REAL INDUSTRY, INC., 10-Q filed on 8/9/2016
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 30, 2016
Aug. 1, 2016
Document 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
RELY 
 
Entity Registrant Name
REAL INDUSTRY, INC. 
 
Entity Central Index Key
0000038984 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
29,261,586 
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Millions, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Current assets:
 
 
Cash and cash equivalents
$ 40.2 
$ 35.7 
Trade accounts receivable, net
93.7 
77.2 
Financing receivable
40.9 
32.7 
Inventories
89.3 
101.2 
Prepaid expenses, supplies, and other current assets
23.0 
24.7 
Current assets of discontinued operations
0.3 
0.3 
Total current assets
287.4 
271.8 
Property, plant and equipment, net
290.4 
301.5 
Intangible assets, net
13.8 
15.1 
Goodwill
104.5 
104.3 
Other noncurrent assets
8.0 
8.2 
TOTAL ASSETS
704.1 
700.9 
Current liabilities:
 
 
Trade payables
112.5 
100.9 
Accrued liabilities
47.5 
51.8 
Long-term debt due within one year
2.4 
2.3 
Current liabilities of discontinued operations
0.1 
0.1 
Total current liabilities
162.5 
155.1 
Accrued pension benefits
38.8 
38.0 
Environmental liabilities
11.7 
11.7 
Long-term debt, net
316.7 
312.1 
Common stock warrant liability
6.1 
6.9 
Deferred income taxes
5.9 
6.7 
Other noncurrent liabilities
6.2 
5.4 
Noncurrent liabilities of discontinued operations
0.7 
0.7 
TOTAL LIABILITIES
548.6 
536.6 
Redeemable Preferred Stock, Series B; $1,000 liquidation preference per share; 100,000 shares designated; 27,438 and 26,502 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively
23.3 
21.9 
Stockholders’ equity:
 
 
Preferred stock, Series A Junior Participating; $0.001 par value; 665,000 shares authorized; none issued or outstanding
   
   
Additional paid-in capital
545.8 
546.0 
Accumulated deficit
(414.9)
(403.3)
Treasury stock, at cost; 12,448 and 9,698 shares as of June 30, 2016 and December 31, 2015, respectively
(0.1)
(0.1)
Accumulated other comprehensive income (loss)
0.2 
(1.0)
Total stockholders’ equity—Real Industry, Inc.
131.0 
141.6 
Noncontrolling interest
1.2 
0.8 
TOTAL STOCKHOLDERS’ EQUITY
132.2 
142.4 
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
$ 704.1 
$ 700.9 
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
Jun. 30, 2016
Dec. 31, 2015
Common stock, par value
$ 0.001 
$ 0.001 
Common stock, shares authorized
66,500,000 
66,500,000 
Common stock, shares issued
29,265,870 
28,901,464 
Common stock, shares outstanding
29,253,422 
28,891,766 
Treasury Stock, shares
12,448 
9,698 
Series B Preferred Stock
 
 
Preferred stock, liquidation preference per share
$ 1,000 
$ 1,000 
Preferred stock, shares designated
100,000 
100,000 
Preferred stock, issued
27,438 
26,502 
Preferred stock, outstanding
27,438 
26,502 
Series A Junior Participating Preferred Stock
 
 
Preferred stock, issued
Preferred stock, shares authorized
665,000 
665,000 
Preferred stock, outstanding
Preferred stock, par value
$ 0.001 
$ 0.001 
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Millions, 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
$ 320.9 
$ 368.7 
$ 630.3 
$ 506.5 
Cost of sales
298.6 
347.4 
591.4 
480.3 
Gross profit
22.3 
21.3 
38.9 
26.2 
Selling, general and administrative expenses
14.6 
15.7 
30.0 
23.3 
Losses (gains) on derivative financial instruments, net
(1.5)
2.1 
(0.3)
2.0 
Amortization of intangibles
0.6 
0.3 
1.2 
0.4 
Other operating expense, net
0.5 
0.4 
2.0 
0.9 
Operating profit (loss)
8.1 
2.8 
6.0 
(0.4)
Nonoperating expense (income):
 
 
 
 
Interest expense, net
9.1 
9.3 
18.3 
17.4 
Change in fair value of common stock warrant liability
(1.3)
6.3 
(0.7)
5.6 
Acquisition-related costs and expenses
 
0.4 
 
14.8 
Foreign exchange losses (gains) on intercompany loans
1.6 
 
(1.0)
 
Other, net
(0.2)
0.3 
(0.2)
0.5 
Total nonoperating expense
9.2 
16.3 
16.4 
38.3 
Loss from continuing operations before income taxes
(1.1)
(13.5)
(10.4)
(38.7)
Income tax expense (benefit)
0.2 
0.2 
0.9 
(7.2)
Loss from continuing operations
(1.3)
(13.7)
(11.3)
(31.5)
Earnings from discontinued operations, net of income taxes
0.1 
2.9 
0.1 
27.2 
Net loss
(1.2)
(10.8)
(11.2)
(4.3)
Earnings from continuing operations attributable to noncontrolling interest
0.3 
0.1 
0.4 
0.2 
Net loss attributable to Real Industry, Inc.
(1.5)
(10.9)
(11.6)
(4.5)
LOSS PER SHARE
 
 
 
 
Net loss attributable to Real Industry, Inc.
(1.5)
(10.9)
(11.6)
(4.5)
Dividends on Redeemable Preferred Stock, in-kind
(0.5)
(0.5)
(0.9)
(0.6)
Accretion of fair value adjustment to Redeemable Preferred Stock
(0.2)
(0.2)
(0.5)
(0.3)
Net loss available to common stockholders
$ (2.2)
$ (11.6)
$ (13.0)
$ (5.4)
Basic and diluted earnings (loss) per share:
 
 
 
 
Continuing operations
$ (0.08)
$ (0.53)
$ (0.43)
$ (1.32)
Discontinued operations
$ 0.01 
$ 0.11 
 
$ 1.10 
Basic and diluted loss per share
$ (0.07)
$ (0.42)
$ (0.43)
$ (0.22)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Statement Of Income And Comprehensive Income [Abstract]
 
 
 
 
Net loss
$ (1.2)
$ (10.8)
$ (11.2)
$ (4.3)
Other comprehensive loss:
 
 
 
 
Currency translation adjustments
(1.4)
(1.2)
1.3 
(0.9)
Amortization of net actuarial gains, net of tax
 
 
(0.1)
 
Comprehensive loss
(2.6)
(12.0)
(10.0)
(5.2)
Comprehensive income attributable to noncontrolling interest
0.3 
0.1 
0.4 
0.2 
Comprehensive loss attributable to Real Industry, Inc.
$ (2.9)
$ (12.1)
$ (10.4)
$ (5.4)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Cash flows from operating activities:
 
 
Net loss
$ (11.2)
$ (4.3)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
Earnings from discontinued operations, net of income taxes
(0.1)
(27.2)
Depreciation and amortization
25.3 
13.9 
Deferred income taxes
(0.7)
(7.2)
Change in fair value of common stock warrant liability
(0.7)
5.6 
Share-based compensation expense included in Corporate and Other
1.0 
0.6 
Amortization of debt issuance costs
2.4 
2.4 
Unrealized losses (gains) on derivative financial instruments
(1.5)
1.3 
Foreign exchange losses (gains) on intercompany loans
(1.0)
 
Amortization of inventories and supplies purchase accounting adjustments
0.9 
7.2 
Other
1.2 
0.6 
Changes in operating assets and liabilities
(5.8)
62.6 
Net cash used in operating activities of discontinued operations
0.2 
(0.6)
Net cash provided by operating activities
10.0 
54.9 
Cash flows from investing activities:
 
 
Acquisition of business, net of cash
 
(522.3)
Proceeds from sale of NABCO
3.9 
74.1 
Purchases of property and equipment
(11.1)
(10.0)
Other
0.1 
(0.2)
Net cash used in investing activities
(7.1)
(458.4)
Cash flows from financing activities:
 
 
Payment of NABCO outstanding debt
 
(14.3)
Proceeds from Asset-Based Facility, net of issuance costs
44.0 
92.4 
Repayments on capital leases and the Asset-Based Facility
(43.1)
(45.3)
Proceeds from issuance of Senior Secured Notes, net of debt issuance costs
 
287.1 
Proceeds from exercise of common stock options and Warrants
 
1.1 
Proceeds from issuance of common stock, net of issuance costs
 
58.2 
Other
0.7 
0.1 
Net cash used in financing activities of discontinued operations
 
(0.4)
Net cash provided by financing activities
1.6 
378.9 
Effect of exchange rate changes on cash and cash equivalents
 
0.2 
Increase (decrease) in cash and cash equivalents
4.5 
(24.4)
Cash and cash equivalents, beginning of period
35.8 
63.0 
Cash and cash equivalents, end of period
40.3 
38.6 
Cash and cash equivalents, end of period—continuing operations
40.2 
38.5 
Cash and cash equivalents, end of period—discontinued operations
$ 0.1 
$ 0.1 
Business and Operations
Business and Operations

NOTE 1—BUSINESS AND OPERATIONS

Real Industry, Inc. (“Real Industry,” the “Company,” “we,” “us” or “our”), formerly known as Signature Group Holding, Inc., is a Delaware holding company that operates through its operating subsidiaries. Management expects to grow the Company through acquisitions, as well as through organic efforts within our existing operations described below. Our current business strategy seeks to leverage our public company status, considerable United States (“U.S.”) federal net operating tax loss carryforwards (“NOLs”) and the experience of our executive management team to acquire operating businesses at prices and on terms that are aligned with our growth plans.

During the first quarter of 2015, the Company underwent a considerable transformation. On January 9, 2015, we completed the sale of North American Breaker Co., LLC (“NABCO”), previously our primary operating business. On February 27, 2015, we acquired the global recycling and specification alloys business (the “Real Alloy Business”) of Aleris Corporation (“Aleris”) (the “Real Alloy Acquisition”). The Real Alloy Business, operating under Real Alloy Intermediate Holding, LLC (“Real Alloy Parent”) through its wholly owned subsidiary Real Alloy Holding, Inc. (“Real Alloy”), is a global leader in third-party aluminum recycling. Real Alloy offers a broad range of products and services to wrought alloy processors, automotive original equipment manufacturers, and foundries and casters. Real Alloy’s customers include companies that participate in or sell to the automotive, consumer packaging, steel and durable goods, aerospace, and building and construction industries. Real Alloy processes scrap aluminum and by-products, and delivers recycled metal in solid or molten form according to customer specifications. Real Alloy’s facilities are capable of processing industrial (new) scrap, post-consumer (old/obsolete) scrap, and various aluminum by-products, providing a great degree of flexibility in reclaiming high-quality recycled aluminum. Real Alloy currently operates twenty-four facilities strategically located throughout North America and Europe and, as of June 30, 2016, had approximately 1,700 employees.

Other significant milestones achieved in 2015 included: on April 21, 2015, our common stock began trading on the Nasdaq Stock Market (“NASDAQ”) under the symbol “RELY” as part of the NASDAQ Global Select Market; on May 28, 2015, our stockholders approved an amendment to our charter to change our name to Real Industry, Inc.; and in June 2015, Real Industry became a member of the Russell Global®, Russell 2000® and Russell Microcap® indexes.    

As a result of the transformative nature of the acquisition and divestiture activities described above, our operations for the six months ended June 30, 2015, which included the results of operations of Real Alloy for approximately four months, are not comparable to the results of operations for the six months ended June 30, 2016, in which Real Alloy is reporting results for the full six months in this Quarterly Report on Form 10-Q (the “Report”). See Note 11—Segment Information for additional information about our reportable segments.

The assets and liabilities and results of operations of NABCO, prior to its divestiture, are included in discontinued operations for all periods presented as a result of its sale in the first quarter of 2015, and the strategic shift in the Company’s operations. Discontinued operations also includes certain assets and liabilities related to the former businesses of our subsidiary SGGH, LLC (“SGGH”), then known as Fremont General Corporation (“Fremont”) and its primary operating subsidiary, Fremont Investment & Loan (“FIL”). See Note 12—Discontinued Operations for additional information about our discontinued operations.

Financial Statement Presentation and Recent Accounting Updates
Financial Statement Presentation and Recent Accounting Updates

NOTE 2—FINANCIAL STATEMENT PRESENTATION AND RECENT ACCOUNTING UPDATES

The accompanying unaudited condensed consolidated financial statements comprise the accounts of Real Industry and its wholly owned and majority-owned subsidiaries, and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation, have been included. The Company evaluates subsequent events through the date of filing with the Securities and Exchange Commission (“SEC”). Operating results for the six months ended June 30, 2016 may not necessarily be indicative of the results that may be expected for the full year ending December 31, 2016. These interim period unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2015, which are included in the Company’s Annual Report on Form 10-K, as filed with the SEC on March 14, 2016 (the “Annual Report”).

During the quarter ended March 31, 2016, the Company identified an error in the depreciation expense reported in the December 31, 2015 consolidated financial statements, which resulted in the overstatement of property, plant and equipment, net, by $3.8 million, overstated deferred tax liability by $1.1 million and overstated net earnings by $2.7 million. The error occurred in the quarter ended December 31, 2015, and was corrected during the quarter ended March 31, 2016. As a result of the correction, cost of sales; gross profit; selling, general and administrative (“SG&A”) expenses; operating loss; loss from continuing operations; and net loss are each impacted by the correction, with $3.7 million of the adjustment classified in cost of sales and $0.1 million in SG&A expenses presented in the results of operations during the six months ended June 30, 2016. Management has concluded that the error reflected in the December 31, 2015 consolidated financial statements was not material and that the error correction in 2016 is not expected to be material to the full year results of operations.

Recent accounting updates

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which was the result of a joint project by the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP and International Financial Reporting Standards. The issuance of a comprehensive and converged standard on revenue recognition is expected to enable financial statement users to better understand and consistently analyze an entity’s revenue across industries, transactions and geographies. The standard will require additional disclosures to help financial statement users better understand the nature, amount, timing, and potential uncertainty of the revenue that is recognized. ASU 2014-09 will be effective for the Company on January 1, 2018, and management is evaluating the application methods available, but has yet to select from either retrospective application to each prior reporting period presented or retrospective application with the cumulative effect of initially applying the standard recognized at the date of adoption. Management continues to evaluate the impact ASU 2014-09 will have on the Company’s financial position, results of operations, and disclosure requirements. The adoption and implementation of the accounting and disclosure requirements of ASU 2014-09 is expected to have a substantial impact on financial statement disclosures.

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”), which clarifies two aspects of Topic 606, identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Before an entity can identify its performance obligations in a contract with a customer, the entity first identifies the promised goods or services in the contract. ASU 2016-10 is intended to clarify the operability and understandability of the licensing implementation guidance. ASU 2016-10 will be effective for the Company in conjunction with the effective date of ASU 2014-09. The Company is currently evaluating the impact of adopting this guidance in connection with the adoption of ASU 2014-09.

In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients (“ASU 2016-10”), which provides clarification to Topic 606 on how to assess collectability, present sales tax, treat noncash consideration, and account for completed and modified contracts at the time of transition. In addition, ASU 2016-12 clarifies that an entity retrospectively applying the guidance in Topic 606 is not required to disclose the effect of the accounting change in the period of adoption. The effective date and transition requirements for these amendments are the same as the effective date and transition requirements of ASU 2014-09, which is effective January 1, 2018. The Company is currently evaluating the impact of adopting this guidance in connection with the adoption of ASU 2014-09.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which generally requires companies to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet. This guidance will be effective for the Company in fiscal years beginning after December 31, 2018 on a modified retrospective basis and early adoption is permitted. The Company is currently evaluating the effect this guidance will have on our consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815) (“ASU 2016-06”), which clarifies what steps are required when assessing whether the economic characteristics and risks of call or put options are clearly and closely related to the economic characteristics and risks of their debt hosts, which is one of the criteria for bifurcating an embedded derivative. Consequently, when an option is contingently exercisable, an entity does not have to assess whether the event that triggers the ability to exercise the option is related to interest rates or credit risks. ASU 2016-06 is effective for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. The Company is currently evaluating the effect this guidance will have on our consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which simplifies the accounting for share-based payment transactions, including the income tax consequences, an option to recognize gross share-based compensation expense with actual forfeitures recognized as they occur, as well as certain classifications in the statement of cash flows. This guidance will be effective for fiscal years beginning after December 15, 2016, and early adoption is permitted. The Company is currently evaluating the effect this guidance will have on our consolidated financial statements and related disclosures.

Inventories
Inventories

NOTE 3—INVENTORIES

The following table presents the components of inventories as of June 30, 2016 and December 31, 2015:

 

 

June 30,

 

 

December 31,

 

(In millions)

2016

 

 

2015

 

Real Alloy:

 

 

 

 

 

 

 

Finished goods

$

31.2

 

 

$

32.2

 

Raw materials and work in process

 

57.2

 

 

 

68.1

 

Total Real Alloy inventories

 

88.4

 

 

 

100.3

 

Cosmedicine - finished goods

 

0.9

 

 

 

0.9

 

Total inventories

$

89.3

 

 

$

101.2

 

 

Debt and Redeemable Preferred Stock
Debt, Other Financing Arrangements and Redeemable Preferred Stock

NOTE 4—DEBT AND REDEEMABLE PREFERRED STOCK

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

 

 

June 30,

 

 

December 31,

 

(In millions)

2016

 

 

2015

 

Senior Secured Notes:

 

 

 

 

 

 

 

Principal amount outstanding

$

305.0

 

 

$

305.0

 

Unamortized original issue discount and issuance costs

 

(12.3

)

 

 

(14.3

)

Senior Secured Notes, net

 

292.7

 

 

 

290.7

 

Asset-Based Facility:

 

 

 

 

 

 

 

Principal amount outstanding

 

24.0

 

 

 

22.0

 

Unamortized debt issuance costs

 

(1.9

)

 

 

(2.4

)

Asset-Based Facility, net

 

22.1

 

 

 

19.6

 

Capital leases

 

4.3

 

 

 

4.1

 

Current portion of long-term debt

 

(2.4

)

 

 

(2.3

)

Total long-term debt, net

$

316.7

 

 

$

312.1

 

Long-term debt

Senior Secured Notes

The Senior Secured Notes mature on January 15, 2019 and interest is payable on January 15 and July 15 of each year through the date of maturity. For the three months ended June 30, 2016 and 2015, interest expense associated with the Senior Secured Notes was $8.5 million and $8.7 million, respectively, including $1.0 million and $1.1 million of noncash expense related to the amortization of the original issue discount and debt issuance costs, respectively. For the six months ended June 30, 2016 and 2015, interest expense was $17.3 million and $16.7 million, respectively, including $2.0 million and $2.1 million, respectively, of amortization of debt discount and issuance costs. As of June 30, 2016, the borrowers were in compliance with all applicable covenants under the Indenture of the Senior Secured Notes.

Asset-Based Facility

For the three months ended June 30, 2016 and 2015, interest expense associated with the Asset-Based Facility was $0.6 million and $0.5 million, respectively, including $0.2 million and $0.2 million, respectively, related to the amortization of debt issuance costs. For the six months ended June 30, 2016 and 2015, interest expense was $1.0 million and $0.6 million, respectively, including $0.4 million and $0.2 million, respectively, related to the amortization of debt issuance costs. As of June 30, 2016, the borrowers were in compliance with all applicable covenants under the Asset-Based Facility.

Capital Leases

In the normal course of operations, Real Alloy enters into capital leases to finance office and other equipment for its operations. As of June 30, 2016, $2.4 million of the $4.3 million in capital lease obligations are due within the next twelve months.

Redeemable Preferred Stock

The Redeemable Preferred Stock was issued to Aleris on February 27, 2015 as a portion of the purchase price for the Real Alloy Acquisition and has a liquidation preference of $27.4 million, as of June 30, 2016. The Redeemable Preferred Stock pays quarterly dividends at a rate of 7% for the first eighteen months after the date of issuance, 8% for the next twelve months, and 9% thereafter. Dividends may be paid in-kind for the first two years, and thereafter will be paid in cash. All accrued and accumulated dividends on the Redeemable Preferred Stock will be prior and in preference to any dividend on any of the Company’s common stock or other junior securities.

The Company may generally redeem the shares of Redeemable Preferred Stock at any time at the liquidation preference, and the holders may require the Company to redeem their shares of Redeemable Preferred Stock at the liquidation preference upon a change of control as defined in the Indenture of the Senior Secured Notes (or any debt facility that replaces or redeems the Senior Secured Notes) to the extent that the change of control does not provide for such redemption at the liquidation preference. A holder of Redeemable Preferred Stock may require the Company to redeem all, but not less than all, of such holder’s Redeemable Preferred Stock sixty-six months after the issuance date. In addition, the Company shall redeem shares of Redeemable Preferred Stock to the extent Aleris is required to indemnify the Company under the Real Alloy Purchase Agreement for the Real Alloy Acquisition. The Redeemable Preferred Stock is not transferrable (other than to another subsidiary of Aleris) for eighteen months following issuance (or such longer period in connection with any ongoing indemnity claims under the Real Alloy Purchase Agreement).

The carrying value of Redeemable Preferred Stock is based on the estimated fair value of the instrument as of the issuance date plus dividends paid in-kind and accretion of the fair value adjustment to the Redeemable Preferred Stock. The difference between the liquidation preference and the estimated fair value as of the issuance date is being accreted over the period preceding the holder’s right to redeem the instrument, or sixty-six months.

The following table presents the activity related to the carrying value of Redeemable Preferred Stock during the six months ended June 30, 2016:

 

(In millions)

 

 

 

Balance, December 31, 2015

$

21.9

 

Dividends on Redeemable Preferred Stock, in-kind

 

0.9

 

Accretion of fair value adjustment to Redeemable Preferred Stock

 

0.5

 

Balance, June 30, 2016

$

23.3

 

 

Stockholders Equity and Noncontrolling Interest
Stockholders Equity and Noncontrolling Interest

NOTE 5—STOCKHOLDERSEQUITY AND NONCONTROLLING INTEREST

The following table summarizes the activity within stockholders’ equity attributable to Real Industry and noncontrolling interest for the six months ended June 30, 2016:

 

(In millions)

Equity Attributable to Real Industry, Inc.

 

 

Noncontrolling Interest

 

 

Total Equity

 

Balance, December 31, 2015

$

141.6

 

 

$

0.8

 

 

$

142.4

 

Net earnings (loss)

 

(11.6

)

 

 

0.4

 

 

 

(11.2

)

Dividends and accretion of fair value adjustment to

   Redeemable Preferred Stock

 

(1.4

)

 

 

 

 

 

(1.4

)

Share-based compensation expense

 

1.0

 

 

 

 

 

 

1.0

 

Warrants exercised

 

0.2

 

 

 

 

 

 

0.2

 

Change in accumulated other comprehensive income (loss)

 

1.2

 

 

 

 

 

 

1.2

 

Balance, June 30, 2016

$

131.0

 

 

$

1.2

 

 

$

132.2

 

 

The following table reflects changes in the shares of common stock outstanding during the six months ended June 30, 2016:

 

Shares of Common Stock Outstanding

 

Balance, December 31, 2015

 

28,891,766

 

Restricted common stock awards granted, net of treasury shares reissued

 

344,406

 

Common stock issued from the exercise of Warrants

 

20,000

 

Treasury shares acquired, net of reissuance

 

(2,750

)

Balance, June 30, 2016

 

29,253,422

 

 

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

NOTE 6—ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table summarizes the activity within accumulated other comprehensive income (loss) for the six months ended June 30, 2016:

 

(In millions)

Currency Translation Adjustments

 

 

Pension Benefit Adjustments

 

 

Accumulated Other Comprehensive Income (Loss)

 

Balance, beginning of period

$

(6.0

)

 

$

5.0

 

 

$

(1.0

)

Current period currency translation adjustments

 

1.2

 

 

 

0.1

 

 

 

1.3

 

Amortization of net actuarial gains, net of tax

 

 

 

 

(0.1

)

 

 

(0.1

)

Balance, end of period

$

(4.8

)

 

$

5.0

 

 

$

0.2

 

 

Included in current period currency translation adjustments are $1.0 million of currency translation adjustment losses associated with intercompany loans considered long-term in nature.

See Note 8—Employee Benefit Plans for additional information about the Company’s periodic benefit expense.

Income Taxes
Income Taxes

NOTE 7—INCOME TAXES

At the end of each reporting period, Real Industry makes an estimate of its annual effective income tax rate. The estimate used for the six months ended June 30, 2016 may change in subsequent periods. The effective tax rate for the six months ended June 30, 2016 differed from the federal statutory rate applied to earnings and losses before income taxes primarily as a result of the mix of earnings, losses and tax rates between tax jurisdictions, and changes in valuation allowances. The income tax expense for the three months ended June 30, 2016 and 2015 was $0.2 million income tax expense. For the six months ended June 30, 2016, income tax expense was $0.9 million, compared to a $7.2 million income tax benefit for the six months ended June 30, 2015.    

As of December 31, 2015, the Company has estimated U.S. federal NOLs of $871.8 million and non-U.S. NOLs of $27.6 million. The U.S. federal NOLs have a 20-year life and begin to expire after the 2027 tax year. Additionally, the Company has state NOLs in amounts that are comparable to the U.S. federal NOLs. Real Industry has valuation allowances recorded to reduce certain deferred tax assets to amounts that are more likely than not to be realized. Real Industry intends to maintain its valuation allowances until sufficient positive evidence exists to support their realization through achieving profitability.  

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, various state and local jurisdictions, as well as foreign jurisdictions located in Canada, Mexico, Germany, Norway, and the United Kingdom. With few exceptions, the 2010 through 2015 tax years remain open to examination.

Employee Benefit Plans
Employee Benefit Plans

NOTE 8—EMPLOYEE BENEFIT PLANS

The following table presents the components of net periodic benefit expense under the German defined benefit pension plans for the three and six months ended June 30, 2016 and 2015:

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In millions)

 

2016

 

 

 

2015

 

 

 

2016

 

 

 

2015

 

Service cost

$

0.2

 

 

$

0.3

 

 

$

0.4

 

 

$

0.4

 

Interest cost

 

0.3

 

 

 

0.2

 

 

 

0.5

 

 

 

0.3

 

Amortization of net actuarial gains

 

 

 

 

 

 

 

(0.1

)

 

 

 

Expected return on plan assets

 

(0.1

)

 

 

 

 

 

(0.1

)

 

 

 

Net periodic benefit expense

$

0.4

 

 

$

0.5

 

 

$

0.7

 

 

$

0.7

 

 

Loss Per Share
Loss Per Share

NOTE 9—LOSS PER SHARE

The Company computes earnings (loss) per share using the two-class method, as unvested restricted common stock and unvested performance shares contain non-forfeitable rights to dividends and meet the criteria of participating securities. Under the two-class method, earnings are allocated between common stock and participating securities. The presentation of basic and diluted earnings per share is required only for each class of common stock and not for participating securities. As such, the Company presents basic and diluted earnings per share for its one class of common stock.

The two-class method includes an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared and undistributed earnings for the period. The Company’s reported net earnings are reduced by the amount allocated to participating securities to arrive at the earnings allocated to common stockholders for purposes of calculating earnings per share.

Basic earnings (loss) per share is computed by dividing net earnings (loss) attributable to Real Industry, Inc., less dividends and accretion on the fair value adjustment to Redeemable Preferred Stock, by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the calculation of diluted earnings per share, the basic weighted average number of common shares outstanding is increased by the dilutive effect of unvested restricted common stock awards, common stock options, unvested performance shares and the Warrants, determined using the treasury stock method.

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

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In millions, except share and per share amounts)

2016

 

 

2015

 

 

2016

 

 

2015

 

Loss from continuing operations

$

(1.3

)

 

$

(13.7

)

 

$

(11.3

)

 

$

(31.5

)

Earnings from discontinued operations,

   net of income taxes

 

0.1

 

 

 

2.9

 

 

 

0.1

 

 

 

27.2

 

Net loss

 

(1.2

)

 

 

(10.8

)

 

 

(11.2

)

 

 

(4.3

)

Earnings from continuing operations

   attributable to noncontrolling interest

 

0.3

 

 

 

0.1

 

 

 

0.4

 

 

 

0.2

 

Net loss attributable to Real Industry, Inc.

 

(1.5

)

 

 

(10.9

)

 

 

(11.6

)

 

 

(4.5

)

Dividends on Redeemable Preferred

   Stock, in-kind

 

(0.5

)

 

 

(0.5

)

 

 

(0.9

)

 

 

(0.6

)

Accretion of fair value adjustment to

   Redeemable Preferred Stock

 

(0.2

)

 

 

(0.2

)

 

 

(0.5

)

 

 

(0.3

)

Numerator for basic and diluted earnings

   (loss) per share—Net loss available to

   common stockholders

$

(2.2

)

 

$

(11.6

)

 

$

(13.0

)

 

$

(5.4

)

Denominator for basic and diluted earnings

   (loss) per share—Weighted average

   shares outstanding

 

29,252,343

 

 

 

27,631,795

 

 

 

29,160,245

 

 

 

24,689,253

 

Basic and diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

$

(0.08

)

 

$

(0.53

)

 

$

(0.43

)

 

$

(1.32

)

Discontinued operations

 

0.01

 

 

 

0.11

 

 

 

 

 

 

1.10

 

Basic and diluted loss per share

$

(0.07

)

 

$

(0.42

)

 

$

(0.43

)

 

$

(0.22

)

 

Unvested restricted common stock, common stock options, unvested performance shares and the Warrants are antidilutive and excluded from the computation of diluted earnings per share if the assumed proceeds upon exercise or vesting are greater than the cost to reacquire the same number of shares at the average market price during the period. For the three and six months ended June 30, 2016 and 2015, the impact of all outstanding unvested shares of restricted common stock, common stock options, unvested performance shares and the Warrants are excluded from diluted loss per share as their impact would be antidilutive.

The following tables provide details on the average market price of Real Industry common stock; the outstanding shares of unvested restricted common stock, common stock options, unvested performance shares and Warrants that were potentially dilutive; and summary information about the potentially dilutive common stock equivalents for each of the periods presented:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Average market price of

   Real Industry common stock

$

8.12

 

 

$

9.63

 

 

$

7.51

 

 

$

8.44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Potentially dilutive common stock equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unvested restricted common stock

 

491,286

 

 

 

264,630

 

 

 

491,286

 

 

 

264,630

 

Common stock options

 

775,650

 

 

 

815,650

 

 

 

775,650

 

 

 

815,650

 

Unvested performance shares

 

381,823

 

 

 

260,000

 

 

 

381,823

 

 

 

260,000

 

Warrants

 

1,448,333

 

 

 

1,485,000

 

 

 

1,448,333

 

 

 

1,485,000

 

Total potentially dilutive

   common stock equivalents

 

3,097,092

 

 

 

2,825,280

 

 

 

3,097,092

 

 

 

2,825,280

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In millions, except exercise prices)

2016

 

 

2015

 

 

2016

 

 

2015

 

Average unamortized share-based

   compensation expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unvested restricted common stock awards

$

3.0

 

 

$

1.6

 

 

$

2.6

 

 

$

1.3

 

Unvested performance share awards

$

2.1

 

 

$

0.6

 

 

$

2.0

 

 

$

0.3

 

Range of exercise prices on common stock options

$3.00 - $10.00

 

 

$3.00 - $10.00

 

 

$3.00 - $10.00

 

 

$3.00 - $10.00

 

Weighted average exercise price of the Warrants

$

5.64

 

 

$

5.64

 

 

$

5.64

 

 

$

5.81

 

 

Derivative and Other Financial Instruments and Fair Value Measurements
Derivative and Other Financial Instruments and Fair Value Measurements

NOTE 10—DERIVATIVE AND OTHER FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Derivatives

Real Alloy may use forward contracts and options, as well as contractual price escalators, to reduce the risks associated with its metal, natural gas, and certain currency exposures. Generally, Real Alloy enters into master netting arrangements with its counterparties and offsets net derivative positions with the same counterparties against amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral under those arrangements in our unaudited condensed consolidated balance sheets. For classification purposes, Real Alloy records the net fair value of each type of derivative position expected to settle in less than one year (by counterparty) as a net current asset or liability and each type of long-term position as a net long-term asset or liability.

Metal hedging

Primarily in our RAEU segment, London Metal Exchange (“LME”) future swaps or forward contracts are sold as metal is purchased to fill fixed-priced customer sales orders. As sales orders are priced, LME future or forward contracts may be purchased, which generally settle within six months. Real Alloy may also buy put option contracts for managing metal price exposures. Option contracts require the payment of a premium, which is recorded as a realized loss upon settlement or expiration of the option contract. Upon settlement of the put option contracts, Real Alloy receives cash and recognizes a related gain if the LME closing price is less than the strike price of the put option. If the put option strike price is less than the LME closing price, no amount is paid and the option expires. As of June 30, 2016, Real Alloy had 30.0 thousand metric tons of metal buy and sell derivative contracts.

Natural gas hedging

To manage the price exposure for natural gas purchases, Real Alloy may fix the future price of a portion of its natural gas requirements by entering into financial hedge agreements. Under these swap agreements, payments are made or received based on the differential between the monthly closing price on the New York Mercantile Exchange (“NYMEX”) and the contractual hedge price. Natural gas cost can also be managed through the use of cost escalators included in some long-term supply contracts with customers, which limits exposure to natural gas price risk. As of June 30, 2016, Real Alloy had 2.5 trillion British thermal unit forward buy contracts.

Currency exchange hedging

From time to time, Real Alloy may enter into currency forwards, futures, call options and similar derivative financial instruments to limit its exposure to fluctuations in currency exchange rates. As of June 30, 2016, no currency derivative contracts were outstanding.

Credit risk

Real Alloy is exposed to losses in the event of nonperformance by the counterparties to the derivative financial instruments discussed above; however, management does not anticipate any nonperformance by the counterparties. The counterparties are evaluated for creditworthiness and risk assessment prior to initiating trading activities with the brokers and periodically throughout each year while actively trading. As of June 30, 2016, no cash collateral was posted or held.

The table below presents gross amounts of recognized assets and liabilities, the amounts offset in the unaudited condensed consolidated balance sheets and the net amounts of assets and liabilities presented therein. As of June 30, 2016, there were no amounts subject to an enforceable master netting arrangement or similar agreement that have not been offset in the unaudited condensed consolidated balance sheets.

 

 

Fair Value of Derivatives

 

 

Fair Value of Derivatives

 

 

as of June 30, 2016

 

 

as of December 31, 2015

 

(In millions)

Asset

 

 

Liability

 

 

Asset

 

 

Liability

 

Metal

$

0.3

 

 

$

 

 

$

0.2

 

 

$

(0.3

)

Natural gas

 

0.5

 

 

 

 

 

 

 

 

 

(0.6

)

Total

 

0.8

 

 

 

 

 

 

0.2

 

 

 

(0.9

)

Effect of counterparty netting arrangements

 

 

 

 

 

 

 

(0.2

)

 

 

0.2

 

Net derivatives assets (liabilities) as classified

   in the consolidated balance sheets

$

0.8

 

 

$

 

 

$

 

 

$

(0.7

)

The following table presents details of the fair value of Real Alloy’s derivative financial instruments as of June 30, 2016 and December 31, 2015, as recorded in the unaudited condensed consolidated balance sheets:  

 

 

 

 

June 30,

 

 

December 31,

 

(In millions)

Balance Sheet Location

 

2016

 

 

2015

 

Derivative assets:

 

 

 

 

 

 

 

 

 

Metal

Prepaid expenses, supplies, and other current assets

 

$

0.3

 

 

$

 

Natural Gas

Prepaid expenses, supplies, and other current assets

 

 

0.3

 

 

 

 

Natural Gas

Other noncurrent assets

 

 

0.2

 

 

 

 

Total derivative assets

 

 

$

0.8

 

 

$

 

Derivative liabilities:

 

 

 

 

 

 

 

 

 

Metal

Accrued liabilities

 

$

 

 

$

0.1

 

Natural Gas

Accrued liabilities

 

 

 

 

 

0.6

 

Total derivative liabilities

 

 

$

 

 

$

0.7

 

Common stock warrant liability

On June 11, 2010, warrants to purchase an aggregate of 1.5 million shares of Real Industry’s common stock were issued (the “Warrants”). The aggregate purchase price for the Warrants was $0.3 million, due in equal installments as the Warrants vested, 20% upon issuance and, thereafter, 20% annually on the anniversary of the issuance date and, as of June 30, 2015, the Warrants are 100% vested. The Warrants expire in June 2020 and had an original exercise price of $10.30 per share. The Warrants were issued without registration in reliance on the exemption set forth in Section 4(a)(2) of the Securities Act of 1933, as amended.

The Warrants include customary terms that provide for certain adjustments of the exercise price and the number of shares of common stock to be issued upon the exercise of the Warrants in the event of stock splits, stock dividends, pro rata distributions and certain other fundamental transactions. Additionally, the Warrants are subject to pricing protection provisions. During the term of the Warrants, the pricing protection provisions provide that certain issuances of new shares of common stock at prices below the current exercise price of the Warrants automatically reduce the exercise price of the Warrants to the lowest per share purchase price of common stock issued. In February 2015, the Company issued shares of common stock in the Rights Offering at $5.64 per share, thereby reducing the exercise price of the Warrants to $5.64 per share. During the six months ended June 30, 2016, 20,000 Warrants were exercised on a cashless basis and, as of June 30, 2016, there were 1,448,333 Warrants outstanding.

The common stock warrant liability is a derivative liability related to the anti-dilution and pricing protection provisions of the Warrants. The fair value of the common stock warrant liability is based on a Monte Carlo simulation that utilizes various assumptions, including estimated volatility of 49.8% and an expected term of 3.9 years as of June 30, 2016, and 49.9% volatility and an expected term of 4.4 years as of December 31, 2015, along with a 60% equity raise probability assumption, and a 15% equity raise price discount assumption in the periods following the measurement date. The most significant input in determining the fair value of the common stock warrant liability is the price of our common stock on the measurement date. Significant decreases in the expected term or the equity raise probability and related assumptions would result in a minor decrease in the estimated fair value of the common stock warrant liability, while significant increases in the expected term or the equity raise probability and related assumptions would result in a minor increase in the estimated fair value of the common stock warrant liability. A 10% increase or decrease in any or all of the unobservable inputs would not have a material impact on the estimated fair value of the common stock warrant liability.

The following table presents changes in the fair value of the common stock warrant liability during the three and six months ended June 30, 2016 and 2015:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In millions)

 

2016

 

 

 

2015

 

 

 

2016

 

 

 

2015

 

Balance, beginning of period

$

7.5

 

 

$

4.9

 

 

$

6.9

 

 

$

5.6

 

Warrants exercised

 

(0.1

)

 

 

(0.1

)

 

 

(0.1

)

 

 

(0.1

)

Change in fair value of common

   stock warrant liability

 

(1.3

)

 

 

6.3

 

 

 

(0.7

)

 

 

5.6

 

Balance, end of period

$

6.1

 

 

$

11.1

 

 

$

6.1

 

 

$

11.1

 

Fair values

Derivative contracts are recorded at fair value using quoted market prices and significant other observable inputs. 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. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3—Inputs that are both significant to the fair value measurement and unobservable.

We endeavor to utilize the best available information in measuring fair value. Where appropriate, valuations are adjusted for various factors such as liquidity, bid/offer spreads, and credit considerations. Such adjustments are generally based on available market evidence and unobservable inputs. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables set forth financial assets and liabilities and their level in the fair value hierarchy that are accounted for at fair value on a recurring basis as of June 30, 2016 and December 31, 2015:

 

 

 

Estimated Fair Value

 

 

Fair Value

 

June 30,

 

 

December 31,

 

(In millions)

Hierarchy

 

2016

 

 

2015

 

Derivative assets

Level 2

 

$

0.8

 

 

$

0.2

 

Derivative liabilities

Level 2

 

 

 

 

 

(0.9

)

Net derivative assets (liabilities)

 

 

$

0.8

 

 

$

(0.7

)

Common stock warrant liability

Level 3

 

$

(6.1

)

 

$

(6.9

)

 

Both realized and unrealized gains and losses on derivative financial instruments are included within losses (gains) on derivative financial instruments in the unaudited condensed consolidated statements of operations. The following table presents losses (gains) on derivative financial instruments during the three and six months ended June 30, 2016 and 2015:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In millions)

 

2016

 

 

 

2015

 

 

 

2016

 

 

 

2015

 

Realized losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metal

$

0.2

 

 

$

0.8

 

 

$

0.4

 

 

$

0.7

 

Natural gas

 

0.2

 

 

 

 

 

 

0.8

 

 

 

 

Total realized losses

 

0.4

 

 

 

0.8

 

 

 

1.2

 

 

 

0.7

 

Unrealized losses (gains):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metal

 

(0.8

)

 

 

1.3

 

 

 

(0.4

)

 

 

1.3

 

Natural gas

 

(1.1

)

 

 

 

 

 

(1.1

)

 

 

 

Total unrealized losses (gains)

 

(1.9

)

 

 

1.3

 

 

 

(1.5

)

 

 

1.3

 

Losses (gains) on derivative financial instruments

$

(1.5

)

 

$

2.1

 

 

$

(0.3

)

 

$

2.0

 

 

Other Financial Instruments

The following tables present the carrying values and estimated fair values of other financial instruments as of June 30, 2016 and December 31, 2015:

 

 

 

June 30, 2016

 

(In millions)

Fair Value Hierarchy

 

Carrying Amount

 

 

Estimated

Fair Value

 

Assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

Level 1

 

$

40.2

 

 

$

40.2

 

Financing receivable

Level 2

 

 

40.9

 

 

 

40.9

 

Loans receivable, net (other noncurrent assets)

Level 3

 

 

1.0

 

 

 

1.0

 

Liabilities

 

 

 

 

 

 

 

 

 

Long-term debt:

 

 

 

 

 

 

 

 

 

Senior Secured Notes

Level 1

 

$

292.7

 

 

$

305.0

 

Asset-Based Facility

Level 2

 

 

22.1

 

 

 

24.0

 

Redeemable Preferred Stock

Level 3

 

$

23.3

 

 

$

21.3

 

 

 

 

 

December 31, 2015

 

(In millions)

Fair Value Hierarchy

 

Carrying Amount

 

 

Estimated

Fair Value

 

Assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

Level 1

 

$

35.7

 

 

$

35.7

 

Financing receivable

Level 2

 

 

32.7

 

 

 

32.7

 

Restricted cash held in escrow (other current assets)

Level 1

 

 

3.9

 

 

 

3.9

 

Loans receivable, net (other noncurrent assets)

Level 3

 

 

1.1

 

 

 

1.1

 

Liabilities

 

 

 

 

 

 

 

 

 

Long-term debt:

 

 

 

 

 

 

 

 

 

Senior Secured Notes

Level 1

 

$

290.7

 

 

$

310.9

 

Asset-Based Facility

Level 2

 

 

19.6

 

 

 

22.0

 

Redeemable Preferred Stock

Level 3

 

$

21.9

 

 

$

18.7

 

 

The Company used the following methods and assumptions to estimate the fair value of each financial instrument as of June 30, 2016 and December 31, 2015:

Cash and cash equivalents and restricted cash held in escrow

Cash and cash equivalents and restricted cash held in escrow are recorded at historical cost. The carrying value is a reasonable estimate of fair value as these instruments have short-term maturities and market interest rates.

Financing receivable

Financing receivable represents the net amount due from the sale and transfer of trade accounts receivable under a €50 million factoring facility (the “Factoring Facility”). The Factoring Facility provides for the transfer and sale of eligible receivables to a counterparty, the settlement of which generally occurs within thirty days of transfer, which are accounted for as true sales, and are included in operating cash flows. During the three and six months ended June 30, 2016, $83.7 million and $173.5 million, respectively, of receivables were transferred on a nonrecourse basis and proceeds of $81.6 million and $170.0 million, respectively, were received. During the three months ended June 30, 2015, $117.2 million of trade receivables were transferred and $119.0 million of proceeds were received. Administrative fees and expenses associated with the Factoring Facility were $0.2 million in each of the three months ended June 30, 2016 and 2015, and $0.4 million in each of the six months ended June 30, 2016 and 2015.

The transferred receivables are isolated from Real Alloy’s accounts. Real Alloy maintains continuing involvement with the transferred receivables through limited servicing obligations, primarily related to recordkeeping. Real Alloy retains no rights to the transferred receivables, or associated collateral, and does not collect a servicing fee. Following transfer, Real Alloy has no further rights to any cash flows or other assets to any party related to the transfer.

The carrying value is a reasonable estimate of fair value as the financing receivable is generally outstanding for no more than thirty days and the counterparty is a large creditworthy financial institution.

Loans receivable, net

Loans receivable, net, consists of commercial real estate loans. The estimated fair value considers the collateral coverage of assets securing the loans and estimated credit losses, as well as variable interest rates, which approximate market interest rates.

Long-term debt – Senior Secured Notes

The estimated fair value of the Senior Secured Notes is based on observable market prices.

Long-term debt – Asset-Based Facility

The estimated fair value of the Asset-Based Facility is based on its market characteristics, including interest rates and maturity dates generally consistent with market terms.

Redeemable Preferred Stock

The estimated fair value of Redeemable Preferred Stock is determined based on a discounted cash flow analysis using the Hull & White model, with a remaining term of fifty months, assuming either the holder will put or the issuer will call at the redemption date. The cash dividend yield and the Redeemable Preferred Stock, including the payment-in-kind Redeemable Preferred Stock, were discounted at the spot rate plus a 17.0% credit spread adjustment to a zero coupon yield curve, based on similar market instruments.

Segment Information
Segment Information

NOTE 11—SEGMENT INFORMATION

Segment information is prepared on the same basis that our chief operating decision-maker (“CODM”), who is our chief executive officer, manages the segments, evaluates financial results, and makes key operating decisions, and for which discrete financial information is available. As of June 30, 2016, the Company had two reportable segments: Real Alloy North America (“RANA”) and Real Alloy Europe (“RAEU”).

Measurement of segment income or loss and segment assets and liabilities

Our measure of profitability for our reportable segments is earnings before interest, taxes, depreciation and amortization and excludes certain other items (“Adjusted EBITDA”). Certain of the Company’s assets and liabilities have not been allocated to our reportable segments, including corporate cash, the common stock warrant liability, deferred income taxes, and long-term debt, none of which our CODM uses to evaluate the performance of our reportable segments. Additionally, certain of the Company’s corporate administrative expenses are not allocated to the reportable segments.

Reportable segment information

The following tables show segment revenues from external customers (there were no intersegment revenues) and Adjusted EBITDA for the three and six months ended June 30, 2016 and 2015 and reconciliations of Adjusted EBITDA to net loss for each period presented. Although the three month periods are comparable, the year-to-date periods are not comparable as the results for 2015 include the results of operations for the period from the Real Alloy acquisition date to June 30, 2015, or approximately four months.  

 

Three Months Ended June 30, 2016

 

(In millions)

RANA

 

 

RAEU

 

 

Total

 

Revenues

$

212.4

 

 

$

108.4

 

 

$

320.8

 

Adjusted EBITDA

$

14.3

 

 

$

6.6

 

 

$

20.9

 

 

 

Three Months Ended June 30, 2015

 

(In millions)

RANA

 

 

RAEU

 

 

Total

 

Revenues

$

231.0

 

 

$

137.6

 

 

$

368.6

 

Adjusted EBITDA

$

15.9

 

 

$

7.0

 

 

$

22.9

 

 

 

Six Months Ended June 30, 2016

 

(In millions)

RANA

 

 

RAEU

 

 

Total

 

Revenues

$

413.2

 

 

$

217.0

 

 

$

630.2

 

Adjusted EBITDA

$

27.5

 

 

$

11.7

 

 

$

39.2

 

 

 

Six Months Ended June 30, 2015

 

(In millions)

RANA

 

 

RAEU

 

 

Total

 

Revenues

$

316.5

 

 

$

189.9

 

 

$

506.4

 

Adjusted EBITDA

$

20.9

 

 

$

9.5

 

 

$

30.4

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In millions)

 

2016

 

 

 

2015

 

 

 

2016

 

 

 

2015

 

Adjusted EBITDA

$

20.9

 

 

$

22.9

 

 

$

39.2

 

 

$

30.4

 

Unrealized gains (losses) on

   derivative financial instruments

 

1.9

 

 

 

(1.3

)

 

 

1.5

 

 

 

(1.3

)

Segment depreciation and amortization

 

(10.6

)

 

 

(10.2

)

 

 

(25.3

)

 

 

(13.9

)

Amortization of inventories and supplies

   purchase accounting adjustments

 

(0.3

)

 

 

(3.5

)

 

 

(0.9

)

 

 

(7.2

)

Corporate and Other:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss—excludes share-based

   compensation expense

 

(3.1

)

 

 

(3.8

)

 

 

(5.9

)

 

 

(6.7

)

Share-based compensation expense

 

(0.5

)

 

 

(0.3

)

 

 

(1.0

)

 

 

(0.6

)

Other

 

(0.2

)

 

 

(1.0

)

 

 

(1.6

)

 

 

(1.1

)

Operating profit (loss)

 

8.1

 

 

 

2.8

 

 

 

6.0

 

 

 

(0.4

)

Nonoperating expenses

 

(9.2

)

 

 

(16.3

)

 

 

(16.4

)

 

 

(38.3

)

Income tax benefit (expense)

 

(0.2

)

 

 

(0.2

)

 

 

(0.9

)

 

 

7.2

 

Earnings from discontinued operations,

   net of income taxes

 

0.1

 

 

 

2.9

 

 

 

0.1

 

 

 

27.2

 

Net loss

$

(1.2

)

 

$

(10.8

)

 

$

(11.2

)

 

$

(4.3

)

 

The following tables present summarized balance sheet information for each of our reportable segments and reconciliations to consolidated assets and liabilities as of June 30, 2016 and December 31, 2015:

 

June 30, 2016

 

 

December 31, 2015

 

(In millions)

RANA

 

 

RAEU

 

 

RANA

 

 

RAEU

 

Segment Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

16.4

 

 

$

5.3

 

 

$

8.1

 

 

$

7.2

 

Trade accounts receivable, net

 

77.6

 

 

 

16.0

 

 

 

63.7

 

 

 

13.5

 

Financing receivable

 

 

 

 

40.9

 

 

 

 

 

 

32.7

 

Inventories

 

57.3

 

 

 

31.1

 

 

 

61.7

 

 

 

38.5

 

Prepaid expenses, supplies, and other

   current assets

 

15.7

 

 

 

5.9

 

 

 

12.5

 

 

 

6.8

 

Total current assets

 

167.0

 

 

 

99.2

 

 

 

146.0

 

 

 

98.7

 

Property, plant and equipment, net

 

193.2

 

 

 

97.2

 

 

 

199.3

 

 

 

102.2

 

Intangible assets, net

 

13.8

 

 

 

 

 

 

15.0

 

 

 

 

Goodwill

 

95.4

 

 

 

9.1

 

 

 

95.4

 

 

 

8.9

 

Other noncurrent assets

 

5.0

 

 

 

2.0

 

 

 

4.9

 

 

 

1.9

 

Total segment assets

$

474.4

 

 

$

207.5

 

 

$

460.6

 

 

$

211.7

 

Segment Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade payables

$

70.2

 

 

$

42.0

 

 

$

58.1

 

 

$

42.3

 

Accrued liabilities

 

31.3

 

 

 

12.0

 

 

 

34.3

 

 

 

14.6

 

Total current liabilities

 

101.5

 

 

 

54.0

 

 

 

92.4

 

 

 

56.9

 

Accrued pension benefits

 

 

 

 

38.8

 

 

 

 

 

 

38.0

 

Environmental liabilities

 

11.7

 

 

 

 

 

 

11.7

 

 

 

 

Other noncurrent liabilities

 

4.4

 

 

 

1.8

 

 

 

4.1

 

 

 

1.4

 

Total segment liabilities

$

117.6

 

 

$

94.6

 

 

$

108.2

 

 

$

96.3

 

 

 

 

June 30,

 

 

December 31,

 

(In millions)

 

2016

 

 

 

2015

 

Assets:

 

 

 

 

 

 

 

Real Alloy North America

$

474.4

 

 

$

460.6

 

Real Alloy Europe

 

207.5

 

 

 

211.7

 

Unallocated

 

22.2

 

 

 

28.6

 

Total consolidated assets

$

704.1

 

 

$

700.9

 

Liabilities:

 

 

 

 

 

 

 

Real Alloy North America

$

117.6

 

 

$

108.2

 

Real Alloy Europe

 

94.6

 

 

 

96.3

 

Unallocated

 

336.4

 

 

 

332.1

 

Total consolidated liabilities

$

548.6

 

 

$

536.6

 

 

Discontinued Operations
Discontinued Operations

NOTE 12—DISCONTINUED OPERATIONS

NABCO

On January 9, 2015, we sold all of our interests in NABCO for $77.9 million, including a final working capital adjustment of $0.1 million, and $3.9 million of proceeds released from escrow in the first quarter of 2016. As a result of the sale, the gain on sale of NABCO, along with the assets, liabilities and results of operations of NABCO are included in discontinued operations for all periods presented.

SGGH

As of June 30, 2016, the largest liability within discontinued operations is a repurchase reserve that represents estimated losses from repurchase claims based on claimed breaches of certain representations and warranties provided by FIL to counterparties that purchased residential real estate loans, predominantly from 2002 through 2007. Management estimates the likely range of the loan repurchase liability based on a number of factors, including, but not limited to, the timing of such claims relative to the loan origination date, the quality of the documentation supporting such claims, the number and involvement of cross-defendants, if any, related to such claims, and a time and expense estimate if a claim were to result in litigation. The estimate is based on currently available information and was subject to known and unknown uncertainties using multiple assumptions requiring significant judgment.

In June 2015, the New York State Court of Appeals affirmed the decision of the New York State Supreme Court, Appellate Division in ACE Securities Corp v. DB Structured Products, Inc. (the “ACE Securities Case”), whereby the New York state six-year statute of limitations on loan repurchase demands begins to run as of the closing date on which the representations were made, which, in the ACE Securities Case, was the date of the mortgage loan purchase agreements. Based on the final decision in the ACE Securities Case, management has reassessed its exposure to losses from repurchase demands and believes a repurchase reserve of $0.7 million is adequate as of June 30, 2016.

The Company did not settle or receive any repurchase claims during the six months ended June 30, 2016 or the year ended December 31, 2015. The repurchase reserve liability was $0.7 million as of June 30, 2016 and December 31, 2015. During the three months ended June 30, 2016 and 2015, the repurchase reserve was reduced by zero and $0.2 million, respectively. During the six months ended June 30, 2016 and 2015, the repurchase reserve was reduced by zero and $4.8 million, respectively.

Earnings from discontinued operations for the six months ended June 30, 2016 is primarily related to $0.2 million of restitution received from the U.S. government related to an investigation of various sub-prime mortgage loan brokers. Earnings from discontinued operations, net of income taxes for the six months ended June 30, 2015 is primarily related to the $39.7 million pretax gain on sale of NABCO and a $4.8 million reduction in the repurchase reserve.

Commitments and Contingencies
Commitments and Contingencies

NOTE 13—COMMITMENTS AND CONTINGENCIES

Environmental Matters

Real Alloy’s operations are subject to environmental laws and regulations governing air emissions, wastewater discharges, the handling, disposal and remediation of hazardous substances and waste, and employee health and safety. These laws and regulations can impose joint and several liabilities for releases or threatened releases of hazardous substances upon statutorily defined parties, including us, regardless of fault or the lawfulness of the original activity or disposal. Given the changing nature of environmental legal requirements, we may be required, from time to time, to take environmental control measures at some of our facilities to meet future requirements. Real Alloy is under regulatory consent orders or directives to perform environmental remediation by agencies in two states, and is working with local authorities to resume the operations of its Norwegian salt slag operations. Based on currently available information, the Company believes that the ultimate outcome of the June 2016 suspension of its salt slag operations will not have a material adverse effect on its financial position, overall trends in results of operations, or cash flows.

Real Alloy’s reserves for environmental remediation liabilities totaled $15.6 million and $16.0 as of June 30, 2016 and December 31, 2015, respectively. Of the total remediation liability as of June 30, 2016 and December 31, 2015, $3.9 million and $4.3 million, respectively, are classified in accrued liabilities in the unaudited condensed consolidated balance sheets, with the remaining portion classified as environmental liabilities.

In addition to environmental liabilities, Real Alloy has asset retirement obligations associated with legal requirements related primarily to the normal operation of its landfills and the retirement of the related assets, which represents the most probable costs of remedial actions. Real Alloy’s total asset retirement obligations were $5.1 million and $5.0 million as of June 30, 2016 and December 31, 2015, respectively, of which $0.8 million and $0.9 million are classified as accrued liabilities, respectively, and $4.3 million and $4.1 million as other noncurrent liabilities, respectively.

Legal Proceedings

Real Industry, Real Alloy and SGGH have been named as a defendant in or as a party to a number of legal actions or proceedings that arose in the ordinary course of business. In some of these actions and proceedings, claims for monetary damages are asserted. In view of the inherent difficulty of predicting the outcome of such legal actions and proceedings, management generally cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss related to each pending matter may be, if any.

In accordance with applicable accounting guidance, management establishes an accrued liability for litigation when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. The estimated loss is based upon currently available information and is subject to significant judgment, a variety of assumptions, and known and unknown uncertainties. The matters underlying the estimated loss may change from time to time, and actual results may vary significantly from the current estimate. Therefore, an estimate of loss represents what management believes to be an estimate of loss only for certain matters meeting these criteria. It does not represent the Company’s maximum loss exposure.

Based on management’s current understanding of these pending legal actions and proceedings, it does not believe that judgments or settlements arising from pending or threatened legal matters, individually or in the aggregate, would have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company. However, in light of the inherent uncertainties involved in these matters, some of which are beyond the Company’s control, and the very large or indeterminate damages that may be sought in some of these matters, an adverse outcome in one or more of these matters could be material to the Company’s results of operations or cash flows for any particular reporting period.

See Note 23—Commitments and Contingencies in the Notes to Consolidated Financial Statements included in Part IV, Item 15 of the Company’s Annual Report for additional information on certain legal proceedings and other matters involving the Company.

 

Financial Statement Presentation and Recent Accounting Updates (Policies)
Recent Accounting Updates

Recent accounting updates

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which was the result of a joint project by the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP and International Financial Reporting Standards. The issuance of a comprehensive and converged standard on revenue recognition is expected to enable financial statement users to better understand and consistently analyze an entity’s revenue across industries, transactions and geographies. The standard will require additional disclosures to help financial statement users better understand the nature, amount, timing, and potential uncertainty of the revenue that is recognized. ASU 2014-09 will be effective for the Company on January 1, 2018, and management is evaluating the application methods available, but has yet to select from either retrospective application to each prior reporting period presented or retrospective application with the cumulative effect of initially applying the standard recognized at the date of adoption. Management continues to evaluate the impact ASU 2014-09 will have on the Company’s financial position, results of operations, and disclosure requirements. The adoption and implementation of the accounting and disclosure requirements of ASU 2014-09 is expected to have a substantial impact on financial statement disclosures.

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”), which clarifies two aspects of Topic 606, identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Before an entity can identify its performance obligations in a contract with a customer, the entity first identifies the promised goods or services in the contract. ASU 2016-10 is intended to clarify the operability and understandability of the licensing implementation guidance. ASU 2016-10 will be effective for the Company in conjunction with the effective date of ASU 2014-09. The Company is currently evaluating the impact of adopting this guidance in connection with the adoption of ASU 2014-09.

In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients (“ASU 2016-10”), which provides clarification to Topic 606 on how to assess collectability, present sales tax, treat noncash consideration, and account for completed and modified contracts at the time of transition. In addition, ASU 2016-12 clarifies that an entity retrospectively applying the guidance in Topic 606 is not required to disclose the effect of the accounting change in the period of adoption. The effective date and transition requirements for these amendments are the same as the effective date and transition requirements of ASU 2014-09, which is effective January 1, 2018. The Company is currently evaluating the impact of adopting this guidance in connection with the adoption of ASU 2014-09.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which generally requires companies to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet. This guidance will be effective for the Company in fiscal years beginning after December 31, 2018 on a modified retrospective basis and early adoption is permitted. The Company is currently evaluating the effect this guidance will have on our consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815) (“ASU 2016-06”), which clarifies what steps are required when assessing whether the economic characteristics and risks of call or put options are clearly and closely related to the economic characteristics and risks of their debt hosts, which is one of the criteria for bifurcating an embedded derivative. Consequently, when an option is contingently exercisable, an entity does not have to assess whether the event that triggers the ability to exercise the option is related to interest rates or credit risks. ASU 2016-06 is effective for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. The Company is currently evaluating the effect this guidance will have on our consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which simplifies the accounting for share-based payment transactions, including the income tax consequences, an option to recognize gross share-based compensation expense with actual forfeitures recognized as they occur, as well as certain classifications in the statement of cash flows. This guidance will be effective for fiscal years beginning after December 15, 2016, and early adoption is permitted. The Company is currently evaluating the effect this guidance will have on our consolidated financial statements and related disclosures.

Inventories (Tables)
Inventories

The following table presents the components of inventories as of June 30, 2016 and December 31, 2015:

 

 

June 30,

 

 

December 31,

 

(In millions)

2016

 

 

2015

 

Real Alloy:

 

 

 

 

 

 

 

Finished goods

$

31.2

 

 

$

32.2

 

Raw materials and work in process

 

57.2

 

 

 

68.1

 

Total Real Alloy inventories

 

88.4

 

 

 

100.3

 

Cosmedicine - finished goods

 

0.9

 

 

 

0.9

 

Total inventories

$

89.3

 

 

$

101.2

 

 

Debt and Redeemable Preferred Stock (Tables)

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

 

 

June 30,

 

 

December 31,

 

(In millions)

2016

 

 

2015

 

Senior Secured Notes:

 

 

 

 

 

 

 

Principal amount outstanding

$

305.0

 

 

$

305.0

 

Unamortized original issue discount and issuance costs

 

(12.3

)

 

 

(14.3

)

Senior Secured Notes, net

 

292.7

 

 

 

290.7

 

Asset-Based Facility:

 

 

 

 

 

 

 

Principal amount outstanding

 

24.0

 

 

 

22.0

 

Unamortized debt issuance costs

 

(1.9

)

 

 

(2.4

)

Asset-Based Facility, net

 

22.1

 

 

 

19.6

 

Capital leases

 

4.3

 

 

 

4.1

 

Current portion of long-term debt

 

(2.4

)

 

 

(2.3

)

Total long-term debt, net

$

316.7

 

 

$

312.1

 

 

The following table presents the activity related to the carrying value of Redeemable Preferred Stock during the six months ended June 30, 2016:

 

(In millions)

 

 

 

Balance, December 31, 2015

$

21.9

 

Dividends on Redeemable Preferred Stock, in-kind

 

0.9

 

Accretion of fair value adjustment to Redeemable Preferred Stock

 

0.5

 

Balance, June 30, 2016

$

23.3

 

 

Stockholders Equity and Noncontrolling Interest (Tables)

The following table summarizes the activity within stockholders’ equity attributable to Real Industry and noncontrolling interest for the six months ended June 30, 2016:

 

(In millions)

Equity Attributable to Real Industry, Inc.

 

 

Noncontrolling Interest

 

 

Total Equity

 

Balance, December 31, 2015

$

141.6

 

 

$

0.8

 

 

$

142.4

 

Net earnings (loss)

 

(11.6

)

 

 

0.4

 

 

 

(11.2

)

Dividends and accretion of fair value adjustment to

   Redeemable Preferred Stock

 

(1.4

)

 

 

 

 

 

(1.4

)

Share-based compensation expense

 

1.0

 

 

 

 

 

 

1.0

 

Warrants exercised

 

0.2

 

 

 

 

 

 

0.2

 

Change in accumulated other comprehensive income (loss)

 

1.2

 

 

 

 

 

 

1.2

 

Balance, June 30, 2016

$

131.0

 

 

$

1.2

 

 

$

132.2

 

 

The following table reflects changes in the shares of common stock outstanding during the six months ended June 30, 2016:

 

Shares of Common Stock Outstanding

 

Balance, December 31, 2015

 

28,891,766

 

Restricted common stock awards granted, net of treasury shares reissued

 

344,406

 

Common stock issued from the exercise of Warrants

 

20,000

 

Treasury shares acquired, net of reissuance

 

(2,750

)

Balance, June 30, 2016

 

29,253,422

 

 

Accumulated Other Comprehensive Income (Loss) (Tables)
Schedule of Accumulated Other Comprehensive Income (Loss)

The following table summarizes the activity within accumulated other comprehensive income (loss) for the six months ended June 30, 2016:

 

(In millions)

Currency Translation Adjustments

 

 

Pension Benefit Adjustments

 

 

Accumulated Other Comprehensive Income (Loss)

 

Balance, beginning of period

$

(6.0

)

 

$

5.0

 

 

$

(1.0

)

Current period currency translation adjustments

 

1.2

 

 

 

0.1

 

 

 

1.3

 

Amortization of net actuarial gains, net of tax

 

 

 

 

(0.1

)

 

 

(0.1

)

Balance, end of period

$

(4.8

)

 

$

5.0

 

 

$

0.2

 

 

Employee Benefit Plans (Tables)
Components of Net Period Benefit Expense

The following table presents the components of net periodic benefit expense under the German defined benefit pension plans for the three and six months ended June 30, 2016 and 2015:

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In millions)

 

2016

 

 

 

2015

 

 

 

2016

 

 

 

2015

 

Service cost

$

0.2

 

 

$

0.3

 

 

$

0.4

 

 

$

0.4

 

Interest cost

 

0.3

 

 

 

0.2

 

 

 

0.5

 

 

 

0.3

 

Amortization of net actuarial gains

 

 

 

 

 

 

 

(0.1

)

 

 

 

Expected return on plan assets

 

(0.1

)

 

 

 

 

 

(0.1

)

 

 

 

Net periodic benefit expense

$

0.4

 

 

$

0.5

 

 

$

0.7

 

 

$

0.7

 

 

Loss Per Share (Tables)

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

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In millions, except share and per share amounts)

2016

 

 

2015

 

 

2016

 

 

2015

 

Loss from continuing operations

$

(1.3

)

 

$

(13.7

)

 

$

(11.3

)

 

$

(31.5

)

Earnings from discontinued operations,

   net of income taxes

 

0.1

 

 

 

2.9

 

 

 

0.1

 

 

 

27.2

 

Net loss

 

(1.2

)

 

 

(10.8

)

 

 

(11.2

)

 

 

(4.3

)

Earnings from continuing operations

   attributable to noncontrolling interest

 

0.3

 

 

 

0.1

 

 

 

0.4

 

 

 

0.2

 

Net loss attributable to Real Industry, Inc.

 

(1.5

)

 

 

(10.9

)

 

 

(11.6

)

 

 

(4.5

)

Dividends on Redeemable Preferred

   Stock, in-kind

 

(0.5

)

 

 

(0.5

)

 

 

(0.9

)

 

 

(0.6

)

Accretion of fair value adjustment to

   Redeemable Preferred Stock

 

(0.2

)

 

 

(0.2

)

 

 

(0.5

)

 

 

(0.3

)

Numerator for basic and diluted earnings

   (loss) per share—Net loss available to

   common stockholders

$

(2.2

)

 

$

(11.6

)

 

$

(13.0

)

 

$

(5.4

)

Denominator for basic and diluted earnings

   (loss) per share—Weighted average

   shares outstanding

 

29,252,343

 

 

 

27,631,795

 

 

 

29,160,245

 

 

 

24,689,253

 

Basic and diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

$

(0.08

)

 

$

(0.53

)

 

$

(0.43

)

 

$

(1.32

)

Discontinued operations

 

0.01

 

 

 

0.11

 

 

 

 

 

 

1.10

 

Basic and diluted loss per share

$

(0.07

)

 

$

(0.42

)

 

$

(0.43

)

 

$

(0.22

)

 

The following tables provide details on the average market price of Real Industry common stock; the outstanding shares of unvested restricted common stock, common stock options, unvested performance shares and Warrants that were potentially dilutive; and summary information about the potentially dilutive common stock equivalents for each of the periods presented:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Average market price of

   Real Industry common stock

$

8.12

 

 

$

9.63

 

 

$

7.51

 

 

$

8.44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Potentially dilutive common stock equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unvested restricted common stock

 

491,286

 

 

 

264,630

 

 

 

491,286

 

 

 

264,630

 

Common stock options

 

775,650

 

 

 

815,650

 

 

 

775,650

 

 

 

815,650

 

Unvested performance shares

 

381,823

 

 

 

260,000

 

 

 

381,823

 

 

 

260,000

 

Warrants

 

1,448,333

 

 

 

1,485,000

 

 

 

1,448,333

 

 

 

1,485,000

 

Total potentially dilutive

   common stock equivalents

 

3,097,092

 

 

 

2,825,280

 

 

 

3,097,092

 

 

 

2,825,280

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In millions, except exercise prices)

2016

 

 

2015

 

 

2016

 

 

2015

 

Average unamortized share-based

   compensation expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unvested restricted common stock awards

$

3.0

 

 

$

1.6

 

 

$

2.6

 

 

$

1.3

 

Unvested performance share awards

$

2.1

 

 

$

0.6

 

 

$

2.0

 

 

$

0.3

 

Range of exercise prices on common stock options

$3.00 - $10.00

 

 

$3.00 - $10.00

 

 

$3.00 - $10.00

 

 

$3.00 - $10.00

 

Weighted average exercise price of the Warrants

$

5.64

 

 

$

5.64

 

 

$

5.64

 

 

$

5.81

 

 

Derivative and Other Financial Instruments and Fair Value Measurements (Tables)

The table below presents gross amounts of recognized assets and liabilities, the amounts offset in the unaudited condensed consolidated balance sheets and the net amounts of assets and liabilities presented therein. As of June 30, 2016, there were no amounts subject to an enforceable master netting arrangement or similar agreement that have not been offset in the unaudited condensed consolidated balance sheets.

 

 

Fair Value of Derivatives

 

 

Fair Value of Derivatives

 

 

as of June 30, 2016

 

 

as of December 31, 2015

 

(In millions)

Asset

 

 

Liability

 

 

Asset

 

 

Liability

 

Metal

$

0.3

 

 

$

 

 

$

0.2

 

 

$

(0.3

)

Natural gas

 

0.5

 

 

 

 

 

 

 

 

 

(0.6

)

Total

 

0.8

 

 

 

 

 

 

0.2

 

 

 

(0.9

)

Effect of counterparty netting arrangements

 

 

 

 

 

 

 

(0.2

)

 

 

0.2

 

Net derivatives assets (liabilities) as classified

   in the consolidated balance sheets

$

0.8

 

 

$

 

 

$

 

 

$

(0.7

)

 

The following table presents details of the fair value of Real Alloy’s derivative financial instruments as of June 30, 2016 and December 31, 2015, as recorded in the unaudited condensed consolidated balance sheets:  

 

 

 

 

June 30,

 

 

December 31,

 

(In millions)

Balance Sheet Location

 

2016

 

 

2015

 

Derivative assets:

 

 

 

 

 

 

 

 

 

Metal

Prepaid expenses, supplies, and other current assets

 

$

0.3

 

 

$

 

Natural Gas

Prepaid expenses, supplies, and other current assets

 

 

0.3

 

 

 

 

Natural Gas

Other noncurrent assets

 

 

0.2

 

 

 

 

Total derivative assets

 

 

$

0.8

 

 

$

 

Derivative liabilities:

 

 

 

 

 

 

 

 

 

Metal

Accrued liabilities

 

$

 

 

$

0.1

 

Natural Gas

Accrued liabilities

 

 

 

 

 

0.6

 

Total derivative liabilities

 

 

$

 

 

$

0.7

 

 

The following table presents changes in the fair value of the common stock warrant liability during the three and six months ended June 30, 2016 and 2015:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In millions)

 

2016

 

 

 

2015

 

 

 

2016

 

 

 

2015

 

Balance, beginning of period

$

7.5

 

 

$

4.9

 

 

$

6.9

 

 

$

5.6

 

Warrants exercised

 

(0.1

)

 

 

(0.1

)

 

 

(0.1

)

 

 

(0.1

)

Change in fair value of common

   stock warrant liability

 

(1.3

)

 

 

6.3

 

 

 

(0.7

)

 

 

5.6

 

Balance, end of period

$

6.1

 

 

$

11.1

 

 

$

6.1

 

 

$

11.1

 

 

The following tables set forth financial assets and liabilities and their level in the fair value hierarchy that are accounted for at fair value on a recurring basis as of June 30, 2016 and December 31, 2015:

 

 

 

Estimated Fair Value

 

 

Fair Value

 

June 30,

 

 

December 31,

 

(In millions)

Hierarchy

 

2016

 

 

2015

 

Derivative assets

Level 2

 

$

0.8

 

 

$

0.2

 

Derivative liabilities

Level 2

 

 

 

 

 

(0.9

)

Net derivative assets (liabilities)

 

 

$

0.8

 

 

$

(0.7

)

Common stock warrant liability

Level 3

 

$

(6.1

)

 

$

(6.9

)

 

The following table presents losses (gains) on derivative financial instruments during the three and six months ended June 30, 2016 and 2015:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In millions)

 

2016

 

 

 

2015

 

 

 

2016

 

 

 

2015

 

Realized losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metal

$

0.2

 

 

$

0.8

 

 

$

0.4

 

 

$

0.7

 

Natural gas

 

0.2

 

 

 

 

 

 

0.8

 

 

 

 

Total realized losses

 

0.4

 

 

 

0.8

 

 

 

1.2

 

 

 

0.7

 

Unrealized losses (gains):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metal

 

(0.8

)

 

 

1.3

 

 

 

(0.4

)

 

 

1.3

 

Natural gas

 

(1.1

)

 

 

 

 

 

(1.1

)

 

 

 

Total unrealized losses (gains)

 

(1.9

)

 

 

1.3

 

 

 

(1.5

)

 

 

1.3

 

Losses (gains) on derivative financial instruments

$

(1.5

)

 

$

2.1

 

 

$

(0.3

)

 

$

2.0

 

 

The following tables present the carrying values and estimated fair values of other financial instruments as of June 30, 2016 and December 31, 2015:

 

 

 

June 30, 2016

 

(In millions)

Fair Value Hierarchy

 

Carrying Amount

 

 

Estimated

Fair Value

 

Assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

Level 1

 

$

40.2

 

 

$

40.2

 

Financing receivable

Level 2

 

 

40.9

 

 

 

40.9

 

Loans receivable, net (other noncurrent assets)

Level 3

 

 

1.0

 

 

 

1.0

 

Liabilities

 

 

 

 

 

 

 

 

 

Long-term debt:

 

 

 

 

 

 

 

 

 

Senior Secured Notes

Level 1

 

$

292.7

 

 

$

305.0

 

Asset-Based Facility

Level 2

 

 

22.1

 

 

 

24.0

 

Redeemable Preferred Stock

Level 3

 

$

23.3

 

 

$

21.3

 

 

 

 

 

December 31, 2015

 

(In millions)

Fair Value Hierarchy

 

Carrying Amount

 

 

Estimated

Fair Value

 

Assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

Level 1

 

$

35.7

 

 

$

35.7

 

Financing receivable

Level 2

 

 

32.7

 

 

 

32.7

 

Restricted cash held in escrow (other current assets)

Level 1

 

 

3.9

 

 

 

3.9

 

Loans receivable, net (other noncurrent assets)

Level 3

 

 

1.1

 

 

 

1.1

 

Liabilities

 

 

 

 

 

 

 

 

 

Long-term debt:

 

 

 

 

 

 

 

 

 

Senior Secured Notes

Level 1

 

$

290.7

 

 

$

310.9

 

Asset-Based Facility

Level 2

 

 

19.6

 

 

 

22.0

 

Redeemable Preferred Stock

Level 3

 

$

21.9

 

 

$

18.7

 

 

Segment Information (Tables)

Reportable segment information

The following tables show segment revenues from external customers (there were no intersegment revenues) and Adjusted EBITDA for the three and six months ended June 30, 2016 and 2015 and reconciliations of Adjusted EBITDA to net loss for each period presented. Although the three month periods are comparable, the year-to-date periods are not comparable as the results for 2015 include the results of operations for the period from the Real Alloy acquisition date to June 30, 2015, or approximately four months.  

 

Three Months Ended June 30, 2016

 

(In millions)

RANA

 

 

RAEU

 

 

Total

 

Revenues

$

212.4

 

 

$

108.4

 

 

$

320.8

 

Adjusted EBITDA

$

14.3

 

 

$

6.6

 

 

$

20.9

 

 

 

Three Months Ended June 30, 2015

 

(In millions)

RANA

 

 

RAEU

 

 

Total

 

Revenues

$

231.0

 

 

$

137.6

 

 

$

368.6

 

Adjusted EBITDA

$

15.9

 

 

$

7.0

 

 

$

22.9

 

 

 

Six Months Ended June 30, 2016

 

(In millions)

RANA

 

 

RAEU

 

 

Total

 

Revenues

$

413.2

 

 

$

217.0

 

 

$

630.2

 

Adjusted EBITDA

$

27.5

 

 

$

11.7

 

 

$

39.2

 

 

 

Six Months Ended June 30, 2015

 

(In millions)

RANA

 

 

RAEU

 

 

Total

 

Revenues

$

316.5

 

 

$

189.9

 

 

$

506.4

 

Adjusted EBITDA

$

20.9

 

 

$

9.5

 

 

$

30.4

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In millions)

 

2016

 

 

 

2015

 

 

 

2016

 

 

 

2015

 

Adjusted EBITDA

$

20.9

 

 

$

22.9

 

 

$

39.2

 

 

$

30.4

 

Unrealized gains (losses) on

   derivative financial instruments

 

1.9

 

 

 

(1.3

)

 

 

1.5

 

 

 

(1.3

)

Segment depreciation and amortization

 

(10.6

)

 

 

(10.2

)

 

 

(25.3

)

 

 

(13.9

)

Amortization of inventories and supplies

   purchase accounting adjustments

 

(0.3

)

 

 

(3.5

)

 

 

(0.9

)

 

 

(7.2

)

Corporate and Other:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss—excludes share-based

   compensation expense

 

(3.1

)

 

 

(3.8

)

 

 

(5.9

)

 

 

(6.7

)

Share-based compensation expense

 

(0.5

)

 

 

(0.3

)

 

 

(1.0

)

 

 

(0.6

)

Other

 

(0.2

)

 

 

(1.0

)

 

 

(1.6

)

 

 

(1.1

)

Operating profit (loss)

 

8.1

 

 

 

2.8

 

 

 

6.0

 

 

 

(0.4

)

Nonoperating expenses

 

(9.2

)

 

 

(16.3

)

 

 

(16.4

)

 

 

(38.3

)

Income tax benefit (expense)

 

(0.2

)

 

 

(0.2

)

 

 

(0.9

)

 

 

7.2

 

Earnings from discontinued operations,

   net of income taxes

 

0.1

 

 

 

2.9

 

 

 

0.1

 

 

 

27.2

 

Net loss

$

(1.2

)

 

$

(10.8

)

 

$

(11.2

)

 

$

(4.3

)

 

The following tables present summarized balance sheet information for each of our reportable segments and reconciliations to consolidated assets and liabilities as of June 30, 2016 and December 31, 2015:

 

June 30, 2016

 

 

December 31, 2015

 

(In millions)

RANA

 

 

RAEU

 

 

RANA

 

 

RAEU

 

Segment Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

16.4

 

 

$

5.3

 

 

$

8.1

 

 

$

7.2

 

Trade accounts receivable, net

 

77.6

 

 

 

16.0

 

 

 

63.7

 

 

 

13.5

 

Financing receivable

 

 

 

 

40.9

 

 

 

 

 

 

32.7

 

Inventories

 

57.3

 

 

 

31.1

 

 

 

61.7

 

 

 

38.5

 

Prepaid expenses, supplies, and other

   current assets

 

15.7

 

 

 

5.9

 

 

 

12.5

 

 

 

6.8

 

Total current assets

 

167.0

 

 

 

99.2

 

 

 

146.0

 

 

 

98.7

 

Property, plant and equipment, net

 

193.2

 

 

 

97.2

 

 

 

199.3

 

 

 

102.2

 

Intangible assets, net

 

13.8

 

 

 

 

 

 

15.0

 

 

 

 

Goodwill

 

95.4

 

 

 

9.1

 

 

 

95.4

 

 

 

8.9

 

Other noncurrent assets

 

5.0

 

 

 

2.0

 

 

 

4.9

 

 

 

1.9

 

Total segment assets

$

474.4

 

 

$

207.5

 

 

$

460.6

 

 

$

211.7

 

Segment Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade payables

$

70.2

 

 

$

42.0

 

 

$

58.1

 

 

$

42.3

 

Accrued liabilities

 

31.3

 

 

 

12.0

 

 

 

34.3

 

 

 

14.6

 

Total current liabilities

 

101.5

 

 

 

54.0

 

 

 

92.4

 

 

 

56.9

 

Accrued pension benefits

 

 

 

 

38.8

 

 

 

 

 

 

38.0

 

Environmental liabilities

 

11.7

 

 

 

 

 

 

11.7

 

 

 

 

Other noncurrent liabilities

 

4.4

 

 

 

1.8

 

 

 

4.1

 

 

 

1.4

 

Total segment liabilities

$

117.6

 

 

$

94.6

 

 

$

108.2

 

 

$

96.3

 

 

 

 

June 30,

 

 

December 31,

 

(In millions)

 

2016

 

 

 

2015

 

Assets:

 

 

 

 

 

 

 

Real Alloy North America

$

474.4

 

 

$

460.6

 

Real Alloy Europe

 

207.5

 

 

 

211.7

 

Unallocated

 

22.2

 

 

 

28.6

 

Total consolidated assets

$

704.1

 

 

$

700.9

 

Liabilities:

 

 

 

 

 

 

 

Real Alloy North America

$

117.6

 

 

$

108.2

 

Real Alloy Europe

 

94.6

 

 

 

96.3

 

Unallocated

 

336.4

 

 

 

332.1

 

Total consolidated liabilities

$

548.6

 

 

$

536.6

 

 

Business and Operations - Additional Information (Detail)
Jun. 30, 2016
Facility
Organization And Business Activities [Line Items]
 
Facilities
24 
Real Alloy
 
Organization And Business Activities [Line Items]
 
Employees
1,700 
Financial Statement Presentation and Significant Accounting Policies - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Dec. 31, 2015
Dec. 31, 2015
Overstatement Due To Depreciation Expense Error [Member]
Jun. 30, 2016
Adjustment To Correct Depreciation Expense Error [Member]
Schedule Of Significant Accounting Policies [Line Items]
 
 
 
 
 
 
 
Property, plant and equipment, net
$ 290.4 
 
$ 290.4 
 
$ 301.5 
$ 3.8 
 
Deferred income taxes
5.9 
 
5.9 
 
6.7 
1.1 
 
Net earnings (loss)
(1.2)
(10.8)
(11.2)
(4.3)
 
2.7 
 
Cost of sales
298.6 
347.4 
591.4 
480.3 
 
 
3.7 
Selling, general and administrative expenses
$ 14.6 
$ 15.7 
$ 30.0 
$ 23.3 
 
 
$ 0.1 
Immaterial error correction
 
 
Management has concluded that the error reflected in the December 31, 2015 consolidated financial statements was not material and that the error correction in 2016 is not expected to be material to the full year results of operations. 
 
 
 
 
Inventories (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Inventory [Line Items]
 
 
Total inventories
$ 89.3 
$ 101.2 
Real Alloy
 
 
Inventory [Line Items]
 
 
Finished goods
31.2 
32.2 
Raw materials and work in process
57.2 
68.1 
Total inventories
88.4 
100.3 
Cosmedicine
 
 
Inventory [Line Items]
 
 
Finished goods
$ 0.9 
$ 0.9 
Schedule of long-term Debt (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Debt Instrument [Line Items]
 
 
Capital leases
$ 4.3 
$ 4.1 
Current portion of long-term debt
(2.4)
(2.3)
Total long-term debt, net
316.7 
312.1 
Senior Secured Notes
 
 
Debt Instrument [Line Items]
 
 
Principal amount outstanding
305.0 
305.0 
Unamortized original issue discount and issuance costs
(12.3)
(14.3)
Senior Secured Notes, net
292.7 
290.7 
Asset Based Facility
 
 
Debt Instrument [Line Items]
 
 
Principal amount outstanding
24.0 
22.0 
Unamortized original issue discount and issuance costs
(1.9)
(2.4)
Senior Secured Notes, net
$ 22.1 
$ 19.6 
Debt and Redeemable Preferred Stock - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
6 Months Ended 0 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Redeemable Preferred Stock
Feb. 27, 2015
Redeemable Preferred Stock
First Eighteen Months
Feb. 27, 2015
Redeemable Preferred Stock
Next Twelve Months
Feb. 27, 2015
Redeemable Preferred Stock
Thereafter
Jun. 30, 2016
Senior Secured Notes
Jun. 30, 2015
Senior Secured Notes
Jun. 30, 2016
Senior Secured Notes
Jun. 30, 2015
Senior Secured Notes
Jun. 30, 2016
Asset Based Facility
Jun. 30, 2015
Asset Based Facility
Jun. 30, 2016
Asset Based Facility
Jun. 30, 2015
Asset Based Facility
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt, interest expense
 
 
 
 
 
 
$ 8.5 
$ 8.7 
$ 17.3 
$ 16.7 
$ 0.6 
$ 0.5 
$ 1.0 
$ 0.6 
Debt, due date
 
 
 
 
 
 
Jan. 15, 2019 
 
 
 
 
 
 
 
Amortization of debt issuance costs
2.4 
2.4 
 
 
 
 
1.0 
1.1 
2.0 
2.1 
0.2 
0.2 
0.4 
0.2 
Capital leases due within next twelve months
2.4 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital leases
4.3 
 
 
 
 
 
 
 
 
 
 
 
 
 
Redeemable preferred stock dividends rate
 
 
 
7.00% 
8.00% 
9.00% 
 
 
 
 
 
 
 
 
Preferred stock, dividend payment terms
 
 
Dividends may be paid in-kind for the first two years, and thereafter will be paid in cash. 
 
 
 
 
 
 
 
 
 
 
 
Liquidation preference value
 
 
$ 27.4 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock redemption period
 
 
66 months 
 
 
 
 
 
 
 
 
 
 
 
Summary of Activity within Stockholders Equity Attributable to Real Industry and Noncontrolling Interest (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Class Of Stock [Line Items]
 
 
 
 
Balance, December 31, 2015
 
 
$ 142.4 
 
Net earnings (loss)
(1.2)
(10.8)
(11.2)
(4.3)
Dividends and accretion of fair value adjustment to Redeemable Preferred Stock
 
 
(1.4)
 
Share-based compensation expense
 
 
1.0 
 
Warrants exercised
 
 
0.2 
 
Change in accumulated other comprehensive income (loss)
 
 
1.2 
 
Balance, June 30, 2016
132.2 
 
132.2 
 
Equity Attributable to Real Industry, Inc.
 
 
 
 
Class Of Stock [Line Items]
 
 
 
 
Balance, December 31, 2015
 
 
141.6 
 
Net earnings (loss)
 
 
(11.6)
 
Dividends and accretion of fair value adjustment to Redeemable Preferred Stock
 
 
(1.4)
 
Share-based compensation expense
 
 
1.0 
 
Warrants exercised
 
 
0.2 
 
Change in accumulated other comprehensive income (loss)
 
 
1.2 
 
Balance, June 30, 2016
131.0 
 
131.0 
 
Noncontrolling Interest
 
 
 
 
Class Of Stock [Line Items]
 
 
 
 
Balance, December 31, 2015
 
 
0.8 
 
Net earnings (loss)
 
 
0.4 
 
Balance, June 30, 2016
$ 1.2 
 
$ 1.2 
 
Changes in the Shares of Common Stock Outstanding (Detail)
6 Months Ended
Jun. 30, 2016
Stockholders Equity Note [Abstract]
 
Balance, December 31, 2015
28,891,766 
Restricted common stock awards granted, net of treasury shares reissued
344,406 
Common stock issued from the exercise of Warrants
20,000 
Treasury shares acquired, net of reissuance
(2,750)
Balance, June 30, 2016
29,253,422 
Schedule of Accumulated Other Comprehensive Income (Loss) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Accumulated Other Comprehensive Income Loss [Line Items]
 
 
 
 
Balance, beginning of period
 
 
$ (1.0)
 
Current period currency translation adjustments
(1.4)
(1.2)
1.3 
(0.9)
Amortization of net actuarial gains, net of tax
 
 
(0.1)
 
Balance, end of period
0.2 
 
0.2 
 
Currency Translation Adjustments
 
 
 
 
Accumulated Other Comprehensive Income Loss [Line Items]
 
 
 
 
Balance, beginning of period
 
 
(6.0)
 
Current period currency translation adjustments
 
 
1.2 
 
Balance, end of period
(4.8)
 
(4.8)
 
Pension Benefit Adjustments
 
 
 
 
Accumulated Other Comprehensive Income Loss [Line Items]
 
 
 
 
Balance, beginning of period
 
 
5.0 
 
Current period currency translation adjustments
 
 
0.1 
 
Amortization of net actuarial gains, net of tax
 
 
(0.1)
 
Balance, end of period
$ 5.0 
 
$ 5.0 
 
Accumulated Other Comprehensive Income (Loss) - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Accumulated Other Comprehensive Income Loss [Line Items]
 
 
 
 
Currency translation adjustments
$ (1.4)
$ (1.2)
$ 1.3 
$ (0.9)
Long-Term Intercompany Loans [Member]
 
 
 
 
Accumulated Other Comprehensive Income Loss [Line Items]
 
 
 
 
Currency translation adjustments
 
 
$ (1.0)
 
Income Taxes - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Dec. 31, 2015
U.S. Federal NOLs
Dec. 31, 2015
Non-U.S. NOLs
Income Taxes [Line Items]
 
 
 
 
 
 
Income tax expense (benefit)
$ 0.2 
$ 0.2 
$ 0.9 
$ (7.2)
 
 
Net operating loss carry forwards
 
 
 
 
$ 871.8 
$ 27.6 
Net operating loss expiration period
 
 
 
 
20 years 
 
Net operating loss carry forwards expiration year
 
 
 
 
Dec. 31, 2027 
 
Employee Benefit Plans - Components of Net Period Benefit Expense (Details) (German Defined Benefit Pension Plan, USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
German Defined Benefit Pension Plan
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Service cost
$ 0.2 
$ 0.3 
$ 0.4 
$ 0.4 
Interest cost
0.3 
0.2 
0.5 
0.3 
Amortization of net actuarial gains
 
 
(0.1)
 
Expected return on plan assets
(0.1)
 
(0.1)
 
Net periodic benefit expense
$ 0.4 
$ 0.5 
$ 0.7 
$ 0.7 
Computation of Basic and Diluted Earnings (loss) Per Share (Detail) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Earnings Per Share [Abstract]
 
 
 
 
Loss from continuing operations
$ (1.3)
$ (13.7)
$ (11.3)
$ (31.5)
Earnings from discontinued operations, net of income taxes
0.1 
2.9 
0.1 
27.2 
Net loss
(1.2)
(10.8)
(11.2)
(4.3)
Earnings from continuing operations attributable to noncontrolling interest
0.3 
0.1 
0.4 
0.2 
Net loss attributable to Real Industry, Inc.
(1.5)
(10.9)
(11.6)
(4.5)
Dividends on Redeemable Preferred Stock, in-kind
(0.5)
(0.5)
(0.9)
(0.6)
Accretion of fair value adjustment to Redeemable Preferred Stock
(0.2)
(0.2)
(0.5)
(0.3)
Net loss available to common stockholders
$ (2.2)
$ (11.6)
$ (13.0)
$ (5.4)
Denominator for basic and diluted earnings (loss) per share—Weighted average shares outstanding
29,252,343 
27,631,795 
29,160,245 
24,689,253 
Basic and diluted earnings (loss) per share:
 
 
 
 
Continuing operations
$ (0.08)
$ (0.53)
$ (0.43)
$ (1.32)
Discontinued operations
$ 0.01 
$ 0.11 
 
$ 1.10 
Basic and diluted loss per share
$ (0.07)
$ (0.42)
$ (0.43)
$ (0.22)
Average Market Price of Common Stock and the Incremental Shares that were Dilutive or Potentially Dilutive (Detail) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
 
 
 
 
Average market price of Real Industry common stock
$ 8.12 
$ 9.63 
$ 7.51 
$ 8.44 
Potentially dilutive common stock equivalents:
 
 
 
 
Total potentially dilutive common stock equivalents
3,097,092 
2,825,280 
3,097,092 
2,825,280 
Unvested Restricted Common Stock
 
 
 
 
Potentially dilutive common stock equivalents:
 
 
 
 
Total potentially dilutive common stock equivalents
491,286 
264,630 
491,286 
264,630 
Common Stock Options
 
 
 
 
Potentially dilutive common stock equivalents:
 
 
 
 
Total potentially dilutive common stock equivalents
775,650 
815,650 
775,650 
815,650 
Unvested Performance Shares
 
 
 
 
Potentially dilutive common stock equivalents:
 
 
 
 
Total potentially dilutive common stock equivalents
381,823 
260,000 
381,823 
260,000 
Warrants
 
 
 
 
Potentially dilutive common stock equivalents:
 
 
 
 
Total potentially dilutive common stock equivalents
1,448,333 
1,485,000 
1,448,333 
1,485,000 
Summary of Potentially Dilutive Common Stock Equivalents (Detail) (USD $)
In Millions, 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
Average unamortized share-based compensation expense:
 
 
 
 
Exercise prices on common stock options, lower range
$ 3.00 
$ 3.00 
$ 3.00 
$ 3.00 
Exercise prices on common stock options, upper range
$ 10.00 
$ 10.00 
$ 10.00 
$ 10.00 
Weighted average exercise price of the Warrants
$ 5.64 
$ 5.64 
$ 5.64 
$ 5.81 
Unvested Restricted Common Stock Awards
 
 
 
 
Average unamortized share-based compensation expense:
 
 
 
 
Average unamortized share-based compensation expense
$ 3.0 
$ 1.6 
$ 2.6 
$ 1.3 
Unvested Performance Share Awards
 
 
 
 
Average unamortized share-based compensation expense:
 
 
 
 
Average unamortized share-based compensation expense
$ 2.1 
$ 0.6 
$ 2.0 
$ 0.3 
Derivative and Other Financial Instruments and Fair Value Measurements - Additional Information (Detail)
0 Months Ended 6 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended
Jun. 11, 2010
USD ($)
Jun. 30, 2016
USD ($)
t
Jun. 30, 2015
Jun. 30, 2016
Redeemable Preferred Stock
Jun. 30, 2016
Maximum
Jun. 30, 2016
Factoring Facility
USD ($)
Jun. 30, 2015
Factoring Facility
USD ($)
Jun. 30, 2016
Factoring Facility
USD ($)
Jun. 30, 2015
Factoring Facility
USD ($)
Jun. 30, 2016
Factoring Facility
EUR (€)
Jun. 30, 2016
Common Stock Warrant Liability
Dec. 31, 2015
Common Stock Warrant Liability
Jun. 30, 2016
NABCO
USD ($)
Jun. 30, 2016
Currency Exchange Hedging
USD ($)
Jun. 30, 2016
Natural Gas
Swap Contract One
Btu
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative contracts
 
30,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Forward buy contracts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,500,000,000,000 
Currency derivative contracts outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 0 
 
Cash collateral posted or held
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount subject to enforceable master netting arrangement not offset
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Warrant issued to purchase common stock
1,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate purchase price of common stock warrant
300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Warrant vested upon issuance
 
 
20.00% 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock warrants vesting percentage on each anniversary date
 
 
20.00% 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock warrants percentage vested
 
 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
Exercise price of warrants
$ 10.30 
$ 5.64 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock warrants expiration date
 
2020-06 
 
 
 
 
 
 
 
 
 
 
 
 
 
Price per share of common stock issued
 
 
 
 
 
 
 
 
 
 
 
 
$ 5.64 
 
 
Warrants exercised on cashless basis
 
20,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Warrants outstanding
 
1,448,333 
 
 
 
 
 
 
 
 
 
 
 
 
 
Valuation technique
 
 
 
 
 
 
 
 
 
 
Monte Carlo simulation 
 
 
 
 
Volatility
 
 
 
 
 
 
 
 
 
 
49.80% 
49.90% 
 
 
 
Expected term
 
 
 
 
 
 
 
 
 
 
3 years 10 months 24 days 
4 years 7 months 6 days 
 
 
 
Equity raise probability
 
 
 
 
 
 
 
 
 
 
60.00% 
 
 
 
 
Equity raise price discount assumption
 
 
 
 
 
 
 
 
 
 
15.00% 
 
 
 
 
Percentage of increase decrease in unobservable inputs on estimated fair value of common stock warrant liability
 
 
 
 
 
 
 
 
 
 
10.00% 
 
 
 
 
Maximum financing amount
 
 
 
 
 
 
 
 
 
50,000,000 
 
 
 
 
 
Sales of trade accounts receivable
 
 
 
 
 
83,700,000 
117,200,000 
173,500,000 
 
 
 
 
 
 
 
Proceeds from sales of trade accounts receivable
 
 
 
 
 
81,600,000 
119,000,000 
170,000,000 
 
 
 
 
 
 
 
Administrative fees and expenses associated with Factoring Facility
 
 
 
 
 
$ 200,000 
$ 200,000 
$ 400,000 
$ 400,000 
 
 
 
 
 
 
Number of days financing receivable is estimated to be outstanding
 
 
 
 
30 days 
 
 
 
 
 
 
 
 
 
 
Preferred stock redemption period
 
 
 
50 months 
 
 
 
 
 
 
 
 
 
 
 
Credit spread adjustment percentage
 
 
 
17.00% 
 
 
 
 
 
 
 
 
 
 
 
Gross Amounts of Recognized Assets and Liabilities (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Fair Value of Derivatives, Asset
 
 
Derivative assets as classified in the unaudited condensed consolidated balance sheet
$ 0.8 
$ 0.2 
Derivative assets, effect of counterparty netting arrangements
 
(0.2)
Net derivatives assets (liabilities) as classified in the consolidated balance sheets
0.8 
 
Fair Value of Derivatives, Liability
 
 
Derivative liabilities as classified in the unaudited condensed consolidated balance sheet
 
(0.9)
Derivative liabilities, effect of counterparty netting arrangements
 
0.2 
Net derivatives assets (liabilities) as classified in the consolidated balance sheets
 
(0.7)
Metal
 
 
Fair Value of Derivatives, Asset
 
 
Derivative assets as classified in the unaudited condensed consolidated balance sheet
0.3 
0.2 
Fair Value of Derivatives, Liability
 
 
Derivative liabilities as classified in the unaudited condensed consolidated balance sheet
 
(0.3)
Natural Gas
 
 
Fair Value of Derivatives, Asset
 
 
Derivative assets as classified in the unaudited condensed consolidated balance sheet
0.5 
 
Fair Value of Derivatives, Liability
 
 
Derivative liabilities as classified in the unaudited condensed consolidated balance sheet
 
$ (0.6)
Fair Value of Derivative Financial Instruments (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Derivative Instruments And Hedging Activities Disclosures [Line Items]
 
 
Fair value of derivative assets
$ 0.8 
 
Fair value of derivative liabilities
 
0.7 
Prepaid Expenses, Supplies, and Other Current Assets |
Metal
 
 
Derivative Instruments And Hedging Activities Disclosures [Line Items]
 
 
Fair value of derivative assets
0.3 
 
Prepaid Expenses, Supplies, and Other Current Assets |
Natural Gas
 
 
Derivative Instruments And Hedging Activities Disclosures [Line Items]
 
 
Fair value of derivative assets
0.3 
 
Other Noncurrent Assets |
Natural Gas
 
 
Derivative Instruments And Hedging Activities Disclosures [Line Items]
 
 
Fair value of derivative assets
0.2 
 
Accrued Liabilities |
Metal
 
 
Derivative Instruments And Hedging Activities Disclosures [Line Items]
 
 
Fair value of derivative liabilities
 
0.1 
Accrued Liabilities |
Natural Gas
 
 
Derivative Instruments And Hedging Activities Disclosures [Line Items]
 
 
Fair value of derivative liabilities
 
$ 0.6 
Changes in Fair Value of Common Stock Warrant Liability (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Warrants And Rights Note Disclosure [Abstract]
 
 
 
 
Common stock warrant liability, beginning balance
$ 7.5 
$ 4.9 
$ 6.9 
$ 5.6 
Warrants exercised
(0.1)
(0.1)
(0.1)
(0.1)
Change in fair value of common stock warrant liability
(1.3)
6.3 
(0.7)
5.6 
Common stock warrant liability, ending balance
$ 6.1 
$ 11.1 
$ 6.1 
$ 11.1 
Assets and Liabilities Measured at Fair Value on Recurring Basis Based on Fair Value Hierarchy (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
 
 
 
 
 
 
Common stock warrant liability, estimated fair value
$ (6.1)
$ (7.5)
$ (6.9)
$ (11.1)
$ (4.9)
$ (5.6)
Fair Value, Recurring
 
 
 
 
 
 
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
 
 
 
 
 
 
Net derivative assets (liabilities)
0.8 
 
(0.7)
 
 
 
Fair Value, Recurring |
Level 2
 
 
 
 
 
 
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
 
 
 
 
 
 
Derivative assets
0.8 
 
0.2 
 
 
 
Derivative liabilities
 
 
(0.9)
 
 
 
Fair Value, Recurring |
Level 3
 
 
 
 
 
 
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
 
 
 
 
 
 
Common stock warrant liability, estimated fair value
$ (6.1)
 
$ (6.9)
 
 
 
Schedule of Losses (Gains) on Derivative Financial Instruments (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Realized Losses on derivative financial instruments
$ 0.4 
$ 0.8 
$ 1.2 
$ 0.7 
Unrealized Losses (Gains) on derivative financial instruments
(1.9)
1.3 
(1.5)
1.3 
Losses (gains) on derivative financial instruments
(1.5)
2.1 
(0.3)
2.0 
Metal
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Realized Losses on derivative financial instruments
0.2 
0.8 
0.4 
0.7 
Unrealized Losses (Gains) on derivative financial instruments
(0.8)
1.3 
(0.4)
1.3 
Natural Gas
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Realized Losses on derivative financial instruments
0.2 
 
0.8 
 
Unrealized Losses (Gains) on derivative financial instruments
$ (1.1)
 
$ (1.1)
 
Carrying Value and Estimated Fair Value of Financial Instruments (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Jun. 30, 2015
Assets
 
 
 
Cash and cash equivalents
$ 40.2 
$ 35.7 
$ 38.5 
Financing receivable
40.9 
32.7 
 
Long-term debt:
 
 
 
Redeemable Preferred Stock, carrying amount
23.3 
21.9 
 
Carrying Amount
 
 
 
Assets
 
 
 
Cash and cash equivalents
40.2 
35.7 
 
Financing receivable
40.9 
32.7 
 
Long-term debt:
 
 
 
Asset-Based Facility, net
22.1 
19.6 
 
Carrying Amount |
Other Noncurrent Assets
 
 
 
Assets
 
 
 
Loans receivable, net, carrying amount
1.0 
1.1 
 
Carrying Amount |
Other Current Assets
 
 
 
Assets
 
 
 
Restricted cash held in escrow (other current assets)
 
3.9 
 
Carrying Amount |
Redeemable Preferred Stock
 
 
 
Long-term debt:
 
 
 
Redeemable Preferred Stock, carrying amount
23.3 
21.9 
 
Estimated Fair Value |
Level 1
 
 
 
Assets, estimated fair value
 
 
 
Cash and cash equivalents, estimated fair value
40.2 
35.7 
 
Estimated Fair Value |
Significant Other Observable Inputs (Level 2)
 
 
 
Assets, estimated fair value
 
 
 
Financing receivable
40.9 
32.7 
 
Long-term debt:
 
 
 
Asset-Based Facility, Estimated Fair value
24.0 
22.0 
 
Estimated Fair Value |
Level 3
 
 
 
Long-term debt:
 
 
 
Redeemable Preferred Stock, estimated fair value
21.3 
18.7 
 
Estimated Fair Value |
Other Noncurrent Assets |
Level 3
 
 
 
Assets, estimated fair value
 
 
 
Loans receivable, net, estimated fair value
1.0 
1.1 
 
Estimated Fair Value |
Other Current Assets |
Level 1
 
 
 
Assets, estimated fair value
 
 
 
Cash and cash equivalents, estimated fair value
 
3.9 
 
Senior Secured Notes
 
 
 
Long-term debt:
 
 
 
Senior Secured Notes, net
292.7 
290.7 
 
Senior Secured Notes |
Carrying Amount
 
 
 
Long-term debt:
 
 
 
Senior Secured Notes, net
292.7 
290.7 
 
Senior Secured Notes |
Estimated Fair Value |
Level 1
 
 
 
Long-term debt:
 
 
 
Senior Secured Notes, net
$ 305.0 
$ 310.9 
 
Segment Information - Additional Information (Detail)
6 Months Ended
Jun. 30, 2016
Segment
Segment Reporting [Abstract]
 
Number of Reportable Segments
Operating Results of Segments and Reconciliations to Loss Before Income taxes (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
$ 320.9 
$ 368.7 
$ 630.3 
$ 506.5 
Unrealized gains (losses) on derivative financial instruments
1.9 
(1.3)
1.5 
(1.3)
Segment depreciation and amortization
 
 
(25.3)
(13.9)
Amortization of inventories and supplies purchase accounting adjustments
 
 
(0.9)
(7.2)
Share-based compensation expense
 
 
(1.0)
(0.6)
Other
(0.2)
(1.0)
(1.6)
(1.1)
Operating profit (loss)
8.1 
2.8 
6.0 
(0.4)
Nonoperating expenses
(9.2)
(16.3)
(16.4)
(38.3)
Income tax benefit (expense)
(0.2)
(0.2)
(0.9)
7.2 
Earnings from discontinued operations, net of income taxes
0.1 
2.9 
0.1 
27.2 
Net loss
(1.2)
(10.8)
(11.2)
(4.3)
Corporate and Other
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Operating loss—excludes share-based compensation expense
(3.1)
(3.8)
(5.9)
(6.7)
Share-based compensation expense
(0.5)
(0.3)
(1.0)
(0.6)
Operating Segments
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
320.8 
368.6 
630.2 
506.4 
Adjusted EBITDA
20.9 
22.9 
39.2 
30.4 
Unrealized gains (losses) on derivative financial instruments
1.9 
(1.3)
1.5 
(1.3)
Segment depreciation and amortization
(10.6)
(10.2)
(25.3)
(13.9)
Amortization of inventories and supplies purchase accounting adjustments
(0.3)
(3.5)
(0.9)
(7.2)
Operating Segments |
RANA
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
212.4 
231.0 
413.2 
316.5 
Adjusted EBITDA
14.3 
15.9 
27.5 
20.9 
Operating Segments |
RAEU
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
108.4 
137.6 
217.0 
189.9 
Adjusted EBITDA
$ 6.6 
$ 7.0 
$ 11.7 
$ 9.5 
Summarized Balance Sheet Information of Reportable Segments (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Jun. 30, 2015
Current assets:
 
 
 
Cash and cash equivalents
$ 40.2 
$ 35.7 
$ 38.5 
Trade accounts receivable, net
93.7 
77.2 
 
Inventories
89.3 
101.2 
 
Prepaid expenses, supplies, and other current assets
23.0 
24.7 
 
Total current assets
287.4 
271.8 
 
Property, plant and equipment, net
290.4 
301.5 
 
Intangible assets, net
13.8 
15.1 
 
Goodwill
104.5 
104.3 
 
Other noncurrent assets
8.0 
8.2 
 
TOTAL ASSETS
704.1 
700.9 
 
Current liabilities:
 
 
 
Trade payables
112.5 
100.9 
 
Accrued liabilities
47.5 
51.8 
 
Total current liabilities
162.5 
155.1 
 
Accrued pension benefits
38.8 
38.0 
 
Environmental liabilities
11.7 
11.7 
 
Other noncurrent liabilities
6.2 
5.4 
 
TOTAL LIABILITIES
548.6 
536.6 
 
Operating Segments |
RANA
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
16.4 
8.1 
 
Trade accounts receivable, net
77.6 
63.7 
 
Inventories
57.3 
61.7 
 
Prepaid expenses, supplies, and other current assets
15.7 
12.5 
 
Total current assets
167.0 
146.0 
 
Property, plant and equipment, net
193.2 
199.3 
 
Intangible assets, net
13.8 
15.0 
 
Goodwill
95.4 
95.4 
 
Other noncurrent assets
5.0 
4.9 
 
TOTAL ASSETS
474.4 
460.6 
 
Current liabilities:
 
 
 
Trade payables
70.2 
58.1 
 
Accrued liabilities
31.3 
34.3 
 
Total current liabilities
101.5 
92.4 
 
Environmental liabilities
11.7 
11.7 
 
Other noncurrent liabilities
4.4 
4.1 
 
TOTAL LIABILITIES
117.6 
108.2 
 
Operating Segments |
RAEU
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
5.3 
7.2 
 
Trade accounts receivable, net
16.0 
13.5 
 
Financing receivable
40.9 
32.7 
 
Inventories
31.1 
38.5 
 
Prepaid expenses, supplies, and other current assets
5.9 
6.8 
 
Total current assets
99.2 
98.7 
 
Property, plant and equipment, net
97.2 
102.2 
 
Goodwill
9.1 
8.9 
 
Other noncurrent assets
2.0 
1.9 
 
TOTAL ASSETS
207.5 
211.7 
 
Current liabilities:
 
 
 
Trade payables
42.0 
42.3 
 
Accrued liabilities
12.0 
14.6 
 
Total current liabilities
54.0 
56.9 
 
Accrued pension benefits
38.8 
38.0 
 
Other noncurrent liabilities
1.8 
1.4 
 
TOTAL LIABILITIES
$ 94.6 
$ 96.3 
 
Summarized Balance Sheet Information of Reportable Segments and Consolidated (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
ASSETS
 
 
Assets
$ 704.1 
$ 700.9 
LIABILITIES
 
 
liabilities
548.6 
536.6 
Operating Segments |
RANA
 
 
ASSETS
 
 
Assets
474.4 
460.6 
LIABILITIES
 
 
liabilities
117.6 
108.2 
Operating Segments |
RAEU
 
 
ASSETS
 
 
Assets
207.5 
211.7 
LIABILITIES
 
 
liabilities
94.6 
96.3 
Unallocated
 
 
ASSETS
 
 
Assets
22.2 
28.6 
LIABILITIES
 
 
liabilities
$ 336.4 
$ 332.1 
Discontinued Operations - Additional Information (Detail) (USD $)
0 Months Ended 3 Months Ended 6 Months Ended
Jan. 9, 2015
Jun. 30, 2016
Mar. 31, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Dec. 31, 2015
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]
 
 
 
 
 
 
 
Gross proceeds from sale of wholly owned subsidiary
$ 77,900,000 
 
 
 
 
 
 
Payment for final working capital adjustment from buyer
100,000 
 
 
 
 
 
 
Proceeds released from escrow
 
 
3,900,000 
 
3,900,000 
74,100,000 
 
Repurchase claims received or settled
 
 
 
 
Repurchase reserve
 
700,000 
 
 
700,000 
 
700,000 
Decrease in allowance for repurchase reserve
 
 
200,000 
4,800,000 
 
Restitution received
 
200,000 
 
(300,000)
200,000 
(500,000)
 
Pretax gain on sale of NABCO
 
 
 
 
 
39,700,000 
 
Recovery of allowance for repurchase reserve
 
 
 
 
 
4,800,000 
 
Discontinued Operations
 
 
 
 
 
 
 
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]
 
 
 
 
 
 
 
Restitution received
 
 
 
 
$ 200,000 
 
 
Commitments and Contingencies - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Commitments And Contingencies Disclosure [Abstract]
 
 
Reserves for environmental remediation liabilities
$ 15.6 
$ 16.0 
Accounts payable and accrued liabilities of environmental remediation reserves
3.9 
4.3 
Asset retirement obligations
5.1 
5.0 
Asset Retirement Obligation, current
0.8 
0.9 
Asset Retirement Obligation, non-current
$ 4.3 
$ 4.1