FAIRMOUNT SANTROL HOLDINGS INC., 10-Q filed on 5/10/2018
Quarterly Report
v3.8.0.1
Document and Entity Information - shares
3 Months Ended
Mar. 31, 2018
May 08, 2018
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Mar. 31, 2018  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q1  
Trading Symbol FMSA  
Entity Registrant Name Fairmount Santrol Holdings Inc.  
Entity Central Index Key 0001010858  
Current Fiscal Year End Date --12-31  
Entity Filer Category Accelerated Filer  
Entity Common Stock Shares Outstanding   225,117,303
v3.8.0.1
Condensed Consolidated Statements of Income (Loss) (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Income Statement [Abstract]    
Revenues $ 273,338 $ 172,583
Cost of goods sold (excluding depreciation, depletion, and amortization shown separately) 186,078 134,203
Operating expenses    
Selling, general and administrative expenses 27,353 22,470
Depreciation, depletion and amortization expense 17,225 17,246
Other operating income (729) (1,060)
Income (loss) from operations 43,411 (276)
Interest expense 13,783 12,537
Income (loss) before provision (benefit) for income taxes 29,628 (12,813)
Provision (benefit) for income taxes 872 (1,160)
Net income (loss) 28,756 (11,653)
Less: Net income attributable to the non-controlling interest 3 178
Net income (loss) attributable to Fairmount Santrol Holdings Inc. $ 28,753 $ (11,831)
Earnings (loss) per share    
Basic $ 0.13 $ (0.05)
Diluted $ 0.13 $ (0.05)
Weighted average number of shares outstanding    
Basic 224,484 223,739
Diluted 228,940 223,739
v3.8.0.1
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Statement Of Income And Comprehensive Income [Abstract]    
Net income (loss) $ 28,756 $ (11,653)
Other comprehensive income, before tax    
Foreign currency translation 16 (39)
Pension obligations 60 61
Amortization and change in fair value of derivative agreements 1,069 1,613
Total other comprehensive income, before tax 1,145 1,635
Provision for income taxes related to items of other comprehensive income (loss) 538 1,316
Comprehensive income (loss), net of tax 29,363 (11,334)
Comprehensive income attributable to the non-controlling interest 3 178
Comprehensive income (loss) attributable to Fairmount Santrol Holdings Inc. $ 29,360 $ (11,512)
v3.8.0.1
Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Thousands
Mar. 31, 2018
Dec. 31, 2017
Mar. 31, 2017
Dec. 31, 2016
Current assets        
Cash and cash equivalents $ 84,768 $ 127,967 $ 210,664 $ 194,069
Accounts receivable, net of allowance for doubtful accounts of $1,237 and $2,003 at March 31, 2018 and December 31, 2017, respectively 179,234 156,916    
Inventories, net 64,895 70,528    
Prepaid expenses and other assets 7,590 7,765    
Total current assets 336,487 363,176    
Property, plant and equipment, net 783,429 756,288    
Deferred income taxes 351 350    
Goodwill 15,301 15,301    
Intangibles, net 92,892 93,268    
Other assets 10,088 7,711    
Total assets 1,238,548 1,236,094    
Current liabilities        
Current portion of long-term debt 18,924 19,189    
Accounts payable 83,852 70,633    
Accrued expenses 41,660 74,007    
Deferred revenue 9,346 5,660    
Total current liabilities 153,782 169,489    
Long-term debt 715,316 729,741    
Deferred income taxes 6,807 2,429    
Other long-term liabilities 36,901 42,189    
Total liabilities 912,806 943,848    
Commitments and contingent liabilities (Note 14)    
Equity        
Preferred stock: $0.01 par value, 100,000 authorized shares Shares outstanding: 0 at March 31, 2018 and December 31, 2017    
Common stock: $0.01 par value, 1,850,000 authorized shares Shares issued: 242,366 at March 31, 2018 and December 31, 2017 Shares outstanding: 224,895 and 224,291 at March 31, 2018 and December 31, 2017, respectively 2,423 2,423    
Additional paid-in capital 294,500 299,912    
Retained earnings 318,912 290,159    
Accumulated other comprehensive loss (14,491) (15,098)    
Total equity attributable to Fairmount Santrol Holdings Inc. before treasury stock 601,344 577,396    
Less: Treasury stock at cost Shares in treasury: 17,471 and 18,075 at March 31, 2018 and December 31, 2017, respectively (275,975) (285,520)    
Total equity attributable to Fairmount Santrol Holdings Inc. 325,369 291,876    
Non-controlling interest 373 370    
Total equity 325,742 292,246 $ 215,568 $ 223,734
Total liabilities and equity $ 1,238,548 $ 1,236,094    
v3.8.0.1
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)
$ in Thousands
Mar. 31, 2018
Dec. 31, 2017
Statement Of Financial Position [Abstract]    
Allowance for doubtful accounts $ 1,237 $ 2,003
Preferred stock, par value $ 0.01 $ 0.01
Preferred stock, shares authorized 100,000,000 100,000,000
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 1,850,000,000 1,850,000,000
Common Stock, Shares, Issued 242,366,000 242,366,000
Common stock, shares outstanding 224,895,000 224,291,000
Shares in treasury 17,471,000 18,075,000
v3.8.0.1
Condensed Consolidated Statements of Equity (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Other Comprehensive Income (Loss) [Member]
Treasury Stock [Member]
Subtotal [Member]
Non-controlling Interest [Member]
Beginning balances at Dec. 31, 2016 $ 223,734 $ 2,422 $ 297,649 $ 237,466 $ (19,002) $ (294,874) $ 223,661 $ 73
Beginning balances, shares at Dec. 31, 2016   223,601       18,666    
Re-issuance of treasury stock 4,061         $ 4,061 4,061  
Re-issuance of treasury stock, shares   257       (257)    
Share-based awards exercised or distributed (3,575)   (3,575)       (3,575)  
Share-based awards exercised or distributed, shares   81            
Stock compensation expense 3,116   3,116       3,116  
Impact of adoption of ASU 2016-09, net of tax | ASU 2016-09 [Member] (433)     (433)     (433)  
Transactions with non-controlling interest (1)             (1)
Net (loss) income (11,653)     (11,831)     (11,831) 178
Other comprehensive income (loss) 319       319   319  
Ending balances at Mar. 31, 2017 215,568 $ 2,422 297,190 225,202 (18,683) $ (290,813) 215,318 250
Ending balances, shares at Mar. 31, 2017   223,939       18,409    
Beginning balances at Dec. 31, 2016 223,734 $ 2,422 297,649 237,466 (19,002) $ (294,874) 223,661 73
Beginning balances, shares at Dec. 31, 2016   223,601       18,666    
Ending balances at Dec. 31, 2017 292,246 $ 2,423 299,912 290,159 (15,098) $ (285,520) 291,876 370
Ending balances, shares at Dec. 31, 2017   224,291       18,075    
Re-issuance of treasury stock 9,545         $ 9,545 9,545  
Re-issuance of treasury stock, shares   604       (604)    
Share-based awards exercised or distributed (8,832)   (8,832)       (8,832)  
Stock compensation expense 3,420   3,420       3,420  
Net (loss) income 28,756     28,753     28,753 3
Other comprehensive income (loss) 607       607   607  
Ending balances at Mar. 31, 2018 $ 325,742 $ 2,423 $ 294,500 $ 318,912 $ (14,491) $ (275,975) $ 325,369 $ 373
Ending balances, shares at Mar. 31, 2018   224,895       17,471    
v3.8.0.1
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Statement Of Cash Flows [Abstract]    
Net income (loss) $ 28,756 $ (11,653)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:    
Depreciation and depletion 15,198 15,334
Amortization 2,945 3,130
Reserve for doubtful accounts (764) (447)
Gain on disposal of fixed assets (10) (714)
Gain on interest rate swaps (99)
Deferred income taxes and taxes payable 3,578 107
Stock compensation expense 3,420 2,416
Change in operating assets and liabilities:    
Accounts receivable (21,554) (15,956)
Inventories 5,633 (9,038)
Prepaid expenses and other assets (3,120) 867
Accounts payable 5,613 12,981
Accrued expenses (33,431) 9,744
Deferred revenue 3,686 16,969
Net cash provided by operating activities 9,851 23,740
Cash flows from investing activities    
Proceeds from sale of fixed assets 205 957
Capital expenditures and stripping costs (37,823) (4,574)
Net cash used in investing activities (37,618) (3,617)
Cash flows from financing activities    
Payments on term loans (4,375) (2,170)
Payments on capital leases and other long-term debt (1,163) (817)
Payments on revolving credit facility (10,000)  
Proceeds from share-based awards exercised or distributed 713 486
Tax payments for withholdings on share-based awards exercised or distributed (623) (982)
Transactions with non-controlling interest   (1)
Net cash used in financing activities (15,448) (3,484)
Foreign currency adjustment 16 (44)
(Decrease) increase in cash and cash equivalents (43,199) 16,595
Cash and cash equivalents:    
Beginning of period 127,967 194,069
End of period 84,768 210,664
Supplemental disclosure of cash flow information:    
Interest paid, net of capitalized interest 14,853 11,717
Income taxes paid (refunded) 375 (1,601)
Non-cash investing activities:    
Equipment purchased under capital leases   4,175
Decrease in accounts payable for additions to property, plant, and equipment $ (7,606) $ (1,301)
v3.8.0.1
Significant Accounting Policies
3 Months Ended
Mar. 31, 2018
Accounting Policies [Abstract]  
Significant Accounting Policies

1.

Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements of Fairmount Santrol Holdings Inc. and its consolidated subsidiaries (collectively, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.  In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments (which are of a normal, recurring nature) and disclosures necessary for a fair statement of the financial position, results of operations, comprehensive income, and cash flows of the reported interim periods.  The Condensed Consolidated Balance Sheets as of December 31, 2017 was derived from audited financial statements, but does not include all disclosures required by GAAP.  Certain reclassifications of prior year amounts have been made to conform to current year presentation.  Interim results are not necessarily indicative of the results to be expected for the full year or any other interim period.  These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements as filed in the 2017 Annual Report on Form 10-K and notes thereto and information included elsewhere in this Quarterly Report on Form 10-Q.

Use of Estimates

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

Revisions of Previously-Issued Financial Statements

The Company has revised previously-reported results to properly report stripping costs that were previously capitalized when incurred and amortized in subsequent periods.  Such costs incurred during the production phase of a mine are variable production costs that should be included in the costs of the inventory produced during the period the stripping costs are incurred.  The Company also revised the asset impairment charge for the quarter ended June 30, 2016 to correct its estimated fair value for an impaired mine property included in the determination of the impairment charge.  Additionally, the Company has included in the revised statements of cash flows a previously-omitted disclosure to show increase or decrease in accounts payable for additions to property, plant, and equipment.  The Company assessed the materiality of these misstatements on prior periods’ financial statements and concluded that these misstatements were not material, individually or in aggregate, to any previously-issued financial statements.  Refer to Note 2 for additional information.  

Revenues

The Company derives its revenues by mining, manufacturing, and processing minerals that its customers purchase for various uses.  Revenues are measured by the amount of consideration the Company expects to receive in exchange for transferring its product.  The consideration the Company expects to receive is based on volumes and price of product as defined in the underlying contract.  Depending on the contract, this may include the cost of transportation and may be net of discounts and rebates.  In some instances, revenues also include a separate charge for transportation services the Company provides or arranges for customers.

On January 1, 2018, the Company adopted Revenue from Contracts with Customers (Topic 606).  The adoption did not require a cumulative adjustment to opening retained earnings and did not have a material impact on revenues for the quarter ended March 31, 2018.  Revenues are recognized as each performance obligation within the contract is satisfied; this occurs with the transfer of control of the Company’s product in accordance with delivery methods as defined in the underlying contract.  Transfer of control to customers generally occurs when products leave the Company’s distribution terminals or, in the case of direct shipments, when products leave the Company’s production facilities, and customers arrange for shipping and handling of product to its final destination.  In those instances in which transfer of control occurs upon delivery to customers, the Company arranges for shipping and handling fees which are recorded as a cost of fulfillment.  Transportation costs to move product from the Company’s production facilities to its storage terminals are borne by the Company and capitalized into inventory.  These costs are included in cost of sales as the products are sold.  The Company’s contracts may include one or multiple distinct performance obligations.  Revenues are assigned to each performance obligation based on its relative standalone selling price, which is generally the contractually-stated price.  Refer to Note 18 for further details.

Accounts Receivable – Contract Balances

Accounts receivable as presented in the consolidated balance sheets are related to the Company’s contracts and are recorded when the right to consideration becomes unconditional at the amount management expects to collect.  Accounts receivable do not bear interest if paid when contractually due, and payments are generally due within thirty to forty-five days of invoicing.  Accounts receivable, net of allowance for doubtful accounts, are $179,234 and $156,916 as of March 31, 2018 and December 31, 2017, respectively.  The Company typically does not record contract assets, as the transfer of control of its products results in an unconditional right to receive consideration.

Deferred Revenues – Contract Balances

The Company enters into certain contracts with customers that include provisions requiring receipt of payment at the inception of the contract.  Deferred revenue is recorded when payment is received or due in advance of the performance obligation.  Changes in deferred revenue were as follows:

 

 

 

Three Months Ended March 31,

 

 

 

2018

 

Beginning balance

 

$

8,963

 

Deferral of revenue

 

 

5,000

 

Recognition of unearned revenue

 

 

(678

)

Ending balance

 

$

13,285

 

 

At March 31, 2018 and December 31, 2017, respectively, deferred revenue balances of $9,346 and $5,660 were recorded as current liabilities.  At March 31, 2018 and December 31, 2017, respectively, deferred revenue balances of $3,939 and $3,303 were recorded in other long-term liabilities.  

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 – Revenue from Contracts with Customers (Topic 606).  Topic 606 supersedes the revenue recognition requirements in Topic 605 – Revenue Recognition and clarifies the principles for recognizing revenue and creates common revenue recognition guidance between GAAP and International Financial Reporting Standards.  Revenues are recognized when customers obtain control of promised goods or services and at an amount that reflects the consideration expected to be received in exchange for such goods or services.  In addition, the ASU requires disclosure of the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers.

On January 1, 2018, the Company adopted the ASU for all contracts which were not completed as of January 1, 2018 using the modified retrospective transition method.  The adoption did not require a cumulative adjustment to opening retained earnings and did not have a material impact on revenues for the quarter ended March 31, 2018.  See Note 18 for further details.

In March 2017, the FASB issued ASU No. 2017-07 – Compensation – Retirement Benefits (Topic 715) – Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.  The ASU requires that an employer report the service cost component in the same line item in the income statement as other compensation costs arising from services rendered by the pertinent employees during the period.  The ASU also requires only the service cost component to be eligible for capitalization when applicable.  The ASU is effective for annual reporting periods beginning after December 15, 2017 including interim periods within those annual periods with early adoption permitted.  The Company has adopted this ASU as of January 1, 2018, however, has determined it has no material impact on its consolidated financial statements and disclosures.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02 – Leases (Topic 842), which requires lessees to recognize assets and liabilities on their balance sheet related to the rights and obligations created by most leases, while continuing to recognize expense on their income statements over the lease term.  The ASU also requires disclosures designed to give financial statement users information regarding the amount, timing, and uncertainty of cash flows arising from leases.  The ASU is effective for fiscal years, and related interim periods, beginning after December 15, 2018 and early adoption is permitted, and mandates a modified retrospective transition method.  The Company believes the adoption of this ASU will likely have a material impact on its consolidated balance sheets for the recognition of certain operating leases as right-of-use assets and lease liabilities and is in the process of analyzing its lease portfolio and evaluating systems to comply with adoption.  

In August 2017, the FASB issued ASU No. 2017-12 – Derivatives and Hedging (Topic 815) – Targeted Improvements to Accounting for Hedging Activities.  The ASU expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements.  Subject matters addressed include risk component hedging, accounting for the hedged item in fair value hedges of interest rate risk, recognition and presentation of the effects of hedging instruments, amounts excluded from the assessment of hedge effectiveness, and effectiveness testing.  The ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years with early adoption permitted.  All transition requirements and elections should be applied to existing hedging relationships as of the date of adoption and reflected as of the beginning of the fiscal year of adoption.  The Company is in the process of evaluating the impact of this new guidance on its consolidated financial statements and disclosures.

In February 2018, the FASB issued ASU No. 2018-02 – Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.  The FASB is providing ongoing guidance on certain accounting and tax effects of the legislation in the Tax Cuts and Jobs Act (the “Tax Act”), which was enacted in December 2017.  Specifically, the ASU allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from this legislation.  The ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years with early adoption permitted.  The ASU should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is recognized.  The Company is in the process of evaluating the impact of this new guidance on its consolidated financial statements and disclosures.

In March 2018, the FASB issued ASU no. 2018-05 Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118.  This ASU amends certain SEC material in Topic 740 for the income tax accounting implication of the Tax Act.  This ASU adds guidance to the FASB Accounting Standards Codification regarding the Tax Act.  The additional guidance, among other things, includes accounting for income tax effects of the Tax Act during the measurement period and required disclosures of the income tax effects of the Tax Act under a measurement period approach.  The ASU is effective upon inclusion in the FASB Codification.  

v3.8.0.1
Revisions of Previously-Reported Results
3 Months Ended
Mar. 31, 2018
Accounting Changes And Error Corrections [Abstract]  
Revisions of Previously-Issued Financial Statements

2.

Revisions of Previously-Issued Financial Statements

The Company has revised previously-reported results to properly report stripping costs that were previously capitalized when incurred and amortized in subsequent periods.  Such costs incurred during the production phase of a mine are variable production costs that should be included in the costs of the inventory produced during the period the stripping costs are incurred.  The Company also revised the asset impairment charge for the quarter ended June 30, 2016 to correct its estimated fair value for an impaired mine property included in the determination of the impairment charge.  Additionally, the Company has included in the revised statements of cash flows a previously-omitted disclosure to show increase or decrease in accounts payable for additions to property, plant, and equipment.  The Company assessed the materiality of these misstatements on prior periods’ financial statements in accordance with SEC Staff Accounting Bulletin (“SAB”) No. 99, Materiality, codified in ASC 250, Presentation of Financial Statements, and concluded that these misstatements were not material, individually or in the aggregate, to any previously-issued financial statements.  In accordance with ASC 250 (SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements), the unaudited condensed consolidated financial statements and notes to consolidated financial statements as of December 31, 2017 and March 31, 2017, and for the period ended March 31, 2017, which are presented herein, have been revised.  

The following tables show the impact of these revisions on all of the impacted line items from the Company’s (i) unaudited condensed consolidated financial statements for the three months ended March 31, 2017 and (ii) consolidated financial statements as of December 31, 2017 and 2016, and for the years ended December 31, 2017, 2016, and 2015:

Consolidated Statement of Loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2017

 

 

 

As Reported

 

 

Adjustments

 

 

As Corrected

 

 

 

(in thousands, except per share amounts)

 

Revenues

 

$

172,583

 

 

$

-

 

 

$

172,583

 

Cost of goods sold (excluding depreciation, depletion,

 

 

 

 

 

 

 

 

 

 

 

 

and amortization shown separately)

 

 

131,752

 

 

 

2,451

 

 

 

134,203

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

22,470

 

 

 

-

 

 

 

22,470

 

Depreciation, depletion and amortization expense

 

 

19,442

 

 

 

(2,196

)

 

 

17,246

 

Other operating (income) expense

 

 

(1,060

)

 

 

-

 

 

 

(1,060

)

Income (loss) from operations

 

 

(21

)

 

 

(255

)

 

 

(276

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

12,537

 

 

 

-

 

 

 

12,537

 

Income (loss) before benefit from income taxes

 

 

(12,558

)

 

 

(255

)

 

 

(12,813

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefit from income taxes

 

 

(1,148

)

 

 

(12

)

 

 

(1,160

)

Net income (loss)

 

 

(11,410

)

 

 

(243

)

 

 

(11,653

)

Less: Net income attributable to the non-controlling interest

 

 

178

 

 

 

-

 

 

 

178

 

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

 

$

(11,588

)

 

$

(243

)

 

$

(11,831

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.05

)

 

$

-

 

 

$

(0.05

)

Diluted

 

$

(0.05

)

 

$

-

 

 

$

(0.05

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

223,739

 

 

 

 

 

223,739

 

Diluted

 

 

223,739

 

 

 

 

 

223,739

 

 

 

Consolidated Statement of Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2017

 

 

 

As Reported

 

 

Adjustments

 

 

As Corrected

 

 

 

(in thousands, except per share amounts)

 

Revenues

 

$

959,795

 

 

$

-

 

 

$

959,795

 

Cost of goods sold (excluding depreciation, depletion,

 

 

 

 

 

 

 

 

 

 

 

 

and amortization shown separately)

 

 

659,758

 

 

 

11,443

 

 

 

671,201

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

113,240

 

 

 

-

 

 

 

113,240

 

Depreciation, depletion and amortization expense

 

 

79,144

 

 

 

(9,734

)

 

 

69,410

 

Other operating income

 

 

(1,072

)

 

 

-

 

 

 

(1,072

)

Income from operations

 

 

108,725

 

 

 

(1,709

)

 

 

107,016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

56,408

 

 

 

-

 

 

 

56,408

 

Loss on debt extinguishment, net

 

 

2,898

 

 

 

-

 

 

 

2,898

 

Income before benefit from income taxes

 

 

49,419

 

 

 

(1,709

)

 

 

47,710

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefit from income taxes

 

 

(4,666

)

 

 

(1,049

)

 

 

(5,715

)

Net income

 

 

54,085

 

 

 

(660

)

 

 

53,425

 

Less: Net income attributable to the non-controlling interest

 

 

297

 

 

 

-

 

 

 

297

 

Net income attributable to Fairmount Santrol Holdings Inc.

 

$

53,788

 

 

$

(660

)

 

$

53,128

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.24

 

 

$

-

 

 

$

0.24

 

Diluted

 

$

0.23

 

 

$

-

 

 

$

0.23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

223,993

 

 

 

 

 

223,993

 

Diluted

 

 

229,084

 

 

 

 

 

229,084

 

 

Consolidated Statement of Loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2016

 

 

 

As Reported

 

 

Adjustments

 

 

As Corrected

 

 

 

(in thousands, except per share amounts)

 

Revenues

 

$

535,013

 

 

$

-

 

 

$

535,013

 

Cost of goods sold (excluding depreciation, depletion,

 

 

 

 

 

 

 

 

 

 

 

 

and amortization shown separately)

 

 

459,714

 

 

 

9,803

 

 

 

469,517

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

79,140

 

 

 

-

 

 

 

79,140

 

Depreciation, depletion and amortization expense

 

 

72,276

 

 

 

(8,962

)

 

 

63,314

 

Goodwill and other asset impairments

 

 

93,148

 

 

 

(3,297

)

 

 

89,851

 

Restructuring charges

 

 

1,155

 

 

 

-

 

 

 

1,155

 

Other operating expense

 

 

8,899

 

 

 

-

 

 

 

8,899

 

Loss from operations

 

 

(179,319

)

 

 

2,456

 

 

 

(176,863

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

65,367

 

 

 

-

 

 

 

65,367

 

Gain on repurchase of debt, net

 

 

(5,110

)

 

 

-

 

 

 

(5,110

)

Other non-operating income

 

 

(10

)

 

 

-

 

 

 

(10

)

Loss before benefit from income taxes

 

 

(239,566

)

 

 

2,456

 

 

 

(237,110

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefit from income taxes

 

 

(99,441

)

 

 

10,811

 

 

 

(88,630

)

Net loss

 

 

(140,125

)

 

 

(8,355

)

 

 

(148,480

)

Less: Net income attributable to the non-controlling interest

 

 

67

 

 

 

-

 

 

 

67

 

Net loss attributable to Fairmount Santrol Holdings Inc.

 

$

(140,192

)

 

$

(8,355

)

 

$

(148,547

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.78

)

 

$

(0.05

)

 

$

(0.83

)

Diluted

 

$

(0.78

)

 

$

(0.05

)

 

$

(0.83

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

179,429

 

 

 

 

 

179,429

 

Diluted

 

 

179,429

 

 

 

 

 

179,429

 

 

Consolidated Statement of Loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2015

 

 

 

As Reported

 

 

Adjustments

 

 

As Corrected

 

 

 

(in thousands, except per share amounts)

 

Revenues

 

$

828,709

 

 

$

-

 

 

$

828,709

 

Cost of goods sold (excluding depreciation, depletion,

 

 

 

 

 

 

 

 

 

 

 

 

and amortization shown separately)

 

 

608,845

 

 

 

7,175

 

 

 

616,020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

85,191

 

 

 

-

 

 

 

85,191

 

Depreciation, depletion and amortization expense

 

 

66,754

 

 

 

(6,348

)

 

 

60,406

 

Goodwill and other asset impairments

 

 

87,476

 

 

 

-

 

 

 

87,476

 

Restructuring charges

 

 

9,221

 

 

 

-

 

 

 

9,221

 

Other operating expense

 

 

1,357

 

 

 

(378

)

 

 

979

 

Loss from operations

 

 

(30,135

)

 

 

(449

)

 

 

(30,584

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

62,242

 

 

 

-

 

 

 

62,242

 

Other non-operating expense

 

 

1,492

 

 

 

-

 

 

 

1,492

 

Loss before benefit from income taxes

 

 

(93,869

)

 

 

(449

)

 

 

(94,318

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefit from income taxes

 

 

(1,939

)

 

 

(164

)

 

 

(2,103

)

Net loss

 

 

(91,930

)

 

 

(285

)

 

 

(92,215

)

Less: Net income attributable to the non-controlling interest

 

 

205

 

 

 

-

 

 

 

205

 

Net loss attributable to Fairmount Santrol Holdings Inc.

 

$

(92,135

)

 

$

(285

)

 

$

(92,420

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.57

)

 

$

-

 

 

$

(0.57

)

Diluted

 

$

(0.57

)

 

$

-

 

 

$

(0.57

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

161,297

 

 

 

 

 

161,297

 

Diluted

 

 

161,297

 

 

 

 

 

161,297

 

 

 

 

 

 

Consolidated Statement of Comprehensive Loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2017

 

 

 

As Reported

 

 

Adjustments

 

 

As Corrected

 

 

 

(in thousands)

 

Net loss

 

$

(11,410

)

 

$

(243

)

 

$

(11,653

)

Other comprehensive income, before tax

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

 

(39

)

 

 

-

 

 

 

(39

)

Pension obligations

 

 

61

 

 

 

-

 

 

 

61

 

Change in fair value of derivative agreements

 

 

1,613

 

 

 

-

 

 

 

1,613

 

Total other comprehensive income, before tax

 

 

1,635

 

 

 

-

 

 

 

1,635

 

Provision for income taxes related to items of other comprehensive income

 

 

1,316

 

 

 

-

 

 

 

1,316

 

Comprehensive loss, net of tax

 

 

(11,091

)

 

 

(243

)

 

 

(11,334

)

Comprehensive income attributable to the non-controlling interest

 

 

178

 

 

 

-

 

 

 

178

 

Comprehensive loss attributable to Fairmount Santrol Holdings Inc.

 

$

(11,269

)