| Segments
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Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Stock-based compensation expense | $ | 905 | $ | 1,109 | $ | 5,549 | $ | 3,746 |
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(dollars in thousands) | September 30, 2015 | December 31, 2014 | |||||
Accounts receivable: | |||||||
Trade receivables | $ | 92,790 | $ | 87,700 | |||
Other receivables | 3,948 | 3,406 | |||||
Total accounts receivable, less allowances of $6,042 and $5,586 | $ | 96,738 | $ | 91,106 | |||
Inventories: | |||||||
Finished goods | $ | 181,219 | $ | 151,698 | |||
Work in process | 821 | 1,153 | |||||
Raw materials | 5,143 | 4,708 | |||||
Repair parts | 10,709 | 10,840 | |||||
Operating supplies | 1,223 | 1,429 | |||||
Total inventories, less loss provisions of $4,459 and $4,370 | $ | 199,115 | $ | 169,828 | |||
Prepaid and other current assets | |||||||
Value added tax | $ | 13,486 | $ | 13,512 | |||
Prepaid expenses | 7,085 | 6,947 | |||||
Deferred income taxes | 4,885 | 4,888 | |||||
Prepaid income taxes | 3,571 | 1,951 | |||||
Derivative asset | 250 | 403 | |||||
Total prepaid and other current assets | $ | 29,277 | $ | 27,701 | |||
Other assets: | |||||||
Deposits | $ | 1,272 | $ | 890 | |||
Finance fees — net of amortization | 6,052 | 6,958 | |||||
Other assets | 6,248 | 6,128 | |||||
Total other assets | $ | 13,572 | $ | 13,976 | |||
Accrued liabilities: | |||||||
Accrued incentives | $ | 29,149 | $ | 17,648 | |||
Workers compensation | 6,358 | 7,121 | |||||
Medical liabilities | 4,425 | 3,887 | |||||
Interest | 3,805 | 3,876 | |||||
Commissions payable | 1,019 | 1,068 | |||||
Withholdings and other non-income tax accruals | 2,975 | 3,078 | |||||
Other accrued liabilities | 7,116 | 5,960 | |||||
Total accrued liabilities | $ | 54,847 | $ | 42,638 | |||
Other long-term liabilities: | |||||||
Deferred liability | $ | 7,859 | $ | 8,081 | |||
Derivative liability | 1,746 | 215 | |||||
Environmental obligation (see note 14) | 1,085 | 1,000 | |||||
Other long-term liabilities | 4,889 | 3,860 | |||||
Total other long-term liabilities | $ | 15,579 | $ | 13,156 |
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• | the entry into an amended and restated credit agreement with respect to our ABL Facility; |
• | the issuance of $440.0 million in aggregate principal amount of Senior Secured Term Loan B facility of Libbey Glass due 2021 (Term Loan B); and |
• | the repurchase and cancellation of all Libbey Glass's then outstanding $405.0 million in aggregate principal amount Senior Secured Notes ($360.0 million on April 9, 2014 and $45.0 million on May 9, 2014). |
(dollars in thousands) | Interest Rate | Maturity Date | September 30, 2015 | December 31, 2014 | ||||||
Borrowings under ABL Facility | floating | April 9, 2019 | $ | 7,000 | $ | — | ||||
Term Loan B | floating | April 9, 2021 | 434,500 | 437,800 | ||||||
RMB Working Capital Loan | 6.78% | July, 2015 | — | 3,258 | ||||||
AICEP Loan | 0.00% | January, 2016 to July 30, 2018 | 3,559 | 3,846 | ||||||
Total borrowings | 445,059 | 444,904 | ||||||||
Less — unamortized discount | 862 | 982 | ||||||||
Total borrowings — net | 444,197 | 443,922 | ||||||||
Less — long term debt due within one year | 4,758 | 7,658 | ||||||||
Total long-term portion of borrowings — net | $ | 439,439 | $ | 436,264 |
• | a first-priority security interest in substantially all of the existing and future personal property of Libbey Glass and its domestic subsidiaries (ABL Priority Collateral); |
• | a first-priority security interest in: |
• | 100 percent of the stock of Libbey Glass and 100 percent of the stock of substantially all of Libbey Glass’s present and future direct and indirect domestic subsidiaries; |
• | 100 percent of the non-voting stock of substantially all of Libbey Glass’s first-tier present and future foreign subsidiaries; and |
• | 65 percent of the voting stock of substantially all of Libbey Glass’s first-tier present and future foreign subsidiaries |
• | a first priority security interest in substantially all proceeds and products of the property and assets described above; and |
• | a second-priority security interest in substantially all of the owned real property, equipment and fixtures in the United States of Libbey Glass and its domestic subsidiaries, subject to certain exceptions and permitted liens (Term Priority Collateral). |
• | a first-priority lien on substantially all of the existing and future real and personal property of Libbey Europe and its Dutch subsidiaries; and |
• | a first-priority security interest in: |
• | 100 percent of the stock of Libbey Europe and 100 percent of the stock of substantially all of the Dutch subsidiaries; and |
• | 100 percent (or a lesser percentage in certain circumstances) of the outstanding stock issued by the first-tier foreign subsidiaries of Libbey Europe and its Dutch subsidiaries. |
• | incur, assume or guarantee additional indebtedness; |
• | pay dividends, make certain investments or other restricted payments; |
• | create liens; |
• | enter into affiliate transactions; |
• | merge or consolidate, or otherwise dispose of all or substantially all the assets of Libbey Glass and the Guarantors; and |
• | transfer or sell assets. |
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Three months ended September 30, | U.S. Plans | Non-U.S. Plans | Total | ||||||||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Service cost | $ | 1,091 | $ | 916 | $ | 741 | $ | 567 | $ | 1,832 | $ | 1,483 | |||||||||||
Interest cost | 3,678 | 3,845 | 1,085 | 1,396 | 4,763 | 5,241 | |||||||||||||||||
Expected return on plan assets | (5,666 | ) | (5,597 | ) | (608 | ) | (616 | ) | (6,274 | ) | (6,213 | ) | |||||||||||
Amortization of unrecognized: | |||||||||||||||||||||||
Prior service cost | 104 | 265 | (62 | ) | 55 | 42 | 320 | ||||||||||||||||
Loss | 1,823 | 1,014 | 400 | 253 | 2,223 | 1,267 | |||||||||||||||||
Pension expense | $ | 1,030 | $ | 443 | $ | 1,556 | $ | 1,655 | $ | 2,586 | $ | 2,098 | |||||||||||
Nine months ended September 30, | U.S. Plans | Non-U.S. Plans | Total | ||||||||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Service cost | $ | 3,274 | $ | 2,748 | $ | 2,251 | $ | 1,724 | $ | 5,525 | $ | 4,472 | |||||||||||
Interest cost | 11,036 | 11,534 | 3,295 | 4,242 | 14,331 | 15,776 | |||||||||||||||||
Expected return on plan assets | (16,996 | ) | (16,790 | ) | (1,844 | ) | (1,872 | ) | (18,840 | ) | (18,662 | ) | |||||||||||
Amortization of unrecognized: | |||||||||||||||||||||||
Prior service cost | 313 | 794 | (187 | ) | 170 | 126 | 964 | ||||||||||||||||
Loss | 5,468 | 3,043 | 1,215 | 770 | 6,683 | 3,813 | |||||||||||||||||
Pension expense | $ | 3,095 | $ | 1,329 | $ | 4,730 | $ | 5,034 | $ | 7,825 | $ | 6,363 | |||||||||||
Three months ended September 30, | U.S. Plans | Non-U.S. Plans | Total | ||||||||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Service cost | $ | 214 | $ | 252 | $ | — | $ | — | $ | 214 | $ | 252 | |||||||||||
Interest cost | 634 | 710 | 10 | 26 | 644 | 736 | |||||||||||||||||
Amortization of unrecognized: | |||||||||||||||||||||||
Prior service cost | 35 | 35 | — | — | 35 | 35 | |||||||||||||||||
Loss / (gain) | 148 | 66 | (19 | ) | — | 129 | 66 | ||||||||||||||||
Non-pension postretirement benefit expense | $ | 1,031 | $ | 1,063 | $ | (9 | ) | $ | 26 | $ | 1,022 | $ | 1,089 | ||||||||||
Nine months ended September 30, | U.S. Plans | Non-U.S. Plans | Total | ||||||||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Service cost | $ | 641 | $ | 755 | $ | 1 | $ | 1 | $ | 642 | $ | 756 | |||||||||||
Interest cost | 1,903 | 2,130 | 39 | 82 | 1,942 | 2,212 | |||||||||||||||||
Amortization of unrecognized: | |||||||||||||||||||||||
Prior service cost | 105 | 105 | — | — | 105 | 105 | |||||||||||||||||
Loss / (gain) | 444 | 200 | (43 | ) | — | 401 | 200 | ||||||||||||||||
Non-pension postretirement benefit expense | $ | 3,093 | $ | 3,190 | $ | (3 | ) | $ | 83 | $ | 3,090 | $ | 3,273 | ||||||||||
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Asset Derivatives: | ||||||||||||
(dollars in thousands) | September 30, 2015 | December 31, 2014 | ||||||||||
Derivatives not designated as hedging instruments under FASB ASC 815: | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Currency contracts | Prepaid and other current assets | $ | 250 | Prepaid and other current assets | $ | 403 | ||||||
Total undesignated | 250 | 403 | ||||||||||
Total | $ | 250 | $ | 403 | ||||||||
Liability Derivatives: | ||||||||||||
(dollars in thousands) | September 30, 2015 | December 31, 2014 | ||||||||||
Derivatives designated as hedging instruments under FASB ASC 815: | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Natural gas contracts | Derivative liability - current | $ | 1,066 | Derivative liability - current | $ | 1,222 | ||||||
Natural gas contracts | Other long-term liabilities | 56 | Other long-term liabilities | 103 | ||||||||
Interest rate contract | Derivative liability - current | 1,557 | Derivative liability - current | — | ||||||||
Interest rate contract | Other long-term liabilities | 1,665 | Other long-term liabilities | — | ||||||||
Total designated | 4,344 | 1,325 | ||||||||||
Derivatives not designated as hedging instruments under FASB ASC 815: | ||||||||||||
Natural gas contracts | Derivative liability - current | 1,194 | Derivative liability - current | 1,431 | ||||||||
Natural gas contracts | Other long-term liabilities | 25 | Other long-term liabilities | 112 | ||||||||
Total undesignated | 1,219 | 1,543 | ||||||||||
Total | $ | 5,563 | $ | 2,868 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Derivatives in Cash Flow Hedging relationships: | ||||||||||||||||
Natural gas contracts | $ | (489 | ) | $ | (670 | ) | $ | (1,265 | ) | $ | (164 | ) | ||||
Total | $ | (489 | ) | $ | (670 | ) | $ | (1,265 | ) | $ | (164 | ) |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | |||||||||||||
Derivative: | Location: | ||||||||||||||||
Natural gas contracts | Cost of sales | $ | (448 | ) | $ | (58 | ) | $ | (1,468 | ) | $ | 756 | |||||
Total impact on net income (loss) | $ | (448 | ) | $ | (58 | ) | $ | (1,468 | ) | $ | 756 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
De-designated contracts | $ | 180 | $ | — | $ | 584 | $ | — | ||||||||
Contracts where hedge accounting was not elected | (222 | ) | — | (459 | ) | — | ||||||||||
Total | $ | (42 | ) | $ | — | $ | 125 | $ | — |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Derivatives in Cash Flow Hedging relationships: | ||||||||||||||||
Interest Rate Swap | $ | (3,211 | ) | $ | — | $ | (3,222 | ) | $ | — | ||||||
Total | $ | (3,211 | ) | $ | — | $ | (3,222 | ) | $ | — |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | |||||||||||||
Derivative: | Location: | ||||||||||||||||
Currency contracts | Other income (expense) | $ | 135 | $ | 461 | $ | (152 | ) | $ | 274 | |||||||
Total | $ | 135 | $ | 461 | $ | (152 | ) | $ | 274 |
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Three months ended September 30, 2015 (dollars in thousands) | Foreign Currency Translation | Derivative Instruments | Pension and Other Postretirement Benefits | Accumulated Other Comprehensive Loss | ||||||||||||
Balance on June 30, 2015 | $ | (17,471 | ) | $ | (295 | ) | $ | (116,239 | ) | $ | (134,005 | ) | ||||
Other comprehensive income (loss) | (1,265 | ) | (3,700 | ) | — | (4,965 | ) | |||||||||
Currency impact | — | — | 709 | 709 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss): | ||||||||||||||||
Amortization of actuarial loss (1) | — | — | 2,352 | 2,352 | ||||||||||||
Amortization of prior service cost (1) | — | — | 77 | 77 | ||||||||||||
Cost of sales | — | 507 | — | 507 | ||||||||||||
Current-period other comprehensive income (loss) | (1,265 | ) | (3,193 | ) | 3,138 | (1,320 | ) | |||||||||
Tax effect | — | (19 | ) | (399 | ) | (418 | ) | |||||||||
Balance on September 30, 2015 | $ | (18,736 | ) | $ | (3,507 | ) | $ | (113,500 | ) | $ | (135,743 | ) | ||||
Nine months ended September 30, 2015 (dollars in thousands) | Foreign Currency Translation | Derivative Instruments | Pension and Other Postretirement Benefits | Accumulated Other Comprehensive Loss | ||||||||||||
Balance on December 31, 2014 | $ | (9,162 | ) | $ | (625 | ) | $ | (128,660 | ) | $ | (138,447 | ) | ||||
Other comprehensive income (loss) | (9,574 | ) | (4,487 | ) | 5,394 | (8,667 | ) | |||||||||
Currency impact | — | — | 3,122 | 3,122 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss): | ||||||||||||||||
Amortization of actuarial loss (1) | — | — | 7,084 | 7,084 | ||||||||||||
Amortization of prior service cost (1) | — | — | 231 | 231 | ||||||||||||
Cost of sales | — | 1,666 | — | 1,666 | ||||||||||||
Current-period other comprehensive income (loss) | (9,574 | ) | (2,821 | ) | 15,831 | 3,436 | ||||||||||
Tax effect | — | (61 | ) | (671 | ) | (732 | ) | |||||||||
Balance on September 30, 2015 | $ | (18,736 | ) | $ | (3,507 | ) | $ | (113,500 | ) | $ | (135,743 | ) |
Three months ended September 30, 2014 (dollars in thousands) | Foreign Currency Translation | Derivative Instruments | Pension and Other Postretirement Benefits | Accumulated Other Comprehensive Loss | ||||||||||||
Balance on June 30, 2014 | $ | 3,181 | $ | 947 | $ | (75,502 | ) | $ | (71,374 | ) | ||||||
Other comprehensive income (loss) | (8,022 | ) | (670 | ) | — | (8,692 | ) | |||||||||
Currency impact | — | — | 933 | 933 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss): | ||||||||||||||||
Amortization of actuarial loss (1) | — | — | 1,333 | 1,333 | ||||||||||||
Amortization of prior service cost (1) | — | — | 355 | 355 | ||||||||||||
Cost of sales | — | 58 | — | 58 | ||||||||||||
Current-period other comprehensive income (loss) | (8,022 | ) | (612 | ) | 2,621 | (6,013 | ) | |||||||||
Tax effect | — | 87 | (320 | ) | (233 | ) | ||||||||||
Balance on September 30, 2014 | $ | (4,841 | ) | $ | 422 | $ | (73,201 | ) | $ | (77,620 | ) | |||||
Nine months ended September 30, 2014 (dollars in thousands) | Foreign Currency Translation | Derivative Instruments | Pension and Other Postretirement Benefits | Accumulated Other Comprehensive Loss | ||||||||||||
Balance on December 31, 2013 | $ | 4,554 | $ | 1,221 | $ | (78,935 | ) | $ | (73,160 | ) | ||||||
Other comprehensive income (loss) | (9,395 | ) | (164 | ) | 1,292 | (8,267 | ) | |||||||||
Currency impact | — | — | 1,243 | 1,243 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss): | ||||||||||||||||
Amortization of actuarial loss (1) | — | — | 4,013 | 4,013 | ||||||||||||
Amortization of prior service cost (1) | — | — | 1,069 | 1,069 | ||||||||||||
Cost of sales | — | (756 | ) | — | (756 | ) | ||||||||||
Current-period other comprehensive income (loss) | (9,395 | ) | (920 | ) | 7,617 | (2,698 | ) | |||||||||
Tax effect | — | 121 | (1,883 | ) | (1,762 | ) | ||||||||||
Balance on September 30, 2014 | $ | (4,841 | ) | $ | 422 | $ | (73,201 | ) | $ | (77,620 | ) |
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Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Net Sales: | |||||||||||||||
Americas | $ | 139,477 | $ | 149,366 | $ | 417,340 | $ | 425,741 | |||||||
EMEA | 30,572 | 37,684 | 91,207 | 111,413 | |||||||||||
U.S. Sourcing | 23,495 | 20,574 | 67,452 | 59,704 | |||||||||||
Other | 8,240 | 8,333 | 27,201 | 24,216 | |||||||||||
Consolidated | $ | 201,784 | $ | 215,957 | $ | 603,200 | $ | 621,074 | |||||||
Segment EBIT: | |||||||||||||||
Americas | $ | 23,908 | $ | 25,489 | $ | 68,788 | $ | 73,464 | |||||||
EMEA | 254 | 909 | 1,274 | 3,072 | |||||||||||
U.S. Sourcing | 3,214 | 2,206 | 6,600 | 5,375 | |||||||||||
Other | 905 | 721 | 3,851 | 2,035 | |||||||||||
Total Segment EBIT | $ | 28,281 | $ | 29,325 | $ | 80,513 | $ | 83,946 | |||||||
Reconciliation of Segment EBIT to Net Income (Loss): | |||||||||||||||
Segment EBIT | $ | 28,281 | $ | 29,325 | $ | 80,513 | $ | 83,946 | |||||||
Retained corporate costs | (7,969 | ) | (7,243 | ) | (26,626 | ) | (22,065 | ) | |||||||
Loss on redemption of debt (note 4) | — | — | — | (47,191 | ) | ||||||||||
Furnace malfunction (note 14) | — | — | — | (5,882 | ) | ||||||||||
Environmental Obligation (note 14) | 100 | — | (123 | ) | — | ||||||||||
Reorganization charges (1) | (1,176 | ) | — | (4,191 | ) | — | |||||||||
Restructuring charges (note 5) | — | — | — | (985 | ) | ||||||||||
Derivatives (2) | (42 | ) | — | 125 | 70 | ||||||||||
Executive retirement | — | — | (235 | ) | — | ||||||||||
Interest expense | (4,701 | ) | (4,797 | ) | (13,762 | ) | (17,984 | ) | |||||||
Income taxes | 2,226 | (3,527 | ) | (1,476 | ) | (4,703 | ) | ||||||||
Net income (loss) | $ | 16,719 | $ | 13,758 | $ | 34,225 | $ | (14,794 | ) | ||||||
Depreciation & Amortization: | |||||||||||||||
Americas | $ | 6,666 | $ | 5,153 | $ | 19,148 | $ | 16,963 | |||||||
EMEA | 2,131 | 2,624 | 6,445 | 7,988 | |||||||||||
U.S. Sourcing | 6 | 6 | 18 | 20 | |||||||||||
Other | 1,462 | 1,444 | 4,434 | 4,716 | |||||||||||
Corporate | 368 | 342 | 1,241 | 1,150 | |||||||||||
Consolidated | $ | 10,633 | $ | 9,569 | $ | 31,286 | $ | 30,837 | |||||||
Capital Expenditures: | |||||||||||||||
Americas | $ | 5,826 | $ | 15,196 | $ | 34,604 | $ | 31,991 | |||||||
EMEA | 1,726 | 1,070 | 4,501 | 4,348 | |||||||||||
U.S. Sourcing | — | — | — | — | |||||||||||
Other | 451 | 359 | 991 | 1,251 | |||||||||||
Corporate | 241 | 68 | 1,384 | 938 | |||||||||||
Consolidated | $ | 8,244 | $ | 16,693 | $ | 41,480 | $ | 38,528 |
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• | Level 1 — Quoted prices in active markets for identical assets or liabilities. |
• | Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. |
• | Level 3 — Unobservable inputs based on our own assumptions. |
Fair Value at | Fair Value at | ||||||||||||||||||||||||||||||
Asset / (Liability) (dollars in thousands) | September 30, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Commodity futures natural gas contracts | $ | — | $ | (2,341 | ) | $ | — | $ | (2,341 | ) | $ | — | $ | (2,868 | ) | $ | — | $ | (2,868 | ) | |||||||||||
Currency contracts | — | 250 | — | 250 | — | 403 | — | 403 | |||||||||||||||||||||||
Interest rate agreement | — | (3,222 | ) | — | (3,222 | ) | — | — | — | — | |||||||||||||||||||||
Net derivative asset (liability) | $ | — | $ | (5,313 | ) | $ | — | $ | (5,313 | ) | $ | — | $ | (2,465 | ) | $ | — | $ | (2,465 | ) |
Asset / (Liability) (dollars in thousands) | September 30, 2015 | December 31, 2014 | ||||||
Prepaid and other current assets | $ | 250 | $ | 403 | ||||
Derivative liability | (3,817 | ) | (2,653 | ) | ||||
Other long-term liabilities | (1,746 | ) | (215 | ) | ||||
Net derivative asset (liability) | $ | (5,313 | ) | $ | (2,465 | ) |
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Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Gain (loss) on currency transactions | $ | (55 | ) | $ | 1,208 | $ | 1,407 | $ | 577 | ||||||
Hedge ineffectiveness | (42 | ) | — | 125 | 70 | ||||||||||
Other non-operating income (expense) | (299 | ) | 132 | (255 | ) | 693 | |||||||||
Other income (expense) | $ | (396 | ) | $ | 1,340 | $ | 1,277 | $ | 1,340 |
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Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Stock-based compensation expense | $ | 905 | $ | 1,109 | $ | 5,549 | $ | 3,746 |
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(dollars in thousands) | September 30, 2015 | December 31, 2014 | |||||
Accounts receivable: | |||||||
Trade receivables | $ | 92,790 | $ | 87,700 | |||
Other receivables | 3,948 | 3,406 | |||||
Total accounts receivable, less allowances of $6,042 and $5,586 | $ | 96,738 | $ | 91,106 | |||
Inventories: | |||||||
Finished goods | $ | 181,219 | $ | 151,698 | |||
Work in process | 821 | 1,153 | |||||
Raw materials | 5,143 | 4,708 | |||||
Repair parts | 10,709 | 10,840 | |||||
Operating supplies | 1,223 | 1,429 | |||||
Total inventories, less loss provisions of $4,459 and $4,370 | $ | 199,115 | $ | 169,828 | |||
Prepaid and other current assets | |||||||
Value added tax | $ | 13,486 | $ | 13,512 | |||
Prepaid expenses | 7,085 | 6,947 | |||||
Deferred income taxes | 4,885 | 4,888 | |||||
Prepaid income taxes | 3,571 | 1,951 | |||||
Derivative asset | 250 | 403 | |||||
Total prepaid and other current assets | $ | 29,277 | $ | 27,701 | |||
Other assets: | |||||||
Deposits | $ | 1,272 | $ | 890 | |||
Finance fees — net of amortization | 6,052 | 6,958 | |||||
Other assets | 6,248 | 6,128 | |||||
Total other assets | $ | 13,572 | $ | 13,976 | |||
Accrued liabilities: | |||||||
Accrued incentives | $ | 29,149 | $ | 17,648 | |||
Workers compensation | 6,358 | 7,121 | |||||
Medical liabilities | 4,425 | 3,887 | |||||
Interest | 3,805 | 3,876 | |||||
Commissions payable | 1,019 | 1,068 | |||||
Withholdings and other non-income tax accruals | 2,975 | 3,078 | |||||
Other accrued liabilities | 7,116 | 5,960 | |||||
Total accrued liabilities | $ | 54,847 | $ | 42,638 | |||
Other long-term liabilities: | |||||||
Deferred liability | $ | 7,859 | $ | 8,081 | |||
Derivative liability | 1,746 | 215 | |||||
Environmental obligation (see note 14) | 1,085 | 1,000 | |||||
Other long-term liabilities | 4,889 | 3,860 | |||||
Total other long-term liabilities | $ | 15,579 | $ | 13,156 |
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(dollars in thousands) | Interest Rate | Maturity Date | September 30, 2015 | December 31, 2014 | ||||||
Borrowings under ABL Facility | floating | April 9, 2019 | $ | 7,000 | $ | — | ||||
Term Loan B | floating | April 9, 2021 | 434,500 | 437,800 | ||||||
RMB Working Capital Loan | 6.78% | July, 2015 | — | 3,258 | ||||||
AICEP Loan | 0.00% | January, 2016 to July 30, 2018 | 3,559 | 3,846 | ||||||
Total borrowings | 445,059 | 444,904 | ||||||||
Less — unamortized discount | 862 | 982 | ||||||||
Total borrowings — net | 444,197 | 443,922 | ||||||||
Less — long term debt due within one year | 4,758 | 7,658 | ||||||||
Total long-term portion of borrowings — net | $ | 439,439 | $ | 436,264 |
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Three months ended September 30, | U.S. Plans | Non-U.S. Plans | Total | ||||||||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Service cost | $ | 1,091 | $ | 916 | $ | 741 | $ | 567 | $ | 1,832 | $ | 1,483 | |||||||||||
Interest cost | 3,678 | 3,845 | 1,085 | 1,396 | 4,763 | 5,241 | |||||||||||||||||
Expected return on plan assets | (5,666 | ) | (5,597 | ) | (608 | ) | (616 | ) | (6,274 | ) | (6,213 | ) | |||||||||||
Amortization of unrecognized: | |||||||||||||||||||||||
Prior service cost | 104 | 265 | (62 | ) | 55 | 42 | 320 | ||||||||||||||||
Loss | 1,823 | 1,014 | 400 | 253 | 2,223 | 1,267 | |||||||||||||||||
Pension expense | $ | 1,030 | $ | 443 | $ | 1,556 | $ | 1,655 | $ | 2,586 | $ | 2,098 | |||||||||||
Nine months ended September 30, | U.S. Plans | Non-U.S. Plans | Total | ||||||||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Service cost | $ | 3,274 | $ | 2,748 | $ | 2,251 | $ | 1,724 | $ | 5,525 | $ | 4,472 | |||||||||||
Interest cost | 11,036 | 11,534 | 3,295 | 4,242 | 14,331 | 15,776 | |||||||||||||||||
Expected return on plan assets | (16,996 | ) | (16,790 | ) | (1,844 | ) | (1,872 | ) | (18,840 | ) | (18,662 | ) | |||||||||||
Amortization of unrecognized: | |||||||||||||||||||||||
Prior service cost | 313 | 794 | (187 | ) | 170 | 126 | 964 | ||||||||||||||||
Loss | 5,468 | 3,043 | 1,215 | 770 | 6,683 | 3,813 | |||||||||||||||||
Pension expense | $ | 3,095 | $ | 1,329 | $ | 4,730 | $ | 5,034 | $ | 7,825 | $ | 6,363 | |||||||||||
Three months ended September 30, | U.S. Plans | Non-U.S. Plans | Total | ||||||||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Service cost | $ | 214 | $ | 252 | $ | — | $ | — | $ | 214 | $ | 252 | |||||||||||
Interest cost | 634 | 710 | 10 | 26 | 644 | 736 | |||||||||||||||||
Amortization of unrecognized: | |||||||||||||||||||||||
Prior service cost | 35 | 35 | — | — | 35 | 35 | |||||||||||||||||
Loss / (gain) | 148 | 66 | (19 | ) | — | 129 | 66 | ||||||||||||||||
Non-pension postretirement benefit expense | $ | 1,031 | $ | 1,063 | $ | (9 | ) | $ | 26 | $ | 1,022 | $ | 1,089 | ||||||||||
Nine months ended September 30, | U.S. Plans | Non-U.S. Plans | Total | ||||||||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Service cost | $ | 641 | $ | 755 | $ | 1 | $ | 1 | $ | 642 | $ | 756 | |||||||||||
Interest cost | 1,903 | 2,130 | 39 | 82 | 1,942 | 2,212 | |||||||||||||||||
Amortization of unrecognized: | |||||||||||||||||||||||
Prior service cost | 105 | 105 | — | — | 105 | 105 | |||||||||||||||||
Loss / (gain) | 444 | 200 | (43 | ) | — | 401 | 200 | ||||||||||||||||
Non-pension postretirement benefit expense | $ | 3,093 | $ | 3,190 | $ | (3 | ) | $ | 83 | $ | 3,090 | $ | 3,273 | ||||||||||
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Asset Derivatives: | ||||||||||||
(dollars in thousands) | September 30, 2015 | December 31, 2014 | ||||||||||
Derivatives not designated as hedging instruments under FASB ASC 815: | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Currency contracts | Prepaid and other current assets | $ | 250 | Prepaid and other current assets | $ | 403 | ||||||
Total undesignated | 250 | 403 | ||||||||||
Total | $ | 250 | $ | 403 | ||||||||
Liability Derivatives: | ||||||||||||
(dollars in thousands) | September 30, 2015 | December 31, 2014 | ||||||||||
Derivatives designated as hedging instruments under FASB ASC 815: | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Natural gas contracts | Derivative liability - current | $ | 1,066 | Derivative liability - current | $ | 1,222 | ||||||
Natural gas contracts | Other long-term liabilities | 56 | Other long-term liabilities | 103 | ||||||||
Interest rate contract | Derivative liability - current | 1,557 | Derivative liability - current | — | ||||||||
Interest rate contract | Other long-term liabilities | 1,665 | Other long-term liabilities | — | ||||||||
Total designated | 4,344 | 1,325 | ||||||||||
Derivatives not designated as hedging instruments under FASB ASC 815: | ||||||||||||
Natural gas contracts | Derivative liability - current | 1,194 | Derivative liability - current | 1,431 | ||||||||
Natural gas contracts | Other long-term liabilities | 25 | Other long-term liabilities | 112 | ||||||||
Total undesignated | 1,219 | 1,543 | ||||||||||
Total | $ | 5,563 | $ | 2,868 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Derivatives in Cash Flow Hedging relationships: | ||||||||||||||||
Natural gas contracts | $ | (489 | ) | $ | (670 | ) | $ | (1,265 | ) | $ | (164 | ) | ||||
Total | $ | (489 | ) | $ | (670 | ) | $ | (1,265 | ) | $ | (164 | ) |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | |||||||||||||
Derivative: | Location: | ||||||||||||||||
Natural gas contracts | Cost of sales | $ | (448 | ) | $ | (58 | ) | $ | (1,468 | ) | $ | 756 | |||||
Total impact on net income (loss) | $ | (448 | ) | $ | (58 | ) | $ | (1,468 | ) | $ | 756 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Derivatives in Cash Flow Hedging relationships: | ||||||||||||||||
Interest Rate Swap | $ | (3,211 | ) | $ | — | $ | (3,222 | ) | $ | — | ||||||
Total | $ | (3,211 | ) | $ | — | $ | (3,222 | ) | $ | — |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | |||||||||||||
Derivative: | Location: | ||||||||||||||||
Currency contracts | Other income (expense) | $ | 135 | $ | 461 | $ | (152 | ) | $ | 274 | |||||||
Total | $ | 135 | $ | 461 | $ | (152 | ) | $ | 274 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
De-designated contracts | $ | 180 | $ | — | $ | 584 | $ | — | ||||||||
Contracts where hedge accounting was not elected | (222 | ) | — | (459 | ) | — | ||||||||||
Total | $ | (42 | ) | $ | — | $ | 125 | $ | — |
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Three months ended September 30, 2015 (dollars in thousands) | Foreign Currency Translation | Derivative Instruments | Pension and Other Postretirement Benefits | Accumulated Other Comprehensive Loss | ||||||||||||
Balance on June 30, 2015 | $ | (17,471 | ) | $ | (295 | ) | $ | (116,239 | ) | $ | (134,005 | ) | ||||
Other comprehensive income (loss) | (1,265 | ) | (3,700 | ) | — | (4,965 | ) | |||||||||
Currency impact | — | — | 709 | 709 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss): | ||||||||||||||||
Amortization of actuarial loss (1) | — | — | 2,352 | 2,352 | ||||||||||||
Amortization of prior service cost (1) | — | — | 77 | 77 | ||||||||||||
Cost of sales | — | 507 | — | 507 | ||||||||||||
Current-period other comprehensive income (loss) | (1,265 | ) | (3,193 | ) | 3,138 | (1,320 | ) | |||||||||
Tax effect | — | (19 | ) | (399 | ) | (418 | ) | |||||||||
Balance on September 30, 2015 | $ | (18,736 | ) | $ | (3,507 | ) | $ | (113,500 | ) | $ | (135,743 | ) | ||||
Nine months ended September 30, 2015 (dollars in thousands) | Foreign Currency Translation | Derivative Instruments | Pension and Other Postretirement Benefits | Accumulated Other Comprehensive Loss | ||||||||||||
Balance on December 31, 2014 | $ | (9,162 | ) | $ | (625 | ) | $ | (128,660 | ) | $ | (138,447 | ) | ||||
Other comprehensive income (loss) | (9,574 | ) | (4,487 | ) | 5,394 | (8,667 | ) | |||||||||
Currency impact | — | — | 3,122 | 3,122 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss): | ||||||||||||||||
Amortization of actuarial loss (1) | — | — | 7,084 | 7,084 | ||||||||||||
Amortization of prior service cost (1) | — | — | 231 | 231 | ||||||||||||
Cost of sales | — | 1,666 | — | 1,666 | ||||||||||||
Current-period other comprehensive income (loss) | (9,574 | ) | (2,821 | ) | 15,831 | 3,436 | ||||||||||
Tax effect | — | (61 | ) | (671 | ) | (732 | ) | |||||||||
Balance on September 30, 2015 | $ | (18,736 | ) | $ | (3,507 | ) | $ | (113,500 | ) | $ | (135,743 | ) |
Three months ended September 30, 2014 (dollars in thousands) | Foreign Currency Translation | Derivative Instruments | Pension and Other Postretirement Benefits | Accumulated Other Comprehensive Loss | ||||||||||||
Balance on June 30, 2014 | $ | 3,181 | $ | 947 | $ | (75,502 | ) | $ | (71,374 | ) | ||||||
Other comprehensive income (loss) | (8,022 | ) | (670 | ) | — | (8,692 | ) | |||||||||
Currency impact | — | — | 933 | 933 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss): | ||||||||||||||||
Amortization of actuarial loss (1) | — | — | 1,333 | 1,333 | ||||||||||||
Amortization of prior service cost (1) | — | — | 355 | 355 | ||||||||||||
Cost of sales | — | 58 | — | 58 | ||||||||||||
Current-period other comprehensive income (loss) | (8,022 | ) | (612 | ) | 2,621 | (6,013 | ) | |||||||||
Tax effect | — | 87 | (320 | ) | (233 | ) | ||||||||||
Balance on September 30, 2014 | $ | (4,841 | ) | $ | 422 | $ | (73,201 | ) | $ | (77,620 | ) | |||||
Nine months ended September 30, 2014 (dollars in thousands) | Foreign Currency Translation | Derivative Instruments | Pension and Other Postretirement Benefits | Accumulated Other Comprehensive Loss | ||||||||||||
Balance on December 31, 2013 | $ | 4,554 | $ | 1,221 | $ | (78,935 | ) | $ | (73,160 | ) | ||||||
Other comprehensive income (loss) | (9,395 | ) | (164 | ) | 1,292 | (8,267 | ) | |||||||||
Currency impact | — | — | 1,243 | 1,243 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss): | ||||||||||||||||
Amortization of actuarial loss (1) | — | — | 4,013 | 4,013 | ||||||||||||
Amortization of prior service cost (1) | — | — | 1,069 | 1,069 | ||||||||||||
Cost of sales | — | (756 | ) | — | (756 | ) | ||||||||||
Current-period other comprehensive income (loss) | (9,395 | ) | (920 | ) | 7,617 | (2,698 | ) | |||||||||
Tax effect | — | 121 | (1,883 | ) | (1,762 | ) | ||||||||||
Balance on September 30, 2014 | $ | (4,841 | ) | $ | 422 | $ | (73,201 | ) | $ | (77,620 | ) |
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Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Net Sales: | |||||||||||||||
Americas | $ | 139,477 | $ | 149,366 | $ | 417,340 | $ | 425,741 | |||||||
EMEA | 30,572 | 37,684 | 91,207 | 111,413 | |||||||||||
U.S. Sourcing | 23,495 | 20,574 | 67,452 | 59,704 | |||||||||||
Other | 8,240 | 8,333 | 27,201 | 24,216 | |||||||||||
Consolidated | $ | 201,784 | $ | 215,957 | $ | 603,200 | $ | 621,074 | |||||||
Segment EBIT: | |||||||||||||||
Americas | $ | 23,908 | $ | 25,489 | $ | 68,788 | $ | 73,464 | |||||||
EMEA | 254 | 909 | 1,274 | 3,072 | |||||||||||
U.S. Sourcing | 3,214 | 2,206 | 6,600 | 5,375 | |||||||||||
Other | 905 | 721 | 3,851 | 2,035 | |||||||||||
Total Segment EBIT | $ | 28,281 | $ | 29,325 | $ | 80,513 | $ | 83,946 | |||||||
Reconciliation of Segment EBIT to Net Income (Loss): | |||||||||||||||
Segment EBIT | $ | 28,281 | $ | 29,325 | $ | 80,513 | $ | 83,946 | |||||||
Retained corporate costs | (7,969 | ) | (7,243 | ) | (26,626 | ) | (22,065 | ) | |||||||
Loss on redemption of debt (note 4) | — | — | — | (47,191 | ) | ||||||||||
Furnace malfunction (note 14) | — | — | — | (5,882 | ) | ||||||||||
Environmental Obligation (note 14) | 100 | — | (123 | ) | — | ||||||||||
Reorganization charges (1) | (1,176 | ) | — | (4,191 | ) | — | |||||||||
Restructuring charges (note 5) | — | — | — | (985 | ) | ||||||||||
Derivatives (2) | (42 | ) | — | 125 | 70 | ||||||||||
Executive retirement | — | — | (235 | ) | — | ||||||||||
Interest expense | (4,701 | ) | (4,797 | ) | (13,762 | ) | (17,984 | ) | |||||||
Income taxes | 2,226 | (3,527 | ) | (1,476 | ) | (4,703 | ) | ||||||||
Net income (loss) | $ | 16,719 | $ | 13,758 | $ | 34,225 | $ | (14,794 | ) | ||||||
Depreciation & Amortization: | |||||||||||||||
Americas | $ | 6,666 | $ | 5,153 | $ | 19,148 | $ | 16,963 | |||||||
EMEA | 2,131 | 2,624 | 6,445 | 7,988 | |||||||||||
U.S. Sourcing | 6 | 6 | 18 | 20 | |||||||||||
Other | 1,462 | 1,444 | 4,434 | 4,716 | |||||||||||
Corporate | 368 | 342 | 1,241 | 1,150 | |||||||||||
Consolidated | $ | 10,633 | $ | 9,569 | $ | 31,286 | $ | 30,837 | |||||||
Capital Expenditures: | |||||||||||||||
Americas | $ | 5,826 | $ | 15,196 | $ | 34,604 | $ | 31,991 | |||||||
EMEA | 1,726 | 1,070 | 4,501 | 4,348 | |||||||||||
U.S. Sourcing | — | — | — | — | |||||||||||
Other | 451 | 359 | 991 | 1,251 | |||||||||||
Corporate | 241 | 68 | 1,384 | 938 | |||||||||||
Consolidated | $ | 8,244 | $ | 16,693 | $ | 41,480 | $ | 38,528 |
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Fair Value at | Fair Value at | ||||||||||||||||||||||||||||||
Asset / (Liability) (dollars in thousands) | September 30, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Commodity futures natural gas contracts | $ | — | $ | (2,341 | ) | $ | — | $ | (2,341 | ) | $ | — | $ | (2,868 | ) | $ | — | $ | (2,868 | ) | |||||||||||
Currency contracts | — | 250 | — | 250 | — | 403 | — | 403 | |||||||||||||||||||||||
Interest rate agreement | — | (3,222 | ) | — | (3,222 | ) | — | — | — | — | |||||||||||||||||||||
Net derivative asset (liability) | $ | — | $ | (5,313 | ) | $ | — | $ | (5,313 | ) | $ | — | $ | (2,465 | ) | $ | — | $ | (2,465 | ) |
Asset / (Liability) (dollars in thousands) | September 30, 2015 | December 31, 2014 | ||||||
Prepaid and other current assets | $ | 250 | $ | 403 | ||||
Derivative liability | (3,817 | ) | (2,653 | ) | ||||
Other long-term liabilities | (1,746 | ) | (215 | ) | ||||
Net derivative asset (liability) | $ | (5,313 | ) | $ | (2,465 | ) |
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Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(dollars in thousands) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Gain (loss) on currency transactions | $ | (55 | ) | $ | 1,208 | $ | 1,407 | $ | 577 | ||||||
Hedge ineffectiveness | (42 | ) | — | 125 | 70 | ||||||||||
Other non-operating income (expense) | (299 | ) | 132 | (255 | ) | 693 | |||||||||
Other income (expense) | $ | (396 | ) | $ | 1,340 | $ | 1,277 | $ | 1,340 |
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