FAIRMOUNT SANTROL HOLDINGS INC., 10-Q filed on 8/14/2015
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 30, 2015
Aug. 7, 2015
Document And Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Jun. 30, 2015 
 
Document Fiscal Year Focus
2015 
 
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
Non-accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
161,423,048 
Condensed Consolidated Statements of Income (Unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2015
Jun. 30, 2014
Jun. 30, 2015
Jun. 30, 2014
Income Statement [Abstract]
 
 
 
 
Revenue
$ 221,323 
$ 334,291 
$ 522,813 
$ 629,223 
Cost of sales (excluding depreciation, depletion, amortization, and stock compensation expense shown separately)
165,130 
211,190 
367,678 
402,302 
Operating expenses
 
 
 
 
Selling, general and administrative expenses
19,204 
27,390 
43,224 
49,168 
Depreciation, depletion and amortization expense
16,276 
14,584 
32,499 
27,522 
Stock compensation expense
2,618 
2,219 
4,501 
4,313 
Restructuring and other charges
14,824 
 
15,148 
 
Other operating expense (income)
913 
(263)
600 
(328)
Income from operations
2,358 
79,171 
59,163 
146,246 
Interest expense, net
14,894 
16,572 
30,202 
34,478 
Other non-operating expense
 
250 
 
541 
Income (loss) before provision for income taxes
(12,536)
62,349 
28,961 
111,227 
Provision (benefit) for income taxes
(26,677)
18,146 
(16,060)
32,412 
Net income
14,141 
44,203 
45,021 
78,815 
Less: Net income attributable to the non-controlling interest
282 
125 
355 
Net income attributable to Fairmount Santrol Holdings Inc.
$ 14,137 
$ 43,921 
$ 44,896 
$ 78,460 
Earnings per share
 
 
 
 
Basic
$ 0.09 
$ 0.28 
$ 0.28 
$ 0.50 
Diluted
$ 0.08 
$ 0.27 
$ 0.27 
$ 0.47 
Weighted average number of shares outstanding
 
 
 
 
Basic
161,368,468 
156,684,036 
161,160,994 
156,573,196 
Diluted
166,866,817 
165,642,288 
166,631,841 
165,585,168 
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2015
Jun. 30, 2014
Jun. 30, 2015
Jun. 30, 2014
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net income
$ 14,141 
$ 44,203 
$ 45,021 
$ 78,815 
Other comprehensive income (loss), net of tax
 
 
 
 
Foreign currency translation adjustment
(120)
63 
(3,353)
(372)
Pension obligations
74 
28 
123 
56 
Change in fair value of derivative agreements
24 
(3,093)
(2,711)
(5,006)
Total other comprehensive income (loss), net of tax
(22)
(3,002)
(5,941)
(5,322)
Comprehensive income
14,119 
41,201 
39,080 
73,493 
Comprehensive income attributable to the non-controlling interest
282 
125 
355 
Comprehensive income attributable to Fairmount Santrol Holdings Inc.
$ 14,115 
$ 40,919 
$ 38,955 
$ 73,138 
Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2015
Dec. 31, 2014
Current assets
 
 
Cash and cash equivalents
$ 175,488 
$ 76,923 
Accounts receivable, net
122,038 
206,094 
Inventories
90,625 
131,613 
Deferred income taxes
5,158 
5,158 
Prepaid expenses and other assets
27,530 
40,766 
Total current assets
420,839 
460,554 
Property, plant and equipment, net
865,784 
841,274 
Goodwill
84,625 
84,677 
Intangibles, net
98,501 
100,769 
Other assets
26,942 
26,742 
Total assets
1,496,691 
1,514,016 
Current liabilities
 
 
Current portion of long-term debt
16,797 
17,274 
Accounts payable
46,940 
88,542 
Accrued expenses
30,562 
36,025 
Total current liabilities
94,299 
141,841 
Long-term debt
1,229,646 
1,235,365 
Deferred income taxes
60,895 
74,351 
Other long-term liabilities
33,016 
28,985 
Total liabilities
1,417,856 
1,480,542 
Commitments and contingent liabilities
   
   
Common stock: $0.01 par value, 272,000,000 authorized shares Shares outstanding: 161,423,048 and 160,913,266 at June 30, 2015 and December 31, 2014, respectively
2,391 
2,387 
Preferred stock: $0.01 par value, 100,000,000 authorized shares Shares outstanding: 0 at June 30, 2015 and December 31, 2014, respectively
   
   
Additional paid-in capital
778,165 
771,888 
Retained earnings
542,075 
497,179 
Accumulated other comprehensive income (loss)
(18,750)
(12,809)
Total equity attributable to Fairmount Santrol Holdings Inc. before treasury stock
1,303,881 
1,258,645 
Less: Treasury stock at cost Shares in treasury: 77,765,480 at June 30, 2015 and December 31, 2014, respectively
(1,227,663)
(1,227,663)
Total equity attributable to Fairmount Santrol Holdings Inc.
76,218 
30,982 
Non-controlling interest
2,617 
2,492 
Total equity
78,835 
33,474 
Total liabilities and equity
$ 1,496,691 
$ 1,514,016 
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)
Jun. 30, 2015
Dec. 31, 2014
Statement of Financial Position [Abstract]
 
 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
272,000,000 
272,000,000 
Common stock, shares outstanding
161,423,048 
160,913,266 
Preferred stock, par value
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
100,000,000 
100,000,000 
Preferred stock, shares outstanding
Shares in treasury
77,765,480 
77,765,480 
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, 2013
$ (165,358)
$ 2,341 
$ 733,088 
$ 326,729 
$ (3,536)
$ (1,227,001)
$ (168,379)
$ 3,021 
Beginning balances, shares at Dec. 31, 2013
 
156,462 
 
 
 
77,706 
 
 
Purchase of treasury stock
(662)
 
 
 
 
(662)
(662)
 
Purchase of treasury stock, shares
 
 
 
 
 
36 
 
 
Stock options exercised
2,306 
15 
2,291 
 
 
 
2,306 
 
Stock options exercised, shares
 
1,381 
 
 
 
 
 
 
Stock compensation expense
4,313 
 
4,313 
 
 
 
4,313 
 
Tax effect of stock options exercised
4,366 
 
4,366 
 
 
 
4,366 
 
Transactions with non-controlling interest
(431)
 
 
 
 
 
 
(431)
Net income
78,815 
 
 
78,460 
 
 
78,460 
355 
Other comprehensive income (loss)
(5,322)
 
 
 
(5,322)
 
(5,322)
 
Ending balances at Jun. 30, 2014
(81,973)
2,356 
744,058 
405,189 
(8,858)
(1,227,663)
(84,918)
2,945 
Ending balances, shares at Jun. 30, 2014
 
157,843 
 
 
 
77,742 
 
 
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
45,021 
 
 
44,896 
 
 
44,896 
125 
Other comprehensive income (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 
 
 
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2015
Jun. 30, 2014
Statement of Cash Flows [Abstract]
 
 
Net income
$ 45,021 
$ 78,815 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and depletion
30,231 
24,861 
Amortization
5,650 
5,898 
Write-off and impairment of intangibles and long-lived assets
7,637 
 
Inventory reserve adjustment
513 
 
(Gain) on sale of fixed assets
 
(953)
Unrealized loss on interest rate swaps
40 
145 
Deferred income taxes
(13,456)
 
Stock compensation expense
4,501 
4,313 
Change in operating assets and liabilities, net of acquired balances:
 
 
Accounts receivable
84,056 
(62,915)
Inventories
40,475 
(9,006)
Prepaid expenses and other assets
11,520 
8,272 
Accounts payable
(38,562)
(951)
Accrued expenses
(4,062)
1,503 
Net cash provided by operating activities
173,564 
49,982 
Cash flows from investing activities
 
 
Proceeds from sale of fixed assets
 
1,214 
Capital expenditures
(61,293)
(61,827)
Net cash used in investing activities
(61,293)
(60,613)
Cash flows from financing activities
 
 
Proceeds from issuance of term loans
41,000 
Payments on term debt
(7,867)
(6,256)
Change in other long-term debt and capital leases
(3,044)
(2,277)
Proceeds from borrowing on revolving credit facility
 
32,000 
Payments on revolving credit facility
 
(63,000)
Proceeds from option exercises
1,759 
2,306 
Purchase of treasury stock
 
(662)
Tax effect of stock options exercised and dividend equivalents
21 
4,366 
Distributions to non-controlling interest
 
(431)
Financing costs
(4,339)
(1,699)
Net cash provided by (used in) financing activities
(13,470)
5,347 
Foreign currency adjustment
(236)
(17)
Increase (decrease) in cash and cash equivalents
98,565 
(5,301)
Cash and cash equivalents:
 
 
Beginning of period
76,923 
17,815 
End of period
$ 175,488 
$ 12,514 
Significant Accounting Policies
Significant Accounting Policies
1. Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements of Fairmount Santrol Holdings Inc. (formerly FMSA Holdings Inc.) and its consolidated subsidiaries (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 presentation 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, 2014 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 2014 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.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09). Under ASU 2014-09, companies recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled, in exchange for those goods or services. The new requirements significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized.

In February 2015, the FASB issued Accounting Standards Update No. 2015-02 – Consolidation (Topic 810). The amendments in this update affect reporting entities that are required to evaluate whether they should consolidate certain legal entities. The amendments modify the evaluation of whether certain limited partnerships and similar entities are variable interest entities (VIEs) or voting interest entities, impact the consolidation analysis of VIEs, and provide an exception for certain registered money market funds. The Company does not have any unconsolidated or consolidated legal entities impacted by this amendment.

On April 1, 2015, the FASB voted to propose a delay in the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, and the interim periods within that year. As such, for a public business entity with a calendar year-end, the ASU would be effective on January 1, 2018, for both its interim and annual reporting periods. This proposal represents a one-year deferral from the original effective date. The proposed new effective date guidance will allow early adoption for all entities (i.e., both public business entities and other entities) as of the original effective date for public business entities, which was annual reporting periods beginning after December 15, 2016, and the interim periods within that year. Early adoption by public business entities was not permitted under the original effective date guidance. The Company is in the process of evaluating the effect of the new guidance on its financial statements and disclosures.

In April 2015, the FASB issued Accounting Standards Update 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 retrospective basis. The Company is not required to adopt this reporting standard until reporting periods beginning after December 15, 2015. The Company is in the process of evaluating the effect of the new guidance on its financial statements and disclosures.

In April 2015, the FASB issued Accounting Standards Update No. 2015-05 – Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40), which provides guidance on whether a cloud computing arrangement includes a software license. Under Subtopic 350-40, if a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance provides that an entity can elect to adopt the amendments either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. The amendments will be effective for annual periods beginning after December 15, 2015. The Company is in the process of evaluating the effect of the new guidance on its financial statements and disclosures.

In July 2015, the FASB issued Accounting Standards Update No. 2015-11 – Inventory (Topic 330) – Simplifying the Measurement of Inventory. An entity should measure inventory within the scope of this update at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this update more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards (IFRS). The amendment is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. 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, 2015 and December 31, 2014, inventories consisted of the following:

 

     June 30, 2015      December 31, 2014  

Raw materials

   $ 16,378       $ 19,803   

Work-in-process

     15,204         23,568   

Finished goods

     60,760         91,202   
  

 

 

    

 

 

 
     92,342         134,573   

Less: LIFO reserve

     (1,717      (2,960
  

 

 

    

 

 

 

Inventories

   $ 90,625       $ 131,613   
  

 

 

    

 

 

 
Property, Plant and Equipment
Property, Plant and Equipment
3. Property, Plant and Equipment

At June 30, 2015 and December 31, 2014, property, plant and equipment consisted of the following:

 

     June 30, 2015      December 31, 2014  

Land and improvements

   $ 77,686       $ 63,800   

Mineral reserves and mine development

     313,905         303,804   

Machinery and equipment

     534,370         478,225   

Buildings and improvements

     147,685         146,165   

Furniture, fixtures and other

     3,732         3,604   

Construction in progress

     89,644         110,677   
  

 

 

    

 

 

 
     1,167,022         1,106,275   

Accumulated depletion and depreciation

     (301,238      (265,001
  

 

 

    

 

 

 

Property, plant and equipment, net

   $ 865,784       $ 841,274   
  

 

 

    

 

 

 
Long-Term Debt
Long-Term Debt
4. Long-Term Debt

At June 30, 2015 and December 31, 2014, long-term debt consisted of the following:

 

     June 30, 2015      December 31, 2014  

Term B-1 Loans

   $ 156,233       $ 319,917   

Term B-2 Loans

     906,651         910,900   

Extended Term B-1 Loans

     160,653         —     

Industrial Revenue bond

     10,000         10,000   

Revolving credit facility and other

     1,082         1,098   

Capital leases, net

     11,824         10,724   
  

 

 

    

 

 

 
     1,246,443         1,252,639   

Less: current portion

     (16,797      (17,274
  

 

 

    

 

 

 

Long-term debt including leases

   $ 1,229,646       $ 1,235,365   
  

 

 

    

 

 

 

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 with a commitment amount of $75,000 (“Revolving Credit Facility”) and two tranches of term loans, pursuant to which the Company has borrowed $325,000 in aggregate principal amount under a term B-1 facility (“Term B-1 Loans”) and $885,000 in aggregate principal under a term B-2 facility (“Term B-2 Loans”). The Revolving Credit Facility and the Term B-1 and B-2 Loans are secured by a first priority lien on substantially all of the Company’s domestic assets.

In February 2014 the Company executed a joinder agreement to borrow $41,000 as an additional Term B-2 Loan. The proceeds of this borrowing were used to repay then outstanding amounts under the revolving credit facility. The additional borrowings mature on the same date as the then existing Term B-2 Loan (September 5, 2019) and the required quarterly principal repayments for the Term B-2 Loan were increased by one-quarter of 1% of the amount borrowed with the balance due at maturity. There were no other changes in the terms, interest rates or covenants of the 2013 Amended Credit Agreement.

In March 2014, the Company amended the 2013 Amended Credit Agreement whereby the applicable margin for the Term B-1 Loan and the Term B-2 Loan base rate loans was reduced to 2.5% and the applicable margin for the Term B-1 Loan and the Term B-2 Loan Eurodollar rate loans was reduced to 3.5%.

In August and September 2014, the Company executed additional joinder agreements for incremental revolving commitments to the Revolving Credit Facility for $46,629 and $3,371 respectively, which brings the Company’s total Revolving Credit Facility commitment to $125,000. As of June 30, 2015, there was $113,467 available borrowing remaining on this facility. There were no other changes in the terms, interest rates or covenants of the Revolving Credit Facility.

As of April 30, 2015, the Company entered into the Third Amendment to the Second Amended and Restated Credit Agreement (the “April 2015 Amendment”) to the 2013 Amended Credit Agreement. The April 2015 Amendment provides for the extension of the maturity date of $46,036 of outstanding Term B-1 Loans from March 15, 2017 (the “Stated B-1 Maturity Date”) to September 5, 2019 (the “Extended Maturity Date,” which is the same maturity date applicable to Term B-2 Loans under the Credit Agreement). The Company paid a fee of approximately $1,151 to the lender as a consent fee.

As of May 15, 2015, the Company entered into the Fourth Amendment to the Second Amended and Restated Credit Agreement (the “May 2015 Amendment”). The May 2015 Amendment provides for the extension of the maturity date of $115,458 of outstanding Term B-1 Loans from March 15, 2017 (the “Stated B-1 Maturity Date”) to September 5, 2019 (the “Extended Maturity Date,” which is the same maturity date applicable to Term B-2 Loans under the Credit Agreement). Such loans (together with other loans whose maturity dates were so extended under a prior amendment to the Credit Agreement, “Extended Term B-1 Loans”) effectively will be converted to Term B-2 Loans, and will be treated as Term B-2 Loans under the Credit Agreement for all purposes (including pricing), except for certain minor administrative differences and except that, prior to the Stated B-1 Maturity Date, Extended Term B-1 Loans shall continue to amortize as Term B-1 Loans. Upon giving effect to the April 2015 and May 2015 Amendments, the maturity date of approximately $161,495 in principal amount of outstanding Term B-1 Loans was so extended, and leaving approximately $156,619 in principal amount of outstanding Term B-1 Loans (not including Extended Term B-1 Loans) maturing on the Stated B-1 Maturity Date. The Company paid a fee of approximately $2,886 to the lender as a consent fee for the May 2015 Amendment.

After the Amendments above, $156,619 in principal amount of outstanding Term B-1 Loans mature on March 15, 2017 and $1,073,706 in principal amount of outstanding Term B-2 Loans (including Extended Term B-1 Loans) mature on September 5, 2019.

Earnings per Share
Earnings per Share
5. Earnings per Share

The table below shows the computation of basic and diluted earnings per share for the six months ended June 30, 2015 and 2014:

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2015      2014      2015      2014  

Numerator:

           

Net income attributable to Fairmount Santrol Holdings Inc.

   $ 14,137       $ 43,921       $ 44,896       $ 78,460   

Denominator:

           

Basic weighted average shares outstanding

     161,368,468         156,684,036         161,160,994         156,573,196   

Dilutive effect of employee stock options & RSU’s

     5,498,349         8,958,252         5,470,847         9,011,972   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted weighted average shares outstanding

     166,866,817         165,642,288         166,631,841         165,585,168   
  

 

 

    

 

 

    

 

 

    

 

 

 

Earnings per common share - basic

   $ 0.09       $ 0.28       $ 0.28       $ 0.50   

Earnings per common share - diluted

   $ 0.08       $ 0.27       $ 0.27       $ 0.47   

The calculation of diluted weighted average shares outstanding for the six months ended June 30, 2015 and 2014 excludes 6,914,209 and 374,850 potential common shares, respectively, 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 hedge its variable interest rate risk on debt instruments. The current notional value of these swap agreements is $520,225 at June 30, 2015 and effectively fixes the variable rate in a range of 0.83% to 3.115%. The notional amount of these instruments is scheduled to increase over time to provide a hedge against variable interest rate debt. The interest rate swap agreements mature at various dates between October 31, 2015 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, 2015 and December 31, 2014:

 

          Assets (Liabilities)  

Interest Rate Swap Agreements

  

Balance Sheet Classification

   June 30, 2015      December 31, 2014  

Designated as hedges

   Other long-term liabilities    $ (14,263    $ (10,253

Not designated as hedges

   Other long-term liabilities      (557      (1,443

Designated as hedges

   Other assets      —           333   
     

 

 

    

 

 

 
      $ (14,820    $ (11,363
     

 

 

    

 

 

 

The Company recognized $16 and $21 in interest expense, representing the ineffective portion of interest rate swap agreements designated as hedges, in the six months ended June 30, 2015 and 2014, respectively. The Company expects $5,884 to be reclassified from accumulated other comprehensive income into interest expense in the twelve-month period ending June 30, 2016.

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 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 carried 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 is recognized at amortized cost. The value of the Company’s Term B-1, Extended Term, and 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 fair value of the Company’s Term B-1 loan was $153,490 and $295,750, Extended Term loan was $150,206 and $0, and Term B-2 loan was $857,577 and $796,500 at June 30, 2015 and December 31, 2014, respectively.

The fair value of certain of the Company’s long-lived assets held and used with a carrying value of $15,271 was written down to a fair value of $7,634 in accordance with ASC 360-10. The resulting impairment charge of $7,637, which was based on management’s estimate of the disposed value of the assets, was recognized in restructuring and other charges in the current period.

The following tables present the amounts carried at fair value as of June 30, 2015 and December 31, 2014 for the Company’s other financial instruments.

 

Recurring Fair Value Measurements

   Quoted Prices
in Active
Markets
(Level 1)
     Other
Observable
Inputs
(Level 2)
     Unobservable
Inputs

(Level 3)
     Total  

June 30, 2015

           

Interest rate swap agreements

   $ —         $ (14,820    $ —         $ (14,820
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ —         $ (14,820    $ —         $ (14,820
  

 

 

    

 

 

    

 

 

    

 

 

 

December 31, 2014

           

Interest rate swap agreements

   $ —         $ (11,363    $ —         $ (11,363
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ —         $ (11,363    $ —         $ (11,363
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-Recurring Fair Value Measurements

   Quoted Prices
in Active
Markets
(Level 1)
     Other
Observable
Inputs
(Level 2)
     Unobservable
Inputs

(Level 3)
     Total  

June 30, 2015

           

Long-lived assets held and used

   $ —         $ —         $ 7,634       $ 7,634   
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ —         $ —         $ 7,634       $ 7,634   
  

 

 

    

 

 

    

 

 

    

 

 

 

December 31, 2014

           

Long-lived assets held and used

   $ —         $ —         $ 15,271       $ 15,271   
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ —         $ —         $ 15,271       $ 15,271   
  

 

 

    

 

 

    

 

 

    

 

 

 
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 1,614,604 shares of common stock in the six months ended June 30, 2015. No options were granted in the six months ended June 30, 2014. The average grant date fair value was $3.97 for options issued in the six months ended June 30, 2015. The Company was not publicly traded in the six months ended June 30, 2014. The company issued restricted stock units of 360,412 in the six months ended June 30, 2015. No restricted stock units were issued in the six months ended June 30, 2014.

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, 2015, the Company recorded a tax benefit of $26,677 on loss before income taxes of $12,536. For the six months ended June 30, 2015, the Company recorded a tax benefit of $16,060 on income before income taxes of $28,961. For the three months ended June 30, 2014, the Company recorded tax expense of $18,146 on income before income taxes of $62,349. For the six months ended June 30, 2014, the Company recorded tax expense of $32,412 on income before income taxes of $111,227. The effective tax rate for the three and six months ended June 30, 2015 was negative 212.8% and negative 55.5%, respectively, as compared with 29.1% for the three and six months ended June 30, 2014, respectively. The decreases in the effective tax rate from the corresponding fiscal periods in 2014 was primarily due to a greater impact on the effective tax rate from the depletion deduction.

Defined Benefit Plans
Defined Benefit Plans
10. Defined Benefit Plans

The Company currently maintains two multiemployer defined benefit pension plans 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 Company is in the process of closing these facilities and is in the process of negotiating a withdrawal from the plans. The estimated cost of the withdrawal liability on a net present value basis has been recorded in the quarter. Net periodic benefit cost recognized for these plans for the six months ended June 30, 2015 and 2014 is as follows:

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2015      2014      2015      2014  

Service cost

   $ 27       $ 19       $ 54       $ 38   

Interest cost

     85         83         170         166   

Expected return on plan assets

     (127      (146      (254      (292

Amortization of prior service cost

     4         5         8         10   

Amortization of net actuarial loss

     70         40         140         80   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net periodic benefit cost

   $ 59       $ 1       $ 118       $ 2   
  

 

 

    

 

 

    

 

 

    

 

 

 

The Company contributed $33 and $130 during the six months ended June 30, 2015 and 2014, respectively. Total expected employer contributions during the year ending December 31, 2015 are $63.

Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income
11. Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income (loss) attributable to Fairmount Santrol Holdings Inc. at June 30, 2015 and December 31, 2014 were as follows:

 

     June 30, 2015  
     Gross      Tax Effect      Net Amount  

Foreign currency translation

   $ (8,332    $ —         $ (8,332

Additional pension liability

     (4,088      1,564         (2,524

Unrealized gain (loss) on interest rate hedges

     (12,353      4,459         (7,894
  

 

 

    

 

 

    

 

 

 
   $ (24,773    $ 6,023       $ (18,750
  

 

 

    

 

 

    

 

 

 
    

 

December 31, 2014

 
     Gross      Tax Effect      Net Amount  

Foreign currency translation

   $ (4,979    $ —         $ (4,979

Additional pension liability

     (4,236      1,588         (2,648

Unrealized gain (loss) on interest rate hedges

     (8,292      3,110         (5,182
  

 

 

    

 

 

    

 

 

 
   $ (17,507    $ 4,698       $ (12,809
  

 

 

    

 

 

    

 

 

 

The following table presents the changes in accumulated other comprehensive income by component for the six months ended June 30, 2015:

 

     Six Months Ended June 30, 2015  
     Unrealized
gain (loss)
on interest
rate hedges
     Additional
pension
liability
     Foreign
currency
translation
     Total  

Beginning balance

   $ (5,182    $ (2,648    $ (4,979    $ (12,809

Other comprehensive income (loss) before reclassifications

     (3,401      —           (3,353      (6,754

Amounts reclassified from accumulated other comprehensive income (loss)

     689         124         —           813   
  

 

 

    

 

 

    

 

 

    

 

 

 

Ending balance

   $ (7,894    $ (2,524    $ (8,332    $ (18,750
  

 

 

    

 

 

    

 

 

    

 

 

 

The following table presents the reclassifications out of accumulated other comprehensive income during the six months ended June 30, 2015:

 

Details about accumulated other comprehensive income

   Amount reclassified
from accumulated
other comprehensive
income
    

Affected line item on
the statement of income

Change in fair value of derivative swap agreements

     

Interest rate hedging contracts

   $ 1,269       Interest expense

Tax effect

     (579    Tax expense (benefit)
  

 

 

    
   $ 690       Net of tax

Amortization of pension obligations

     

Prior service cost

   $ 8       Cost of sales

Actuarial losses

     140       Cost of sales
  

 

 

    
     148       Total before tax

Tax effect

     (25    Tax expense
  

 

 

    
     123       Net of tax
  

 

 

    

Total reclassifications for the period

   $ 813       Net of tax
  

 

 

    
Commitments and Contingencies
Commitments and Contingencies
12. Commitments and Contingencies

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.

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 leases certain machinery, equipment (including railcars), buildings and office space under operating lease arrangements. Total rent expense associated with these leases was $33,503 and $25,458 for the six months ended June 30, 2015 and 2014, 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. Because the earnout is dependent on future sales and the related cost of sales, the amounts of which are highly uncertain, it is not currently possible to estimate the amounts that will be paid. The contingent consideration will be accrued and capitalized as part of the cost of the SSP assets at the time a payment is probable and reasonably estimable.

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,  
     2015      2014      2015      2014  

Revenue

           

Proppant Solutions

   $ 188,150       $ 300,685       $ 461,019       $ 567,185   

Industrial & Recreational Products

     33,173         33,606         61,794         62,038   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenue

     221,323         334,291         522,813         629,223   

Segment contribution margin

           

Proppant Solutions

     35,416         103,900         119,235         192,928   

Industrial & Recreational Products

     (894      10,613         6,182         16,835   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total segment contribution margin

     34,522         114,513         125,417         209,763   

Operating expenses excluded from segment contribution margin

           

Selling, general, and administrative

     12,694         18,884         28,454         32,010   

Depreciation, depletion, and amortization

     16,276         14,584         32,499         27,522   

Stock compensation expense

     2,618         2,219         4,501         4,313   

Corporate restructuring charges and other operating expense (income)

     576         (345      800         (328

Interest expense, net

     14,894         16,572         30,202         34,478   

Other non-operating expense (income)

     —           250         —           541   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before provision for taxes

   $ (12,536    $ 62,349       $ 28,961       $ 111,227   
  

 

 

    

 

 

    

 

 

    

 

 

 
Restructuring and Other Charges
Restructuring and Other Charges
15. Restructuring and Other Charges

As a result of recent challenging conditions in the proppant market, in the first and second quarters of 2015 the Company took actions to rationalize its overall operational footprint and reduce selling, general, and administrative costs. The restructuring program primarily consists of workforce reductions and closure of excess facilities. The expected completion date of these activities is September 30, 2015. A summary of the restructuring and other costs recognized for the six months ended June 30, 2015 is as follows:

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2015      2014      2015      2014  

Restructuring and other charges

           

Workforce reduction costs, including one-time severance payments

   $ 401       $ —         $ 725       $ —     

Write-down to net realizable value of exited facilities and other capitalized costs

     7,637         —           7,637         —     

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

     6,786         —           6,786         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Total restructuring and other charges

     14,824         —           15,148         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

While these restructuring activities primarily were driven by the decline in proppant demand in 2015, certain plants supporting the Industrial & Recreational Products segment have been adversely impacted as well. A summary of the restructuring and other costs by operating segment is as follows:

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2015      2014      2015      2014  

Restructuring and other charges

           

Proppant Solutions

   $ 2,402       $ —         $ 2,402       $ —     

Industrial & Recreational Products

     12,085         —           12,085         —     

Corporate

     337         —           661         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Total restructuring and other charges

   $ 14,824       $ —         $ 15,148       $ —     
  

 

 

    

 

 

    

 

 

    

 

 

 
Significant Accounting Policies (Policies)

Basis of Presentation

The unaudited condensed consolidated financial statements of Fairmount Santrol Holdings Inc. (formerly FMSA Holdings Inc.) and its consolidated subsidiaries (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 presentation 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, 2014 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 2014 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.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09). Under ASU 2014-09, companies recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled, in exchange for those goods or services. The new requirements significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized.

In February 2015, the FASB issued Accounting Standards Update No. 2015-02 – Consolidation (Topic 810). The amendments in this update affect reporting entities that are required to evaluate whether they should consolidate certain legal entities. The amendments modify the evaluation of whether certain limited partnerships and similar entities are variable interest entities (VIEs) or voting interest entities, impact the consolidation analysis of VIEs, and provide an exception for certain registered money market funds. The Company does not have any unconsolidated or consolidated legal entities impacted by this amendment.

On April 1, 2015, the FASB voted to propose a delay in the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, and the interim periods within that year. As such, for a public business entity with a calendar year-end, the ASU would be effective on January 1, 2018, for both its interim and annual reporting periods. This proposal represents a one-year deferral from the original effective date. The proposed new effective date guidance will allow early adoption for all entities (i.e., both public business entities and other entities) as of the original effective date for public business entities, which was annual reporting periods beginning after December 15, 2016, and the interim periods within that year. Early adoption by public business entities was not permitted under the original effective date guidance. The Company is in the process of evaluating the effect of the new guidance on its financial statements and disclosures.

In April 2015, the FASB issued Accounting Standards Update 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 retrospective basis. The Company is not required to adopt this reporting standard until reporting periods beginning after December 15, 2015. The Company is in the process of evaluating the effect of the new guidance on its financial statements and disclosures.

In April 2015, the FASB issued Accounting Standards Update No. 2015-05 – Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40), which provides guidance on whether a cloud computing arrangement includes a software license. Under Subtopic 350-40, if a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance provides that an entity can elect to adopt the amendments either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. The amendments will be effective for annual periods beginning after December 15, 2015. The Company is in the process of evaluating the effect of the new guidance on its financial statements and disclosures.

In July 2015, the FASB issued Accounting Standards Update No. 2015-11 – Inventory (Topic 330) – Simplifying the Measurement of Inventory. An entity should measure inventory within the scope of this update at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this update more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards (IFRS). The amendment is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. 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, 2015 and December 31, 2014, inventories consisted of the following:

 

     June 30, 2015      December 31, 2014  

Raw materials

   $ 16,378       $ 19,803   

Work-in-process

     15,204         23,568   

Finished goods

     60,760         91,202   
  

 

 

    

 

 

 
     92,342         134,573   

Less: LIFO reserve

     (1,717      (2,960
  

 

 

    

 

 

 

Inventories

   $ 90,625       $ 131,613   
  

 

 

    

 

 

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

At June 30, 2015 and December 31, 2014, property, plant and equipment consisted of the following:

 

     June 30, 2015      December 31, 2014  

Land and improvements

   $ 77,686       $ 63,800   

Mineral reserves and mine development

     313,905         303,804   

Machinery and equipment

     534,370         478,225   

Buildings and improvements

     147,685         146,165   

Furniture, fixtures and other

     3,732         3,604   

Construction in progress

     89,644         110,677   
  

 

 

    

 

 

 
     1,167,022         1,106,275   

Accumulated depletion and depreciation

     (301,238      (265,001
  

 

 

    

 

 

 

Property, plant and equipment, net

   $ 865,784       $ 841,274   
  

 

 

    

 

 

 
Long-Term Debt (Tables)
Schedule of Long-Term Debt

At June 30, 2015 and December 31, 2014, long-term debt consisted of the following:

 

     June 30, 2015      December 31, 2014  

Term B-1 Loans

   $ 156,233       $ 319,917   

Term B-2 Loans

     906,651         910,900   

Extended Term B-1 Loans

     160,653         —     

Industrial Revenue bond

     10,000         10,000   

Revolving credit facility and other

     1,082         1,098   

Capital leases, net

     11,824         10,724   
  

 

 

    

 

 

 
     1,246,443         1,252,639   

Less: current portion

     (16,797      (17,274
  

 

 

    

 

 

 

Long-term debt including leases

   $ 1,229,646       $ 1,235,365   
  

 

 

    

 

 

 

Earnings per Share (Tables)
Computation of Basic and Diluted Earnings per Share

The table below shows the computation of basic and diluted earnings per share for the six months ended June 30, 2015 and 2014:

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2015      2014      2015      2014  

Numerator:

           

Net income attributable to Fairmount Santrol Holdings Inc.

   $ 14,137       $ 43,921       $ 44,896       $ 78,460   

Denominator:

           

Basic weighted average shares outstanding

     161,368,468         156,684,036         161,160,994         156,573,196   

Dilutive effect of employee stock options & RSU’s

     5,498,349         8,958,252         5,470,847         9,011,972   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted weighted average shares outstanding

     166,866,817         165,642,288         166,631,841         165,585,168   
  

 

 

    

 

 

    

 

 

    

 

 

 

Earnings per common share - basic

   $ 0.09       $ 0.28       $ 0.28       $ 0.50   

Earnings per common share - diluted

   $ 0.08       $ 0.27       $ 0.27       $ 0.47   

Derivative Instruments (Tables)
Fair Values of Derivative Instrument and the 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, 2015 and December 31, 2014:

 

          Assets (Liabilities)  

Interest Rate Swap Agreements

  

Balance Sheet Classification

   June 30, 2015      December 31, 2014  

Designated as hedges

   Other long-term liabilities    $ (14,263    $ (10,253

Not designated as hedges

   Other long-term liabilities      (557      (1,443

Designated as hedges

   Other assets      —           333   
     

 

 

    

 

 

 
      $ (14,820    $ (11,363
     

 

 

    

 

 

 
Fair Value Measurements (Tables)
Financial Instruments Carried at Fair Value

The following tables present the amounts carried at fair value as of June 30, 2015 and December 31, 2014 for the Company’s other financial instruments.

 

Recurring Fair Value Measurements

   Quoted Prices
in Active
Markets
(Level 1)
     Other
Observable
Inputs
(Level 2)
     Unobservable
Inputs

(Level 3)
     Total  

June 30, 2015

           

Interest rate swap agreements

   $ —         $ (14,820    $ —         $ (14,820
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ —         $ (14,820    $ —         $ (14,820
  

 

 

    

 

 

    

 

 

    

 

 

 

December 31, 2014

           

Interest rate swap agreements

   $ —         $ (11,363    $ —         $ (11,363
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ —         $ (11,363    $ —         $ (11,363
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-Recurring Fair Value Measurements

   Quoted Prices
in Active
Markets
(Level 1)
     Other
Observable
Inputs
(Level 2)
     Unobservable
Inputs

(Level 3)
     Total  

June 30, 2015

           

Long-lived assets held and used

   $ —         $ —         $ 7,634       $ 7,634   
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ —         $ —         $ 7,634       $ 7,634   
  

 

 

    

 

 

    

 

 

    

 

 

 

December 31, 2014

           

Long-lived assets held and used

   $ —         $ —         $ 15,271       $ 15,271   
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ —         $ —         $ 15,271       $ 15,271   
  

 

 

    

 

 

    

 

 

    

 

 

 
Defined Benefit Plans (Tables)
Net Periodic Benefit Cost Recognized for Plans

Net periodic benefit cost recognized for these plans for the six months ended June 30, 2015 and 2014 is as follows:

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2015      2014      2015      2014  

Service cost

   $ 27       $ 19       $ 54       $ 38   

Interest cost

     85         83         170         166   

Expected return on plan assets

     (127      (146      (254      (292

Amortization of prior service cost

     4         5         8         10   

Amortization of net actuarial loss

     70         40         140         80   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net periodic benefit cost

   $ 59       $ 1       $ 118       $ 2   
  

 

 

    

 

 

    

 

 

    

 

 

 
Accumulated Other Comprehensive Income (Tables)

The components of accumulated other comprehensive income (loss) attributable to Fairmount Santrol Holdings Inc. at June 30, 2015 and December 31, 2014 were as follows:

 

     June 30, 2015  
     Gross      Tax Effect      Net Amount  

Foreign currency translation

   $ (8,332    $ —         $ (8,332

Additional pension liability

     (4,088      1,564         (2,524

Unrealized gain (loss) on interest rate hedges

     (12,353      4,459         (7,894
  

 

 

    

 

 

    

 

 

 
   $ (24,773    $ 6,023       $ (18,750
  

 

 

    

 

 

    

 

 

 
    

 

December 31, 2014

 
     Gross      Tax Effect      Net Amount  

Foreign currency translation

   $ (4,979    $ —         $ (4,979

Additional pension liability

     (4,236      1,588         (2,648

Unrealized gain (loss) on interest rate hedges

     (8,292      3,110         (5,182
  

 

 

    

 

 

    

 

 

 
   $ (17,507    $ 4,698       $ (12,809
  

 

 

    

 

 

    

 

 

 

The following table presents the changes in accumulated other comprehensive income by component for the six months ended June 30, 2015:

 

     Six Months Ended June 30, 2015  
     Unrealized
gain (loss)
on interest
rate hedges
     Additional
pension
liability
     Foreign
currency
translation
     Total  

Beginning balance

   $ (5,182    $ (2,648    $ (4,979    $ (12,809

Other comprehensive income (loss) before reclassifications

     (3,401      —           (3,353      (6,754

Amounts reclassified from accumulated other comprehensive income (loss)

     689         124         —           813   
  

 

 

    

 

 

    

 

 

    

 

 

 

Ending balance

   $ (7,894    $ (2,524    $ (8,332    $ (18,750
  

 

 

    

 

 

    

 

 

    

 

 

 

The following table presents the reclassifications out of accumulated other comprehensive income during the six months ended June 30, 2015:

 

Details about accumulated other comprehensive income

   Amount reclassified
from accumulated
other comprehensive
income
    

Affected line item on
the statement of income

Change in fair value of derivative swap agreements

     

Interest rate hedging contracts

   $ 1,269       Interest expense

Tax effect

     (579    Tax expense (benefit)
  

 

 

    
   $ 690       Net of tax

Amortization of pension obligations

     

Prior service cost

   $ 8       Cost of sales

Actuarial losses

     140       Cost of sales
  

 

 

    
     148       Total before tax

Tax effect

     (25    Tax expense
  

 

 

    
     123       Net of tax
  

 

 

    

Total reclassifications for the period

   $ 813       Net of tax
  

 

 

    
Segment Reporting (Tables)
Summarized Financial Information for Reportable Segments
     Three Months Ended June 30,      Six Months Ended June 30,  
     2015      2014      2015      2014  

Revenue

           

Proppant Solutions

   $ 188,150       $ 300,685       $ 461,019       $ 567,185   

Industrial & Recreational Products

     33,173         33,606         61,794         62,038   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenue

     221,323         334,291         522,813         629,223   

Segment contribution margin

           

Proppant Solutions

     35,416         103,900         119,235         192,928   

Industrial & Recreational Products

     (894      10,613         6,182         16,835   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total segment contribution margin

     34,522         114,513         125,417         209,763   

Operating expenses excluded from segment contribution margin

           

Selling, general, and administrative

     12,694         18,884         28,454         32,010   

Depreciation, depletion, and amortization

     16,276         14,584         32,499         27,522   

Stock compensation expense

     2,618         2,219         4,501         4,313   

Corporate restructuring charges and other operating expense (income)

     576         (345      800         (328

Interest expense, net

     14,894         16,572         30,202         34,478   

Other non-operating expense (income)

     —           250         —           541   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before provision for taxes

   $ (12,536    $ 62,349       $ 28,961       $ 111,227   
  

 

 

    

 

 

    

 

 

    

 

 

 
Restructuring and Other Charges (Tables)

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

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2015      2014      2015      2014  

Restructuring and other charges

           

Workforce reduction costs, including one-time severance payments

   $ 401       $ —         $ 725       $ —     

Write-down to net realizable value of exited facilities and other capitalized costs

     7,637         —           7,637         —     

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

     6,786         —           6,786         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Total restructuring and other charges

     14,824         —           15,148         —    

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

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2015      2014      2015      2014  

Restructuring and other charges

           

Proppant Solutions

   $ 2,402       $ —         $ 2,402       $ —     

Industrial & Recreational Products

     12,085         —           12,085         —     

Corporate

     337         —           661         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Total restructuring and other charges

   $ 14,824       $ —         $ 15,148       $ —     
  

 

 

    

 

 

    

 

 

    

 

 

 

 

Inventories - Schedule of Inventories (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2015
Dec. 31, 2014
Inventory Disclosure [Abstract]
 
 
Raw materials
$ 16,378 
$ 19,803 
Work-in-process
15,204 
23,568 
Finished goods
60,760 
91,202 
Inventory gross
92,342 
134,573 
Less: LIFO reserve
(1,717)
(2,960)
Inventories
$ 90,625 
$ 131,613 
Property, Plant and Equipment - Schedule of Property,Plant and Equipment (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2015
Dec. 31, 2014
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment gross
$ 1,167,022 
$ 1,106,275 
Accumulated depletion and depreciation
(301,238)
(265,001)
Property, plant, and equipment, net
865,784 
841,274 
Land and Improvements [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment gross
77,686 
63,800 
Mineral Reserves and Mine Development [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment gross
313,905 
303,804 
Machinery and Equipment [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment gross
534,370 
478,225 
Buildings and Improvements [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment gross
147,685 
146,165 
Furniture, Fixtures and Other [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment gross
3,732 
3,604 
Construction in Progress [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment gross
$ 89,644 
$ 110,677 
Long-Term Debt - Schedule of Long-Term Debt (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2015
May 15, 2015
Apr. 30, 2015
Dec. 31, 2014
Debt Instrument [Line Items]
 
 
 
 
Industrial Revenue bond
$ 10,000 
 
 
$ 10,000 
Revolving credit facility and other
1,082 
 
 
1,098 
Capital leases, net
11,824 
 
 
10,724 
Long term debt
1,246,443 
 
 
1,252,639 
Long term debt
1,246,443 
 
 
1,252,639 
Less: current portion
(16,797)
 
 
(17,274)
Long-term debt including leases
1,229,646 
 
 
1,235,365 
Term B-1 Loans [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Term Loans
156,233 
 
 
319,917 
Revolving credit facility and other
 
115,458 
46,036 
 
Term B-2 Loans [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Term Loans
906,651 
 
 
910,900 
Extended Term B-1 Loans [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Term Loans
$ 160,653 
 
 
 
Long-Term Debt - Additional Information (Detail) (USD $)
6 Months Ended 1 Months Ended 6 Months Ended 6 Months Ended 1 Months Ended 6 Months Ended 6 Months Ended 1 Months Ended 6 Months Ended
Jun. 30, 2015
Dec. 31, 2014
Sep. 30, 2014
Aug. 31, 2014
Sep. 30, 2014
Additional Joinder Agreements [Member]
Aug. 31, 2014
Additional Joinder Agreements [Member]
Sep. 5, 2013
Amended Credit Agreement [Member]
Jun. 30, 2015
Term B-1 Loans [Member]
May 15, 2015
Term B-1 Loans [Member]
Apr. 30, 2015
Term B-1 Loans [Member]
Sep. 5, 2013
Term B-1 Loans [Member]
Amended Credit Agreement [Member]
Jun. 30, 2015
Term B-1 Loans [Member]
Stated B-1 Maturity Date March 15, 2017 [Member]
Mar. 31, 2014
Term B-1 Loans [Member]
Base Rate [Member]
Mar. 31, 2014
Term B-1 Loans [Member]
Eurodollar [Member]
Feb. 28, 2014
Term B-2 Loans [Member]
Jun. 30, 2015
Term B-2 Loans [Member]
Sep. 5, 2013
Term B-2 Loans [Member]
Amended Credit Agreement [Member]
Jun. 30, 2015
Term B-2 Loans [Member]
Extended Maturity Date September 5, 2019 [Member]
Mar. 31, 2014
Term B-2 Loans [Member]
Base Rate [Member]
Mar. 31, 2014
Term B-2 Loans [Member]
Eurodollar [Member]
Jun. 30, 2015
Pre Amendment [Member]
Jun. 30, 2015
Post Amendment [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Revolving Credit Facility commitment
 
 
$ 125,000,000 
$ 125,000,000 
 
 
$ 75,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding term loans
1,082,000 
1,098,000 
 
 
 
 
 
 
115,458,000 
46,036,000 
325,000,000 
156,619,000 
 
 
 
 
885,000,000 
1,073,706,000 
 
 
161,495,000 
 
Debt instrument increased borrowings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
41,000,000 
 
 
 
 
 
 
 
Debt instrument borrowings, interest rate term
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-quarter of 1% 
 
 
 
 
 
 
Reduced margin rate
 
 
 
 
 
 
 
 
 
 
 
 
2.50% 
3.50% 
 
 
 
 
2.50% 
3.50% 
 
 
Line of credit facility, incremental revolving commitments
 
 
 
 
3,371,000 
46,629,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available borrowing remaining on the credit facility
113,467,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument borrowings, maturity date
 
 
 
 
 
 
 
Mar. 15, 2017 
 
 
 
Mar. 15, 2017 
 
 
 
Sep. 05, 2019 
 
Sep. 05, 2019 
 
 
Mar. 15, 2017 
Sep. 05, 2019 
Consent fee paid
$ 2,886,000 
 
 
 
 
 
 
$ 1,151,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings Per Share - Computation of Basic and Diluted Earnings per Share (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2015
Jun. 30, 2014
Jun. 30, 2015
Jun. 30, 2014
Numerator:
 
 
 
 
Net income attributable to Fairmount Santrol Holdings Inc.
$ 14,137 
$ 43,921 
$ 44,896 
$ 78,460 
Denominator:
 
 
 
 
Basic weighted average shares outstanding
161,368,468 
156,684,036 
161,160,994 
156,573,196 
Dilutive effect of employee stock options & RSU's
5,498,349 
8,958,252 
5,470,847 
9,011,972 
Diluted weighted average shares outstanding
166,866,817 
165,642,288 
166,631,841 
165,585,168 
Earnings per common share - basic
$ 0.09 
$ 0.28 
$ 0.28 
$ 0.50 
Earnings per common share - diluted
$ 0.08 
$ 0.27 
$ 0.27 
$ 0.47 
Earnings per Share - Additional Information (Detail)
6 Months Ended
Jun. 30, 2015
Jun. 30, 2014
Earnings Per Share [Abstract]
 
 
Securities excluded from computation of earning per share
6,914,209 
374,850 
Derivative Instruments - Additional Information (Detail) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2015
Jun. 30, 2014
Jun. 30, 2015
Jun. 30, 2014
Derivative [Line Items]
 
 
 
 
Interest expense
$ 14,894,000 
$ 16,572,000 
$ 30,202,000 
$ 34,478,000 
Reclassification Out of Accumulated Other Comprehensive Income [Member]
 
 
 
 
Derivative [Line Items]
 
 
 
 
Interest expense
 
 
5,884,000 
 
Interest Rate Swap Agreements [Member]
 
 
 
 
Derivative [Line Items]
 
 
 
 
Notional amount of swap agreements
520,225,000 
 
520,225,000 
 
Interest expense
 
 
$ 16,000 
$ 21,000 
Interest Rate Swap Agreements [Member] |
Minimum [Member]
 
 
 
 
Derivative [Line Items]
 
 
 
 
Derivative, minimum variable interest rate
0.83% 
 
0.83% 
 
Interest rate swap agreement, maturity date
 
 
Oct. 31, 2015 
 
Interest Rate Swap Agreements [Member] |
Maximum [Member]
 
 
 
 
Derivative [Line Items]
 
 
 
 
Derivative, maximum variable interest rate
3.115% 
 
3.115% 
 
Interest rate swap agreement, maturity date
 
 
Sep. 05, 2019 
 
Derivative Instruments - Fair Values of Derivative Instrument and the Respective Classification in Condensed Consolidated Balance Sheets (Detail) (Interest Rate Swap Agreements [Member], USD $)
In Thousands, unless otherwise specified
Jun. 30, 2015
Dec. 31, 2014
Derivatives, Fair Value [Line Items]
 
 
Derivative, fair value
$ (14,820)
$ (11,363)
Designated as Hedges [Member] |
Other Long-Term Liabilities [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative liabilities
(14,263)
(10,253)
Designated as Hedges [Member] |
Other Assets [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative assets
 
333 
Not Designated as Hedges [Member] |
Other Long-Term Liabilities [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative liabilities
$ (557)
$ (1,443)
Fair Value Measurements - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2015
Long Lived Assets Held and Used [Member]
Jun. 30, 2015
Non-Recurring Fair Value Measurements [Member]
Dec. 31, 2014
Non-Recurring Fair Value Measurements [Member]
Jun. 30, 2015
Non-Recurring Fair Value Measurements [Member]
Long Lived Assets Held and Used [Member]
Dec. 31, 2014
Non-Recurring Fair Value Measurements [Member]
Long Lived Assets Held and Used [Member]
Jun. 30, 2015
Quoted Prices in Active Markets (Level 1) [Member]
Term B-1 Loans [Member]
Dec. 31, 2014
Quoted Prices in Active Markets (Level 1) [Member]
Term B-1 Loans [Member]
Jun. 30, 2015
Quoted Prices in Active Markets (Level 1) [Member]
Extended Term Loans [Member]
Dec. 31, 2014
Quoted Prices in Active Markets (Level 1) [Member]
Extended Term Loans [Member]
Jun. 30, 2015
Quoted Prices in Active Markets (Level 1) [Member]
Term B-2 Loans [Member]
Dec. 31, 2014
Quoted Prices in Active Markets (Level 1) [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
 
 
 
 
 
$ 153,490 
$ 295,750 
$ 150,206 
$ 0 
$ 857,577 
$ 796,500 
Long-lived assets held and used, Carrying value
15,271 
 
 
 
 
 
 
 
 
 
 
Long-lived assets held and used, Fair value
 
7,634 
15,271 
7,634 
15,271 
 
 
 
 
 
 
Impairment charge of long-lived assets held and used
$ 7,637 
 
 
 
 
 
 
 
 
 
 
Fair Value Measurements - Financial Instruments Carried at Fair Value (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2015
Dec. 31, 2014
Interest Rate Swap Agreements [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Interest rate swap agreements
$ (14,820)
$ (11,363)
Recurring Fair Value Measurements [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair Value, Net Asset (Liability)
(14,820)
(11,363)
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
(14,820)
(11,363)
Non-Recurring Fair Value Measurements [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Long-lived assets held and used, Fair value
7,634 
15,271 
Non-Recurring Fair Value Measurements [Member] |
Long Lived Assets Held and Used [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Long-lived assets held and used, Fair value
7,634 
15,271 
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)
(14,820)
(11,363)
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
(14,820)
(11,363)
Unobservable Inputs (Level 3) [Member] |
Non-Recurring Fair Value Measurements [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Long-lived assets held and used, Fair value
7,634 
15,271 
Unobservable Inputs (Level 3) [Member] |
Non-Recurring Fair Value Measurements [Member] |
Long Lived Assets Held and Used [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Long-lived assets held and used, Fair value
$ 7,634 
$ 15,271 
Common Stock and Stock Based Compensation - Additional Information (Detail) (Common Stock [Member], USD $)
6 Months Ended
Jun. 30, 2015
Jun. 30, 2014
Common Stock [Member]
 
 
Stock Based Compensation [Line Items]
 
 
Number of shares granted to purchase
1,614,604 
Average grant date fair value of options issued
$ 3.97 
 
Restricted stock units issued
360,412 
IncomeTaxes - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2015
Jun. 30, 2014
Jun. 30, 2015
Jun. 30, 2014
Income Tax Disclosure [Abstract]
 
 
 
 
Provision (benefit) for income taxes
$ (26,677)
$ 18,146 
$ (16,060)
$ 32,412 
Income (Loss) before income taxes
$ (12,536)
$ 62,349 
$ 28,961 
$ 111,227 
Effective income tax rate
(212.80%)
29.10% 
(55.50%)
29.10% 
Defined Benefit Plans - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2015
Pension_Plan
Jun. 30, 2014
Compensation and Retirement Disclosure [Abstract]
 
 
Number of defined benefit pension plans
 
Pension and postretirement contributions
$ 33 
$ 130 
Expected contribution for pension plan
$ 63 
 
Defined Benefit Plans - Net Periodic Benefit Cost Recognized for Plans (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2015
Jun. 30, 2014
Jun. 30, 2015
Jun. 30, 2014
Schedule Of Sale Of Subsidiary [Abstract]
 
 
 
 
Service cost
$ 27 
$ 19 
$ 54 
$ 38 
Interest cost
85 
83 
170 
166 
Expected return on plan assets
(127)
(146)
(254)
(292)
Amortization of prior service cost
10 
Amortization of net actuarial loss
70 
40 
140 
80 
Net periodic benefit cost
$ 59 
$ 1 
$ 118 
$ 2 
Accumulated Other Comprehensive Income - Components of Accumulated Other Comprehensive Income (Loss) (Detail) (USD $)
In Thousands, unless otherwise specified
6 Months Ended 12 Months Ended
Jun. 30, 2015
Dec. 31, 2014
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Accumulated other comprehensive income (loss), Gross
$ (24,773)
$ (17,507)
Accumulated other comprehensive income (loss), Tax Effect
6,023 
4,698 
Accumulated other comprehensive income (loss)
(18,750)
(12,809)
Foreign Currency Translation [Member]
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Accumulated other comprehensive income (loss), Gross
(8,332)
(4,979)
Accumulated other comprehensive income (loss)
(8,332)
(4,979)
Additional Pension Liability [Member]
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Accumulated other comprehensive income (loss), Gross
(4,088)
(4,236)
Accumulated other comprehensive income (loss), Tax Effect
1,564 
1,588 
Accumulated other comprehensive income (loss)
(2,524)
(2,648)
Unrealized Gain (Loss) on Interest Rate Hedges [Member]
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Accumulated other comprehensive income (loss), Gross
(12,353)
(8,292)
Accumulated other comprehensive income (loss), Tax Effect
4,459 
3,110 
Accumulated other comprehensive income (loss)
$ (7,894)
$ (5,182)
Accumulated Other Comprehensive Income - Changes in Accumulated Other Comprehensive Income by Component (Detail) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2015
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
Beginning balance
$ (12,809)
Other comprehensive income (loss) before reclassifications
(6,754)
Amounts reclassified from accumulated other comprehensive income (loss)
813 
Ending balance
(18,750)
Unrealized Gain (Loss) on Interest Rate Hedges [Member]
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
Beginning balance
(5,182)
Other comprehensive income (loss) before reclassifications
(3,401)
Amounts reclassified from accumulated other comprehensive income (loss)
689 
Ending balance
(7,894)
Additional Pension Liability [Member]
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
Beginning balance
(2,648)
Amounts reclassified from accumulated other comprehensive income (loss)
124 
Ending balance
(2,524)
Foreign Currency Translation [Member]
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
Beginning balance
(4,979)
Other comprehensive income (loss) before reclassifications
(3,353)
Ending balance
$ (8,332)
Accumulated Other Comprehensive Income - Reclassifications out of Accumulated Comprehensive Income (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2015
Jun. 30, 2014
Jun. 30, 2015
Jun. 30, 2014
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Total before tax
$ (12,536)
$ 62,349 
$ 28,961 
$ 111,227 
Tax expense (benefit)
26,677 
(18,146)
16,060 
(32,412)
Net income
14,141 
44,203 
45,021 
78,815 
Cost of sales
165,130 
211,190 
367,678 
402,302 
Reclassification Out of Accumulated Other Comprehensive Income [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Net income
 
 
813 
 
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
 
 
1,269 
 
Tax expense (benefit)
 
 
(579)
 
Net income
 
 
690 
 
Reclassification Out of Accumulated Other Comprehensive Income [Member] |
Accumulated Defined Benefit Plans Adjustment, Net Prior Service Cost (Credit) [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Cost of sales
 
 
 
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
 
 
140 
 
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
 
 
148 
 
Tax expense (benefit)
 
 
(25)
 
Net income
 
 
$ 123 
 
Commitments and Contingencies - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2015
Jun. 30, 2014
Commitments And Contingencies [Line Items]
 
 
Rent expense for lease
$ 33,503 
$ 25,458 
Self-Suspending Proppant LLC [Member]
 
 
Commitments And Contingencies [Line Items]
 
 
Commitment period of sales
5 years 
 
Commitment commencing date
Oct. 01, 2015 
 
Segment Reporting - Additional Information (Detail)
6 Months Ended
Jun. 30, 2015
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, 2015
Jun. 30, 2014
Jun. 30, 2015
Jun. 30, 2014
Revenue
 
 
 
 
Revenue
$ 221,323 
$ 334,291 
$ 522,813 
$ 629,223 
Segment contribution margin
 
 
 
 
Segment contribution margin
34,522 
114,513 
125,417 
209,763 
Operating expenses excluded from segment contribution margin
 
 
 
 
Selling, general, and administrative
19,204 
27,390 
43,224 
49,168 
Depreciation, depletion, and amortization
16,276 
14,584 
32,499 
27,522 
Stock compensation expense
2,618 
2,219 
4,501 
4,313 
Interest expense, net
14,894 
16,572 
30,202 
34,478 
Other non-operating expense (income)
 
250 
 
541 
Income (loss) before provision for income taxes
(12,536)
62,349 
28,961 
111,227 
Proppant Solutions [Member]
 
 
 
 
Revenue
 
 
 
 
Revenue
188,150 
300,685 
461,019 
567,185 
Segment contribution margin
 
 
 
 
Segment contribution margin
35,416 
103,900 
119,235 
192,928 
Industrial & Recreational Products [Member]
 
 
 
 
Revenue
 
 
 
 
Revenue
33,173 
33,606 
61,794 
62,038 
Segment contribution margin
 
 
 
 
Segment contribution margin
(894)
10,613 
6,182 
16,835 
Corporate and Other [Member]
 
 
 
 
Operating expenses excluded from segment contribution margin
 
 
 
 
Selling, general, and administrative
12,694 
18,884 
28,454 
32,010 
Depreciation, depletion, and amortization
16,276 
14,584 
32,499 
27,522 
Stock compensation expense
2,618 
2,219 
4,501 
4,313 
Corporate restructuring charges and other operating expense (income)
576 
(345)
800 
(328)
Interest expense, net
14,894 
16,572 
30,202 
34,478 
Other non-operating expense (income)
 
$ 250 
 
$ 541 
Restructuring and Other Charges - Summary of Restructuring and Other Costs Recognized (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2015
Jun. 30, 2015
Restructuring and other charges
 
 
Workforce reduction costs, including one-time severance payments
$ 401 
$ 725 
Write-down to net realizable value of exited facilities and other capitalized costs
7,637 
7,637 
Other exit costs, including multiemployer pension plan withdrawal liability and additional cash costs to exit facilities
6,786 
6,786 
Total restructuring and other charges
$ 14,824 
$ 15,148 
Restructuring and Other Charges - Summary of Restructuring and Other Costs by Operating Segment (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2015
Jun. 30, 2015
Restructuring Cost and Reserve [Line Items]
 
 
Total restructuring and other charges
$ 14,824 
$ 15,148 
Operating Segments [Member] |
Proppant Solutions [Member]
 
 
Restructuring Cost and Reserve [Line Items]
 
 
Total restructuring and other charges
2,402 
2,402 
Operating Segments [Member] |
Industrial & Recreational Products [Member]
 
 
Restructuring Cost and Reserve [Line Items]
 
 
Total restructuring and other charges
12,085 
12,085 
Corporate, Non-Segment [Member]
 
 
Restructuring Cost and Reserve [Line Items]
 
 
Total restructuring and other charges
$ 337 
$ 661