Operations and Significant Accounting Policies

3 Months Ended

Apr. 03, 2015

Operations and Significant Accounting Policies [Abstract]

Significant Accounting Policies

Operations and Significant Accounting Policies

Indebtedness

The $375 million9.50% Senior Secured Notes (the "Notes") become due on April 1, 2016. In the event the Notes are not refinanced prior to December 31, 2015, the ABL Credit Facility becomes due on January 31, 2016. Generally accepted accounting principles require that long-term debt be classified as a current liability when the maturity date for such debt is within 12 months of a company's reporting period. Accordingly, as of April 3, 2015, the Company is required to classify its outstanding long-term debt under the Notes and the ABL Credit Facility totaling $375 million and $59.8 million, respectively, to current liabilities on its consolidated balance sheet since the Company has not finalized the refinancing of the debt. If the Company were unable to refinance or extend the maturity date of its Notes the Company may not be able to generate sufficient cash to service all of the indebtedness and may not be able to refinance the indebtedness on favorable terms. This ability, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors beyond the Company’s control. The Company is actively pursuing several alternatives to address the maturity date of its Notes, including but not limited to engagement of an investment banking firm and legal counsel to facilitate the refinancing process. Based on current market conditions, the Company expects to be able to complete a refinancing of the Notes prior to December 31, 2015, although there can be no assurances of the timing of terms thereof. See Note 4 for further disclosures related to long-term debt.

Accounts Receivable

Accounts receivable are comprised of trade accounts receivable and other receivables. Trade accounts receivable are recorded at net realizable value and totaled $86.8 million and $77.1 million as of April 3, 2015 and December 31, 2014, respectively. This value includes an allowance for estimated uncollectible accounts, returns and allowances, cash discounts and other adjustments. The allowance for doubtful accounts is based on historical experience, the level of past-due accounts based on the contractual terms of the receivables, current economic conditions and an evaluation of the customers' credit worthiness. Accounts receivable are charged against the allowance for doubtful accounts when it is probable that the receivable will not be recovered. During the first quarter of 2015, the Company incurred a loss of $1.2 million in the European Roll Coated Aluminum segment on accounts receivable related to the bankruptcy of a customer in the UK.