Sale of Millen Facility

12 Months Ended

Dec. 31, 2019

Millen, Georgia Facility

Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]

Sale of Business

17. Sale of Millen Facility

On December 31, 2018, the Company entered into a Purchase and Sale Agreement with a Buyer to sell the Company’s ceramic proppant manufacturing facility in Millen, Georgia for $23,000.  The transaction closed on December 31, 2018.  Selling expenses, including certain post-closing matters and retained liabilities, totaled approximately $7,267.  As of December 31, 2018, the Company had paid approximately $899 of the total selling expenses.  As such, net proceeds of $22,101 is included within investing cash flows on the consolidated statement of cash flows for the year ended December 31, 2018.  The selling expenses that had not yet been paid as of December 31, 2018 primarily relate to the post-closing matters and retained liabilities, and are recorded as liabilities as of December 31, 2018 within other accrued expenses, other current liabilities and other long-term liabilities on the consolidated balance sheets.  The payment of the post-closing matters will be an investing cash outflow when paid, and the repayment of the retained liabilities will be financing outflows when repaid over a multi-year period. During the year ended December 31, 2019, of the previously accrued selling expenses at December 31, 2018, the Company paid approximately $1,516 in post-closing matters and repaid approximately $704 in retained liabilities.  As of December 31, 2019, there are no post-closing matters accrued, and there was $4,016 remaining in retained liabilities, recorded in other current liabilities in our consolidated balance sheet.  These payments are recorded as investing and financing cash outflows, respectively, in the consolidated statement of cash flows for the year ended December 31, 2019.  Net Cash Proceeds, as defined in the New Credit Agreement, approximated $15,733, calculated as the gross proceeds of $23,000 less the selling expenses of $7,267.  The retained liabilities, due to the City of Millen and the local electrical cooperative, are associated with their respective investments in the Millen facility’s electrical and natural gas infrastructure during the construction of the plant.  The Company also retained an existing liability associated with a long-term fixed natural gas transportation agreement.  As of December 31, 2019, the fair value of these retained liabilities approximated the carrying value.  In order to backstop the amounts due under these retained liabilities, the Company agreed to an escrow holdback of $3,000 at closing and provided a letter of credit for an additional $2,000.  These were converted to notes payable during 2019, and the balance as of December 31, 2019 was $2,471 relating to the aggregate of three separate notes payable due to the City of Millen.  The notes bear interest at rates ranging from 0% to 3.5%.  These three notes payable are due in monthly principal and interest payments with maturities ranging from 2021 to 2026.  During 2019, the Company executed a note payable with the local electrical cooperative for its share of the retained liabilities.  The note bears interest at 5% annually and requires monthly principal and interest payments of $35 until maturity in February 2024.  The balance of this note payable at December 31, 2019 was $1,545.  The Company also agreed to a separate escrow holdback of $1,200 pending completion of the post-closing matters.  During 2019, the Company completed the post-closing matters.  However, the Buyer is disputing the repairs, and as such, as of December 31, 2019, we had only received $645 of the escrow holdback.  The remaining $555 is classified as non-current restricted cash pending the outcome of the dispute.  The book value of the assets, which were previously classified as held for sale, was $17,842, which after consideration of the selling price, the write-off of certain spare parts totaling $196 and costs to sell the facility, resulted in a loss on the sale of $2,305.