|
|
|
|
||||||
Advanced Plastic Processing Technologies
|
$
|
16.9
|
|
|
$
|
19.1
|
|
|
$
|
20.3
|
|
Melt Delivery and Control Systems
|
33.4
|
|
|
33.5
|
|
|
33.2
|
|
|||
Fluid Technologies
|
4.4
|
|
|
4.9
|
|
|
5.5
|
|
|||
Corporate
|
1.4
|
|
|
1.1
|
|
|
0.9
|
|
|||
Total depreciation and amortization
|
$
|
56.1
|
|
|
$
|
58.6
|
|
|
$
|
59.9
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Net sales to external customers:
|
|
|
|
|
|
||||||
United States
|
$
|
537.2
|
|
|
$
|
532.6
|
|
|
$
|
546.1
|
|
China
|
152.6
|
|
|
140.1
|
|
|
111.3
|
|
|||
India
|
130.6
|
|
|
115.3
|
|
|
99.7
|
|
|||
Rest of World
|
437.8
|
|
|
446.2
|
|
|
409.6
|
|
|||
Total net sales to external customers
|
$
|
1,258.2
|
|
|
$
|
1,234.2
|
|
|
$
|
1,166.7
|
|
|
December 31,
2018 |
|
December 31, 2017
|
||||
|
(in millions)
|
||||||
Long-lived assets:
|
|
|
|
||||
United States
|
$
|
67.5
|
|
|
$
|
67.9
|
|
China
|
48.4
|
|
|
48.1
|
|
||
India
|
37.9
|
|
|
27.5
|
|
||
Czech Republic
|
33.7
|
|
|
48.2
|
|
||
Canada
|
29.0
|
|
|
31.0
|
|
||
Rest of World
|
24.5
|
|
|
38.1
|
|
||
Total long-lived assets
|
$
|
241.0
|
|
|
$
|
260.8
|
|
|
2018 Quarter Ended
|
||||||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Full Year
|
||||||||||
|
(in millions, except per share data)
|
||||||||||||||||||
Net sales
|
$
|
310.4
|
|
|
$
|
328.1
|
|
|
$
|
308.3
|
|
|
$
|
311.4
|
|
|
$
|
1,258.2
|
|
Manufacturing margins
|
$
|
103.9
|
|
|
$
|
112.2
|
|
|
$
|
102.6
|
|
|
$
|
83.9
|
|
|
$
|
402.6
|
|
Operating earnings
|
$
|
23.1
|
|
|
$
|
35.2
|
|
|
$
|
33.2
|
|
|
$
|
15.1
|
|
|
$
|
106.6
|
|
Net earnings
|
$
|
5.9
|
|
|
$
|
14.9
|
|
|
$
|
14.9
|
|
|
$
|
5.8
|
|
|
$
|
41.5
|
|
Basic EPS
|
$
|
0.09
|
|
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
$
|
0.08
|
|
|
$
|
0.60
|
|
Diluted EPS
|
$
|
0.08
|
|
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
$
|
0.08
|
|
|
$
|
0.58
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
2017 Quarter Ended
|
||||||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Full Year
|
||||||||||
|
(in millions, except per share data)
|
||||||||||||||||||
Net sales
|
$
|
285.4
|
|
|
$
|
309.2
|
|
|
$
|
314.7
|
|
|
$
|
324.9
|
|
|
$
|
1,234.2
|
|
Manufacturing margins
|
$
|
93.8
|
|
|
$
|
103.8
|
|
|
$
|
98.7
|
|
|
$
|
85.6
|
|
|
$
|
381.9
|
|
Operating earnings
|
$
|
20.0
|
|
|
$
|
28.9
|
|
|
$
|
29.8
|
|
|
$
|
10.4
|
|
|
$
|
89.1
|
|
Net (loss) earnings
|
$
|
(24.6
|
)
|
|
$
|
10.1
|
|
|
$
|
12.3
|
|
|
$
|
3.3
|
|
|
$
|
1.1
|
|
Basic EPS
|
$
|
(0.36
|
)
|
|
$
|
0.15
|
|
|
$
|
0.18
|
|
|
$
|
0.05
|
|
|
$
|
0.02
|
|
Diluted EPS
|
$
|
(0.36
|
)
|
|
$
|
0.14
|
|
|
$
|
0.17
|
|
|
$
|
0.05
|
|
|
$
|
0.02
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
|
|||
|
DISCLOSURES
|
•
|
pertain to the maintenance of records that in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
•
|
provide reasonable assurance that unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements are prevented or detected timely.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
|
|||
|
STOCKHOLDER MATTERS
|
|
|
|
|
Additions
|
|
|
|
|
||||||||||||
Description
|
|
Balance at
Beginning
of Period
|
|
Charged to
Costs and
Expenses
|
|
Acquired
Obligations
|
|
Deductions
|
|
Balance at
End of
Period
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
Valuation allowance for deferred tax assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2018
|
|
$
|
79.8
|
|
|
$
|
6.1
|
|
|
$
|
—
|
|
|
$
|
(21.6
|
)
|
|
$
|
64.3
|
|
Year Ended December 31, 2017
|
|
77.7
|
|
|
26.8
|
|
|
—
|
|
|
(24.7
|
)
|
|
79.8
|
|
|||||
Year Ended December 31, 2016
|
|
70.0
|
|
|
20.6
|
|
|
—
|
|
|
(12.9
|
)
|
|
77.7
|
|
|
Milacron Holdings Corp.
|
|
|
(Registrant)
|
|
|
|
|
Date: February 28, 2019
|
By:
|
/s/ BRUCE CHALMERS
|
|
|
Bruce Chalmers
|
|
|
Chief Financial Officer
|
Signatures
|
|
Capacity
|
|
|
|
/s/ Thomas Goeke
|
|
President, Chief Executive Officer and Director
|
Thomas Goeke
|
|
(Principal Executive Officer)
|
|
|
|
/s/ Bruce Chalmers
|
|
Chief Financial Officer
|
Bruce Chalmers
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
/s/ Ira Boots
|
|
Director
|
Ira Boots
|
|
|
|
|
|
/s/ Timothy Walsh
|
|
Director
|
Timothy Walsh
|
|
|
|
|
|
/s/ Jim Gentilcore
|
|
Director
|
Jim Gentilcore
|
|
|
|
|
|
/s/ Waters Davis
|
|
Director
|
Waters Davis
|
|
|
|
|
|
/s/ Jim Kratochvil
|
|
Director
|
Jim Kratochvil
|
|
|
|
|
|
/s/ Rebecca Lee Steinfort
|
|
Director
|
Rebecca Lee Steinfort
|
|
|
|
|
|
/s/ David Reeder
|
|
Director
|
David Reeder
|
|
|
|
|
|
/s/ Gregory Gluchowski Jr.
|
|
Director
|
Gregory Gluchowski Jr.
|
|
|
|
|
|
/s/ Timothy Crow
|
|
Director
|
Timothy Crow
|
|
|
1.
|
Grant of Performance Stock Unit Award
.
|
(a)
|
The Company hereby grants to the Participant a target award of [
__________]
Performance Stock Units (“
Target Award
”), on the terms and conditions set forth in the Plan and this Agreement, subject to adjustment as forth in the Plan. As set forth on
Exhibit A
, Fifty percent (50%) of the Target Award will vest based upon the Company’s achievement of certain Adjusted EBITDA Margin performance vesting goals and fifty percent (50%) of the Target Award will vest based will upon the Company’s achievement of certain Free Cash Flow Conversion performance vesting goals (collectively, the “
Performance Targets
”), in each case over the Performance Period.
|
(b)
|
Except as otherwise set forth in the Plan or this Agreement, the grant of Performance Stock Units represents the right to receive a percentage of the Target Award upon vesting of such Performance Stock Units over the Performance Period upon the Company’s achievement of the Performance Targets (as set forth on
Exhibit A
), with each Performance Stock Unit that vests representing the right to receive one (1) Share upon vesting thereof. The “
Performance Period
” means the three-year period beginning on January 1, 2018 and ending on December 31, 2020.
|
2.
|
Vesting of Performance Stock Units
.
|
(a)
|
Vesting
. Subject to the Participant’s continued Service through the last day of the Performance Period (the “
Vesting Date
”) and except as otherwise provided in
Section 2(b)
and
Section 2(c)
, the Performance Stock Units will be eligible to vest based on the Company’s achievement of the Performance Targets over the Performance Period, as set forth on
Exhibit A
attached hereto. To the extent the Performance Targets for the Performance Period are not achieved at the applicable threshold performance levels set forth on
Exhibit A
, the Participant shall forfeit, immediately and without consideration, all or any portion of the Performance Stock Units that failed to vest for such Performance Period.
|
(b)
|
Change in Control
. In the event of a Change in Control, the Target Award will convert to a number of time-based vesting restricted stock units at the target performance level that vest on the last day of the Performance Period, subject to the Participant’s continued Service through the last day of the Performance Period, except as otherwise provided in
Section 2(c)(ii)
; provided, however, that the Committee may, in its sole discretion, accelerate the vesting and settlement of the Target Award, at no less than the target performance level, in accordance with the terms and conditions of the Plan. Notwithstanding the foregoing, to the extent that the Performance Stock Units constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code (“
Nonqualified Deferred Compensation
”) and the Committee accelerates the vesting of the Target Award as set forth herein, settlement of such vested Target Award shall be made in accordance with
Section 3(a)
.
|
(c)
|
Termination of Service
.
|
(i)
|
Except as otherwise provided in
Section 2(c)(ii)
, the Participant shall forfeit, immediately and without consideration, all Performance Stock Units upon a termination of Service for any reason that occurs prior to the last day of the Performance Period. Without limiting the generality of the foregoing, the Performance Stock Units and the Shares (and any resulting proceeds) will continue to be subject to
Section 13
of the Plan.
|
(ii)
|
Any Performance Share Units that have not previously become vested during the Performance Period will fully vest upon a termination of the Participant’s Service without Cause or for Good Reason occurring upon or within 12 months following a Change in Control. The vesting of the Performance Stock Units pursuant to the immediately preceding sentence is conditioned, however, upon the Participant’s signing a release of claims in a form provided by the Company (a “
Release
”), which Release must be executed, returned and, to the extent applicable, no longer subject to revocation, within 30 days following the Participant’s termination of Service (the date such Release has been executed, returned and, to the extent applicable, no longer subject to revocation, the “
Release Effective Date
”). Notwithstanding anything to the contrary contained in this Agreement, (i) the “Vesting Date” shall be the
|
(iii)
|
Good Reason Defined
. If a Participant has an effective employment agreement, severance agreement, service agreement or other similar agreement with the Company or a Subsidiary that defines “Good Reason” or a like term, Good Reason shall have the meaning set forth in such agreement at the time of the Participant’s termination of Service or, in the absence of such definition, Good Reason means the
termination of S
ervice
by the Participant because of the occurrence of any of the following events without the Participant’s written consent: (i) a material reduction of the Participant’s authorities, duties or responsibilities from those in effect immediately prior to the Change in Control; provided, however, that any change in title, reporting relationship or de minimis reduction in such authorities, duties or responsibilities resulting merely from the acquisition of the Company and its existence as a subsidiary or division of another entity shall not constitute Good Reason; (ii) a material reduction in the Participant’s base salary or target annual bonus opportunity, in each case, as compared to the value of each immediately prior to the Change in Control; or (iii) the Participant is required to relocate to a different principal place of business that is located more than one hundred (100) miles away from the Participant’s primary residence as of immediately prior to the Change in Control. In the event of existence of grounds that would constitute Good Reason as contemplated in subsections (i), (ii) and (iii) above, such grounds shall constitute Good Reason only if the Participant provides written notice to the Company of the facts which constitute the grounds within 90 days following the initial existence of the grounds and the Company thereafter fails to cure such grounds within 30 business days following its receipt of such notice (or, in the event that such grounds cannot be corrected within such 30 day period, the Company has not taken all reasonable steps within such 30 day period to correct such grounds as promptly as practicable thereafter).
|
3.
|
Payment
|
(a)
|
Settlement
. The Company shall deliver to the Participant within 30 days following the Vesting Date a number of Shares equal to the aggregate number of Performance Stock Units that vested as of such date. No fractional Shares shall be delivered; the Company shall pay cash in respect of any fractional Shares. The Company may deliver such shares either through book entry accounts held by, or in the name of, the Participant or cause to be issued a certificate or certificates representing the number of Shares to be issued in respect of the Performance Stock Units, registered in the name of the Participant.
|
(b)
|
Withholding Requirements
. The Company will have the power and the right to deduct or withhold automatically from any Shares deliverable under this Agreement, or to require the Participant or the Participant’s representative to remit to the Company, the amount necessary to satisfy all applicable federal, state, and/or local taxes and any non-U.S. taxes, including, without limitation, income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Participant’s participation in the Plan and legally applicable to Participant (“
Tax-Related Items
”) required to be withheld with respect to any taxable event arising as a result of this Agreement, as determined by the Company using rates of up to the maximum applicable rates in the Participant’s jurisdiction. Alternatively, or in addition to the foregoing withholding methods, the Company or the Employer may satisfy applicable Tax-Related Items withholding obligations by (i) withholding from the Participant’s wages or other cash compensation, or (ii) withholding from proceeds of the sale of Shares acquired upon vesting/settlement of the Performance Stock Units, either through a voluntary sale or through a mandatory sale arranged by the Company (on the Participant’s behalf pursuant to this authorization). Notwithstanding the foregoing, if the Participant is subject to Section 16 of the Exchange Act, any obligation to withhold Tax-Related Items will be satisfied by automatic withholding from any Shares deliverable under this Agreement as provided herein, unless otherwise determined by the Board or Committee.
|
(c)
|
Tax Acknowledgement
. The Participant acknowledges that, regardless of any action taken by the Company or, if different, the Participant’s employer (the “
Employer
”) the ultimate liability for all Tax-Related Items is and remains the Participant’s responsibility and may exceed the amount, if any, withheld by the Company or the Employer. The Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Performance Stock Units, including, but not limited to, the grant, vesting or settlement of the Performance Stock Units, the subsequent sale of Shares acquired pursuant to such settlement and the receipt of any dividends, and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Performance Stock Units to reduce or eliminate the Participant’s liability for Tax-Related Items or achieve any particular tax result. If the Participant is subject to Tax-Related Items in more than
|
4.
|
Adjustment of Shares
. In the event of any change with respect to the outstanding shares of Common Stock contemplated by Section 4.5 of the Plan, the Performance Stock Units may be adjusted in accordance with Section 4.5 of the Plan.
|
5.
|
Restrictive Covenant Agreement
. The Participant agrees to be bound by the Restrictive Covenant Agreement attached hereto as
Exhibit B
(the “
Restrictive Covenant Agreement
”) in consideration of: (a) the Performance Stock Units granted herein; (b) the Participant’s ongoing employment by the Company or a Subsidiary; (c) the importance of protecting the confidential information of the Company, its Subsidiaries and its affiliates and their other legitimate interests, including without limitation the valuable confidential information and goodwill that they have developed or acquired; (d) the Participant being granted access to trade secrets and other confidential information of the Company, its Subsidiaries and its affiliates; and (e) other good and valuable consideration.
|
6.
|
Miscellaneous Provisions
|
(a)
|
Securities Laws Requirements
. No Shares will be issued or transferred pursuant to this Agreement unless and until all then applicable requirements imposed by federal and state securities and other laws, rules and regulations and by any regulatory agencies having jurisdiction, and by any exchanges upon which the Shares may be listed, have been fully met. As a condition precedent to the issuance of Shares pursuant to this Agreement, the Company may require the Participant to take any reasonable action to meet those requirements. The Committee may impose such conditions on any Shares issuable pursuant to this Agreement as it may deem advisable, including, without limitation, restrictions under the Securities Act, as amended, under the requirements of any exchange upon which shares of the same class are then listed and under any blue sky or other securities laws applicable to those Shares.
|
(b)
|
Rights of a Shareholder of the Company
. Prior to settlement of the Performance Stock Units, neither the Participant nor the Participant’s representative will have any rights as a shareholder of the Company with respect to any Shares underlying the Performance Stock Units and the Participant will not receive payment of, or credit for, dividends or dividend equivalents with respect to any Shares underlying the Performance Stock Units.
|
(c)
|
Transfer Restrictions
. The Shares delivered hereunder will be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which such shares are listed, any applicable federal or state laws and any agreement with, or policy of, the Company
|
(d)
|
No Right to Continued Service
. Nothing in this Agreement or the Plan confers upon the Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Subsidiary retaining the Participant) or of the Participant, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without Cause.
|
(e)
|
Notification
. Any notification required by the terms of this Agreement will be given by the Participant (i) in a writing addressed to the Company at its principal executive office and will be deemed effective upon actual receipt when delivered by personal delivery or by registered or certified mail, with postage and fees prepaid, or (ii) by electronic transmission to the Company’s e-mail address of the Company’s General Counsel and will be deemed effective upon actual receipt. Any notification required by the terms of this Agreement will be given by the Company (x) in a writing addressed to the address that the Participant most recently provided to the Company and will be deemed effective upon personal delivery or within three (3) days of deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid, or (y) by facsimile or electronic transmission to the Participant’s primary work fax number or e-mail address (as applicable) and will be deemed effective upon confirmation of receipt by the sender of such transmission.
|
(f)
|
Entire Agreement
. This Agreement and the Plan constitute the entire agreement between the parties hereto with regard to the subject matter of this Agreement. This Agreement and the Plan supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) that relate to the subject matter of this Agreement.
|
(g)
|
Waiver
. No waiver of any breach or condition of this Agreement will be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature.
|
(h)
|
Successors and Assigns
. The provisions of this Agreement will inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon the Participant, the Participant’s executor, personal representative(s), distributees, administrator, permitted transferees, permitted assignees, beneficiaries, and legatee(s), as applicable, whether or not any such person will have become a party to this Agreement and have agreed in writing to be joined herein and be bound by the terms hereof.
|
(i)
|
Severability
. The provisions of this Agreement are severable, and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, then the remaining provisions will nevertheless be binding and enforceable.
|
(j)
|
Amendment
. Except as otherwise provided in the Plan, this Agreement will not be amended unless the amendment is agreed to in writing by both the Participant and the Company.
|
(k)
|
Choice of Law; Jurisdiction
. This Agreement and all claims, causes of action or proceedings (whether in contract, in tort, at law or otherwise) that may be based upon, arise out of or relate to this Agreement will be governed by the internal laws of the State of Delaware, excluding any conflicts or choice-of-law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. The Participant and each party to this Agreement agrees that it will bring all claims, causes of action and proceedings (whether in contract, in tort, at law or otherwise) that may be based upon, arise out of or be related to the Plan and this Agreement exclusively in the Delaware Court of Chancery or, in the event (but only in the event) that such court does not have subject matter jurisdiction over such claim, cause of action or proceeding, exclusively in the United States District Court for the District of Delaware (the “
Chosen Court
”), and hereby (i) irrevocably submits to the exclusive jurisdiction of the Chosen Court, (ii) waives any objection to laying venue in any such proceeding in the Chosen Court, (iii) waives any objection that the Chosen Court is an inconvenient forum or does not have jurisdiction over any party and (iv) agrees that service of process upon such party in any such claim or cause of action will be effective if notice is given in accordance with this Agreement.
|
(l)
|
Code Section 409A Compliance
. To the extent applicable, it is intended that the Performance Stock Units comply with, or be exempt from, the requirements of Section 409A of the Code and the Treasury Regulations and other guidance issued thereunder, and in accordance with Section 15.8 of the Plan, this Agreement shall be interpreted and applied by the Committee in a manner consistent with this intent in order to avoid the imposition of any additional tax under Section 409A of the Code. Without limiting the foregoing, to the extent the Performance Stock Units constitute Nonqualified Deferred Compensation: (i) no settlement of the Performance Stock Units shall be made upon the Participant’s termination of Service unless and until such termination is also a “separation from service,” as determined in accordance with Section 409A of the Code and (ii) if a Participant is a “specified employee” as defined in Section 409A of the Code at the time of such “separation from service” with respect to an Award, then solely to the extent necessary to avoid the imposition of any additional tax under Section 409A of the Code, settlement of the Performance Stock Units shall be deferred until the date that is six months plus one day following the date of the Participant’s separation of service or, if earlier, the Participant’s death (or such other period as required to comply with Section 409A) (the “
Specified Employee Delay
”).
|
(m)
|
Signature in Counterparts
. This Agreement may be signed in counterparts, manually or electronically, each of which will be an original, with the same effect as if the signatures to each were upon the same instrument.
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(n)
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Acceptance
. The Participant hereby acknowledges receipt of a copy of the Plan and this Agreement. The Participant has read and understands the terms and provisions of the Plan and this Agreement, and accepts the Performance Stock Units subject to all of the terms and conditions of the Plan and this Agreement. In the event of a conflict between any term or provision contained in this Agreement and a term or provision of the Plan, the applicable term and provision of the Plan will govern and prevail.
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I.
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Target Award
. The actual number of Performance Stock Units that are eligible to vest in accordance with
Section 2(a)
of the Agreement shall be based on the attainment level of the Performance Targets, in accordance with the following formula:
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II.
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Performance Targets.
The Performance Targets applicable to the Performance Stock Units consist of (A) Adjusted EBITDA Margin (as defined in
Section III
below) and (B) Free Cash Flow Conversion (as defined in
Section III
below), in each case measured for each year in the Performance Period and calculated on a straight-line average basis over such three years (
i.e
., 2018, 2019 and 2020).
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Adjusted EBITDA Margin (Three-Year Average over Performance Period)
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Adjusted EBITDA Margin Attainment Factor
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Threshold Performance:
18.6%
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50%
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Target Performance:
19.6%
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100%
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Stretch Performance:
20.6%
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200%
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Free Cash Flow Conversion (Three-Year Average over Performance Period)
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Free Cash Flow Conversion Attainment Factor
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Threshold Performance:
38.3%
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50%
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Target Performance:
43.3%
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100%
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Stretch Performance:
47.3%
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200%
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III.
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Performance Criteria
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Milacron Holdings Corp.
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By:
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Name:
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Thomas J. Goeke
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Title:
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President and Chief Executive Officer
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Signature:
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Name:
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Subsidiary
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State or Other Jurisdiction of Formation
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Cimcool Europe B.V.
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The Netherlands
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Cimcool Industrial Prod. (Shanghai) Co., Ltd
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China
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Cimcool Industrial Products B.V.
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The Netherlands
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Cimcool Industrial Products LLC
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Delaware
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Cimcool Korea, Inc.
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Korea
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Cimcool Polska Sp. z o.o.
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Poland
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D-M-E (China) Ltd.
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Hong Kong
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DME (India) Private Limited
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India
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D-M-E Company LLC
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Delaware
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DME Czech Republic s.r.o.
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Czech Republic
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D-M-E Europe CVBA
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Belgium
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D-M-E Normalien GmbH
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Germany
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D-M-E Mold Technology (Shenzhen) Company Ltd.
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China
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Ferromatik France SAS
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France
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Ferromatik Milacron AG
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Switzerland
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Ferromatik Milacron C.A.
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Venezuela
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Ferromatik Milacron GmbH
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Germany
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Milacron B.V.
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The Netherlands
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Milacron Canada Corp.
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Ontario, Canada
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Milacron Czech Republic S.P.O.L., s.r.o.
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Czech Republic
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Milacron Dutch Cooperatief U.A.
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The Netherlands
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Milacron India Private Limited
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India
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Milacron Investments B.V.
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The Netherlands
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Milacron LLC
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Delaware
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Milacron Marketing (Shanghai) Co. Ltd.
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China
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Milacron Marketing Company LLC
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Delaware
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Milacron Mexicana Sales S.A. de C.V.
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Mexico
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Milacron Mexico Plastics Services S.A. de C.V.
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Mexico
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Milacron Mold-Masters Sistemas de Processamento de Plasticos Ltda.
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Brazil
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Milacron Nederland B.V.
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The Netherlands
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Milacron Netherlands Holdings LLC
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Delaware
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Milacron Plastics Holding GmbH
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Germany
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Milacron Plastics Machinery (Jiangyin) Ltd.
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China
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Milacron Plastics Technologies Group LLC
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Delaware
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Milacron Services, S.A. de C.V.
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Mexico
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Milacron U.K. Ltd.
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England
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Mold-Masters (2007) Limited
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Canada
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Mold-Masters (Kunshan) Co Ltd
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China
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Mold-Masters (Shanghai) International Trade Co Ltd
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China
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Mold-Masters (U.K.) Ltd.
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England
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Mold-Masters Betelligungsverwaltung
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Austria
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Mold-Masters Europa GmbH
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Germany
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Mold-Masters France SAS
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France
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Mold-Masters Handelgesellschaft mbH
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Austria
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Mold-Masters Hong Kong Acquisitions Limited
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Hong Kong
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Mold-Masters Kabushiki Kaisha
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Japan
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Mold-Masters Korea Ltd
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Korea
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Mold-Masters Luxembourg Acquisitions SARL
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Luxembourg
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Mold-Masters Luxembourg Holdings SARL
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Luxembourg
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Mold-Masters Singapore (MMS) Pte Ltd
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Singapore
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Tirad, s.r.o.
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Czech Republic
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Uniloy Milacron Germany GmbH
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Germany
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Uniloy Milacron S.R.L.
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Italy
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VSI International N.V.
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Belgium
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(1)
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Registration Statement (Form S-8 No. 333-205208) pertaining to the Amended and Restated 2012 Equity Incentive Plan and 2015 Equity Incentive Plan of Milacron Holdings Corp.,
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(2)
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Registration Statement (Form S-8 No. 333-206393) pertaining to the Amended and Restated 2012 Equity Incentive Plan and 2015 Equity Incentive Plan of Milacron Holdings Corp.,
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(3)
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Registration Statement (Form S-3 ASR No. 333-219831) of Milacron Holdings Corp.,
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(4)
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Registration Statement (Form S-8 No. 333-226542) pertaining to the Amended and Restated 2015 Equity Incentive Plan of Milacron Holdings Corp.;
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Date: February 28, 2019
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By:
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/s/ THOMAS GOEKE
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Thomas Goeke
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President and Chief Executive Officer
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Date: February 28, 2019
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By:
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/s/ BRUCE CHALMERS
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Bruce Chalmers
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Chief Financial Officer
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Date: February 28, 2019
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By:
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/s/ THOMAS GOEKE
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Thomas Goeke
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President and Chief Executive Officer
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Date: February 28, 2019
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By:
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/s/ BRUCE CHALMERS
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Bruce Chalmers
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Chief Financial Officer
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