FAIRMOUNT SANTROL HOLDINGS INC., 10-Q filed on 8/4/2016
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 30, 2016
Jul. 31, 2016
Document And Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Jun. 30, 2016 
 
Document Fiscal Year Focus
2016 
 
Document Fiscal Period Focus
Q2 
 
Trading Symbol
FMSA 
 
Entity Registrant Name
Fairmount Santrol Holdings Inc. 
 
Entity Central Index Key
0001010858 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
191,413,428 
Condensed Consolidated Statements of Income (Loss) (unaudited) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Income Statement [Abstract]
 
 
 
 
Revenues
$ 114,249 
$ 221,323 
$ 259,707 
$ 522,813 
Cost of goods sold (excluding depreciation, depletion, amortization, and stock compensation expense shown separately)
114,129 
165,130 
232,593 
367,678 
Operating expenses
 
 
 
 
Selling, general and administrative expenses
21,126 
19,204 
37,751 
43,224 
Depreciation, depletion and amortization expense
18,056 
16,276 
36,642 
32,499 
Stock compensation expense
3,914 
2,618 
5,567 
4,501 
Asset impairments
90,578 
6,475 
90,654 
6,475 
Restructuring charges
1,155 
8,349 
1,155 
8,673 
Other operating expense (income)
(426)
913 
(96)
600 
Income (loss) from operations
(134,283)
2,358 
(144,559)
59,163 
Interest expense, net
16,606 
14,894 
33,868 
30,202 
Other non-operating income
 
 
(5)
 
Income (loss) before provision for income taxes
(150,889)
(12,536)
(178,422)
28,961 
Benefit from income taxes
(63,019)
(26,677)
(78,773)
(16,060)
Net income (loss)
(87,870)
14,141 
(99,649)
45,021 
Less: Net income attributable to the non-controlling interest
16 
13 
125 
Net income (loss) attributable to Fairmount Santrol Holdings Inc.
$ (87,886)
$ 14,137 
$ (99,662)
$ 44,896 
Earnings (loss) per share
 
 
 
 
Basic
$ (0.54)
$ 0.09 
$ (0.62)
$ 0.28 
Diluted
$ (0.54)
$ 0.08 
$ (0.62)
$ 0.27 
Weighted average number of shares outstanding
 
 
 
 
Basic
161,647 
161,368 
161,547 
161,161 
Diluted
161,647 
166,866 
161,547 
166,632 
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net income (loss)
$ (87,870)
$ 14,141 
$ (99,649)
$ 45,021 
Other comprehensive loss, net of tax
 
 
 
 
Foreign currency translation adjustment
87 
(120)
(51)
(3,353)
Pension obligations
34 
74 
108 
123 
Change in fair value of derivative agreements
(3,454)
24 
(5,363)
(2,711)
Total other comprehensive loss, net of tax
(3,333)
(22)
(5,306)
(5,941)
Comprehensive income (loss)
(91,203)
14,119 
(104,955)
39,080 
Comprehensive income attributable to the non-controlling interest
16 
13 
125 
Comprehensive income (loss) attributable to Fairmount Santrol Holdings Inc.
$ (91,219)
$ 14,115 
$ (104,968)
$ 38,955 
Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Current assets
 
 
Cash and cash equivalents
$ 61,635 
$ 171,486 
Accounts receivable, net of allowance for doubtful accounts of $3,244 and $2,470 at June 30, 2016 and December 31, 2015, respectively
63,930 
73,566 
Inventories
56,693 
70,494 
Prepaid expenses and other assets
6,816 
13,404 
Refundable income taxes
42,041 
26,506 
Current assets classified as held-for-sale (includes cash, accounts receivable, inventories, and property, plant, and equipment)
1,317 
4,218 
Total current assets
232,432 
359,674 
Property, plant and equipment, net
756,683 
870,997 
Deferred income taxes
834 
834 
Goodwill
15,301 
15,301 
Intangibles, net
94,057 
96,482 
Other assets
9,744 
10,961 
Total assets
1,109,051 
1,354,249 
Current liabilities
 
 
Current portion of long-term debt
30,677 
17,385 
Accounts payable
34,319 
40,421 
Accrued expenses
20,121 
26,785 
Current liabilities directly related to current assets classified as held-for-sale (includes accounts payable and accrued expenses)
 
934 
Total current liabilities
85,117 
85,525 
Long-term debt
1,115,877 
1,205,721 
Deferred income taxes
26,487 
89,569 
Other long-term liabilities
41,167 
33,802 
Total liabilities
1,268,648 
1,414,617 
Commitments and contingent liabilities (Note 12)
   
   
Preferred stock: $0.01 par value, 100,000 authorized shares Shares outstanding: 0 at June 30, 2016 and December 31, 2015
   
   
Common stock: $0.01 par value, 1,850,000 authorized shares Shares outstanding: 162,020 and 161,433 at June 30, 2016 and December 31, 2015, respectively
2,397 
2,391 
Additional paid-in capital
782,976 
776,705 
Retained earnings
305,382 
405,044 
Accumulated other comprehensive loss
(22,999)
(17,693)
Total equity attributable to Fairmount Santrol Holdings Inc. before treasury stock
1,067,756 
1,166,447 
Less: Treasury stock at cost Shares in treasury: 77,765 at June 30, 2016 and December 31, 2015
(1,227,663)
(1,227,663)
Total equity (deficit) attributable to Fairmount Santrol Holdings Inc.
(159,907)
(61,216)
Non-controlling interest
310 
848 
Total equity (deficit)
(159,597)
(60,368)
Total liabilities and equity
$ 1,109,051 
$ 1,354,249 
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Statement of Financial Position [Abstract]
 
 
Allowance for doubtful accounts
$ 3,244 
$ 2,470 
Preferred stock, par value
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
100,000,000 
100,000,000 
Preferred stock, shares outstanding
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
1,850,000,000 
1,850,000,000 
Common stock, shares outstanding
162,020,000 
161,433,000 
Shares in treasury
77,765,000 
77,765,000 
Condensed Consolidated Statements of Equity (Unaudited) (USD $)
In Thousands
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Other Comprehensive Income (Loss) [Member]
Treasury Stock [Member]
Subtotal [Member]
Non-controlling Interest [Member]
Beginning balances at Dec. 31, 2014
$ 33,474 
$ 2,387 
$ 771,888 
$ 497,179 
$ (12,809)
$ (1,227,663)
$ 30,982 
$ 2,492 
Beginning balances, shares at Dec. 31, 2014
 
160,913 
 
 
 
77,765 
 
 
Stock options exercised
1,759 
1,755 
 
 
 
1,759 
 
Stock options exercised, shares
 
510 
 
 
 
 
 
 
Stock compensation expense
4,501 
 
4,501 
 
 
 
4,501 
 
Tax effect of stock options exercised
21 
 
21 
 
 
 
21 
 
Net income (loss)
45,021 
 
 
44,896 
 
 
44,896 
125 
Other comprehensive loss
(5,941)
 
 
 
(5,941)
 
(5,941)
 
Ending balances at Jun. 30, 2015
78,835 
2,391 
778,165 
542,075 
(18,750)
(1,227,663)
76,218 
2,617 
Ending balances, shares at Jun. 30, 2015
 
161,423 
 
 
 
77,765 
 
 
Beginning balances at Dec. 31, 2015
(60,368)
2,391 
776,705 
405,044 
(17,693)
(1,227,663)
(61,216)
848 
Beginning balances, shares at Dec. 31, 2015
 
161,433 
 
 
 
77,765 
 
 
Stock options exercised
2,007 
2,001 
 
 
 
2,007 
 
Stock options exercised, shares
488 
587 
 
 
 
 
 
 
Stock compensation expense
5,567 
 
5,567 
 
 
 
5,567 
 
Tax effect of stock options exercised
(1,297)
 
(1,297)
 
 
 
(1,297)
 
Transactions with non-controlling interest
(551)
 
 
 
 
 
 
(551)
Net income (loss)
(99,649)
 
 
(99,662)
 
 
(99,662)
13 
Other comprehensive loss
(5,306)
 
 
 
(5,306)
 
(5,306)
 
Ending balances at Jun. 30, 2016
$ (159,597)
$ 2,397 
$ 782,976 
$ 305,382 
$ (22,999)
$ (1,227,663)
$ (159,907)
$ 310 
Ending balances, shares at Jun. 30, 2016
 
162,020 
 
 
 
77,765 
 
 
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Statement of Cash Flows [Abstract]
 
 
Net income (loss)
$ (99,649)
$ 45,021 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
 
 
Depreciation and depletion
34,284 
30,231 
Amortization
5,745 
5,650 
Reserve for doubtful accounts
1,954 
 
Asset impairments
90,654 
6,475 
Restructuring charges
 
1,162 
Inventory write-downs and reserves
10,302 
513 
Loss on sale of fixed assets
35 
 
Unrealized loss on interest rate swaps
 
40 
Deferred income taxes and taxes payable
(59,913)
(13,456)
Refundable income taxes
(15,535)
(14,849)
Stock compensation expense
5,567 
4,501 
Change in operating assets and liabilities:
 
 
Accounts receivable
10,524 
84,056 
Inventories
3,500 
40,475 
Prepaid expenses and other assets
3,745 
26,369 
Accounts payable
298 
(38,562)
Accrued expenses
(4,742)
(4,062)
Net cash provided by (used in) operating activities
(13,231)
173,564 
Cash flows from investing activities
 
 
Proceeds from sale of fixed assets
3,918 
 
Capital expenditures and stripping costs
(21,948)
(61,293)
Other investing activities
(150)
 
Net cash used in investing activities
(18,180)
(61,293)
Cash flows from financing activities
 
 
Payments on long-term debt
(75,479)
(7,867)
Change in other long-term debt and capital leases
(4,109)
(3,044)
Proceeds from option exercises
2,007 
1,759 
Tax effect of stock options exercised
(1,297)
21 
Distributions to non-controlling interest
(551)
 
Other financing activities
 
(4,339)
Net cash used in financing activities
(79,429)
(13,470)
Change in cash and cash equivalents related to assets classified as held-for-sale
1,376 
 
Foreign currency adjustment
(387)
(236)
Increase (decrease) in cash and cash equivalents
(109,851)
98,565 
Cash and cash equivalents:
 
 
Beginning of period
171,486 
76,923 
End of period
$ 61,635 
$ 175,488 
Significant Accounting Policies
Significant Accounting Policies

1. Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements of Fairmount Santrol Holdings Inc. and its consolidated subsidiaries (collectively, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments (which are of a normal, recurring nature) and disclosures necessary for a fair statement of the financial position, results of operations, comprehensive income, and cash flows of the reported interim periods. The condensed consolidated balance sheet as of December 31, 2015 was derived from audited financial statements, but does not include all disclosures required by GAAP. Interim results are not necessarily indicative of the results to be expected for the full year or any other interim period. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements as filed in the 2015 Annual Report on Form 10-K and notes thereto and information included elsewhere in this Quarterly Report on Form 10-Q.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Change in Classification

In the three months ended June 30, 2016, the Company changed the classification of certain operating expenses on the Condensed Consolidated Statements of Income (Loss). Previously, the Company classified expenses incurred related to the downturn in the proppant market as “restructuring and other charges.” The Company now further classifies these types of expenses between asset impairments and restructuring charges. All comparative periods presented have been restated accordingly. See Notes 14 and 15 for further detail.

Recent Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03 – Interest – Imputation of Interest (Subtopic 835-30). Under Subtopic 835-30, debt issuance costs related to a recognized debt liability will be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The guidance is required to be applied on a retrospective basis beginning January 1, 2016. Accordingly, the Company applied this guidance to its Condensed Consolidated Balance Sheets in the first quarter of 2016. See Note 4 for further detail.

In February 2016, the FASB issued ASU No. 2016-02 – Leases (ASC 842), which sets out the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The ASU requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The ASU requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The ASU is expected to impact the Company’s consolidated financial statements as the Company has certain operating and land lease arrangements for which it is the lessee. ASC 842 supersedes the previous leases standard, ASC 840 – Leases. The ASU is effective on January 1, 2019, with early adoption permitted. The Company is in the process of evaluating the impact of this new guidance on its financial statements and disclosures.

In March 2016, the FASB issued ASU No. 2016-09 – Compensation – Stock Compensation (Topic 718), which provides guidance on simplified accounting for and presentation of share-based payment transactions, including income tax consequences, minimum tax withholding requirements, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The ASU requires all tax effects of share-based payments to be recorded through the income statement, windfall tax benefits to be recorded when the benefit arises, and all share-based payment tax-related cash flows to be reported as operating activities in the statement of cash flows. Regarding tax withholding requirements, the ASU allows entities to withhold an amount up to the employees’ maximum individual tax rates without classifying the award as a liability. The ASU also permits entities to make an accounting policy election for the impact of forfeitures on expense recognition, either recognized when forfeitures are estimated or when forfeitures occur. The ASU is expected to impact the Company’s financial statements and disclosures as the Company makes share-based payments to its employees. The ASU is effective beginning January 1, 2017, with early adoption permitted. The Company is in the process of evaluating the impact of this new guidance on its financial statements and disclosures.

In April and May 2016, the FASB issued ASU No. 2016-10 – Revenue from Contracts with Customers – Identifying Performance Obligations and Licensing, ASU No. 2016-11 – Revenue Recognition and Derivatives and Hedging – Recession of SEC Guidance, and ASU No. 2016-12 – Revenue from Contracts with Customers – Narrow-Scope Improvements and Practical Expedients. These ASU’s each affect the guidance of the new revenue recognition standard in ASU No. 2014-09 – Revenue from Contracts with Customers and related subsequent ASUs. This guidance is effective beginning January 1, 2018. The Company is in the process of evaluating the effect of the new guidance on its financial statements and disclosures.

Inventories
Inventories

2. Inventories

At June 30, 2016 and December 31, 2015, inventories consisted of the following:

 

     June 30, 2016      December 31, 2015  

Raw materials

   $ 4,913       $ 10,145   

Work-in-process

     11,353         14,613   

Finished goods

     43,074         48,648   
  

 

 

    

 

 

 
     59,340         73,406   

Less: LIFO reserve

     (2,647      (2,912
  

 

 

    

 

 

 

Inventories

   $ 56,693       $ 70,494   
  

 

 

    

 

 

 
Property, Plant, and Equipment
Property, Plant, and Equipment

3. Property, Plant, and Equipment

At June 30, 2016 and December 31, 2015, property, plant, and equipment consisted of the following:

 

     June 30, 2016      December 31, 2015  

Land and improvements

   $ 83,763       $ 82,966   

Mineral reserves and mine development

     248,196         323,691   

Machinery and equipment

     576,933         575,034   

Buildings and improvements

     152,951         171,791   

Furniture, fixtures, and other

     3,455         3,609   

Construction in progress

     39,260         37,047   
  

 

 

    

 

 

 
     1,104,558         1,194,138   

Accumulated depletion and depreciation

     (347,875      (323,141
  

 

 

    

 

 

 

Property, plant, and equipment, net

   $ 756,683       $ 870,997   
  

 

 

    

 

 

 

Under ASC 360 Property, Plant, and Equipment, the Company is required to evaluate the recoverability of the carrying amount of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Based on the continuing adverse business conditions and the idling of certain assets, the Company evaluated certain of its asset groups that contained mineral reserves and other long-lived assets contained in the Proppant Solutions segment and concluded that the carrying amounts of those assets were not recoverable. Fair value was determined by prices obtained from third parties for the assets and from estimating the net present value of the future cash flows over the life of the assets. Critical assumptions for these valuations included future selling prices of products, future operating costs, and the cost of capital. The Company incurred $90,578 and $6,475 of such asset impairments in the three months ended June 30, 2016 and 2015, respectively, and $90,654 and $6,475 in the six months ended June 30, 2016 and 2015, respectively. These impairments are recorded as asset impairments in operating expenses in the Condensed Consolidated Statements of Income (Loss). See Notes 14 and 15 for further detail. Of the carrying value of the assets (after impairment), $1,317 is classified as a current asset held-for-sale as of June 30, 2016.

If the ongoing uncertainty in oil and gas markets continues, it is possible that additional assets, both tangible and intangible, could be subject to additional impairment losses in future periods.

Long-Term Debt
Long-Term Debt

4. Long-Term Debt

At June 30, 2016 and December 31, 2015, long-term debt consisted of the following:

 

     June 30, 2016      December 31, 2015  

Term B-1 Loans

   $ 16,790       $ 156,134   

Term B-2 Loans

     898,153         902,402   

Extended Term B-1 Loans

     159,103         159,878   

2016 Extended Term Loans

     69,492         —     

Industrial Revenue bond

     10,000         10,000   

Revolving credit facility and other

     88         101   

Capital leases, net

     5,472         9,301   

Deferred financing costs, net

     (12,544      (14,710
  

 

 

    

 

 

 
     1,146,554         1,223,106   

Less: current portion

     (30,677      (17,385
  

 

 

    

 

 

 

Long-term debt including leases

   $ 1,115,877       $ 1,205,721   
  

 

 

    

 

 

 

 

As detailed in “Recent Accounting Pronouncements” in Note 1, ASU 2015-03 dictates that debt issuance costs related to a recognized debt liability are presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The “deferred financing costs, net” line in the table above is the application of this new guidance.

On September 5, 2013, the Company entered into the Second Amended and Restated Credit Agreement (the “2013 Amended Credit Agreement”). The 2013 Amended Credit Agreement initially contained a revolving credit facility (“Revolving Credit Facility”) and two tranches of term loans, a term B-1 facility (“Term B-1 Loans”) and a term B-2 facility (“Term B-2 Loans”). The Revolving Credit Facility, the Term B-1 Loans, and the Term B-2 Loans are secured by a first priority lien on substantially all of the Company’s domestic assets.

The 2013 Amended Credit Agreement was amended in March 2014, April 2015, and May 2015 as well as joinder agreements as of August 2014 and September 2014. These amendments and joinder agreements made various changes to maturity dates and interest rate margins. In addition, amounts that were initially Term B-1 Loans and balances on the Revolving Credit Facility were converted into term loans with essentially the same terms as the Term B-2 Loans (the “Extended Term B-1 Loans”). The applicable margin for B-1 and B-2 Base Rate loans was 2.5% and the margin on B-1 and B-2 Eurodollar Rate loans was 3.5%.

On September 30, 2015, the Company entered into an amendment to the 2013 Amended Credit Agreement that modified the Revolving Credit Facility. These modifications consisted primarily of (i) a reduction in the U.S. revolving commitments from $124,000 to $99,000 (while the aggregate Canadian revolving commitment remained at $1,000) and (ii) changes in the financial covenant governing the availability of amounts under the Revolving Credit Facility if, and only if, the Company has drawn, including letters of credit, more than $31,250 on the Revolving Credit Facility. Generally, if the Company’s leverage ratio is greater than 4.75:1.00 during the period from the third quarter of 2015 through the fourth quarter of 2016, so long as the stated quarterly adjusted EBITDA thresholds are exceeded, the amount available to borrow under the Revolving Credit Facility is increased from $31,250 to $40,000. Commencing with the end of the first quarter of 2017, the quarterly adjusted EBITDA thresholds are discontinued and the full amount of the revolving commitment ($100,000) is available so long as the Company’s leverage ratio does not exceed a revised limit (6.50:1.00 for the first quarter of 2017 declining quarterly to 4.75:1.00 for the fourth quarter of 2017). As of June 30, 2016, the Company’s leverage ratio was 77.75:1.00.

On April 28, 2016, the Company entered into an amendment to the 2013 Amended Credit Agreement that extended the maturity of certain of the Term B-1 Loans to July 15, 2018 (the “2016 Extended Term Loans”). The Company made a prepayment of accrued interest of $227 and principal of $69,580 on April 28, 2016 to the lenders consenting to the amendment. Accrued interest on the extended remainder of the Term B-1 Loan is due at maturity on July 15, 2018. Under the terms of the agreement, the change in the maturities of the Term B-1 Loans and the 2016 Extended Term Loans are as follows:

 

     Principal Payments  

Due Date

   Prior to Extension      Subsequent to Extension  

4/28/2016(A)

   $ —         $ 69,580   

6/30/2016

     400         43   

9/30/2016

     400         43   

12/31/2016

     400         43   

3/17/2017

     154,812         16,723   

7/15/2018

     —           69,580   
  

 

 

    

 

 

 

Total(B)

   $ 156,012       $ 156,012   
  

 

 

    

 

 

 

 

(A)    -   The principal payment shown for April 28, 2016 represents a prepayment of principal to the lenders consenting to the extended maturity.
(B)    -   These amounts do not reflect the amortization of original issue discounts.

Accrued interest related to the $16,723 principal payment due on March 17, 2017 will also be due on the same date, as shown above. The applicable base rate margin on the interest rate for the Base Rate Term B-1 Loans, the Extended Term B-1 Loans, the 2016 Extended Term Loans, and the Term B-2 Loans is 2.5% and the applicable margin on the interest rate for the Eurodollar Term B-1, Extended Term B-1, 2016 Extended Term Loans, and the Term B-2 Loans is 3.5%. The Eurodollar Extended Term B-1, 2016 Extended Term, and Term B-2 Loans all contain a 1% rate floor, plus the applicable margin. The Term B-1 Loan does not contain any type of interest rate floor.

As of June 30, 2016, Term B-1 Loans, Term B-2 Loans, Extended Term B-1 Loans, the 2016 Extended Term Loans, and the Revolving Credit Facility had interest rates of 4.2%, 4.5%, 4.5%, 4.5%, and 4.3%, respectively.

As of June 30, 2016, there was $18,323 available capacity on the Revolving Credit Facility and $12,927 committed to outstanding letters of credit. As of June 30, 2016, the Company has not drawn on the Revolving Credit Facility.

The Company has a $10,000 Industrial Revenue Bond outstanding related to the construction of a manufacturing facility in Wisconsin. The bond bears interest, which is payable monthly, at a variable rate. The rate was 0.46% at June 30, 2016. The bond matures on September 1, 2027 and is collateralized by a letter of credit of $10,000.

Earnings (Loss) per Share
Earnings (Loss) per Share

5. Earnings (Loss) per Share

The table below shows the computation of basic and diluted earnings (loss) per share for the six months ended June 30, 2016 and 2015:

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2016      2015      2016      2015  

Numerator:

           

Net income (loss) attributable to Fairmount Santrol Holdings Inc.

   $ (87,886    $ 14,137       $ (99,662    $ 44,896   

Denominator:

           

Basic weighted average shares outstanding

     161,647         161,368         161,547         161,161   

Dilutive effect of employee stock options, RSUs, and PRSUs

     —           5,498         —           5,471   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted weighted average shares outstanding

     161,647         166,866         161,547         166,632   
  

 

 

    

 

 

    

 

 

    

 

 

 

Earnings (loss) per common share - basic

   $ (0.54    $ 0.09       $ (0.62    $ 0.28   

Earnings (loss) per common share - diluted

   $ (0.54    $ 0.08       $ (0.62    $ 0.27   

 

Because the Company experienced a loss in the six months ended June 30, 2016, the impact of dilution has not been included in the earnings per share calculation as the effect of including these potential common shares would be antidilutive. The calculation of diluted weighted average shares outstanding for the six months ended June 30, 2015 excludes 6,914 potential common shares because the effect of including these potential common shares would be antidilutive.

Derivative Instruments
Derivative Instruments

6. Derivative Instruments

The Company enters into interest rate swap agreements as a means to partially hedge its variable interest rate risk on debt instruments. The current notional value of these swap agreements is $525,225, which represents a total of approximately 46% of term debt outstanding at June 30, 2016 and effectively fixes the variable rate in a range of 0.83% to 3.115% for the portion of the debt that is hedged. The interest rate swap agreements mature at various dates between March 15, 2017 and September 5, 2019.

The derivative instruments are recorded on the balance sheet at their fair values. Changes in the fair value of derivatives are recorded each period in current earnings or in other comprehensive income, depending on whether a derivative is designated as part of a hedging relationship and, if it is, depending on the type of hedging relationship. For cash flow hedges in which the Company is hedging the variability of cash flows related to a variable-rate liability, the effective portion of the gain or loss on the derivative instrument is reported in other comprehensive income in the periods during which earnings are impacted by the variability of the cash flows of the hedged item. The ineffective portion of all hedges is recognized in current period earnings. As interest expense is accrued on the debt obligation, amounts in accumulated other comprehensive income (loss) related to the interest rate swaps are reclassified into income to obtain a net cost on the debt obligation equal to the effective yield of the fixed rate of each swap. In the event that an interest rate swap is terminated prior to maturity, gains or losses in accumulated other comprehensive income (loss) remain deferred and are reclassified into earnings in the periods in which the hedged forecasted transaction affects earnings.

The Company formally designates and documents instruments at inception that qualify for hedge accounting of underlying exposures in accordance with GAAP. Both at inception and for each reporting period, the Company assesses whether the financial instruments used in hedging transactions are effective in offsetting changes in cash flows of the related underlying exposure.

The following table summarizes the fair values and the respective classification in the Condensed Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015:

 

          Assets (Liabilities)  

Interest Rate Swap Agreements

  

Balance Sheet Classification

   June 30, 2016      December 31, 2015  

Designated as hedges

  

Other long-term liabilities

   $ (20,161    $ (12,107

Designated as hedges

  

Other assets

     —           118   
     

 

 

    

 

 

 
      $ (20,161    $ (11,989
     

 

 

    

 

 

 

The Company recognized $109 and $16 in interest expense, representing the ineffective portion of interest rate swap agreements designated as hedges, in the six months ended June 30, 2016 and 2015, respectively. The Company expects $6,550 to be reclassified from accumulated other comprehensive income (loss) into interest expense within the next twelve months.

Fair Value Measurements
Fair Value Measurements

7. Fair Value Measurements

Financial instruments held by the Company include cash equivalents, accounts receivable, accounts payable, long-term debt (including the current portion thereof) and interest rate swaps. The Company is also liable for contingent consideration from an acquisition that is subject to fair value measurement. Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique.

Based on the examination of the inputs used in the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities at fair value will be classified and disclosed in one of the following three categories:

 

Level 1    Quoted market prices in active markets for identical assets or liabilities
Level 2    Observable market based inputs or unobservable inputs that are corroborated by market data
Level 3    Unobservable inputs that are not corroborated by market data

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The book value of cash equivalents, accounts receivable and accounts payable are considered to be representative of their fair values because of their short maturities. The carrying value of the Company’s long-term debt (including the current portion thereof) is recognized at amortized cost. The fair value of the Term B-1 Loans, the Extended Term B-1 Loans, the 2016 Extended Term Loans, and the Term B-2 Loans differs from amortized costs and is valued at prices obtained from a readily-available source for trading non-public debt, which represent quoted prices for identical or similar assets in markets that are not active, and therefore is considered Level 2. The following table presents the fair value as of June 30, 2016 and December 31, 2015 for the Company’s long-term debt:

 

     Quoted Prices      Other                
     in Active      Observable      Unobservable         
     Markets      Inputs      Inputs         

Long-Term Debt Fair Value Measurements

   (Level 1)      (Level 2)      (Level 3)      Total  

June 30, 2016

           

Term B-1 Loans

   $ —         $ 15,464       $ —         $ 15,464   

Term B-2 Loans

     —           729,514         —           729,514   

Extended Term B-1 Loans

     —           127,543         —           127,543   

2016 Extended Term Loans

     —           60,535         —           60,535   
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ —         $ 933,056       $ —         $ 933,056   
  

 

 

    

 

 

    

 

 

    

 

 

 

December 31, 2015

           

Term B-1 Loans

   $ —         $ 106,360       $ —         $ 106,360   

Term B-2 Loans

     —           443,580         —           443,580   

Extended Term B-1 Loans

     —           76,922         —           76,922   
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ —         $ 626,862       $ —         $ 626,862   
  

 

 

    

 

 

    

 

 

    

 

 

 

The following table presents the amounts carried at fair value as of June 30, 2016 and December 31, 2015 for the Company’s other financial instruments.

 

     Quoted Prices      Other                
     in Active      Observable      Unobservable         
     Markets      Inputs      Inputs         

Recurring Fair Value Measurements

   (Level 1)      (Level 2)      (Level 3)      Total  

June 30, 2016

           

Interest rate swap agreements

   $ —         $ (20,161    $ —         $ (20,161
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ —         $ (20,161    $ —         $ (20,161
  

 

 

    

 

 

    

 

 

    

 

 

 

December 31, 2015

           

Interest rate swap agreements

   $ —         $ (11,989    $ —         $ (11,989
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ —         $ (11,989    $ —         $ (11,989
  

 

 

    

 

 

    

 

 

    

 

 

 
Common Stock and Stock-Based Compensation
Common Stock and Stock-Based Compensation

8. Common Stock and Stock-Based Compensation

The Company granted options to purchase 1,731 and 1,615 shares of common stock in the six months ended June 30, 2016 and 2015, respectively. The average grant date fair value was $2.21 and $3.97 for options issued in the six months ended June 30, 2016 and 2015, respectively. The Company issued restricted stock units (“RSUs”) of 1,020 and 360 in the six months ended June 30, 2016 and 2015, respectively. The Company issued performance restricted stock units (“PRSUs”) of 481 and 0 in the six months ended June 30, 2016 and 2015, respectively.

 

     Options     Weighted
Average Exercise
Price, Options
     Restricted
Stock Units
    Weighted
Average Price at
RSU Issue Date
     Performance
Restricted
Stock Units
    Weighted
Average Price at
PRSU Issue Date
 

Outstanding at December 31, 2015

     16,277      $ 6.28         579      $ 10.45         —        $ —     

Granted

     1,731        2.21         1,020        2.40         481        2.27   

Exercised

     (488     4.11         (14     8.83         —          —     

Forfeited

     (425     8.54         (97     7.07         (23     2.04   

Expired

     (542     7.38         —          —           —          —     
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Outstanding at June 30, 2016

     16,553      $ 5.79         1,488      $ 5.12         458      $ 2.28   

In the three months ended June 30, 2016, the Company recorded approximately $2,135 of stock compensation expense related to a modification of the retirement provisions of the Company’s Long Term Incentive Plans. The modification allows retirement-eligible participants (defined as age 55, plus 10 years of service) to continue to vest in options following retirement, and also allows retired participants to exercise options for up to 10 years from grant date.

Income Taxes
Income Taxes

9. Income Taxes

The Company computes and applies to ordinary income an estimated annual effective tax rate on a quarterly basis based on current and forecasted business levels and activities, including the mix of domestic and foreign results and enacted tax laws. The estimated annual effective tax rate is updated quarterly based on actual results and updated operating forecasts. Ordinary income refers to income (loss) before income tax expense excluding significant, unusual, or infrequently occurring items. The tax effect of an unusual or infrequently occurring item is recorded in the interim period in which it occurs as a discrete item of tax.

For the three months ended June 30, 2016, the Company recorded a tax benefit of $63,019 on a loss before income taxes of $150,889 resulting in an effective tax rate of 41.8%, compared to a tax benefit of $26,677 on a loss before income taxes of $12,536 resulting in an effective tax rate of 212.8% for the same period of 2015. The reduction in the effective tax rate is primarily attributable to a decrease in the impact of depletion applied against forecasted results in 2016 as compared to 2015. The effective rate differs from the U.S. federal statutory rate due primarily to the benefit from a loss carryback and depletion.

 

For the six months ended June 30, 2016, the Company recorded a tax benefit $78,773 on a loss before income taxes of $178,422 resulting in an effective tax rate of 44.1%, compared to a tax benefit of $16,060 on income before income taxes of $28,961 resulting in an effective tax rate of (55.5%) for the same period of 2015. The increase in the effective tax rate is primarily attributable to the impact of depletion as well as a tax benefit from a loss carryback, applied against forecasted results in 2016 as compared to forecasted results in 2015. The effective rate differs from the U.S. federal statutory rate due primarily to the benefit from a loss carryback and depletion.

Defined Benefit Plans
Defined Benefit Plans

10. Defined Benefit Plans

The Company maintained two defined benefit pension plans, the Wedron pension plan and the Troy Grove pension plan, covering union employees at certain facilities that provide benefits based upon years of service or a combination of employee earnings and length of service. The benefits under the Wedron plan were frozen effective December 31, 2012.

Net periodic benefit cost recognized for other Company defined benefit pension plans for the six months ended June 30, 2016 and 2015 is as follows:

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2016      2015      2016      2015  

Components of net periodic benefit cost

           

Service cost

   $ 21         27       $ 42       $ 54   

Interest cost

     87         85         174         170   

Expected return on plan assets

     (120      (127      (240      (254

Amortization of prior service cost

     —           4         —           8   

Amortization of net actuarial loss

     35         70         109         140   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net periodic benefit cost

   $ 23       $ 59       $ 85       $ 118   
  

 

 

    

 

 

    

 

 

    

 

 

 

The Company contributed $42 and $33 during the six months ended June 30, 2016 and 2015, respectively. Total expected employer contributions during the year ending December 31, 2016 are $76.

Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)

11. Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) attributable to Fairmount Santrol Holdings Inc. at June 30, 2016 and December 31, 2015 were as follows:

 

     June 30, 2016  
     Gross      Tax Effect      Net Amount  

Foreign currency translation

   $ (10,390    $ 1,627       $ (8,763

Additional pension liability

     (3,906      1,464         (2,442

Unrealized gain (loss) on interest rate hedges

     (18,342      6,548         (11,794
  

 

 

    

 

 

    

 

 

 
   $ (32,638    $ 9,639       $ (22,999
  

 

 

    

 

 

    

 

 

 
     December 31, 2015  
     Gross      Tax Effect      Net Amount  

Foreign currency translation

   $ (10,030    $ 1,318       $ (8,712

Additional pension liability

     (4,014      1,464         (2,550

Unrealized gain (loss) on interest rate hedges

     (10,128      3,697         (6,431
  

 

 

    

 

 

    

 

 

 
   $ (24,172    $ 6,479       $ (17,693
  

 

 

    

 

 

    

 

 

 

The following table presents the changes in accumulated other comprehensive income by component for the six months ended June 30, 2016:

 

     Six Months Ended June 30, 2016  
                   Unrealized         
     Foreign      Additional      gain (loss)         
     currency      pension      on interest         
     translation      liability      rate hedges      Total  

Beginning balance

   $ (8,712    $ (2,550    $ (6,431    $ (17,693

Other comprehensive income (loss) before reclassifications

     (51      —           (7,540      (7,591

Amounts reclassified from accumulated other comprehensive income (loss)

     —           108         2,177         2,285   
  

 

 

    

 

 

    

 

 

    

 

 

 

Ending balance

   $ (8,763    $ (2,442    $ (11,794    $ (22,999
  

 

 

    

 

 

    

 

 

    

 

 

 

The following table presents the reclassifications out of accumulated other comprehensive income during the six months ended June 30, 2016:

 

     Amount reclassified       
     from accumulated       
     other comprehensive      Affected line item on

Details about accumulated other comprehensive income

   income     

the statement of income

Change in fair value of derivative swap agreements

     

Interest rate hedging contracts

   $ 3,332       Interest expense

Tax effect

     (1,156    Tax expense (benefit)
  

 

 

    
   $ 2,176       Net of tax

Amortization of pension obligations

     

Prior service cost

   $ —         Cost of sales

Actuarial losses

     109       Cost of sales
  

 

 

    
     109       Total before tax

Tax effect

     —         Tax expense
  

 

 

    
     109       Net of tax
  

 

 

    

Total reclassifications for the period

   $ 2,285       Net of tax
  

 

 

    
Commitments and Contingent Liabilities
Commitments and Contingent Liabilities

12. Commitments and Contingent Liabilities

The Company has entered into numerous mineral rights agreements, in which payments under the agreements are expensed as incurred. Certain agreements require annual payments while other agreements require payments based upon annual tons mined and others a combination thereof.

The Company has entered into agreements with third party terminal operators whereby certain minimum payments are due regardless of terminal utilization.

The Company leases certain machinery, equipment (including railcars), buildings and office space under operating lease arrangements. Total rent expense associated with these leases was $35,156 and $33,503 for the six months ended June 30, 2016 and 2015, respectively.

 

The Company is subject to a contingent consideration arrangement related to the purchase of Self-Suspending Proppant LLC (“SSP”), which was accounted for as an acquisition of a group of assets. The contingent consideration is based on a fixed percentage of the cumulative product margin, less certain adjustments, generated by sales of Propel SSP and other products incorporating SSP technology for the five years commencing on October 1, 2015. The Company entered into an Amendment to this agreement on December 17, 2015. This Amendment (a) extends the period during which the aggregate earnout payments must equal or exceed $45,000 from the two-year period ending October 1, 2017 until the three-year period ending October 1, 2018; and (b) provides that the aggregate earnout payments during the two-year period ending October 1, 2017 must equal or exceed $15,000 and granted the Seller a security interest in 51% of the equity interests in the Company to secure such $15,000. The Amendment does not alter the final threshold earnout amount, which continues to be $195,000 (inclusive of the $45,000 payment, if any) by October 1, 2020. The contingent consideration is accrued and capitalized as part of the cost of the SSP assets at the time a payment is probable and reasonably estimable. Accordingly, the Company accrued and capitalized $56 in the six months ended June 30, 2016.

Certain subsidiaries are defendants in lawsuits in which the alleged injuries are claimed to be silicosis-related and to have resulted, in whole or in part, from exposure to silica-containing products, allegedly including those sold by certain subsidiaries. In the majority of cases, there are numerous other defendants. In accordance with its insurance obligations, the defense of these actions has been tendered to and the cases are being defended by the subsidiaries’ insurance carriers. Management believes that the Company’s substantial level of existing and available insurance coverage combined with various open indemnities is more than sufficient to cover any exposure to silicosis-related expenses. An estimate of the possible loss, if any, cannot be made at this time.

In December 2015, the Company was notified by the Securities and Exchange Commission (the “SEC”) that it was being investigated for possible violations of the Foreign Corrupt Practices Act (the “FCPA”) and other securities laws relating to matters concerning certain of the Company’s international operations. The Company had previously retained outside legal counsel to investigate the subject matter of the SEC’s investigation, and at that time, the Company determined that no further action was necessary. The Company cannot predict what, if any, further action the SEC may take regarding its investigation, and cannot provide an estimate of the potential costs of the SEC’s investigation or any possible fines, penalties, or other remedial actions that might result, if any, at this time.

Segment Reporting
Segment Reporting

14. Segment Reporting

The Company organizes its business into two reportable segments, Proppant Solutions and Industrial & Recreational Products. The reportable segments are consistent with how management views the markets served by the Company and the financial information reviewed by the chief operating decision maker in deciding how to allocate resources and assess performance.

 

The chief operating decision maker primarily evaluates an operating segment’s performance based on segment contribution margin, which excludes certain corporate costs not associated with the operations of the segment. These corporate costs are separately stated below and include costs that are related to functional areas such as operations management, corporate purchasing, accounting, treasury, information technology, legal and human resources.

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2016      2015      2016      2015  

Revenues

           

Proppant Solutions

   $ 82,102       $ 188,150       $ 199,565       $ 461,019   

Industrial & Recreational Products

     32,147         33,173         60,142         61,794   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     114,249         221,323         259,707         522,813   

Segment contribution margin

           

Proppant Solutions(A)

     (74,398      35,416         (61,790      119,235   

Industrial & Recreational Products(B)

     12,006         (894      20,852         6,182   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total segment contribution margin

     (62,392      34,522         (40,938      125,417   

Operating expenses excluded from segment contribution margin

           

Selling, general, and administrative

     15,565         12,694         26,384         28,454   

Depreciation, depletion, and amortization

     18,056         16,276         36,642         32,499   

Stock compensation expense

     3,914         2,618         5,567         4,501   

Corporate asset impairments, restructuring charges, and other operating expense

     34,356         576         35,028         800   

Interest expense, net

     16,606         14,894         33,868         30,202   

Other non-operating income

     —           —           (5      —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before provision for income taxes

   $ (150,889    $ (12,536    $ (178,422    $ 28,961   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(A)    -   Includes asset impairments and restructuring charges of $57,224 and $2,337 for the three months ended June 30, 2016 and 2015, respectively, and $57,300 and $2,337 for the six months ended June 30, 2016 and 2015, respectively.
(B)    -   Includes asset impairments and restructuring charges of $0 and $12,085 for the three and six months ended June 30, 2016 and 2015, respectively.
Restructuring Charges
Restructuring Charges

15. Restructuring Charges

As a result of challenging conditions in the energy market, the Company has taken actions to adjust its overall operational footprint and reduce costs. The restructuring program primarily consists of workforce reductions and costs to idle or exit facilities. The Company expects to complete these activities prior to the end of 2016, although a continued sustained downturn in the oil and gas market could extend the duration of this restructuring process. A summary of the restructuring costs recognized for the six months ended June 30, 2016 and 2015, respectively, is as follows:

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2016      2015      2016      2015  

Restructuring charges

           

Workforce reduction costs, including one-time severance payments

   $ 1,155       $ 401       $ 1,155       $ 725   

Other exit costs, including multiemployer pension plan withdrawal liability and additional cash costs to exit facilities

     —           7,948         —           7,948   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total restructuring charges

   $ 1,155       $ 8,349       $ 1,155       $ 8,673   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

A summary of the restructuring costs by operating segment is as follows:

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2016      2015      2016      2015  

Restructuring charges

           

Proppant Solutions

   $ —         $ 1,162       $ —         $ 1,162   

Industrial & Recreational Products

     —           6,786         —           6,786   

Corporate

     1,155         401         1,155         725   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total restructuring charges

   $ 1,155       $ 8,349       $ 1,155       $ 8,673   
  

 

 

    

 

 

    

 

 

    

 

 

 
Indefinite-Lived Intangibles - Goodwill
Indefinite-Lived Intangibles - Goodwill

16. Indefinite-Lived Intangibles – Goodwill

As of June 30, 2016, the balance of Goodwill was $15,301, which represents goodwill related to acquisitions in the Company’s Industrial & Recreational Products segment. The Company performed a review of qualitative factors and concluded that, as of June 30, 2016, there were no events or changes in circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying value.

Subsequent Event
Subsequent Event

17. Subsequent Event

On July 26, 2016, the Company completed a public offering of 25,000 shares of its common stock. In addition, the underwriters completed their exercise of an overallotment option on July 28, 2016 to sell an additional 3,750 shares. Cash proceeds received by the Company for the 28,750 shares sold were approximately $161,000, net of underwriting commissions and estimated offering expenses. After these transactions, there were 191,413 shares of common stock issued and outstanding as of July 31, 2016.

The Company intends to use the net proceeds of the offering for general corporate purposes, which include, but are not limited to, working capital, repayment, redemption or refinancing of debt and leases, investments in or loans to subsidiaries, and satisfaction of other obligations.

Significant Accounting Policies (Policies)

Basis of Presentation

The unaudited condensed consolidated financial statements of Fairmount Santrol Holdings Inc. and its consolidated subsidiaries (collectively, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments (which are of a normal, recurring nature) and disclosures necessary for a fair statement of the financial position, results of operations, comprehensive income, and cash flows of the reported interim periods. The condensed consolidated balance sheet as of December 31, 2015 was derived from audited financial statements, but does not include all disclosures required by GAAP. Interim results are not necessarily indicative of the results to be expected for the full year or any other interim period. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements as filed in the 2015 Annual Report on Form 10-K and notes thereto and information included elsewhere in this Quarterly Report on Form 10-Q.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Change in Classification

In the three months ended June 30, 2016, the Company changed the classification of certain operating expenses on the Condensed Consolidated Statements of Income (Loss). Previously, the Company classified expenses incurred related to the downturn in the proppant market as “restructuring and other charges.” The Company now further classifies these types of expenses between asset impairments and restructuring charges. All comparative periods presented have been restated accordingly. See Notes 14 and 15 for further detail.

Recent Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03 – Interest – Imputation of Interest (Subtopic 835-30). Under Subtopic 835-30, debt issuance costs related to a recognized debt liability will be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The guidance is required to be applied on a retrospective basis beginning January 1, 2016. Accordingly, the Company applied this guidance to its Condensed Consolidated Balance Sheets in the first quarter of 2016. See Note 4 for further detail.

In February 2016, the FASB issued ASU No. 2016-02 – Leases (ASC 842), which sets out the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The ASU requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The ASU requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The ASU is expected to impact the Company’s consolidated financial statements as the Company has certain operating and land lease arrangements for which it is the lessee. ASC 842 supersedes the previous leases standard, ASC 840 – Leases. The ASU is effective on January 1, 2019, with early adoption permitted. The Company is in the process of evaluating the impact of this new guidance on its financial statements and disclosures.

In March 2016, the FASB issued ASU No. 2016-09 – Compensation – Stock Compensation (Topic 718), which provides guidance on simplified accounting for and presentation of share-based payment transactions, including income tax consequences, minimum tax withholding requirements, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The ASU requires all tax effects of share-based payments to be recorded through the income statement, windfall tax benefits to be recorded when the benefit arises, and all share-based payment tax-related cash flows to be reported as operating activities in the statement of cash flows. Regarding tax withholding requirements, the ASU allows entities to withhold an amount up to the employees’ maximum individual tax rates without classifying the award as a liability. The ASU also permits entities to make an accounting policy election for the impact of forfeitures on expense recognition, either recognized when forfeitures are estimated or when forfeitures occur. The ASU is expected to impact the Company’s financial statements and disclosures as the Company makes share-based payments to its employees. The ASU is effective beginning January 1, 2017, with early adoption permitted. The Company is in the process of evaluating the impact of this new guidance on its financial statements and disclosures.

In April and May 2016, the FASB issued ASU No. 2016-10 – Revenue from Contracts with Customers – Identifying Performance Obligations and Licensing, ASU No. 2016-11 – Revenue Recognition and Derivatives and Hedging – Recession of SEC Guidance, and ASU No. 2016-12 – Revenue from Contracts with Customers – Narrow-Scope Improvements and Practical Expedients. These ASU’s each affect the guidance of the new revenue recognition standard in ASU No. 2014-09 – Revenue from Contracts with Customers and related subsequent ASUs. This guidance is effective beginning January 1, 2018. The Company is in the process of evaluating the effect of the new guidance on its financial statements and disclosures.

Inventories (Tables)
Schedule of Inventories

At June 30, 2016 and December 31, 2015, inventories consisted of the following:

 

     June 30, 2016      December 31, 2015  

Raw materials

   $ 4,913       $ 10,145   

Work-in-process

     11,353         14,613   

Finished goods

     43,074         48,648   
  

 

 

    

 

 

 
     59,340         73,406   

Less: LIFO reserve

     (2,647      (2,912
  

 

 

    

 

 

 

Inventories

   $ 56,693       $ 70,494   
  

 

 

    

 

 

 
Property, Plant, and Equipment (Tables)
Schedule of Property, Plant, and Equipment

At June 30, 2016 and December 31, 2015, property, plant, and equipment consisted of the following:

 

     June 30, 2016      December 31, 2015  

Land and improvements

   $ 83,763       $ 82,966   

Mineral reserves and mine development

     248,196         323,691   

Machinery and equipment

     576,933         575,034   

Buildings and improvements

     152,951         171,791   

Furniture, fixtures, and other

     3,455         3,609   

Construction in progress

     39,260         37,047   
  

 

 

    

 

 

 
     1,104,558         1,194,138   

Accumulated depletion and depreciation

     (347,875      (323,141
  

 

 

    

 

 

 

Property, plant, and equipment, net

   $ 756,683       $ 870,997   
  

 

 

    

 

 

 
Long-Term Debt (Tables)

At June 30, 2016 and December 31, 2015, long-term debt consisted of the following:

 

     June 30, 2016      December 31, 2015  

Term B-1 Loans

   $ 16,790       $ 156,134   

Term B-2 Loans

     898,153         902,402   

Extended Term B-1 Loans

     159,103         159,878   

2016 Extended Term Loans

     69,492         —     

Industrial Revenue bond

     10,000         10,000   

Revolving credit facility and other

     88         101   

Capital leases, net

     5,472         9,301   

Deferred financing costs, net

     (12,544      (14,710
  

 

 

    

 

 

 
     1,146,554         1,223,106   

Less: current portion

     (30,677      (17,385
  

 

 

    

 

 

 

Long-term debt including leases

   $ 1,115,877       $ 1,205,721   
  

 

 

    

 

 

 

Under the terms of the agreement, the change in the maturities of the Term B-1 Loans and the 2016 Extended Term Loans are as follows:

 

     Principal Payments  

Due Date

   Prior to Extension      Subsequent to Extension  

4/28/2016(A)

   $ —         $ 69,580   

6/30/2016

     400         43   

9/30/2016

     400         43   

12/31/2016

     400         43   

3/17/2017

     154,812         16,723   

7/15/2018

     —           69,580   
  

 

 

    

 

 

 

Total(B)

   $ 156,012       $ 156,012   
  

 

 

    

 

 

 

 

(A)    -   The principal payment shown for April 28, 2016 represents a prepayment of principal to the lenders consenting to the extended maturity.
(B)    -   These amounts do not reflect the amortization of original issue discounts.
Earnings (Loss) per Share (Tables)
Computation of Basic and Diluted Earnings (Loss) per Share

The table below shows the computation of basic and diluted earnings (loss) per share for the six months ended June 30, 2016 and 2015:

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2016      2015      2016      2015  

Numerator:

           

Net income (loss) attributable to Fairmount Santrol Holdings Inc.

   $ (87,886    $ 14,137       $ (99,662    $ 44,896   

Denominator:

           

Basic weighted average shares outstanding

     161,647         161,368         161,547         161,161   

Dilutive effect of employee stock options, RSUs, and PRSUs

     —           5,498         —           5,471   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted weighted average shares outstanding

     161,647         166,866         161,547         166,632   
  

 

 

    

 

 

    

 

 

    

 

 

 

Earnings (loss) per common share - basic

   $ (0.54    $ 0.09       $ (0.62    $ 0.28   

Earnings (loss) per common share - diluted

   $ (0.54    $ 0.08       $ (0.62    $ 0.27   
Derivative Instruments (Tables)
Fair Values of Derivative Instrument and Respective Classification in Condensed Consolidated Balance Sheets

The following table summarizes the fair values and the respective classification in the Condensed Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015:

 

          Assets (Liabilities)  

Interest Rate Swap Agreements

  

Balance Sheet Classification

   June 30, 2016      December 31, 2015  

Designated as hedges

  

Other long-term liabilities

   $ (20,161    $ (12,107

Designated as hedges

  

Other assets

     —           118   
     

 

 

    

 

 

 
      $ (20,161    $ (11,989
     

 

 

    

 

 

 
Fair Value Measurements (Tables)

The following table presents the fair value as of June 30, 2016 and December 31, 2015 for the Company’s long-term debt:

 

     Quoted Prices      Other                
     in Active      Observable      Unobservable         
     Markets      Inputs      Inputs         

Long-Term Debt Fair Value Measurements

   (Level 1)      (Level 2)      (Level 3)      Total  

June 30, 2016

           

Term B-1 Loans

   $ —         $ 15,464       $ —         $ 15,464   

Term B-2 Loans

     —           729,514         —           729,514   

Extended Term B-1 Loans

     —           127,543         —           127,543   

2016 Extended Term Loans

     —           60,535         —           60,535   
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ —         $ 933,056       $ —         $ 933,056   
  

 

 

    

 

 

    

 

 

    

 

 

 

December 31, 2015

           

Term B-1 Loans

   $ —         $ 106,360       $ —         $ 106,360   

Term B-2 Loans

     —           443,580         —           443,580   

Extended Term B-1 Loans

     —           76,922         —           76,922   
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ —         $ 626,862       $ —         $ 626,862   
  

 

 

    

 

 

    

 

 

    

 

 

 

The following table presents the amounts carried at fair value as of June 30, 2016 and December 31, 2015 for the Company’s other financial instruments.

 

     Quoted Prices      Other                
     in Active      Observable      Unobservable         
     Markets      Inputs      Inputs         

Recurring Fair Value Measurements

   (Level 1)      (Level 2)      (Level 3)      Total  

June 30, 2016

           

Interest rate swap agreements

   $ —         $ (20,161    $ —         $ (20,161
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ —         $ (20,161    $ —         $ (20,161
  

 

 

    

 

 

    

 

 

    

 

 

 
Common Stock and Stock-Based Compensation (Tables)
Summary of Share Based Compensation Activity of Option and Non-option Instruments
     Options     Weighted
Average Exercise
Price, Options
     Restricted
Stock Units
    Weighted
Average Price at
RSU Issue Date
     Performance
Restricted
Stock Units
    Weighted
Average Price at
PRSU Issue Date
 

Outstanding at December 31, 2015

     16,277      $ 6.28         579      $ 10.45         —        $ —     

Granted

     1,731        2.21         1,020        2.40         481        2.27   

Exercised

     (488     4.11         (14     8.83         —          —     

Forfeited

     (425     8.54         (97     7.07         (23     2.04   

Expired

     (542     7.38         —          —           —          —     
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Outstanding at June 30, 2016

     16,553      $ 5.79         1,488      $ 5.12         458      $ 2.28   
Defined Benefit Plans (Tables) (Net Periodic Benefit Cost [Member])
Summary of Defined Benefit Plans

Net periodic benefit cost recognized for other Company defined benefit pension plans for the six months ended June 30, 2016 and 2015 is as follows:

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2016      2015      2016      2015  

Components of net periodic benefit cost

           

Service cost

   $ 21         27       $ 42       $ 54   

Interest cost

     87         85         174         170   

Expected return on plan assets

     (120      (127      (240      (254

Amortization of prior service cost

     —           4         —           8   

Amortization of net actuarial loss

     35         70         109         140   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net periodic benefit cost

   $ 23       $ 59       $ 85       $ 118   
  

 

 

    

 

 

    

 

 

    

 

 

 
Accumulated Other Comprehensive Income (Loss) (Tables)

The components of accumulated other comprehensive income (loss) attributable to Fairmount Santrol Holdings Inc. at June 30, 2016 and December 31, 2015 were as follows:

 

     June 30, 2016  
     Gross      Tax Effect      Net Amount  

Foreign currency translation

   $ (10,390    $ 1,627       $ (8,763

Additional pension liability

     (3,906      1,464         (2,442

Unrealized gain (loss) on interest rate hedges

     (18,342      6,548         (11,794
  

 

 

    

 

 

    

 

 

 
   $ (32,638    $ 9,639       $ (22,999
  

 

 

    

 

 

    

 

 

 
     December 31, 2015  
     Gross      Tax Effect      Net Amount  

Foreign currency translation

   $ (10,030    $ 1,318       $ (8,712

Additional pension liability

     (4,014      1,464         (2,550

Unrealized gain (loss) on interest rate hedges

     (10,128      3,697         (6,431
  

 

 

    

 

 

    

 

 

 
   $ (24,172    $ 6,479       $ (17,693
  

 

 

    

 

 

    

 

 

 

The following table presents the changes in accumulated other comprehensive income by component for the six months ended June 30, 2016:

 

     Six Months Ended June 30, 2016  
                   Unrealized         
     Foreign      Additional      gain (loss)         
     currency      pension      on interest         
     translation      liability      rate hedges      Total  

Beginning balance

   $ (8,712    $ (2,550    $ (6,431    $ (17,693

Other comprehensive income (loss) before reclassifications

     (51      —           (7,540      (7,591

Amounts reclassified from accumulated other comprehensive income (loss)

     —           108         2,177         2,285   
  

 

 

    

 

 

    

 

 

    

 

 

 

Ending balance

   $ (8,763    $ (2,442    $ (11,794    $ (22,999
  

 

 

    

 

 

    

 

 

    

 

 

 

The following table presents the reclassifications out of accumulated other comprehensive income during the six months ended June 30, 2016:

 

     Amount reclassified       
     from accumulated       
     other comprehensive      Affected line item on

Details about accumulated other comprehensive income

   income     

the statement of income

Change in fair value of derivative swap agreements

     

Interest rate hedging contracts

   $ 3,332       Interest expense

Tax effect

     (1,156    Tax expense (benefit)
  

 

 

    
   $ 2,176       Net of tax

Amortization of pension obligations

     

Prior service cost

   $ —         Cost of sales

Actuarial losses

     109       Cost of sales
  

 

 

    
     109       Total before tax

Tax effect

     —         Tax expense
  

 

 

    
     109       Net of tax
  

 

 

    

Total reclassifications for the period

   $ 2,285       Net of tax
  

 

 

    
Segment Reporting (Tables)
Summarized Financial Information for Reportable Segments
     Three Months Ended June 30,      Six Months Ended June 30,  
     2016      2015      2016      2015  

Revenues

           

Proppant Solutions

   $ 82,102       $ 188,150       $ 199,565       $ 461,019   

Industrial & Recreational Products

     32,147         33,173         60,142         61,794   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     114,249         221,323         259,707         522,813   

Segment contribution margin

           

Proppant Solutions(A)

     (74,398      35,416         (61,790      119,235   

Industrial & Recreational Products(B)

     12,006         (894      20,852         6,182   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total segment contribution margin

     (62,392      34,522         (40,938      125,417   

Operating expenses excluded from segment contribution margin

           

Selling, general, and administrative

     15,565         12,694         26,384         28,454   

Depreciation, depletion, and amortization

     18,056         16,276         36,642         32,499   

Stock compensation expense

     3,914         2,618         5,567         4,501   

Corporate asset impairments, restructuring charges, and other operating expense

     34,356         576         35,028         800   

Interest expense, net

     16,606         14,894         33,868         30,202   

Other non-operating income

     —           —           (5      —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before provision for income taxes

   $ (150,889    $ (12,536    $ (178,422    $ 28,961   
  

 

 

    

 

 

    

 

 

    

 

 

 
Restructuring Charges (Tables)

A summary of the restructuring costs recognized for the six months ended June 30, 2016 and 2015, respectively, is as follows:

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2016      2015      2016      2015  

Restructuring charges

           

Workforce reduction costs, including one-time severance payments

   $ 1,155       $ 401       $ 1,155       $ 725   

Other exit costs, including multiemployer pension plan withdrawal liability and additional cash costs to exit facilities

     —           7,948         —           7,948   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total restructuring charges

   $ 1,155       $ 8,349       $ 1,155       $ 8,673   
  

 

 

    

 

 

    

 

 

    

 

 

 

A summary of the restructuring costs by operating segment is as follows:

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2016      2015      2016      2015  

Restructuring charges

           

Proppant Solutions

   $ —         $ 1,162       $ —         $ 1,162   

Industrial & Recreational Products

     —           6,786         —           6,786   

Corporate

     1,155         401         1,155         725   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total restructuring charges

   $ 1,155       $ 8,349       $ 1,155       $ 8,673   
  

 

 

    

 

 

    

 

 

    

 

 

 
Inventories - Schedule of Inventories (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Inventory Disclosure [Abstract]
 
 
Raw materials
$ 4,913 
$ 10,145 
Work-in-process
11,353 
14,613 
Finished goods
43,074 
48,648 
Inventory gross
59,340 
73,406 
Less: LIFO reserve
(2,647)
(2,912)
Inventories
$ 56,693 
$ 70,494 
Property, Plant, and Equipment - Schedule of Property, Plant, and Equipment (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment gross
$ 1,104,558 
$ 1,194,138 
Accumulated depletion and depreciation
(347,875)
(323,141)
Property, plant, and equipment, net
756,683 
870,997 
Land and Improvements [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment gross
83,763 
82,966 
Mineral Reserves and Mine Development [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment gross
248,196 
323,691 
Machinery and Equipment [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment gross
576,933 
575,034 
Buildings and Improvements [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment gross
152,951 
171,791 
Furniture, Fixtures and Other [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment gross
3,455 
3,609 
Construction in Progress [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment gross
$ 39,260 
$ 37,047 
Property, Plant, and Equipment - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Dec. 31, 2015
Property Plant And Equipment Capitalized Interest Costs [Abstract]
 
 
 
 
 
Asset impairments
$ 90,578 
$ 6,475 
$ 90,654 
$ 6,475 
 
Asset held-for-sale, current
$ 1,317 
 
$ 1,317 
 
$ 4,218 
Long-Term Debt - Schedule of Long-Term Debt (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Debt Instrument [Line Items]
 
 
Industrial Revenue bond
$ 10,000 
$ 10,000 
Revolving credit facility and other
88 
101 
Capital leases, net
5,472 
9,301 
Deferred financing costs, net
(12,544)
(14,710)
Long term debt
1,146,554 
1,223,106 
Long term debt
1,146,554 
1,223,106 
Less: current portion
(30,677)
(17,385)
Long-term debt including leases
1,115,877 
1,205,721 
Term B-1 Loans [Member]
 
 
Debt Instrument [Line Items]
 
 
Term Loans
16,790 
156,134 
Revolving credit facility and other
156,012 
 
Term B-2 Loans [Member]
 
 
Debt Instrument [Line Items]
 
 
Term Loans
898,153 
902,402 
Extended Term B-1 Loans [Member]
 
 
Debt Instrument [Line Items]
 
 
Term Loans
159,103 
159,878 
2016 Extended Term Loans [Member]
 
 
Debt Instrument [Line Items]
 
 
Term Loans
69,492 
 
Revolving credit facility and other
$ 156,012 
 
Long-Term Debt - Additional Information (Detail) (USD $)
0 Months Ended 6 Months Ended 0 Months Ended 6 Months Ended 0 Months Ended 6 Months Ended 0 Months Ended 6 Months Ended 0 Months Ended 6 Months Ended 0 Months Ended 6 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended
Apr. 28, 2016
Jun. 30, 2016
Apr. 28, 2016
Dec. 31, 2015
Jun. 30, 2016
Revolving Credit Facility [Member]
Jun. 30, 2016
Revolving Credit Facility [Member]
Borrowings [Member]
Jun. 30, 2016
3/17/2017 [Member]
Jun. 30, 2016
3/17/2017 [Member]
Jun. 30, 2016
Term B-1 Loans [Member]
Jun. 30, 2016
Term B-1 Loans [Member]
Base Rate [Member]
Jun. 30, 2016
Term B-1 Loans [Member]
Base Rate [Member]
Jun. 30, 2016
Term B-1 Loans [Member]
Eurodollar [Member]
Jun. 30, 2016
Term B-1 Loans [Member]
Eurodollar [Member]
Jun. 30, 2016
Term B-1 Loans [Member]
Revolving Credit Facility [Member]
Jun. 30, 2016
Term B-1 Loans [Member]
3/17/2017 [Member]
Jun. 30, 2016
Term B-2 Loans [Member]
Base Rate [Member]
Jun. 30, 2016
Term B-2 Loans [Member]
Base Rate [Member]
Jun. 30, 2016
Term B-2 Loans [Member]
Eurodollar [Member]
Jun. 30, 2016
Term B-2 Loans [Member]
Eurodollar [Member]
Jun. 30, 2016
Term B-2 Loans [Member]
Revolving Credit Facility [Member]
Sep. 30, 2015
2013 Pre Amendment [Member]
Revolving Credit Facility [Member]
US [Member]
Jun. 30, 2016
2013 Amended Credit Agreement [Member]
Sep. 30, 2015
2013 Amended Credit Agreement [Member]
Revolving Credit Facility [Member]
Sep. 30, 2015
2013 Amended Credit Agreement [Member]
Revolving Credit Facility [Member]
Minimum [Member]
Sep. 30, 2015
2013 Amended Credit Agreement [Member]
Revolving Credit Facility [Member]
US [Member]
Sep. 30, 2015
2013 Amended Credit Agreement [Member]
Revolving Credit Facility [Member]
Canada [Member]
Sep. 30, 2015
2013 Amended Credit Agreement [Member]
Period from Third Quarter of 2015 to Fourth Quarter of 2016 [Member]
Revolving Credit Facility [Member]
Sep. 30, 2015
2013 Amended Credit Agreement [Member]
Period from Third Quarter of 2015 to Fourth Quarter of 2016 [Member]
Revolving Credit Facility [Member]
Minimum [Member]
Sep. 30, 2015
2013 Amended Credit Agreement [Member]
First Quarter of 2017 [Member]
Revolving Credit Facility [Member]
Sep. 30, 2015
2013 Amended Credit Agreement [Member]
First Quarter of 2017 [Member]
Revolving Credit Facility [Member]
Maximum [Member]
Sep. 30, 2015
2013 Amended Credit Agreement [Member]
Fourth Quarter of 2017 [Member]
Revolving Credit Facility [Member]
Maximum [Member]
Apr. 28, 2016
2016 Extended Term Loans [Member]
Jun. 30, 2016
2016 Extended Term Loans [Member]
Jun. 30, 2016
2016 Extended Term Loans [Member]
Base Rate [Member]
Jun. 30, 2016
2016 Extended Term Loans [Member]
Eurodollar [Member]
Jun. 30, 2016
2016 Extended Term Loans [Member]
Revolving Credit Facility [Member]
Jun. 30, 2016
2016 Extended Term Loans [Member]
3/17/2017 [Member]
Jun. 30, 2016
Extended Term B-1 Loans [Member]
Eurodollar [Member]
Jun. 30, 2016
Extended Term B-1 Loans [Member]
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Applicable margin on interest rate
 
0.46% 
 
 
 
 
 
 
 
2.50% 
2.50% 
3.50% 
3.50% 
 
 
2.50% 
2.50% 
3.50% 
3.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.50% 
3.50% 
 
 
3.50% 
 
Total Revolving Credit Facility commitment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 124,000,000 
 
$ 31,250,000 
 
$ 99,000,000 
$ 1,000,000 
$ 40,000,000 
 
$ 100,000,000 
 
 
 
 
 
 
 
 
 
 
Outstanding term loans
 
88,000 
 
101,000 
 
 
 
16,723,000 
156,012,000 
 
 
 
 
 
154,812,000 
 
 
 
 
 
 
 
 
31,250,000 
 
 
 
 
 
 
 
 
156,012,000 
 
 
 
16,723,000 
 
 
Leverage ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
77.75% 
 
 
 
 
 
475.00% 
 
650.00% 
475.00% 
 
 
 
 
 
 
 
 
Debt instrument borrowings, maturity date
 
Sep. 01, 2027 
 
 
 
 
Mar. 17, 2017 
Mar. 17, 2017 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Jul. 15, 2018 
 
 
 
 
 
 
 
Prepayment of accrued interest
 
 
227,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prepayment of principal amount
69,580,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Floor rate
 
 
 
 
 
 
 
 
 
 
 
0.00% 
 
 
 
 
 
1.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.00% 
 
 
1.00% 
 
Interest rate of borrowings
 
 
 
 
 
4.30% 
 
 
 
 
 
 
 
4.20% 
 
 
 
 
 
4.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.50% 
 
 
4.50% 
Available capacity remaining on the revolving credit facility
 
 
 
 
18,323,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding letters of credit
 
12,927,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Industrial revenue bond outstanding
 
10,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Letter of credit
 
$ 10,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-Term Debt - Summary of Change in Maturities of Term Loans (Detail) (USD $)
In Thousands, unless otherwise specified
6 Months Ended 6 Months Ended 0 Months Ended 6 Months Ended 0 Months Ended
Jun. 30, 2016
Dec. 31, 2015
Jun. 30, 2016
4/28/2016 [Member]
Jun. 30, 2016
6/30/2016 [Member]
Jun. 30, 2016
9/30/2016 [Member]
Jun. 30, 2016
12/31/2016 [Member]
Jun. 30, 2016
3/17/2017 [Member]
Jun. 30, 2016
3/17/2017 [Member]
Jun. 30, 2016
7/15/2018 [Member]
Jun. 30, 2016
Term B-1 Loans [Member]
Jun. 30, 2016
Term B-1 Loans [Member]
6/30/2016 [Member]
Jun. 30, 2016
Term B-1 Loans [Member]
9/30/2016 [Member]
Jun. 30, 2016
Term B-1 Loans [Member]
12/31/2016 [Member]
Jun. 30, 2016
Term B-1 Loans [Member]
3/17/2017 [Member]
Apr. 28, 2016
2016 Extended Term Loans [Member]
Jun. 30, 2016
2016 Extended Term Loans [Member]
Jun. 30, 2016
2016 Extended Term Loans [Member]
4/28/2016 [Member]
Jun. 30, 2016
2016 Extended Term Loans [Member]
6/30/2016 [Member]
Jun. 30, 2016
2016 Extended Term Loans [Member]
9/30/2016 [Member]
Jun. 30, 2016
2016 Extended Term Loans [Member]
12/31/2016 [Member]
Jun. 30, 2016
2016 Extended Term Loans [Member]
3/17/2017 [Member]
Jun. 30, 2016
2016 Extended Term Loans [Member]
7/15/2018 [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Due Date
Sep. 01, 2027 
 
Apr. 28, 2016 
Jun. 30, 2016 
Sep. 30, 2016 
Dec. 31, 2016 
Mar. 17, 2017 
Mar. 17, 2017 
Jul. 15, 2018 
 
 
 
 
 
Jul. 15, 2018 
 
 
 
 
 
 
 
Principal Payments
$ 88 
$ 101 
 
 
 
 
 
$ 16,723 
 
$ 156,012 
$ 400 
$ 400 
$ 400 
$ 154,812 
 
$ 156,012 
$ 69,580 
$ 43 
$ 43 
$ 43 
$ 16,723 
$ 69,580 
Earnings (Loss) per Share - Computation of Basic and Diluted Earnings (Loss) per Share (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Numerator:
 
 
 
 
Net income (loss) attributable to Fairmount Santrol Holdings Inc.
$ (87,886)
$ 14,137 
$ (99,662)
$ 44,896 
Denominator:
 
 
 
 
Basic weighted average shares outstanding
161,647,000 
161,368,000 
161,547,000 
161,161,000 
Dilutive effect of employee stock options, RSUs, and PRSUs
 
5,498,000 
 
5,471,000 
Diluted weighted average shares outstanding
161,647,000 
166,866,000 
161,547,000 
166,632,000 
Earnings (loss) per common share - basic
$ (0.54)
$ 0.09 
$ (0.62)
$ 0.28 
Earnings (loss) per common share - diluted
$ (0.54)
$ 0.08 
$ (0.62)
$ 0.27 
Earnings (Loss) per Share - Additional Information (Detail)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2015
Earnings Per Share [Abstract]
 
Securities excluded from computation of earning per share
6,914 
Derivative Instruments - Additional Information (Detail) (USD $)
3 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Interest Rate Swap Agreements [Member]
Jun. 30, 2015
Interest Rate Swap Agreements [Member]
Jun. 30, 2017
Interest Rate Swap Agreements [Member]
Scenario, Forecast [Member]
Interest Expense [Member]
Jun. 30, 2016
Interest Rate Swap Agreements [Member]
Minimum [Member]
Jun. 30, 2016
Interest Rate Swap Agreements [Member]
Maximum [Member]
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
Notional amount of swap agreements
 
 
 
 
$ 525,225,000 
 
 
 
 
Current notional amount as percent of term debt outstanding
 
 
 
 
46.00% 
 
 
 
 
Derivative variable interest rate
 
 
 
 
 
 
 
0.83% 
3.115% 
Interest rate swap agreement, maturity date
 
 
 
 
 
 
 
Mar. 15, 2017 
Sep. 05, 2019 
Interest income (expense)
(16,606,000)
(14,894,000)
(33,868,000)
(30,202,000)
109,000 
16,000 
 
 
 
Reclassification from Accumulated other comprehensive income (loss)
 
 
 
 
 
 
$ 6,550,000 
 
 
Derivative Instruments - Fair Values of Derivative Instrument and Respective Classification in Condensed Consolidated Balance Sheets (Detail) (Interest Rate Swap Agreements [Member], USD $)
In Thousands, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Derivatives, Fair Value [Line Items]
 
 
Derivative, fair value
$ (20,161)
$ (11,989)
Designated as Hedges [Member] |
Other Long-Term Liabilities [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative liabilities
(20,161)
(12,107)
Designated as Hedges [Member] |
Other Assets [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative assets
 
$ 118 
Fair Value Measurements - Long Term Debt Fair Value (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2016
Jun. 30, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value of long term debt
$ 933,056 
$ 626,862 
Term B-1 Loans [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value of long term debt
15,464 
106,360 
Term B-2 Loans [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value of long term debt
729,514 
443,580 
Extended Term B-1 Loans [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value of long term debt
127,543 
76,922 
2016 Extended Term Loans [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value of long term debt
60,535 
 
Other Observable Inputs (Level 2) [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value of long term debt
933,056 
626,862 
Other Observable Inputs (Level 2) [Member] |
Term B-1 Loans [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value of long term debt
15,464 
106,360 
Other Observable Inputs (Level 2) [Member] |
Term B-2 Loans [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value of long term debt
729,514 
443,580 
Other Observable Inputs (Level 2) [Member] |
Extended Term B-1 Loans [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value of long term debt
127,543 
76,922 
Other Observable Inputs (Level 2) [Member] |
2016 Extended Term Loans [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value of long term debt
$ 60,535 
 
Fair Value Measurements - Financial Instruments Carried at Fair Value (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Interest Rate Swap Agreements [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Interest rate swap agreements
$ (20,161)
$ (11,989)
Recurring Fair Value Measurements [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair Value, Net Asset (Liability)
(20,161)
(11,989)
Recurring Fair Value Measurements [Member] |
Interest Rate Swap Agreements [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Interest rate swap agreements
(20,161)
(11,989)
Other Observable Inputs (Level 2) [Member] |
Recurring Fair Value Measurements [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair Value, Net Asset (Liability)
(20,161)
(11,989)
Other Observable Inputs (Level 2) [Member] |
Recurring Fair Value Measurements [Member] |
Interest Rate Swap Agreements [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Interest rate swap agreements
$ (20,161)
$ (11,989)
Common Stock and Stock Based Compensation - Additional Information (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2016
Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Number of shares granted to purchase
 
1,731 
1,615 
Average grant date fair value of options issued
 
$ 2.21 
$ 3.97 
Performance restricted stock units issued
 
1,020 
360 
Stock compensation expense related to modification of retirement provisions
$ 2,135 
 
 
Modification of retirement provision, description
 
The modification allows retirement-eligible participants (defined as age 55, plus 10 years of service) to continue to vest in options following retirement, and also allows retired participants to exercise options for up to 10 years from grant date. 
 
Retired participants options exercise period from grant date
 
10 years 
 
Performance Restricted Stock Units [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Performance restricted stock units issued
 
481 
Common Stock and Stock Based Compensation - Summary of Share Based Compensation Activity of Option and Non-option Instruments (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified
6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Options, Outstanding Beginning Balance
16,277 
 
Options, Granted
1,731 
1,615 
Options, Exercised
(488)
 
Options, Forfeited
(425)
 
Options, Expired
(542)
 
Options, Outstanding Ending Balance
16,553 
 
Weighted Average Exercise Price, Option, Outstanding Beginning Balance
$ 6.28 
 
Weighted Average Exercise Price, Option, Granted
$ 2.21 
 
Weighted Average Exercise Price, Option, Exercised
$ 4.11 
 
Weighted Average Exercise Price, Option, Forfeited
$ 8.54 
 
Weighted Average Exercise Price, Option, Expired
$ 7.38 
 
Weighted Average Exercise Price, Option, Outstanding Ending Balance
$ 5.79 
 
Restricted Stock Units (RSUs) [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Performance Restricted Stock Units, Outstanding Beginning Balance
579 
 
Performance Restricted Stock Units, Granted
1,020 
 
Options, Exercised
(14)
 
Options, Forfeited
(97)
 
Performance Restricted Stock Units, Outstanding Ending Balance
1,488 
 
Weighted Average Price at PRSU Issue Date, Outstanding Beginning Balance
$ 10.45 
 
Weighted Average Price at PRSU Issue Date, Granted
$ 2.40 
 
Weighted Average Price at PRSU Issue Date, Forfeited
$ 7.07 
 
Weighted Average Price at PRSU Issue Date, Outstanding Ending Balance
$ 5.12 
 
Performance Restricted Stock Units PRSU [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Performance Restricted Stock Units, Granted
481 
 
Options, Forfeited
(23)
 
Performance Restricted Stock Units, Outstanding Ending Balance
458 
 
Weighted Average Price at PRSU Issue Date, Granted
$ 2.27 
 
Weighted Average Price at PRSU Issue Date, Forfeited
$ 2.04 
 
Weighted Average Price at PRSU Issue Date, Outstanding Ending Balance
$ 2.28 
 
Income Taxes - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Income Tax Disclosure [Abstract]
 
 
 
 
Provision (benefit) for income taxes
$ (63,019)
$ (26,677)
$ (78,773)
$ (16,060)
Income (Loss) before income taxes
$ (150,889)
$ (12,536)
$ (178,422)
$ 28,961 
Effective income tax rate
41.80% 
(212.80%)
44.10% 
(55.50%)
Defined Benefit Plans - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2016
Pension_Plan
Jun. 30, 2015
Compensation and Retirement Disclosure [Abstract]
 
 
Number of defined benefit pension plans
 
Pension and postretirement contributions
$ 42 
$ 33 
Expected contribution for pension plan remaining fiscal year
$ 76 
 
Defined Benefit Plans - Summary of Defined Benefit Plans (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Compensation and Retirement Disclosure [Abstract]
 
 
 
 
Service cost
$ 21 
$ 27 
$ 42 
$ 54 
Interest cost
87 
85 
174 
170 
Expected return on plan assets
(120)
(127)
(240)
(254)
Amortization of prior service cost
 
 
Amortization of net actuarial loss
35 
70 
109 
140 
Net periodic benefit cost
$ 23 
$ 59 
$ 85 
$ 118 
Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income (Loss) (Detail) (USD $)
In Thousands, unless otherwise specified
6 Months Ended 12 Months Ended
Jun. 30, 2016
Dec. 31, 2015
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Accumulated other comprehensive income (loss), Gross
$ (32,638)
$ (24,172)
Accumulated other comprehensive income (loss), Tax Effect
9,639 
6,479 
Accumulated other comprehensive income (loss)
(22,999)
(17,693)
Foreign Currency Translation [Member]
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Accumulated other comprehensive income (loss), Gross
(10,390)
(10,030)
Accumulated other comprehensive income (loss), Tax Effect
1,627 
1,318 
Accumulated other comprehensive income (loss)
(8,763)
(8,712)
Additional Pension Liability [Member]
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Accumulated other comprehensive income (loss), Gross
(3,906)
(4,014)
Accumulated other comprehensive income (loss), Tax Effect
1,464 
1,464 
Accumulated other comprehensive income (loss)
(2,442)
(2,550)
Unrealized Gain (Loss) on Interest Rate Hedges [Member]
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Accumulated other comprehensive income (loss), Gross
(18,342)
(10,128)
Accumulated other comprehensive income (loss), Tax Effect
6,548 
3,697 
Accumulated other comprehensive income (loss)
$ (11,794)
$ (6,431)
Accumulated Other Comprehensive Income (Loss) - Changes in Accumulated Other Comprehensive Income by Component (Detail) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
Beginning balance
$ (17,693)
Other comprehensive income (loss) before reclassifications
(7,591)
Amounts reclassified from accumulated other comprehensive income (loss)
2,285 
Ending balance
(22,999)
Foreign Currency Translation [Member]
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
Beginning balance
(8,712)
Other comprehensive income (loss) before reclassifications
(51)
Ending balance
(8,763)
Additional Pension Liability [Member]
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
Beginning balance
(2,550)
Amounts reclassified from accumulated other comprehensive income (loss)
108 
Ending balance
(2,442)
Unrealized Gain (Loss) on Interest Rate Hedges [Member]
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
Beginning balance
(6,431)
Other comprehensive income (loss) before reclassifications
(7,540)
Amounts reclassified from accumulated other comprehensive income (loss)
2,177 
Ending balance
$ (11,794)
Accumulated Other Comprehensive Income (Loss) - Reclassifications out of Accumulated Comprehensive Income (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Total before tax
$ (150,889)
$ (12,536)
$ (178,422)
$ 28,961 
Tax expense (benefit)
(63,019)
(26,677)
(78,773)
(16,060)
Net income (loss)
(87,870)
14,141 
(99,649)
45,021 
Cost of sales
114,129 
165,130 
232,593 
367,678 
Reclassification Out of Accumulated Other Comprehensive Income [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Net income (loss)
 
 
2,285 
 
Reclassification Out of Accumulated Other Comprehensive Income [Member] |
Unrealized Gain (Loss) on Interest Rate Hedges [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Interest expense
 
 
3,332 
 
Tax expense (benefit)
 
 
(1,156)
 
Net income (loss)
 
 
2,176 
 
Reclassification Out of Accumulated Other Comprehensive Income [Member] |
Accumulated Defined Benefit Plans Adjustment, Net Unamortized Gain (Loss) [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Cost of sales
 
 
109 
 
Reclassification Out of Accumulated Other Comprehensive Income [Member] |
Additional Pension Liability [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Total before tax
 
 
109 
 
Net income (loss)
 
 
$ 109 
 
Commitments and Contingent Liabilities - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
6 Months Ended 0 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Dec. 17, 2015
Self-Suspending Proppant LLC [Member]
Jun. 30, 2016
Self-Suspending Proppant LLC [Member]
Commitments and Contingencies [Line Items]
 
 
 
 
Rent expense for lease
$ 35,156 
$ 33,503 
 
 
Commitment period of sales
 
 
 
5 years 
Commitment commencing date
 
 
 
Oct. 01, 2015 
Aggregate earnout payment from the two-year period ending October 1, 2017 until the three-year period ending October 1, 2018
 
 
45,000 
 
Aggregate earnout payment during the two-year period ending October 1, 2017
 
 
15,000 
 
Security interest percentage of equity in contingent consideration
 
 
51.00% 
 
Contingent consideration
 
 
195,000 
 
Contingent consideration accrued and capitalized
 
 
 
$ 56 
Segment Reporting - Additional Information (Detail)
6 Months Ended
Jun. 30, 2016
Segments
Segment Reporting [Abstract]
 
Number of reportable segments
Segment Reporting - Summarized Financial Information for Reportable Segments (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Revenues
 
 
 
 
Revenues
$ 114,249 
$ 221,323 
$ 259,707 
$ 522,813 
Operating expenses excluded from segment contribution margin
 
 
 
 
Selling, general, and administrative
21,126 
19,204 
37,751 
43,224 
Depreciation, depletion, and amortization
18,056 
16,276 
36,642 
32,499 
Stock compensation expense
3,914 
2,618 
5,567 
4,501 
Interest expense, net
16,606 
14,894 
33,868 
30,202 
Other non-operating income
 
 
(5)
 
Income (loss) before provision for income taxes
(150,889)
(12,536)
(178,422)
28,961 
Operating Segments [Member]
 
 
 
 
Revenues
 
 
 
 
Revenues
114,249 
221,323 
259,707 
522,813 
Segment contribution margin
 
 
 
 
Segment contribution margin
(62,392)
34,522 
(40,938)
125,417 
Operating Segments [Member] |
Proppant Solutions [Member]
 
 
 
 
Revenues
 
 
 
 
Revenues
82,102 
188,150 
199,565 
461,019 
Segment contribution margin
 
 
 
 
Segment contribution margin
(74,398)
35,416 
(61,790)
119,235 
Operating Segments [Member] |
Industrial & Recreational Products [Member]
 
 
 
 
Revenues
 
 
 
 
Revenues
32,147 
33,173 
60,142 
61,794 
Segment contribution margin
 
 
 
 
Segment contribution margin
12,006 
(894)
20,852 
6,182 
Corporate, Non-Segment [Member]
 
 
 
 
Operating expenses excluded from segment contribution margin
 
 
 
 
Selling, general, and administrative
15,565 
12,694 
26,384 
28,454 
Depreciation, depletion, and amortization
18,056 
16,276 
36,642 
32,499 
Stock compensation expense
3,914 
2,618 
5,567 
4,501 
Corporate asset impairments, restructuring charges, and other
34,356 
576 
35,028 
800 
Interest expense, net
16,606 
14,894 
33,868 
30,202 
Other non-operating income
 
 
$ (5)
 
Segment Reporting - Summarized Financial Information for Reportable Segments (Parenthetical) (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Proppant Solutions [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Asset impairments and restructuring charges
$ 57,224 
$ 2,337 
$ 57,300 
$ 2,337 
Industrial & Recreational Products [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Asset impairments and restructuring charges
$ 0 
 
 
$ 12,085 
Restructuring Charges - Summary of Restructuring Costs Recognized (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Restructuring charges
 
 
 
 
Workforce reduction costs, including one-time severance payments
$ 1,155 
$ 401 
$ 1,155 
$ 725 
Other exit costs, including multiemployer pension plan withdrawal liability and additional cash costs to exit facilities
 
7,948 
 
7,948 
Total restructuring charges
$ 1,155 
$ 8,349 
$ 1,155 
$ 8,673 
Restructuring Charges - Summary of Restructuring Costs by Operating Segment (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Total restructuring charges
$ 1,155 
$ 8,349 
$ 1,155 
$ 8,673 
Operating Segments [Member] |
Proppant Solutions [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Total restructuring charges
 
1,162 
 
1,162 
Operating Segments [Member] |
Industrial & Recreational Products [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Total restructuring charges
 
6,786 
 
6,786 
Corporate, Non-Segment [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Total restructuring charges
$ 1,155 
$ 401 
$ 1,155 
$ 725 
Indefinite-Lived Intangibles - Goodwill - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Goodwill [Line Items]
 
 
Goodwill
$ 15,301 
$ 15,301 
Industrial & Recreational Products [Member]
 
 
Goodwill [Line Items]
 
 
Goodwill
$ 15,301 
 
Subsequent Event - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
0 Months Ended 0 Months Ended
Jun. 30, 2016
Dec. 31, 2015
Jul. 28, 2016
Subsequent Event [Member]
Jul. 31, 2016
Subsequent Event [Member]
Jul. 26, 2016
Subsequent Event [Member]
IPO [Member]
Subsequent Event [Line Items]
 
 
 
 
 
Shares sold
 
 
28,750 
 
25,000 
Shares option to sell exercised by underwriters
 
 
3,750 
 
 
Proceeds from issuance of common stock, net
 
 
$ 161,000 
 
 
Common stock, shares issued
 
 
 
191,413 
 
Common stock, shares outstanding
162,020 
161,433 
 
191,413