Maryland | 36-0879160 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
1420 Kensington Road, Suite 220, Oak Brook, Illinois | 60523 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered | |
Common Stock - $0.01 par value | New York Stock Exchange |
Large Accelerated Filer | ¨ | Accelerated Filer | x | |||
Non-Accelerated Filer | ¨ | Smaller Reporting Company | ¨ |
Documents Incorporated by Reference | Applicable Part of Form 10-K | |
Portions of the registrant’s definitive Proxy Statement for the Annual Meeting of Stockholders to be held April 25, 2013. | Part III |
2012 | 2011 | 2010 | ||||||
Metals | 90 | % | 90 | % | 89 | % | ||
Plastics | 10 | % | 10 | % | 11 | % | ||
100 | % | 100 | % | 100 | % |
• | it may be more difficult for us to satisfy our financial obligations; |
• | our ability to obtain additional financing for working capital, capital expenditures, strategic acquisitions or general corporate purposes may be impaired; |
• | we must use a substantial portion of our cash flow from operations to pay interest on our indebtedness, which will reduce the funds available to use for operations and other purposes; |
• | our ability to fund a change of control offer under our debt instruments may be limited; |
• | our substantial level of indebtedness could place us at a competitive disadvantage compared to our competitors that may have proportionately less debt; |
• | our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate may be limited; and |
• | our substantial level of indebtedness may make us more vulnerable to economic downturns and adverse developments in our business. |
• | incur additional indebtedness unless certain financial tests are satisfied or issue disqualified capital stock; |
• | pay dividends, redeem subordinated debt or make other restricted payments; |
• | make certain investments or acquisitions; |
• | issue stock of subsidiaries; |
• | grant or permit certain liens on our assets; |
• | enter into certain transactions with affiliates; |
• | merge, consolidate or transfer substantially all of our assets; |
• | incur dividend or other payment restrictions affecting certain of our subsidiaries; |
• | transfer, sell or acquire assets, including capital stock of our subsidiaries; and |
• | change the business we conduct. |
• | potential for adverse change in the local political or social climate or in government policies, laws and regulations; |
• | difficulty staffing and managing geographically diverse operations and the application of foreign labor regulations; |
• | restrictions on imports and exports or sources of supply; |
• | currency exchange rate risk; and |
• | change in duties and taxes. |
• | difficulties in integrating and managing personnel, financial reporting and other systems used by the acquired businesses; |
• | the failure of the acquired businesses to perform in accordance with our expectations; |
• | failure to achieve anticipated synergies between our business units and the acquired businesses; |
• | the loss of the acquired businesses' customers; and |
• | cyclicality of business. |
• | damage to or inoperability of our warehouse or related systems; |
• | a prolonged power or telecommunication failure; |
• | a natural disaster, environmental or public health issue; or |
• | an airplane crash or act of war or terrorism on-site or nearby as the facility is located within seven miles of O'Hare International Airport (a major U.S. airport) and lies below certain take-off and landing flight patterns. |
Locations | Approximate Floor Area in Square Feet | ||
Metals Segment | |||
North America | |||
Bedford Heights, Ohio | 374,400 | (1) | |
Birmingham, Alabama | 76,000 | (1) | |
Blaine, Minnesota | 65,200 | (1) | |
Charlotte, North Carolina | 116,500 | (1) | |
Edmonton, Alberta | 87,103 | ||
Fairless Hills, Pennsylvania | 71,600 | (1) | |
Franklin Park, Illinois | 522,600 | (1) | |
Gardena, California | 117,000 | ||
Grand Prairie, Texas | 78,000 | (1) | |
Hammond, Indiana (H-A Industries) | 243,000 | ||
Houston, Texas | 383,100 | (3) | |
Kansas City, Missouri | 118,000 | ||
Kennesaw, Georgia | 87,500 | ||
Kent, Washington | 53,000 | ||
Lafayette, Louisiana | 5,000 | ||
Mississauga, Ontario | 57,000 | ||
Orange, Connecticut | 57,389 | ||
Paramount, California | 155,500 | ||
Point Claire, Quebec | 38,760 | ||
Santa Cantarina, Nuevo Leon, Mexico | 112,000 | ||
Saskatoon, Saskatchewan | 15,000 | ||
Selkirk, Manitoba | 50,000 | (1) | |
Stockton, California | 60,000 | ||
Twinsburg, Ohio | 120,000 | ||
Wichita, Kansas | 95,000 |
Locations | Approximate Floor Area in Square Feet | ||
Worcester, Massachusetts | 53,500 | (1) | |
Europe | |||
Blackburn, England | 62,139 | ||
Letchworth, England | 40,000 | ||
Trafford Park, England | 30,000 | ||
Montoir de Bretagne, France | 38,944 | ||
Asia | |||
Shanghai, China | 45,700 | ||
Sales Offices | |||
Bilbao, Spain | (Intentionally left blank) | ||
Fairfield, Ohio | |||
Milwaukee, Wisconsin | |||
Phoenix, Arizona | |||
Singapore | |||
Tulsa, Oklahoma | |||
Total Metals Segment | 3,428,935 | ||
Plastics Segment | |||
Baltimore, Maryland | 24,000 | ||
Cleveland, Ohio | 8,600 | ||
Cranston, Rhode Island | 14,990 | ||
Detroit, Michigan | 22,000 | ||
Elk Grove Village, Illinois | 22,500 | ||
Fort Wayne, Indiana | 17,600 | ||
Grand Rapids, Michigan | 42,500 | (1) | |
Harrisburg, Pennsylvania | 13,900 | ||
Indianapolis, Indiana | 13,500 | ||
Kalamazoo, Michigan | 81,000 | ||
Knoxville, Tennessee | 16,530 | ||
Maple Shade, New Jersey | 12,480 | ||
Mt. Vernon, New York | 30,000 | ||
New Philadelphia, Ohio | 15,700 | ||
Pittsburgh, Pennsylvania | 12,800 | ||
Rockford, Michigan | 53,600 | ||
Tampa, Florida | 17,700 | ||
Worcester, Massachusetts | 2,500 | (1) | |
Total Plastics Segment | 421,900 | ||
Headquarters | |||
Oak Brook, Illinois | 39,360 | (2) | |
GRAND TOTAL | 3,890,195 |
(1) | Represents owned facility. |
(2) | The Company’s principal executive offices do not include a distribution or sales office. |
(3) | Represents two leased facilities (274,000 square feet) and one owned facility (109,100 square feet). |
Name and Title | Age | Business Experience | ||
Patrick R. Anderson Vice President, Corporate Controller and Chief Accounting Officer | 41 | Mr. Anderson began his employment with the registrant in 2007 and was elected to the position of Vice President, Corporate Controller and Chief Accounting Officer. Prior to joining the registrant, he was employed as a Senior Manager with Deloitte & Touche LLP (a global accounting firm) where he was employed from 1994 to 2007. | ||
Scott J. Dolan President and Chief Executive Officer | 42 | Mr. Dolan most recently served as Senior Vice President, Airport Operations and Cargo, of United Continental Holdings, Inc. (a $37 billion publicly traded provider of passenger and cargo air transportation services), and its principal wholly-owned subsidiaries, United Airlines and Continental Airlines, from 2010 to 2011. From 2004 until 2010, Mr. Dolan served as Senior Vice President, Airport Operations and President, United Cargo (2006-2010) and as Senior Vice President and President, United Cargo (2004-2006) for UAL Corporation and its principal subsidiary, United Airlines. Mr. Dolan worked at Atlas Air Worldwide Holdings, Inc. (a global airfreight company) from 2002 to 2004, where he served as Senior Vice President and Chief Operating Officer from 2003-2004 and as Vice President, Business Integration from 2002 to 2003. Prior to joining Atlas Air, Mr. Dolan spent five years at General Electric Company, where he served in a variety of positions including Vice President, Operational Performance, Polar Air Cargo, a subsidiary of GE Capital Aviation Services. |
Name and Title | Age | Business Experience | ||
Thomas L. Garrett Vice President and President, Total Plastics, Inc. | 50 | Mr. Garrett began his employment with Total Plastics, Inc., a wholly owned subsidiary of the registrant, in 1988 and was appointed to the position of Controller. In 1996, he was elected to the position of Vice President and in 2001 was appointed to the position of Vice President of the registrant and President of Total Plastics, Inc. | ||
Kevin H. Glynn Vice President and Chief Information Officer | 49 | Mr. Glynn began his employment with the registrant in October 2010 as the Interim Chief Information Officer. In January 2011 he was appointed Vice President and Chief Information Officer. Prior to joining the registrant, he was employed as a Managing Principal at Laminar Group LLC (a management consulting company) from 2009 to 2010, Chief Operating Officer at IRON Solutions, Inc. (an information technology company specializing in data, software and media services for the agriculture equipment market) from 2008 to 2009 and as Senior Vice President and Chief Information Officer at CNH America, LLC (a manufacturer of agricultural and construction equipment) from 2006 to 2007. | ||
Robert J. Perna Vice President, General Counsel and Secretary | 49 | Mr. Perna began his employment with the registrant in 2008 and was elected to the position of Vice President-General Counsel and Secretary. Prior to joining the registrant he was General Counsel, North America, CNH America, LLC (a manufacturer of agricultural and construction equipment) since 2007, and he also served as Associate General Counsel and Corporate Secretary for Navistar International Corporation (a manufacturer of commercial trucks and diesel engines) since 2001. | ||
Anne D. Scharm Vice President, Human Resources | 36 | Ms. Scharm began her employment with the registrant in 2011 as the Director of Organizational Development. In December 2011, she was appointed as the Interim Vice President, Human Resources. In March 2012, she was appointed Vice President, Human Resources. Prior to joining the registrant, she was employed as Director of Human Resources and Organizational Development with Delnor Health System, (now known as Cadence Health - a healthcare organization) from 2006 to 2011. | ||
Scott F. Stephens Vice President, Chief Financial Officer and Treasurer | 43 | Mr. Stephens began his employment with the registrant in 2008 and was elected to the position of Vice President, Chief Financial Officer, and Treasurer. From February 2010 to December 2010, he was also appointed to the position of Interim President, Castle Metals Oil & Gas. In May 2012, Mr. Stephens was elected to serve as Interim Chief Executive Officer until October 2012. Formerly, he served as the CFO of Lawson Products, Inc. (a distributor of services, systems and products to the MRO and OEM marketplace) from 2004 to 2008, and CFO of The Wormser Company from 2001 to 2004. | ||
Blain A. Tiffany Chief Commercial Officer | 54 | Mr. Tiffany began his employment with the registrant in 2000 and was appointed to the position of District Manager. He was appointed Eastern Region Manager in 2003, Vice President – Regional Manager in 2005 and in 2006 was appointed to the position of Vice President – Sales. In 2007, Mr. Tiffany was appointed to the position of Vice President, President of Castle Metals Plate. In 2009, Mr. Tiffany served as Vice President, President of Castle Metals Aerospace through 2011. In 2012, Mr. Tiffany served as Vice President, Castle Metals and in January 2013 was appointed to the position of Chief Commercial Officer. |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased under the Plans or Programs | ||||||||
October 1 through October 31 | — | — | — | — | ||||||||
November 1 through November 30 | — | — | — | — | ||||||||
December 1 through December 31 | 24,469 | $ | 14.77 | — | — | |||||||
Total | 24,469 | $ | 14.77 | — | — |
(1) | The total number of shares purchased represents shares surrendered to the Company by employees to satisfy tax withholding obligations upon vesting of restricted stock units awarded pursuant to the Company’s 2010 - 2012 Long-Term Compensation Plan. |
2012 | 2011 | ||||||||||||||
Low | High | Low | High | ||||||||||||
First Quarter | $ | 9.59 | $ | 12.90 | $ | 15.14 | $ | 19.29 | |||||||
Second Quarter | $ | 9.65 | $ | 14.20 | $ | 15.25 | $ | 19.24 | |||||||
Third Quarter | $ | 6.99 | $ | 13.54 | $ | 10.37 | $ | 18.46 | |||||||
Fourth Quarter | $ | 10.83 | $ | 14.97 | $ | 7.85 | $ | 14.91 |
12/07 | 12/08 | 12/09 | 12/10 | 12/11 | 12/12 | ||||||||||||||||||
A. M. Castle & Co. | $ | 100.00 | $ | 40.32 | $ | 51.30 | $ | 68.99 | $ | 35.45 | $ | 55.35 | |||||||||||
S&P 500 | 100.00 | 63.00 | 79.67 | 91.67 | 93.61 | 108.59 | |||||||||||||||||
Peer Group (a) | 100.00 | 51.46 | 69.81 | 84.89 | 76.47 | 78.43 |
(a) | The Peer Group Index consists of the following companies: AEP Industries Inc.; AK Steel Holding Corp.; Allegheny Technologies Inc.; Amcol International Corp.; Applied Industrial Technologies Inc.; Carpenter Technology Corp.; Cliffs Natural Resources Inc.; Commercial Metals Company; Fastenal Company; Gibraltar Industries Inc.; Haynes International Inc.; Kaman Corp.; Lawson Products Inc.; MSC Industrial Direct Company Inc.; Nucor Corp.; Olin Corp.; Olympic Steel, Inc.; Quanex Building Products Corp.; Reliance Steel & Aluminum Co.; RTI International Metals Inc.; Schnitzer Steel Industries Inc.; Steel Dynamics Inc.; Stillwater Mining Company; Texas Industries Inc.; United States Steel Corp.; and Worthington Industries Inc. |
(dollars in millions, except per share data) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||
For the year ended December 31: | |||||||||||||||||||
Net sales | $ | 1,270.4 | $ | 1,132.4 | $ | 943.7 | $ | 812.6 | $ | 1,501.0 | |||||||||
Equity in earnings of joint venture | 7.2 | 11.7 | 5.6 | 0.4 | 8.8 | ||||||||||||||
Net loss from continuing operations | (9.7 | ) | (1.8 | ) | (5.6 | ) | (26.9 | ) | (17.1 | ) | |||||||||
Basic (loss) earnings per common share from continuing operations | (0.42 | ) | (0.08 | ) | (0.25 | ) | (1.18 | ) | (0.76 | ) | |||||||||
Diluted (loss) earnings per common share from continuing operations | (0.42 | ) | (0.08 | ) | (0.25 | ) | (1.18 | ) | (0.76 | ) | |||||||||
Cash dividends declared per common share | — | — | — | 0.06 | 0.24 | ||||||||||||||
As of December 31: | |||||||||||||||||||
Total assets | 788.8 | 822.3 | 529.4 | 558.0 | 679.0 | ||||||||||||||
Long-term debt, less current portion | 296.2 | 314.2 | 61.1 | 67.7 | 75.0 | ||||||||||||||
Total debt | 297.1 | 314.9 | 69.1 | 89.2 | 117.1 | ||||||||||||||
Total stockholders’ equity | 337.3 | 312.3 | 313.5 | 318.2 | 347.3 |
• | Lower LIFO charges and the inclusion of Tube Supply's activity in 2012 resulted in decreased cost of materials as a percentage of sales to 73.0% in 2012 compared to 74.7% in 2011; |
• | Increased operating income as a percentage of sales to 3.2%, up from 0.5% in 2011; |
• | Expanded operations in the United Kingdom to support the continued increase in aerospace defense program business; and |
• | In the first four months of 2012, the Company recognized $15.6 million of interest expense related to the mark-to-market adjustment on the conversion option associated with the convertible debt. In April, the Company reclassified the cumulative value of the conversion option associated with the convertible debt to additional paid-in capital as a result of the authorization of additional shares of common stock and the conversion option is no longer required to be marked-to-market through earnings. |
• | Changes in volume typically result in corresponding changes to the Company’s variable costs. However, as pricing changes occur, variable expenses are not directly impacted. |
• | If surcharges are not passed through to the customer or are passed through without a mark-up, the Company’s profitability will be adversely impacted. |
YEAR | Qtr 1 | Qtr 2 | Qtr 3 | Qtr 4 | |||||||
2010 | 58.2 | 58.8 | 55.4 | 56.8 | |||||||
2011 | 61.1 | 56.4 | 51.0 | 52.4 | |||||||
2012 | 53.3 | 52.7 | 50.3 | 50.6 |
• | Warehouse, processing and delivery expenses, including occupancy costs, compensation and employee benefits for warehouse personnel, processing, shipping and handling costs; |
• | Sales expenses, including compensation and employee benefits for sales personnel; |
• | General and administrative expenses, including compensation for executive officers and general management, expenses for professional services primarily related to accounting and legal advisory services, bad debt expense, data communication, computer hardware and maintenance and foreign currency gain or loss; and |
• | Depreciation and amortization expenses, including depreciation for all owned property and equipment, and amortization of various intangible assets. |
Year Ended December 31, | Fav / (Unfav) | |||||||||||||
2012 | 2011 | $ Change | % Change | |||||||||||
Net Sales | ||||||||||||||
Metals | $ | 1,143.9 | $ | 1,014.2 | $ | 129.7 | 12.8 | % | ||||||
Plastics | 126.5 | 118.2 | 8.3 | 7.0 | % | |||||||||
Total Net Sales | $ | 1,270.4 | $ | 1,132.4 | $ | 138.0 | 12.2 | % | ||||||
Cost of Materials | ||||||||||||||
Metals | $ | 836.3 | $ | 763.0 | $ | (73.3 | ) | (9.6 | )% | |||||
% of Metals Sales | 73.1 | % | 75.2 | % | ||||||||||
Plastics | 91.0 | 82.6 | (8.4 | ) | (10.2 | )% | ||||||||
% of Plastics Sales | 71.9 | % | 69.9 | % | ||||||||||
Total Cost of Materials | $ | 927.3 | $ | 845.6 | $ | (81.7 | ) | (9.7 | )% | |||||
% of Total Sales | 73.0 | % | 74.7 | % | ||||||||||
Operating Costs and Expenses | ||||||||||||||
Metals | $ | 257.8 | $ | 237.7 | $ | (20.1 | ) | (8.5 | )% | |||||
Plastics | 32.3 | 32.7 | 0.4 | 1.2 | % | |||||||||
Other | 11.9 | 11.2 | (0.7 | ) | (6.3 | )% | ||||||||
Total Operating Costs & Expenses | $ | 302.0 | $ | 281.6 | $ | (20.4 | ) | (7.2 | )% | |||||
% of Total Sales | 23.8 | % | 24.9 | % | ||||||||||
Operating Income (Loss) | ||||||||||||||
Metals | $ | 49.8 | $ | 13.5 | $ | 36.3 | 268.9 | % | ||||||
% of Metals Sales | 4.4 | % | 1.3 | % | ||||||||||
Plastics | 3.2 | 2.9 | 0.3 | 10.3 | % | |||||||||
% of Plastics Sales | 2.5 | % | 2.5 | % | ||||||||||
Other | (11.9 | ) | (11.2 | ) | (0.7 | ) | (6.3 | )% | ||||||
Total Operating Income | $ | 41.1 | $ | 5.2 | $ | 35.9 | 690.4 | % | ||||||
% of Total Sales | 3.2 | % | 0.5 | % |
• | Warehouse, processing and delivery costs increased by $13.4 million of which a $15.6 million increase is associated with the increase for Tube Supply for the period. The Tube Supply impact was offset by a $2.2 million decrease primarily attributed to a decline in workers’ compensation, overtime wage, temporary employee and utilities costs, partially offset by an increase in compensation and benefits expense as a result of headcount, merit and healthcare cost increases and rent expense due to a full year of expense for the expanded facility in Mexico, which was substantially completed in 2011 and rent expense for the new facility in Trafford Park, United Kingdom during 2012; |
• | Sales, general and administrative costs increased by $1.6 million of which a $9.8 million increase is associated with the increase for Tube Supply for the period. The net impact of the CEO transition costs of $0.6 million and an increase to bad debt reserves for customer bankruptcies of $0.8 million were included in the 2012 results. The 2011 results include a $0.9 million charge for export penalties related to product shipments that occurred from 2005 to 2008 and $4.3 million for charges related to the acquisition of Tube Supply. The remaining decrease of $4.6 million is primarily attributed to a decline incentive compensation and other compensation and benefits costs, partially offset by an increase in workers' compensation and outside services costs; and |
• | Depreciation and amortization expense was $5.4 million higher than 2011 primarily due to the depreciation and amortization of Tube Supply’s fixed and intangible assets acquired in December 2011. |
• | Increase for the non-cash interest charge of $11.6 million associated with the mark-to-market adjustment on the conversion option associated with the convertible notes, which is not deductible for federal income tax purposes; |
• | Increase for interest on senior secured and convertible notes of $31.0 million; and |
• | Increase for amortization of deferred financing fees and debt discount of $1.1 million. |
Year Ended December 31, | Fav / (Unfav) | |||||||||||||
2011 | 2010 | $ Change | % Change | |||||||||||
Net Sales | ||||||||||||||
Metals | $ | 1,014.2 | $ | 841.1 | $ | 173.1 | 20.6 | % | ||||||
Plastics | 118.2 | 102.6 | 15.6 | 15.2 | % | |||||||||
Total Net Sales | $ | 1,132.4 | $ | 943.7 | $ | 188.7 | 20.0 | % | ||||||
Cost of Materials | ||||||||||||||
Metals | $ | 763.0 | $ | 631.1 | $ | (131.9 | ) | (20.9 | )% | |||||
% of Metals Sales | 75.2 | % | 75.0 | % | ||||||||||
Plastics | 82.6 | 69.8 | (12.8 | ) | (18.3 | )% | ||||||||
% of Plastics Sales | 69.9 | % | 68.0 | % | ||||||||||
Total Cost of Materials | $ | 845.6 | $ | 700.9 | $ | (144.7 | ) | (20.6 | )% | |||||
% of Total Sales | 74.7 | % | 74.3 | % | ||||||||||
Operating Costs and Expenses | ||||||||||||||
Metals | $ | 237.7 | $ | 215.5 | $ | (22.2 | ) | (10.3 | )% | |||||
Plastics | 32.7 | 29.3 | (3.4 | ) | (11.6 | )% | ||||||||
Other | 11.2 | 7.4 | (3.8 | ) | (51.4 | )% | ||||||||
Total Operating Costs & Expenses | $ | 281.6 | $ | 252.2 | $ | (29.4 | ) | (11.7 | )% | |||||
% of Total Sales | 24.9 | % | 26.7 | % | ||||||||||
Operating (Loss) Income | ||||||||||||||
Metals | $ | 13.5 | $ | (5.5 | ) | $ | 19.0 | 345.5 | % | |||||
% of Metals Sales | 1.3 | % | (0.7 | )% | ||||||||||
Plastics | 2.9 | 3.6 | (0.7 | ) | (19.4 | )% | ||||||||
% of Plastics Sales | 2.5 | % | 3.5 | % | ||||||||||
Other | (11.2 | ) | (7.4 | ) | (3.8 | ) | (51.4 | )% | ||||||
Total Operating (Loss) | $ | 5.2 | $ | (9.3 | ) | $ | 14.5 | 155.9 | % | |||||
% of Total Sales | 0.5 | % | (1.0 | )% |
• | Warehouse, processing and delivery costs increased by $11.6 million of which $4.1 million is due to increased compensation and benefits expenses as a result of headcount, merit and healthcare cost increases and $7.2 million is the result of increases in charges associated with higher sales volumes, such as warehouse, packing and shipping supplies, repairs and maintenance, utilities, outside services, overtime wages and temporary help. The warehouse, processing and delivery cost increase associated with Tube Supply for the two-week period ended December 31, 2011 amounted to $0.3 million; |
• | Sales, general and administrative costs increased by $17.9 million. The increase is primarily comprised of $4.3 million of direct acquisition-related costs, $7.1 million as a result of headcount, merit and healthcare cost increases and a $0.9 million charge for export penalties related to product shipments that occurred from 2005 to 2008 and in 2011. The sales, general and administrative cost increase associated with Tube Supply for the two-week period ended December 31, 2011 amounted to $0.3 million. The balance of the difference relates other administrative expenses including training, travel and insurance; and |
• | Depreciation and amortization expense decreased $0.1 million in 2011 compared to 2010. The depreciation and amortization expense for Tube Supply for the two-week period ended December 31, 2011 amounted to $0.3 million. |
• | Non-cash interest charge of $4.0 million associated with the mark-to-market adjustment for the derivative liability component of the convertible notes, which is not deductible for federal income tax purposes; |
• | Non-cash interest charge of $0.2 million for the amortization of new debt origination fees; |
• | Interest on new debt of $1.6 million; and |
• | Underwriting fees of $3.4 million associated with the debt financing. |
• | During 2012, cash receipts from customers exceeded net sales resulting in a $44.6 million cash flow source due to a decrease in accounts receivable compared to a $26.4 million cash flow use due to an increase in accounts receivable for 2011. Net sales increased 12.2% from 2011. Average receivable days outstanding was 49.0 days for 2012 and 50.3 for 2011. |
• | During 2012, inventory purchases exceeded sales of inventory resulting in a $29.3 million cash flow use due to an increase in inventory compared to a $39.4 million cash flow use due to an increase in inventory in 2011. Average days sales in inventory was 187.0 days for 2012 verses 128.5 days for 2011. |
• | During 2012, cash paid for inventories and other goods and services exceeded purchases resulting in a $38.0 million cash flow use due to a net decrease in accounts payable and accrued liabilities compared to a $9.7 million cash flow source due to a net increase in accounts payable and accrued liabilities for 2011. |
• | The Company received its 2010 federal income tax refund of approximately $2.0 million during February 2012 and its 2009 federal income tax refund of approximately $6.3 million during January 2011. |
Payments Due In | Total | Less Than One Year | One to Three Years | Three to Five Years | More Than Five Years | ||||||||||||||
Long-term debt obligations (excluding capital lease obligations) | $ | 322.0 | $ | — | $ | 39.5 | $ | 282.5 | $ | — | |||||||||
Interest payments on debt obligations (a) | 137.4 | 33.6 | 67.1 | 36.7 | — | ||||||||||||||
Capital lease obligations | 1.4 | 0.4 | 0.8 | 0.2 | — | ||||||||||||||
Operating lease obligations | 76.7 | 14.4 | 21.5 | 16.7 | 24.1 | ||||||||||||||
Purchase obligations (b) | 333.5 | 222.6 | 110.9 | — | — | ||||||||||||||
Other (c) | 8.1 | 8.1 | — | — | — | ||||||||||||||
Total | $ | 879.1 | $ | 279.1 | $ | 239.8 | $ | 336.1 | $ | 24.1 |
a) | Interest payments on debt obligations represent interest on all Company debt outstanding as of December 31, 2012. The interest payment amounts related to the variable rate component of the Company’s debt assume that interest will be paid at the rates prevailing at December 31, 2012. Future interest rates may change, and therefore, actual interest payments could differ from those disclosed in the table above. |
b) | Purchase obligations consist of raw material purchases made in the normal course of business. The Company has contracts to purchase minimum quantities of material with certain suppliers. For each contractual purchase obligation, the Company generally has a purchase agreement from its customer for the same amount of material over the same time period. |
c) | ‘Other’ is comprised of deferred revenues that represent commitments to deliver products and obligations related to recognizing and measuring tax positions taken or expected to be taken in a tax return that directly or indirectly affect amounts reported in financial statements. The uncertain tax positions included in the Company’s obligations are related to temporary differences and uncertain tax positions where the Company anticipates a high probability of settlement within a given timeframe. The years for which the temporary differences related to the uncertain tax positions will reverse have been estimated in scheduling the obligations within the table. |
2012 | 2011 | ||||
Discount rate | 4.25 | % | 5.25 | % | |
Expected long-term rate of return on plan assets | 5.75 | % | 6.50 | % |
Impact on 2012 Expenses - increase (decrease) | |
50 basis point decrease in discount rate | $(1.1) |
50 basis point increase in discount rate | $1.1 |
50 basis point decrease in expected return on assets | $0.9 |
Aerospace | Oil & Gas | ||||
Discount rate | 15.0 | % | 14.0 | % | |
5-year CAGR | 4.2 | % | 1.5 | % | |
Terminal growth rate | 3.0 | % | 3.0 | % |
Aerospace | Oil & Gas | ||||
Discount rate | 16.5 | % | 14.8 | % | |
EBITDA multiple | 5.8 | 5.6 |
2010 | ||
Expected volatility | 58.5 | % |
Risk-free interest rate | 2.3 | % |
Expected life (in years) | 5.5 | |
Expected dividend yield | 1.2 | % |
2012 | 2011 | 2010 | |||||
Expected volatility | 85.0 | % | 62.0 | % | 61.6 | % | |
Risk-free interest rate | 0.40 | % | 1.10 | % | 1.45 | % | |
Expected life (in years) | 2.81 | 2.84 | 2.80 | ||||
Expected dividend yield | — | — | — |
2012 | 2011 | 2010 | ||||||
Expected volatility | 60.7 | % | 60.7 | % | 60.7 | % | ||
Risk-free interest rate | 0.34 | % | 0.34 | % | 0.34 | % | ||
Expected life (in years) | 2.21 | 1.21 | 0.21 | |||||
Expected dividend yield | — | — | — |
Consolidated Statements of Operations and Comprehensive Loss | |||||||||||
Year Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Net sales | $ | 1,270,368 | $ | 1,132,366 | $ | 943,706 | |||||
Costs and expenses: | |||||||||||
Cost of materials (exclusive of depreciation and amortization) | 927,287 | 845,609 | 700,854 | ||||||||
Warehouse, processing and delivery expense | 148,256 | 134,898 | 123,318 | ||||||||
Sales, general and administrative expense | 127,813 | 126,193 | 108,223 | ||||||||
Depreciation and amortization expense | 25,867 | 20,472 | 20,649 | ||||||||
Operating income (loss) | 41,145 | 5,194 | (9,338 | ) | |||||||
Interest expense, net | (41,090 | ) | (9,663 | ) | (4,988 | ) | |||||
Interest expense - unrealized loss on debt conversion option | (15,597 | ) | (3,991 | ) | — | ||||||
Loss on extinguishment of debt | — | (6,153 | ) | — | |||||||
Loss before income taxes and equity in earnings of joint venture | (15,542 | ) | (14,613 | ) | (14,326 | ) | |||||
Income taxes | (1,430 | ) | 1,126 | 3,101 | |||||||
Loss before equity in earnings of joint venture | (16,972 | ) | (13,487 | ) | (11,225 | ) | |||||
Equity in earnings of joint venture | 7,224 | 11,727 | 5,585 | ||||||||
Net loss | (9,748 | ) | (1,760 | ) | (5,640 | ) | |||||
Basic loss per share | $ | (0.42 | ) | $ | (0.08 | ) | $ | (0.25 | ) | ||
Diluted loss per share | $ | (0.42 | ) | $ | (0.08 | ) | $ | (0.25 | ) | ||
Dividends per common share | $ | — | $ | — | $ | — | |||||
Comprehensive loss: | |||||||||||
Foreign currency translation gains (losses) | $ | 2,369 | $ | (941 | ) | $ | (536 | ) | |||
Unrecognized pension and postretirement benefit costs, net of tax benefit of $2,312, $1,965 and $1,116 | (3,616 | ) | (3,071 | ) | (1,748 | ) | |||||
Other comprehensive loss | (1,247 | ) | (4,012 | ) | (2,284 | ) | |||||
Net loss | (9,748 | ) | (1,760 | ) | (5,640 | ) | |||||
Comprehensive loss | $ | (10,995 | ) | $ | (5,772 | ) | $ | (7,924 | ) |
Consolidated Balance Sheets | |||||||
December 31, | |||||||
2012 | 2011 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 21,607 | $ | 30,524 | |||
Accounts receivable, less allowances of $3,529 and $3,584 | 138,311 | 181,036 | |||||
Inventories, principally on last-in first-out basis (replacement cost higher by $139,940 and $138,882) | 303,772 | 272,039 | |||||
Prepaid expenses and other current assets | 15,092 | 10,382 | |||||
Income tax receivable | 7,596 | 8,287 | |||||
Total current assets | 486,378 | 502,268 | |||||
Investment in joint venture | 38,854 | 36,460 | |||||
Goodwill | 70,300 | 69,901 | |||||
Intangible assets | 82,477 | 93,813 | |||||
Prepaid pension cost | 12,891 | 15,956 | |||||
Other assets | 18,266 | 21,784 | |||||
Property, plant and equipment, at cost | |||||||
Land | 5,195 | 5,194 | |||||
Building | 52,884 | 52,434 | |||||
Machinery and equipment | 178,664 | 172,833 | |||||
Property, plant and equipment, at cost | 236,743 | 230,461 | |||||
Less—accumulated depreciation | (157,103 | ) | (148,320 | ) | |||
Property, plant and equipment, net | 79,640 | 82,141 | |||||
Total assets | $ | 788,806 | $ | 822,323 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 67,990 | $ | 116,874 | |||
Accrued payroll and employee benefits | 11,749 | 14,792 | |||||
Accrued liabilities | 24,815 | 19,036 | |||||
Income taxes payable | 1,563 | 1,884 | |||||
Current portion of long-term debt | 415 | 192 | |||||
Short term debt | 500 | 500 | |||||
Total current liabilities | 107,032 | 153,278 | |||||
Long-term debt, less current portion | 296,154 | 314,240 | |||||
Deferred income taxes | 32,350 | 25,650 | |||||
Other non-current liabilities | 5,279 | 7,252 | |||||
Pension and post retirement benefit obligations | 10,651 | 9,624 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity | |||||||
Preferred stock, $0.01 par value—9,988 shares authorized (including 400 Series B Junior Preferred $0.00 par value shares); no shares issued and outstanding at December 31, 2012 and December 31, 2011 | — | — | |||||
Common stock, $0.01 par value—60,000 shares authorized and 23,211 shares issued and 23,152 outstanding at December 31, 2012; 30,000 shares authorized and 23,159 shares issued and 23,010 outstanding at December 31, 2011 | 232 | 232 | |||||
Additional paid-in capital | 219,619 | 184,596 | |||||
Retained earnings | 139,239 | 148,987 | |||||
Accumulated other comprehensive loss | (21,071 | ) | (19,824 | ) | |||
Treasury stock, at cost—59 shares at December 31, 2012 and 149 shares at December 31, 2011 | (679 | ) | (1,712 | ) | |||
Total stockholders’ equity | 337,340 | 312,279 | |||||
Total liabilities and stockholders’ equity | $ | 788,806 | $ | 822,323 |
Consolidated Statements of Cash Flows | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Operating activities: | |||||||||||
Net loss | $ | (9,748 | ) | $ | (1,760 | ) | $ | (5,640 | ) | ||
Adjustments to reconcile net loss to net cash from (used in) operating activities: | |||||||||||
Depreciation and amortization | 25,867 | 20,472 | 20,649 | ||||||||
Amortization of deferred gain | (1,619 | ) | (503 | ) | (890 | ) | |||||
Amortization of deferred financing costs and debt discount | 6,232 | 1,662 | 685 | ||||||||
Loss on sale of fixed assets | 354 | 120 | 391 | ||||||||
Unrealized loss on debt conversion option | 15,597 | 3,991 | — | ||||||||
Unrealized losses on commodity hedges | 163 | 2,331 | — | ||||||||
Equity in earnings of joint venture | (7,224 | ) | (11,727 | ) | (5,585 | ) | |||||
Dividends from joint venture | 4,729 | 3,117 | 1,260 | ||||||||
Deferred tax (benefit) provision | (1,284 | ) | (3,333 | ) | (11,386 | ) | |||||
Share-based compensation expense | 2,277 | 4,349 | 2,411 | ||||||||
Excess tax benefits from share-based payment arrangements | (90 | ) | (301 | ) | (219 | ) | |||||
Increase (decrease) from changes in, net of acquisition: | |||||||||||
Accounts receivable | 44,570 | (26,446 | ) | (22,521 | ) | ||||||
Inventories | (29,340 | ) | (39,435 | ) | 39,686 | ||||||
Prepaid expenses and other current assets | (2,397 | ) | (3,408 | ) | (1,718 | ) | |||||
Other assets | (480 | ) | 188 | 399 | |||||||
Prepaid pension costs | (2,863 | ) | (2,412 | ) | (1,530 | ) | |||||
Accounts payable | (42,560 | ) | 9,910 | (1,866 | ) | ||||||
Accrued payroll and employee benefits | (2,974 | ) | (2,470 | ) | 5,827 | ||||||
Income taxes payable and receivable | 454 | (820 | ) | 11,536 | |||||||
Accrued liabilities | 4,514 | (184 | ) | 1,586 | |||||||
Postretirement benefit obligations and other liabilities | 1,173 | 371 | 1,287 | ||||||||
Net cash from (used in) operating activities | 5,351 | (46,288 | ) | 34,362 | |||||||
Investing activities: | |||||||||||
Acquisition/Investment of businesses, net of cash acquired | (6,472 | ) | (174,244 | ) | — | ||||||
Capital expenditures | (11,121 | ) | (11,744 | ) | (7,572 | ) | |||||
Proceeds from sale of fixed assets | 153 | 226 | 4 | ||||||||
Insurance proceeds | — | 573 | 125 | ||||||||
Net cash used in investing activities | (17,440 | ) | (185,189 | ) | (7,443 | ) | |||||
Financing activities: | |||||||||||
Short-term (repayments) borrowings, net | (27 | ) | 653 | (13,720 | ) | ||||||
Net (repayments) borrowings on previously existing revolving lines of credit | — | (26,403 | ) | 2,324 | |||||||
Proceeds from long-term debt, including new revolving credit facility | 767,090 | 320,476 | — | ||||||||
Repayments of long-term debt, including new revolving credit facility | (762,887 | ) | (53,212 | ) | (7,754 | ) | |||||
Payment of debt issue costs | (1,503 | ) | (16,633 | ) | — | ||||||
Exercise of stock options | 146 | 356 | 566 | ||||||||
Excess tax benefits from share-based payment arrangements | 90 | 301 | 219 | ||||||||
Net cash from (used in) financing activities | 2,909 | 225,538 | (18,365 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents | 263 | (253 | ) | (149 | ) | ||||||
Net (decrease) increase in cash and cash equivalents | (8,917 | ) | (6,192 | ) | 8,405 | ||||||
Cash and cash equivalents—beginning of year | 30,524 | 36,716 | 28,311 | ||||||||
Cash and cash equivalents—end of year | $ | 21,607 | $ | 30,524 | $ | 36,716 |
Consolidated Statements of Stockholders' Equity | |||||||||||||||||||||||||||||||||
Common Shares | Treasury Shares | Preferred Stock | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Total | |||||||||||||||||||||||||
Balance at January 1, 2010 | 23,115 | (209 | ) | $ | — | $ | 230 | $ | (3,010 | ) | $ | 178,129 | $ | 156,387 | $ | (13,528 | ) | $ | 318,208 | ||||||||||||||
Net loss | (5,640 | ) | (5,640 | ) | |||||||||||||||||||||||||||||
Foreign currency translation | (536 | ) | (536 | ) | |||||||||||||||||||||||||||||
Defined benefit pension liability adjustments, net of tax benefit of $1,116 | (1,748 | ) | (1,748 | ) | |||||||||||||||||||||||||||||
Long-term incentive plan | 1,278 | 1,278 | |||||||||||||||||||||||||||||||
Exercise of stock options and other | 34 | 46 | 1 | 784 | 1,112 | 1,897 | |||||||||||||||||||||||||||
Balance at December 31, 2010 | 23,149 | (163 | ) | $ | — | $ | 231 | $ | (2,226 | ) | $ | 180,519 | $ | 150,747 | $ | (15,812 | ) | $ | 313,459 | ||||||||||||||
Net loss | (1,760 | ) | (1,760 | ) | |||||||||||||||||||||||||||||
Foreign currency translation | (941 | ) | (941 | ) | |||||||||||||||||||||||||||||
Defined benefit pension liability adjustments, net of tax benefit of $1,965 | (3,071 | ) | (3,071 | ) | |||||||||||||||||||||||||||||
Long-term incentive plan | 3,260 | 3,260 | |||||||||||||||||||||||||||||||
Exercise of stock options and other | 10 | 14 | 1 | 514 | 817 | 1,332 | |||||||||||||||||||||||||||
Balance at December 31, 2011 | 23,159 | (149 | ) | $ | — | $ | 232 | $ | (1,712 | ) | $ | 184,596 | $ | 148,987 | $ | (19,824 | ) | $ | 312,279 | ||||||||||||||
Net loss | (9,748 | ) | — | (9,748 | ) | ||||||||||||||||||||||||||||
Foreign currency translation | 2,369 | 2,369 | |||||||||||||||||||||||||||||||
Defined benefit pension liability adjustments, net of tax benefit of $2,312 | (3,616 | ) | (3,616 | ) | |||||||||||||||||||||||||||||
Embedded conversion option, net of tax benefit of $8,285 | 33,752 | 33,752 | |||||||||||||||||||||||||||||||
Long-term incentive plan | 1,592 | 1,592 | |||||||||||||||||||||||||||||||
Exercise of stock options and other | 52 | 90 | 1,033 | (321 | ) | 712 | |||||||||||||||||||||||||||
Balance at December 31, 2012 | 23,211 | (59 | ) | $ | — | $ | 232 | $ | (679 | ) | $ | 219,619 | $ | 139,239 | $ | (21,071 | ) | $ | 337,340 |
2012 | 2011 | 2010 | |||||||||
Balance, beginning of year | $ | 3,584 | $ | 3,848 | $ | 4,195 | |||||
Add Provision charged to expense | 1,420 | 523 | 777 | ||||||||
Recoveries | 90 | 140 | 186 | ||||||||
Other | — | 157 | — | ||||||||
Less Charges against allowance | (1,565 | ) | (1,084 | ) | (1,310 | ) | |||||
Balance, end of year | $ | 3,529 | $ | 3,584 | $ | 3,848 |
• | Warehouse, processing and delivery expenses, including occupancy costs, compensation and employee benefits for warehouse personnel, processing, shipping and handling costs; |
• | Sales expenses, including compensation and employee benefits for sales personnel; |
• | General and administrative expenses, including compensation for executive officers and general management, expenses for professional services primarily attributable to accounting and legal advisory services, bad debt expenses, data communication, computer hardware and maintenance and foreign currency gain or loss; and |
• | Depreciation and amortization expenses, including depreciation for all owned property and equipment, and amortization of various intangible assets. |
Year Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Non-cash investing and financing activities: | |||||||||||
Capital expenditures financed by accounts payable | $ | 479 | $ | 1,123 | $ | 100 | |||||
Capital lease obligations | 1,009 | — | — | ||||||||
Deferred debt origination fees | — | 886 | — | ||||||||
Additional purchase price paid in 2012 for Tube Supply acquisition | — | 6,472 | — | ||||||||
Cash paid during the year for: | |||||||||||
Interest | 34,051 | 7,234 | 4,392 | ||||||||
Income taxes | 5,557 | 9,555 | 1,631 | ||||||||
Cash received during the year for: | |||||||||||
Income tax refunds | 3,184 | 6,724 | 4,430 |
Buildings and building improvements | 3 – 40 years |
Plant equipment | 3 – 25 years |
Furniture and fixtures | 2 – 10 years |
Vehicles and office equipment | 3 – 7 years |
2012 | 2011 | 2010 | |||||||||
Numerator: | |||||||||||
Net loss | $ | (9,748 | ) | $ | (1,760 | ) | $ | (5,640 | ) | ||
Denominator: | |||||||||||
Denominator for basic loss per share: | |||||||||||
Weighted average common shares outstanding | 22,993 | 22,983 | 22,708 | ||||||||
Effect of dilutive securities: | |||||||||||
Outstanding common stock equivalents | — | — | — | ||||||||
Denominator for diluted loss per share | 22,993 | 22,983 | 22,708 | ||||||||
Basic loss per share | $ | (0.42 | ) | $ | (0.08 | ) | $ | (0.25 | ) | ||
Diluted loss per share | $ | (0.42 | ) | $ | (0.08 | ) | $ | (0.25 | ) | ||
Excluded outstanding share-based awards having an anti-dilutive effect | 994 | 757 | 471 |
Current assets | $ | 134,817 | |
Property, plant and equipment, net | 6,767 | ||
Other assets | 346 | ||
Trade name | 7,700 | ||
Customer relationships | 48,800 | ||
Non-compete agreements | 1,000 | ||
Developed technology | 1,400 | ||
Goodwill | 19,637 | ||
Total assets acquired | 220,467 | ||
Current liabilities | 33,211 | ||
Long-term liabilities | 2,871 | ||
Total liabilities assumed | 36,082 | ||
Total purchase price | $ | 184,385 |
Year ended December 31, (Unaudited) | |||||||
2011 | 2010 | ||||||
Pro forma net sales | $ | 1,332,176 | $ | 1,069,564 | |||
Pro forma net income (loss) | 7,033 | (24,268 | ) | ||||
Pro forma basic net income (loss) per share | $ | 0.31 | $ | (1.06 | ) | ||
Pro forma diluted net income (loss) per share | 0.28 | (1.06 | ) |
2012 | 2011 | 2010 | |||||||||
Net sales | |||||||||||
United States | $ | 988,161 | $ | 895,165 | $ | 757,052 | |||||
All other countries | 282,207 | 237,201 | 186,654 | ||||||||
Total | $ | 1,270,368 | $ | 1,132,366 | $ | 943,706 | |||||
Long-lived assets | |||||||||||
United States | $ | 68,253 | $ | 72,138 | |||||||
All other countries | 11,387 | 10,003 | |||||||||
Total | $ | 79,640 | $ | 82,141 |
Net Sales | Operating Income (Loss) | Total Assets | Capital Expenditures | Depreciation & Amortization | |||||||||||||||
2012 | |||||||||||||||||||
Metals segment (a) | $ | 1,143,884 | $ | 49,822 | $ | 693,803 | $ | 9,819 | $ | 24,480 | |||||||||
Plastics segment | 126,484 | 3,188 | 56,149 | 1,831 | 1,387 | ||||||||||||||
Other (b) | — | (11,865 | ) | 38,854 | — | — | |||||||||||||
Consolidated | $ | 1,270,368 | $ | 41,145 | $ | 788,806 | $ | 11,650 | $ | 25,867 | |||||||||
2011 | |||||||||||||||||||
Metals segment (a) | $ | 1,014,130 | $ | 13,524 | $ | 729,692 | $ | 10,639 | $ | 19,329 | |||||||||
Plastics segment | 118,236 | 2,860 | 56,171 | 2,228 | 1,143 | ||||||||||||||
Other (b) | — | (11,190 | ) | 36,460 | — | — | |||||||||||||
Consolidated | $ | 1,132,366 | $ | 5,194 | $ | 822,323 | $ | 12,867 | $ | 20,472 | |||||||||
2010 | |||||||||||||||||||
Metals segment | $ | 841,067 | $ | (5,478 | ) | $ | 454,345 | $ | 6,815 | $ | 19,392 | ||||||||
Plastics segment | 102,639 | 3,559 | 47,128 | 757 | 1,257 | ||||||||||||||
Other (b) | — | (7,419 | ) | 27,879 | — | — | |||||||||||||
Consolidated | $ | 943,706 | $ | (9,338 | ) | $ | 529,352 | $ | 7,572 | $ | 20,649 |
2012 | 2011 | 2010 | |||||||||
Operating income (loss) | $ | 41,145 | $ | 5,194 | $ | (9,338 | ) | ||||
Interest expense, net | (41,090 | ) | (9,663 | ) | (4,988 | ) | |||||
Interest expense - unrealized loss on debt conversion option | (15,597 | ) | (3,991 | ) | — | ||||||
Loss on extinguishment of debt | — | (6,153 | ) | — | |||||||
Loss before income taxes and equity in earnings of joint venture | (15,542 | ) | (14,613 | ) | (14,326 | ) | |||||
Equity in earnings of joint venture | 7,224 | 11,727 | 5,585 | ||||||||
Consolidated loss before income taxes | $ | (8,318 | ) | $ | (2,886 | ) | $ | (8,741 | ) |
Capital | Operating | ||||||
2013 | $ | 415 | $ | 14,401 | |||
2014 | 396 | 11,375 | |||||
2015 | 392 | 10,091 | |||||
2016 | 197 | 8,702 | |||||
2017 | — | 8,007 | |||||
Later years | — | 24,130 | |||||
Total future minimum rental payments | $ | 1,400 | $ | 76,706 |
2012 | 2011 | 2010 | |||||||||
Service cost | $ | 608 | $ | 539 | $ | 623 | |||||
Interest cost | 6,832 | 7,393 | 7,456 | ||||||||
Expected return on assets | (9,855 | ) | (10,054 | ) | (9,342 | ) | |||||
Amortization of prior service cost | 324 | 324 | 231 | ||||||||
Amortization of actuarial loss | 594 | 229 | 237 | ||||||||
Net periodic pension credit | $ | (1,497 | ) | $ | (1,569 | ) | $ | (795 | ) |
2012 | 2011 | ||||||
Change in projected benefit obligation: | |||||||
Projected benefit obligation at beginning of year | $ | 164,407 | $ | 144,235 | |||
Service cost | 608 | 539 | |||||
Interest cost | 6,832 | 7,393 | |||||
Benefit payments | (6,558 | ) | (6,151 | ) | |||
Actuarial loss | 15,848 | 18,391 | |||||
Projected benefit obligation at end of year | $ | 181,137 | $ | 164,407 | |||
Change in plan assets: | |||||||
Fair value of plan assets at beginning of year | $ | 174,938 | $ | 157,996 | |||
Actual return on assets | 18,463 | 22,867 | |||||
Employer contributions | 307 | 226 | |||||
Benefit payments | (6,558 | ) | (6,151 | ) | |||
Fair value of plan assets at end of year | $ | 187,150 | $ | 174,938 | |||
Funded status – net prepaid | $ | 6,013 | $ | 10,531 | |||
Amounts recognized in the consolidated balance sheets consist of: | |||||||
Prepaid pension cost | $ | 12,891 | $ | 15,956 | |||
Accrued liabilities | (309 | ) | (219 | ) | |||
Pension benefit obligations | (6,569 | ) | (5,206 | ) | |||
Net amount recognized | $ | 6,013 | $ | 10,531 | |||
Pre-tax components of accumulated other comprehensive income (loss): | |||||||
Unrecognized actuarial loss | $ | (29,778 | ) | $ | (23,131 | ) | |
Unrecognized prior service cost | (1,617 | ) | (1,942 | ) | |||
Total | $ | (31,395 | ) | $ | (25,073 | ) | |
Accumulated benefit obligation | $ | 180,551 | $ | 163,874 |
2012 | 2011 | |||
Discount rate | 3.50 - 3.75% | 4.25 | % | |
Projected annual salary increases | 0 - 3.00% | 0 - 3.00% |
2012 | 2011 | 2010 | ||||||
Discount rate | 4.25 | % | 5.25 | % | 5.75 | % | ||
Expected long-term rate of return on plan assets | 5.75 | % | 6.50 | % | 6.50 | % | ||
Projected annual salary increases | 0 - 3.00% | 0 - 3.00% | 0 - 3.00% |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Fixed income securities (1) | $ | 10,562 | $ | 176,610 | $ | — | $ | 187,172 | |||||||
Accounts payable – pending trades | (22 | ) | |||||||||||||
Total | $ | 187,150 |
(1) | Fixed income securities are comprised of corporate bonds (75%), government bonds (16%), government agencies securities (6%) and other fixed income securities (3%). |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Fixed income securities (2) | $ | 9,949 | $ | 172,694 | $ | — | $ | 182,643 | |||||||
Accounts payable – pending trades | (7,705 | ) | |||||||||||||
Total | $ | 174,938 |
(2) | Fixed income securities are comprised of corporate bonds (74%), government bonds (16%), government agencies securities (7%) and other fixed income securities (3%). |
2013 | $ | 7,974 | |
2014 | 8,213 | ||
2015 | 8,828 | ||
2016 | 9,115 | ||
2017 | 9,607 | ||
2018 — 2022 | 51,839 |
2012 | 2011 | 2010 | |||||||||
Service cost | $ | 161 | $ | 164 | $ | 177 | |||||
Interest cost | 170 | 222 | 219 | ||||||||
Amortization of prior service cost | — | — | 29 | ||||||||
Amortization of actuarial gain | — | — | (16 | ) | |||||||
Net periodic postretirement benefit cost | $ | 331 | $ | 386 | $ | 409 |
2012 | 2011 | ||||||
Change in accumulated postretirement benefit obligations: | |||||||
Accumulated postretirement benefit obligation at beginning of year | $ | 4,635 | $ | 4,339 | |||
Service cost | 161 | 164 | |||||
Interest cost | 170 | 222 | |||||
Benefit payments | (193 | ) | (100 | ) | |||
Actuarial (gain) loss | (394 | ) | 10 | ||||
Accumulated postretirement benefit obligation at end of year | $ | 4,379 | $ | 4,635 | |||
Funded status – net liability | $ | 4,379 | $ | 4,635 | |||
Amounts recognized in the consolidated balance sheets consist of: | |||||||
Accrued liabilities | $ | (296 | ) | $ | (218 | ) | |
Postretirement benefit obligations | (4,083 | ) | (4,417 | ) | |||
Net amount recognized | $ | (4,379 | ) | $ | (4,635 | ) | |
Pre-tax components of accumulated other comprehensive income (loss): | |||||||
Unrecognized actuarial gain | $ | 661 | $ | 266 | |||
Total | $ | 661 | $ | 266 |
2012 | 2011 | 2010 | ||||||
Medical cost trend rate | 8.00 | % | 8.50 | % | 8.00 | % | ||
Ultimate medical cost trend rate | 5.00 | % | 5.00 | % | 5.00 | % | ||
Year ultimate medical cost trend rate will be reached | 2019 | 2018 | 2013 |
2012 | 2011 | 2010 | ||||||
Net periodic postretirement benefit costs | 3.75 | % | 5.25 | % | 5.75 | % | ||
Accumulated postretirement benefit obligations | 3.50 | % | 3.75 | % | 5.25 | % |
2012 | 2011 | 2010 | |||||||||
Supplemental contributions and 401(k) match | $ | 5,260 | $ | 4,414 | $ | 1,634 |
2012 | 2011 | 2010 | |||||||||
Equity in earnings of joint venture | $ | 7,224 | $ | 11,727 | $ | 5,585 | |||||
Investment in joint venture | 38,854 | 36,460 | 27,879 | ||||||||
Sales to joint venture | 455 | 362 | 973 | ||||||||
Purchases from joint venture | 695 | 884 | 223 |
2012 | 2011 | 2010 | |||||||||
Revenues | $ | 257,776 | $ | 269,657 | $ | 188,107 | |||||
Net income | 14,603 | 23,643 | 11,035 | ||||||||
Current assets | 92,421 | 111,263 | 71,611 | ||||||||
Non-current assets | 26,099 | 22,979 | 17,880 | ||||||||
Current liabilities | 14,315 | 59,952 | 32,828 | ||||||||
Non-current liabilities | 27,845 | 3,089 | 2,872 | ||||||||
Members’ equity | 76,360 | 71,199 | 53,791 | ||||||||
Capital expenditures | 5,259 | 6,736 | 2,271 | ||||||||
Depreciation and amortization | 2,034 | 1,603 | 1,720 |
2012 | 2011 | 2010 | |||||||||
U.S | $ | (28,398 | ) | $ | (26,321 | ) | $ | (19,420 | ) | ||
Non-U.S. | 12,856 | 11,708 | 5,094 |
2012 | 2011 | 2010 | |||||||||
Federal | |||||||||||
current | $ | (842 | ) | $ | (1,204 | ) | $ | 6,823 | |||
deferred | (1,542 | ) | (2,041 | ) | (11,270 | ) | |||||
State | |||||||||||
current | 629 | 461 | 17 | ||||||||
deferred | 401 | (1,218 | ) | (186 | ) | ||||||
Foreign | |||||||||||
current | 2,927 | 2,970 | 1,464 | ||||||||
deferred | (143 | ) | (94 | ) | 51 | ||||||
$ | 1,430 | $ | (1,126 | ) | $ | (3,101 | ) |
2012 | 2011 | 2010 | |||||||||
Federal income tax at statutory rates | $ | (5,439 | ) | $ | (5,115 | ) | $ | (5,014 | ) | ||
State income taxes, net of federal income tax benefits | 22 | (1,007 | ) | (313 | ) | ||||||
Permanent items: | |||||||||||
Dividends received deductions | (766 | ) | — | — | |||||||
Convertible debt mark-to-market - non-deductible | 6,206 | 1,551 | |||||||||
Other permanent differences | 480 | 662 | 326 | ||||||||
Federal and state income tax on joint venture | 2,766 | 4,478 | 2,158 | ||||||||
Rate differential on foreign income | (1,680 | ) | (726 | ) | (755 | ) | |||||
Unrecognized tax benefits | (557 | ) | (576 | ) | 424 | ||||||
Audit settlements | 218 | — | — | ||||||||
State rate changes | (68 | ) | (478 | ) | — | ||||||
Other | 248 | 85 | 73 | ||||||||
Income tax expense (benefit) | $ | 1,430 | $ | (1,126 | ) | $ | (3,101 | ) | |||
Effective income tax expense rate | 9.2 | % | 7.7 | % | 21.7 | % |
2012 | 2011 | ||||||
Deferred tax assets: | |||||||
Postretirement benefits | $ | 3,830 | $ | 3,675 | |||
Deferred compensation | 1,940 | 1,916 | |||||
Deferred gain | — | 271 | |||||
Impairments | 1,452 | 1,311 | |||||
Alternative minimum tax and net operating loss carryforward | 3,487 | 2,635 | |||||
Total deferred tax assets | $ | 10,709 | $ | 9,808 | |||
Deferred tax liabilities: | |||||||
Depreciation | $ | 8,032 | $ | 8,307 | |||
Inventory | 1,146 | 1,695 | |||||
Pension | 4,240 | 5,742 | |||||
Intangible assets and goodwill | 24,224 | 16,486 | |||||
Other, net | 1,665 | 1,475 | |||||
Total deferred tax liabilities | 39,307 | 33,705 | |||||
Net deferred tax liabilities | $ | 28,598 | $ | 23,897 |
Amount | Expiration Period | ||||
Federal | $ | — | |||
State | 19,499 | 2015 to 2032 | |||
Foreign | 2,473 | (a) |
2012 | 2011 | 2010 | |||||||||
Balance as of January 1 | $ | 861 | $ | 1,465 | $ | 726 | |||||
Increases (decreases) in unrecognized tax benefits: | |||||||||||
Due to tax positions taken in prior years | — | 91 | 729 | ||||||||
Due to tax positions taken during the current year | 45 | 60 | 44 | ||||||||
Due to settlement with tax authorities | (757 | ) | — | (34 | ) | ||||||
Due to expiration of statute | (44 | ) | (755 | ) | — | ||||||
Balance as of December 31 | $ | 105 | $ | 861 | $ | 1,465 |
U.S. Federal | 2010 to 2011 |
U.S. States | 2008 to 2011 |
Foreign | 2007 to 2011 |
2012 | 2011 | ||||||||||||||||||||||
Metals Segment | Plastics Segment | Total | Metals Segment | Plastics Segment | Total | ||||||||||||||||||
Balance as of January 1 | |||||||||||||||||||||||
Goodwill | $ | 117,145 | $ | 12,973 | $ | 130,118 | $ | 97,354 | $ | 12,973 | $ | 110,327 | |||||||||||
Accumulated impairment losses | (60,217 | ) | — | (60,217 | ) | (60,217 | ) | — | (60,217 | ) | |||||||||||||
56,928 | 12,973 | 69,901 | 37,137 | 12,973 | 50,110 | ||||||||||||||||||
Acquisition of Tube Supply | — | — | — | 19,637 | — | 19,637 | |||||||||||||||||
Currency valuation | 399 | — | 399 | 154 | — | 154 | |||||||||||||||||
Balance as of December 31 | |||||||||||||||||||||||
Goodwill | 117,544 | 12,973 | 130,517 | 117,145 | 12,973 | 130,118 | |||||||||||||||||
Accumulated impairment losses | (60,217 | ) | — | (60,217 | ) | (60,217 | ) | — | (60,217 | ) | |||||||||||||
$ | 57,327 | $ | 12,973 | $ | 70,300 | $ | 56,928 | $ | 12,973 | $ | 69,901 |
2012 | 2011 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||
Customer relationships | $ | 119,118 | $ | 45,317 | $ | 118,567 | $ | 34,960 | |||||||
Non-compete agreements | 3,888 | 3,235 | 3,888 | 2,902 | |||||||||||
Trade names | 8,297 | 1,188 | 8,249 | 410 | |||||||||||
Developed technology | 1,400 | 486 | 1,400 | 19 | |||||||||||
Total | $ | 132,703 | $ | 50,226 | $ | 132,104 | $ | 38,291 |
2013 | $ | 11,775 | |
2014 | 11,742 | ||
2015 | 10,975 | ||
2016 | 10,975 | ||
2017 | 8,951 |
2012 | 2011 | ||||||
SHORT-TERM DEBT | |||||||
Foreign | $ | 500 | $ | 500 | |||
Total short-term debt | 500 | 500 | |||||
LONG-TERM DEBT | |||||||
12.75% Senior Secured Notes due December 15, 2016 | 225,000 | 225,000 | |||||
7.0% Convertible Notes due December 15, 2017 | 57,500 | 57,500 | |||||
New Revolving Credit Facility due December 15, 2015 | 39,500 | 35,500 | |||||
Other, primarily capital leases | 1,400 | 244 | |||||
Total long-term debt | 323,400 | 318,244 | |||||
Plus: derivative liability for conversion feature associated with convertible debt | — | 26,440 | |||||
Less: unamortized discount | (26,831 | ) | (30,252 | ) | |||
Less: current portion | (415 | ) | (192 | ) | |||
Total long-term portion | 296,154 | 314,240 | |||||
TOTAL SHORT-TERM AND LONG-TERM DEBT | $ | 297,069 | $ | 314,932 |
Company's stock price at the end of the period | $ | 14.77 | |
Expected volatility | 22.3 | % | |
Credit spreads | 8.22 | % | |
Risk-free interest rate | 0.36 | % |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
As of December 31, 2012: | |||||||||||||||
Derivative liability for commodity hedges | $ | — | $ | 2,494 | $ | — | $ | 2,494 | |||||||
As of December 31, 2011: | |||||||||||||||
Derivative liability for commodity hedges | $ | — | $ | 2,331 | $ | — | $ | 2,331 | |||||||
Derivative liability for conversion feature associated with convertible debt | — | — | 26,440 | 26,440 |
Derivative liability for conversion feature associated with convertible debt | |||
Fair value as of January 1 | $ | 26,440 | |
Mark-to-market adjustment on conversion feature | 15,597 | ||
Reclassification from long-term debt to additional paid-in capital | (42,037 | ) | |
Fair value as of December 31 | $ | — |
Plan Description | Authorized Shares | |
1995 Directors Stock Option Plan | 188 | |
1996 Restricted Stock and Stock Option Plan | 938 | |
2000 Restricted Stock and Stock Option Plan | 1,200 | |
2004 Restricted Stock, Stock Option and Equity Compensation Plan | 1,350 | |
2008 A. M. Castle & Co. Omnibus Incentive Plan (amended and restated as of April 28, 2011) | 2,750 |
Shares | Units | ||||||||||||
Shares | Weighted-Average Grant Date Fair Value | Units | Weighted- Average Grant Date Fair Value | ||||||||||
Outstanding at January 1, 2012 | 38 | $ | 18.74 | 232 | $ | 14.39 | |||||||
Granted | 73 | $ | 12.22 | 309 | $ | 10.60 | |||||||
Forfeited | (5 | ) | $ | 17.02 | (158 | ) | $ | 12.44 | |||||
Vested | (33 | ) | $ | 18.95 | (85 | ) | $ | 12.45 | |||||
Outstanding at December 31, 2012 | 73 | $ | 12.22 | 298 | $ | 12.05 | |||||||
Expected to vest at December 31, 2012 | 73 | $ | 12.22 | 256 | $ | 12.36 |
2012 | 2011 | 2010 | |||||||||
Grant Date Fair Value per Share | $ | 13.78 | $ | 23.89 | $ | 12.26 | |||||
Expected volatility | 85.0 | % | 62.0 | % | 61.6 | % | |||||
Risk-free interest rate | 0.40 | % | 1.10 | % | 1.45 | % | |||||
Expected life (in years) | 2.81 | 2.84 | 2.80 | ||||||||
Expected dividend yield | — | — | — |
2012 | 2011 | 2010 | |||||||||
Grant Date Fair Value per Share | $ | 16.65 | $ | 10.61 | $ | 5.57 | |||||
Expected volatility | 60.7 | % | 60.7 | % | 60.7 | % | |||||
Risk-free interest rate | 0.34 | % | 0.34 | % | 0.34 | % | |||||
Expected life (in years) | 2.21 | 1.21 | 0.21 | ||||||||
Expected dividend yield | — | — | — |
Plan Year | Grant Date Fair Value | Estimated Number of Performance Shares to be Issued | Maximum Number of Performance Shares that could Potentially be Issued | ||||||
2012 LTC Plan | |||||||||
Market-based performance condition | $ | 13.78 | 172 | 244 | |||||
Market-based performance condition (1) | $ | 16.65 | 41 | 58 | |||||
Non-market-based performance condition | $ | 10.02 | — | 244 | |||||
Non-market-based performance condition (1) | $ | 12.74 | — | 58 | |||||
2011 LTC Plan | |||||||||
Market-based performance condition | $ | 23.89 | 39 | 131 | |||||
Market-based performance condition (1) | $ | 10.61 | 9 | 32 | |||||
Non-market-based performance condition | $ | 17.13 | — | 131 | |||||
Non-market-based performance condition (1) | $ | 12.74 | — | 32 | |||||
2010 LTC Plan | |||||||||
Market-based performance condition | $ | 12.26 | 83 | 237 | |||||
Market-based performance condition (1) | $ | 5.57 | 2 | 5 |
2010 | ||
Expected volatility | 58.5 | % |
Risk-free interest rate | 2.3 | % |
Expected life (in years) | 5.5 | |
Expected dividend yield | 1.2 | % |
Shares | Weighted Average Exercise Price | Intrinsic Value | Weighted Average Remaining Contractual Life | |||||||||
Stock options outstanding at January 1, 2012 | 418 | $ | 12.44 | |||||||||
Exercised | (16 | ) | $ | 9.11 | ||||||||
Forfeited | (113 | ) | $ | 15.56 | ||||||||
Expired | (19 | ) | $ | 12.60 | ||||||||
Stock options outstanding at December 31, 2012 | 270 | $ | 11.34 | $ | 937 | 3.8 | ||||||
Stock options exercisable at December 31, 2012 | 111 | $ | 9.25 | $ | 621 | 1.5 | ||||||
Stock options vested or expected to vest as of December 31, 2012 | 259 | $ | 11.28 | $ | 915 | 3.7 |
2012 | 2011 | ||||||
Foreign currency translation losses | $ | (2,322 | ) | $ | (4,691 | ) | |
Unrecognized pension and postretirement benefit costs, net of tax | (18,749 | ) | (15,133 | ) | |||
Total accumulated other comprehensive loss | $ | (21,071 | ) | $ | (19,824 | ) |
Condensed Consolidating Balance Sheet As of December 31, 2012 | |||||||||||||||||||
Parent | Guarantors | Non-Guarantors | Eliminations | Consolidated | |||||||||||||||
Assets | |||||||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | 3,332 | $ | 1,677 | $ | 16,598 | $ | — | $ | 21,607 | |||||||||
Accounts receivable, less allowance for doubtful accounts | 60,293 | 34,037 | 43,981 | — | 138,311 | ||||||||||||||
Receivables from affiliates | 95 | 1,118 | 668 | (1,881 | ) | — | |||||||||||||
Inventories | 183,189 | 44,874 | 75,777 | (68 | ) | 303,772 | |||||||||||||
Prepaid expenses and other current assets | 16,141 | (1,490 | ) | 8,239 | (202 | ) | 22,688 | ||||||||||||
Total current assets | 263,050 | 80,216 | 145,263 | (2,151 | ) | 486,378 | |||||||||||||
Investment in joint venture | 38,854 | — | — | — | 38,854 | ||||||||||||||
Goodwill | 12,921 | 41,556 | 15,823 | — | 70,300 | ||||||||||||||
Intangible assets | 34,343 | 28,325 | 19,809 | — | 82,477 | ||||||||||||||
Other assets | 28,142 | (98 | ) | 3,113 | — | 31,157 | |||||||||||||
Investment in subsidiaries | 245,798 | 11,526 | — | (257,324 | ) | — | |||||||||||||
Receivables from affiliates | 62,696 | 83,891 | 3,280 | (149,867 | ) | — | |||||||||||||
Property, plant and equipment, net | 52,424 | 15,403 | 11,813 | — | 79,640 | ||||||||||||||
Total assets | $ | 738,228 | $ | 260,819 | $ | 199,101 | $ | (409,342 | ) | $ | 788,806 | ||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||
Current liabilities | |||||||||||||||||||
Accounts payable | $ | 40,510 | $ | 13,434 | $ | 14,046 | $ | — | $ | 67,990 | |||||||||
Payables due to affiliates | 742 | 95 | 1,044 | (1,881 | ) | — | |||||||||||||
Other current liabilities | 26,566 | 3,478 | 8,083 | — | 38,127 | ||||||||||||||
Current portion of long-term debt and short-term debt | 386 | 1 | 528 | — | 915 | ||||||||||||||
Total current liabilities | 68,204 | 17,008 | 23,701 | (1,881 | ) | 107,032 | |||||||||||||
Long-term debt, less current portion | 292,086 | — | 4,068 | — | 296,154 | ||||||||||||||
Payables due to affiliates | 12,114 | 11,994 | 125,759 | (149,867 | ) | — | |||||||||||||
Deferred income taxes | 14,209 | 18,614 | (473 | ) | — | 32,350 | |||||||||||||
Other non-current liabilities | 14,275 | 1,339 | 316 | — | 15,930 | ||||||||||||||
Stockholders’ equity | 337,340 | 211,864 | 45,730 | (257,594 | ) | 337,340 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 738,228 | $ | 260,819 | $ | 199,101 | $ | (409,342 | ) | $ | 788,806 |
Condensed Consolidating Balance Sheet As of December 31, 2011 | |||||||||||||||||||
Parent | Guarantors | Non-Guarantors | Eliminations | Consolidated | |||||||||||||||
Assets | |||||||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | 11,534 | $ | 582 | $ | 18,408 | $ | — | $ | 30,524 | |||||||||
Accounts receivable, less allowance for doubtful accounts | 88,434 | 37,487 | 55,115 | — | 181,036 | ||||||||||||||
Receivables from affiliates | 273 | 3,495 | 146 | (3,914 | ) | — | |||||||||||||
Inventories | 163,776 | 48,980 | 59,547 | (264 | ) | 272,039 | |||||||||||||
Prepaid expenses and other current assets | 18,517 | (3,331 | ) | 3,483 | — | 18,669 | |||||||||||||
Total current assets | 282,534 | 87,213 | 136,699 | (4,178 | ) | 502,268 | |||||||||||||
Investment in joint venture | 36,460 | — | — | — | 36,460 | ||||||||||||||
Goodwill | 12,921 | 41,556 | 15,424 | — | 69,901 | ||||||||||||||
Intangible assets | 38,238 | 34,395 | 21,180 | — | 93,813 | ||||||||||||||
Other assets | 34,691 | 237 | 2,812 | — | 37,740 | ||||||||||||||
Investment in subsidiaries | 243,823 | 12,151 | — | (255,974 | ) | — | |||||||||||||
Receivables from affiliates | 66,878 | 71,041 | 7,292 | (145,211 | ) | — | |||||||||||||
Property, plant and equipment, net | 56,266 | 15,416 | 10,459 | — | 82,141 | ||||||||||||||
Total assets | $ | 771,811 | $ | 262,009 | $ | 193,866 | $ | (405,363 | ) | $ | 822,323 | ||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||
Current liabilities | |||||||||||||||||||
Accounts payable | $ | 84,437 | $ | 14,826 | $ | 17,611 | $ | — | $ | 116,874 | |||||||||
Payables due to affiliates | 1,387 | 76 | 2,451 | (3,914 | ) | — | |||||||||||||
Other current liabilities | 25,895 | 4,459 | 5,358 | — | 35,712 | ||||||||||||||
Current portion of long-term debt and short-term debt | 82 | 50 | 560 | — | 692 | ||||||||||||||
Total current liabilities | 111,801 | 19,411 | 25,980 | (3,914 | ) | 153,278 | |||||||||||||
Long-term debt, less current portion | 303,739 | 1 | 10,500 | — | 314,240 | ||||||||||||||
Payables due to affiliates | 23,727 | 8,572 | 112,912 | (145,211 | ) | — | |||||||||||||
Deferred income taxes | 6,280 | 19,647 | (277 | ) | — | 25,650 | |||||||||||||
Other non-current liabilities | 13,985 | 2,324 | 567 | — | 16,876 | ||||||||||||||
Stockholders’ equity | 312,279 | 212,054 | 44,184 | (256,238 | ) | 312,279 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 771,811 | $ | 262,009 | $ | 193,866 | $ | (405,363 | ) | $ | 822,323 |
Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income For the year ended December 31, 2012 | |||||||||||||||||||
Parent | Guarantors | Non-Guarantors | Eliminations | Consolidated | |||||||||||||||
Net Sales | $ | 755,642 | $ | 270,644 | $ | 282,274 | $ | (38,192 | ) | $ | 1,270,368 | ||||||||
Costs and expenses: | |||||||||||||||||||
Cost of materials (exclusive of depreciation and amortization) | 548,659 | 199,004 | 217,749 | (38,125 | ) | 927,287 | |||||||||||||
Warehouse, processing and delivery expense | 91,628 | 32,459 | 24,169 | — | 148,256 | ||||||||||||||
Sales, general and administrative expense | 75,497 | 30,351 | 21,965 | — | 127,813 | ||||||||||||||
Depreciation and amortization expense | 12,955 | 8,888 | 4,024 | — | 25,867 | ||||||||||||||
Operating income (loss) | 26,903 | (58 | ) | 14,367 | (67 | ) | 41,145 | ||||||||||||
Interest expense, net | (25,820 | ) | — | (15,270 | ) | — | (41,090 | ) | |||||||||||
Interest expense - unrealized loss on debt conversion option | (15,597 | ) | — | — | — | (15,597 | ) | ||||||||||||
Loss before income taxes and equity in earnings of subsidiaries and joint venture | (14,514 | ) | (58 | ) | (903 | ) | (67 | ) | (15,542 | ) | |||||||||
Income taxes | (1,805 | ) | 475 | 102 | (202 | ) | (1,430 | ) | |||||||||||
Equity in (losses) earnings of subsidiaries | (653 | ) | (1,203 | ) | — | 1,856 | — | ||||||||||||
Equity in earnings of joint venture | 7,224 | — | — | — | 7,224 | ||||||||||||||
Net (loss) income | (9,748 | ) | (786 | ) | (801 | ) | 1,587 | (9,748 | ) | ||||||||||
Comprehensive (loss) income: | |||||||||||||||||||
Foreign currency translation gains (losses) | 2,369 | 578 | 2,369 | (2,947 | ) | 2,369 | |||||||||||||
Unrecognized pension and postretirement benefit costs, net of tax | (3,616 | ) | — | — | — | (3,616 | ) | ||||||||||||
Other comprehensive (loss) income | (1,247 | ) | 578 | 2,369 | (2,947 | ) | (1,247 | ) | |||||||||||
Net loss | (9,748 | ) | (786 | ) | (801 | ) | 1,587 | (9,748 | ) | ||||||||||
Comprehensive (loss) income | $ | (10,995 | ) | $ | (208 | ) | $ | 1,568 | $ | (1,360 | ) | $ | (10,995 | ) |
Condensed Consolidating Statement of Operations Comprehensive (Loss) Income For the year ended December 31, 2011 | |||||||||||||||||||
Parent | Guarantors | Non-Guarantors | Eliminations | Consolidated | |||||||||||||||
Net Sales | $ | 621,036 | $ | 283,290 | $ | 237,201 | $ | (9,161 | ) | $ | 1,132,366 | ||||||||
Costs and expenses: | |||||||||||||||||||
Cost of materials (exclusive of depreciation and amortization) | 466,133 | 207,269 | 181,104 | (8,897 | ) | 845,609 | |||||||||||||
Warehouse, processing and delivery expense | 80,543 | 33,828 | 20,527 | — | 134,898 | ||||||||||||||
Sales, general and administrative expense | 74,154 | 31,807 | 20,232 | — | 126,193 | ||||||||||||||
Depreciation and amortization expense | 8,874 | 8,910 | 2,688 | — | 20,472 | ||||||||||||||
Operating (loss) income | (8,668 | ) | 1,476 | 12,650 | (264 | ) | 5,194 | ||||||||||||
Interest expense, net | (4,982 | ) | — | (4,681 | ) | — | (9,663 | ) | |||||||||||
Interest expense - unrealized loss on debt conversion option | (3,991 | ) | (3,991 | ) | |||||||||||||||
Loss on extinguishment of debt | (6,153 | ) | — | — | — | (6,153 | ) | ||||||||||||
(Loss) income before income taxes and equity in earnings of subsidiaries and joint venture | (23,794 | ) | 1,476 | 7,969 | (264 | ) | (14,613 | ) | |||||||||||
Income taxes | 3,267 | (433 | ) | (1,708 | ) | — | 1,126 | ||||||||||||
Equity in earnings of subsidiaries | 7,040 | (209 | ) | — | (6,831 | ) | — | ||||||||||||
Equity in earnings of joint venture | 11,727 | — | — | — | 11,727 | ||||||||||||||
Net (loss) income | (1,760 | ) | 834 | 6,261 | (7,095 | ) | (1,760 | ) | |||||||||||
Comprehensive (loss) income: | |||||||||||||||||||
Foreign currency translation (losses) gains | (941 | ) | 1,180 | (941 | ) | (239 | ) | (941 | ) | ||||||||||
Unrecognized pension and postretirement benefit costs, net of tax | (3,071 | ) | — | — | — | (3,071 | ) | ||||||||||||
Other comprehensive (loss) income | (4,012 | ) | 1,180 | (941 | ) | (239 | ) | (4,012 | ) | ||||||||||
Net (loss) income | (1,760 | ) | 834 | 6,261 | (7,095 | ) | (1,760 | ) | |||||||||||
Comprehensive (loss) income | $ | (5,772 | ) | $ | 2,014 | $ | 5,320 | $ | (7,334 | ) | $ | (5,772 | ) |
Condensed Consolidating Statement of Operations Comprehensive (Loss) Income For the year ended December 31, 2010 | |||||||||||||||||||
Parent | Guarantors | Non-Guarantors | Eliminations | Consolidated | |||||||||||||||
Net Sales | $ | 498,848 | $ | 266,491 | $ | 186,654 | $ | (8,287 | ) | $ | 943,706 | ||||||||
Costs and expenses: | |||||||||||||||||||
Cost of materials (exclusive of depreciation and amortization) | 369,865 | 195,184 | 144,092 | (8,287 | ) | 700,854 | |||||||||||||
Warehouse, processing and delivery expense | 72,234 | 33,250 | 17,834 | — | 123,318 | ||||||||||||||
Sales, general and administrative expense | 61,751 | 29,684 | 16,788 | — | 108,223 | ||||||||||||||
Depreciation and amortization expense | 8,665 | 9,114 | 2,870 | — | 20,649 | ||||||||||||||
Operating (loss) income | (13,667 | ) | (741 | ) | 5,070 | — | (9,338 | ) | |||||||||||
Interest expense, net | (1,008 | ) | — | (3,980 | ) | — | (4,988 | ) | |||||||||||
(Loss) income before income taxes and equity in earnings of subsidiaries and joint venture | (14,675 | ) | (741 | ) | 1,090 | — | (14,326 | ) | |||||||||||
Income taxes | 3,106 | 420 | (425 | ) | — | 3,101 | |||||||||||||
Equity in earnings of subsidiaries | 344 | 110 | — | (454 | ) | — | |||||||||||||
Equity in earnings of joint venture | 5,585 | — | — | — | 5,585 | ||||||||||||||
Net (loss) income | (5,640 | ) | (211 | ) | 665 | (454 | ) | (5,640 | ) | ||||||||||
Comprehensive (loss) income: | |||||||||||||||||||
Foreign currency translation (losses) gains | (536 | ) | (2,337 | ) | (536 | ) | 2,873 | (536 | ) | ||||||||||
Unrecognized pension and postretirement benefit costs, net of tax | (1,748 | ) | — | — | — | (1,748 | ) | ||||||||||||
Other comprehensive (loss) income | (2,284 | ) | (2,337 | ) | (536 | ) | 2,873 | (2,284 | ) | ||||||||||
Net (loss) income | (5,640 | ) | (211 | ) | 665 | (454 | ) | (5,640 | ) | ||||||||||
Comprehensive (loss) income | $ | (7,924 | ) | $ | (2,548 | ) | $ | 129 | $ | 2,419 | $ | (7,924 | ) |
Condensed Consolidating Statement of Cash Flows For the year ended December 31, 2012 | |||||||||||||||||||
Parent | Guarantors | Non-Guarantors | Eliminations | Consolidated | |||||||||||||||
Operating activities: | |||||||||||||||||||
Net (loss) income | $ | (9,748 | ) | $ | (786 | ) | $ | (801 | ) | $ | 1,587 | $ | (9,748 | ) | |||||
Equity in losses of subsidiaries | 653 | 1,203 | — | (1,856 | ) | — | |||||||||||||
Adjustments to reconcile net (loss) income to cash provided by operating activities | 10,688 | 12,951 | (8,809 | ) | 269 | 15,099 | |||||||||||||
Net cash from (used in) operating activities | 1,593 | 13,368 | (9,610 | ) | — | 5,351 | |||||||||||||
Investing activities: | |||||||||||||||||||
Acquisition/Investment of businesses, net of cash acquired | (6,472 | ) | — | — | — | (6,472 | ) | ||||||||||||
Capital expenditures | (5,336 | ) | (2,802 | ) | (2,983 | ) | — | (11,121 | ) | ||||||||||
Other investing activities, net | — | 6 | 147 | — | 153 | ||||||||||||||
Net cash used in investing activities | (11,808 | ) | (2,796 | ) | (2,836 | ) | — | (17,440 | ) | ||||||||||
Financing activities: | |||||||||||||||||||
Proceeds from long-term debt, including new revolving credit facility | 756,550 | — | 10,540 | — | 767,090 | ||||||||||||||
Repayments of long-term debt, including new revolving credit facility | (745,839 | ) | (49 | ) | (16,999 | ) | — | (762,887 | ) | ||||||||||
Payment of debt issue costs | (1,503 | ) | — | — | — | (1,503 | ) | ||||||||||||
Net intercompany (repayments) borrowings | (7,431 | ) | (9,428 | ) | 16,859 | — | — | ||||||||||||
Other financing | 236 | — | (27 | ) | — | 209 | |||||||||||||
Net cash from (used in) financing activities | 2,013 | (9,477 | ) | 10,373 | — | 2,909 | |||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | 263 | — | 263 | ||||||||||||||
(Decrease) increase in cash and cash equivalents | (8,202 | ) | 1,095 | (1,810 | ) | — | (8,917 | ) | |||||||||||
Cash and cash equivalents - beginning of year | 11,534 | 582 | 18,408 | — | 30,524 | ||||||||||||||
Cash and cash equivalents - end of period | $ | 3,332 | $ | 1,677 | $ | 16,598 | $ | — | $ | 21,607 |
Condensed Consolidating Statement of Cash Flows For the year ended December 31, 2011 | |||||||||||||||||||
Parent | Guarantors | Non-Guarantors | Eliminations | Consolidated | |||||||||||||||
Operating activities: | |||||||||||||||||||
Net (loss) income | $ | (1,760 | ) | $ | 834 | $ | 6,261 | $ | (7,095 | ) | $ | (1,760 | ) | ||||||
Equity in earnings of subsidiaries | (7,040 | ) | 209 | — | 6,831 | — | |||||||||||||
Adjustments to reconcile net (loss) income to cash provided by operating activities | 10,232 | 15,095 | (70,119 | ) | 264 | (44,528 | ) | ||||||||||||
Net cash from (used in) operating activities | 1,432 | 16,138 | (63,858 | ) | — | (46,288 | ) | ||||||||||||
Investing activities: | |||||||||||||||||||
Acquisition/Investment of businesses, net of cash acquired | (175,836 | ) | — | 1,592 | (174,244 | ) | |||||||||||||
Capital expenditures | (6,077 | ) | (2,783 | ) | (2,884 | ) | — | (11,744 | ) | ||||||||||
Other investing activities, net | 605 | 136 | 58 | — | 799 | ||||||||||||||
Net cash used in investing activities | (181,308 | ) | (2,647 | ) | (1,234 | ) | — | (185,189 | ) | ||||||||||
Financing activities: | |||||||||||||||||||
Net borrowings (repayments) of debt | 82 | 8 | (25,840 | ) | — | (25,750 | ) | ||||||||||||
Proceeds from long-term debt, including new revolving credit facility | 309,625 | — | 10,851 | — | 320,476 | ||||||||||||||
Repayments of long-term debt, including new revolving credit facility | (52,896 | ) | (55 | ) | (261 | ) | — | (53,212 | ) | ||||||||||
Payment of debt issue costs | (16,380 | ) | — | (253 | ) | — | (16,633 | ) | |||||||||||
Net intercompany (repayments) borrowings | (57,307 | ) | (13,930 | ) | 71,237 | — | — | ||||||||||||
Other financing activities, net | 657 | — | — | — | 657 | ||||||||||||||
Net cash from (used in) financing activities | 183,781 | (13,977 | ) | 55,734 | — | 225,538 | |||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | (253 | ) | — | (253 | ) | ||||||||||||
Increase (decrease) in cash and cash equivalents | 3,905 | (486 | ) | (9,611 | ) | — | (6,192 | ) | |||||||||||
Cash and cash equivalents - beginning of year | 7,629 | 1,068 | 28,019 | — | 36,716 | ||||||||||||||
Cash and cash equivalents - end of period | $ | 11,534 | $ | 582 | $ | 18,408 | $ | — | $ | 30,524 |
Condensed Consolidating Statement of Cash Flows For the year ended December 31, 2010 | |||||||||||||||||||
Parent | Guarantors | Non-Guarantors | Eliminations | Consolidated | |||||||||||||||
Operating activities: | |||||||||||||||||||
Net (loss) income | $ | (5,640 | ) | $ | (211 | ) | $ | 665 | $ | (454 | ) | $ | (5,640 | ) | |||||
Equity in earnings of subsidiaries | (344 | ) | (110 | ) | — | 454 | — | ||||||||||||
Adjustments to reconcile net (loss) income to cash provided by operating activities | 12,721 | 29,562 | 500 | (2,781 | ) | 40,002 | |||||||||||||
Net cash from (used in) operating activities | 6,737 | 29,241 | 1,165 | (2,781 | ) | 34,362 | |||||||||||||
Investing activities: | |||||||||||||||||||
Capital expenditures | (4,244 | ) | (1,267 | ) | (2,061 | ) | — | (7,572 | ) | ||||||||||
Other investing activities, net | 125 | 4 | — | — | 129 | ||||||||||||||
Net cash used in investing activities | (4,119 | ) | (1,263 | ) | (2,061 | ) | — | (7,443 | ) | ||||||||||
Financing activities: | |||||||||||||||||||
Net (repayments) borrowings of debt | (13,720 | ) | — | 2,324 | — | (11,396 | ) | ||||||||||||
Repayments of long-term debt | (7,007 | ) | (343 | ) | (404 | ) | — | (7,754 | ) | ||||||||||
Net intercompany borrowings (repayments) | 15,794 | (27,350 | ) | 8,775 | 2,781 | — | |||||||||||||
Other financing activities, net | 785 | — | — | — | 785 | ||||||||||||||
Net cash (used in) from financing activities | (4,148 | ) | (27,693 | ) | 10,695 | 2,781 | (18,365 | ) | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | (149 | ) | — | (149 | ) | ||||||||||||
(Decrease) increase in cash and cash equivalents | (1,530 | ) | 285 | 9,650 | — | 8,405 | |||||||||||||
Cash and cash equivalents - beginning of year | 9,159 | 783 | 18,369 | — | 28,311 | ||||||||||||||
Cash and cash equivalents - end of period | $ | 7,629 | $ | 1,068 | $ | 28,019 | $ | — | $ | 36,716 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
2012 | |||||||||||||||
Net sales | $ | 362,916 | $ | 329,392 | $ | 304,039 | $ | 274,021 | |||||||
Gross profit (a) | 53,810 | 43,763 | 42,867 | 28,518 | |||||||||||
Net (loss) income (c) | (4,300 | ) | (2,978 | ) | 3,173 | (5,643 | ) | ||||||||
Basic (loss) earnings per share | $ | (0.19 | ) | $ | (0.13 | ) | $ | 0.14 | $ | (0.24 | ) | ||||
Diluted (loss) earnings per share | $ | (0.19 | ) | $ | (0.13 | ) | $ | 0.13 | $ | (0.24 | ) | ||||
Common stock dividends declared | $ | — | $ | — | $ | — | $ | — | |||||||
2011 | |||||||||||||||
Net sales | $ | 272,788 | $ | 282,568 | $ | 294,860 | $ | 282,150 | |||||||
Gross profit (a) | 33,219 | 35,165 | 33,233 | 29,770 | |||||||||||
Net income (loss) (b) | 2,703 | 3,697 | 3,803 | (11,963 | ) | ||||||||||
Basic earnings (loss) per share | $ | 0.12 | $ | 0.16 | $ | 0.17 | $ | (0.52 | ) | ||||||
Diluted earnings (loss) per share | $ | 0.12 | $ | 0.16 | $ | 0.16 | $ | (0.52 | ) | ||||||
Common stock dividends declared | $ | — | $ | — | $ | — | $ | — |
(a) | Gross profit equals net sales minus cost of materials, warehouse, processing, and delivery costs and less depreciation and amortization expense. |
(b) | Fourth quarter results include fees incurred as a result of the acquisition of Tube Supply and the related debt refinancing in December 2011. The results of Tube Supply are included in the fourth quarter results for the two-week period ended December 31, 2011 and for the entire fiscal year ended December 31, 2012. In addition, a mark-to-market adjustment related to the conversion option associated with the convertible debt in the amount of $3,991 was included in interest expense during the fourth quarter. |
(c) | First and second quarter results include a mark-to-market adjustment related to the conversion option associated with the convertible debt in the amount of $11,340 and $4,257, respectively. Amounts were included in interest expense during the respective quarters. |
Kreher Steel Company, LLC and Subsidiaries CONSOLIDATED BALANCE SHEETS December 31, | |||||||
2012 | 2011 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 3,373,355 | $ | 8,743,820 | |||
Accounts receivable (net of allowance for doubtful accounts of approximately $1,435,000 in 2012 and $1,335,000 in 2011) | 19,736,301 | 32,461,983 | |||||
Inventory, net | 66,958,361 | 69,297,422 | |||||
Deferred taxes | 271,553 | 29,699 | |||||
Prepaid income taxes | 1,424,064 | 186,889 | |||||
Prepaid expenses and other current assets | 657,039 | 542,689 | |||||
Total current assets | 92,420,673 | 111,262,502 | |||||
Property and equipment | |||||||
Land and building | 14,485,343 | 14,334,997 | |||||
Machinery and equipment | 16,533,990 | 11,923,342 | |||||
Furniture, fixtures and office equipment | 2,155,447 | 1,952,447 | |||||
Automobiles and trucks | 990,508 | 871,929 | |||||
Leasehold improvements | 2,334,855 | 1,872,955 | |||||
Construction in progress | 266,129 | 753,234 | |||||
36,766,272 | 31,708,904 | ||||||
Less accumulated depreciation and amortization | 14,719,685 | 12,856,503 | |||||
Property and equipment, net | 22,046,587 | 18,852,401 | |||||
Deferred financing costs, net of amortization | 104,616 | 121,263 | |||||
Goodwill | 3,525,247 | 3,525,247 | |||||
Intangible assets, net of amortization | 275,616 | 398,112 | |||||
Other assets | 146,785 | 81,543 | |||||
$ | 118,519,524 | $ | 134,241,068 | ||||
LIABILITIES AND MEMBER'S CAPITAL | |||||||
Current liabilities | |||||||
Revolving line of credit | $ | — | $ | 35,000,000 | |||
Current portion of long-term debt | 211,894 | 215,918 | |||||
Accounts payable | 11,536,613 | 21,094,460 | |||||
Accrued expenses | 2,565,966 | 3,641,502 | |||||
Total current liabilities | 14,314,473 | 59,951,880 | |||||
Revolving line of credit | 24,000,000 | — | |||||
Deferred taxes, non-current | 1,977,273 | 1,008,748 | |||||
Long-term debt, less current portion | 1,867,707 | 2,080,993 | |||||
Commitments and contingencies | |||||||
Member's capital | 76,360,071 | 71,199,447 | |||||
$ | 118,519,524 | $ | 134,241,068 |
Kreher Steel Company, LLC and Subsidiaries CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Years ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Net revenues | $ | 257,776,157 | $ | 269,657,054 | $ | 188,107,237 | |||||
Cost of sales | 213,490,152 | 219,478,535 | 156,801,397 | ||||||||
Gross profit | 44,286,005 | 50,178,519 | 31,305,840 | ||||||||
Operating expenses | |||||||||||
Selling | 12,970,475 | 12,761,204 | 9,729,856 | ||||||||
General and administrative | 12,657,611 | 9,970,335 | 8,283,347 | ||||||||
Total operating expenses | 25,628,086 | 22,731,539 | 18,013,203 | ||||||||
Earnings from operations | 18,657,919 | 27,446,980 | 13,292,637 | ||||||||
Other expense (income) | |||||||||||
Interest expense | 519,416 | 432,990 | 259,558 | ||||||||
Interest income | (3,263 | ) | (1,994 | ) | (5,035 | ) | |||||
Other income, net | (169,015 | ) | (180,807 | ) | (152,887 | ) | |||||
Net earnings before taxes | 18,310,781 | 27,196,791 | 13,191,001 | ||||||||
Income tax provision (benefit) | 3,708,101 | 3,553,382 | 2,155,950 | ||||||||
NET EARNINGS | 14,602,680 | 23,643,409 | 11,035,051 | ||||||||
Other comprehensive income | |||||||||||
Foreign currency translation adjustment | 15,554 | — | — | ||||||||
COMPREHENSIVE INCOME | $ | 14,618,234 | $ | 23,643,409 | $ | 11,035,051 |
Kreher Steel Company, LLC and Subsidiaries CONSOLIDATED STATEMENTS OF MEMBERS’ CAPITAL Three years ended December 31, 2012 | |||||||||||||||||||||||
Accumulated | |||||||||||||||||||||||
other | Total | ||||||||||||||||||||||
Member's | Retained | Accumulated | Treasury | comprehensive | member's | ||||||||||||||||||
contribution | earnings | distributions | stock | income | capital | ||||||||||||||||||
Balance at January 1, 2010, 400 units | 7,042,411 | 67,379,821 | (23,906,770 | ) | (5,240,092 | ) | — | 45,275,370 | |||||||||||||||
Net earnings | — | 11,035,051 | — | — | — | 11,035,051 | |||||||||||||||||
Distributions | — | — | (2,519,593 | ) | — | — | (2,519,593 | ) | |||||||||||||||
Balance at December 31, 2010, 400 units | 7,042,411 | 78,414,872 | (26,426,363 | ) | (5,240,092 | ) | — | 53,790,828 | |||||||||||||||
Net earnings | — | 23,643,409 | — | — | — | 23,643,409 | |||||||||||||||||
Distributions | — | — | (6,234,790 | ) | — | — | (6,234,790 | ) | |||||||||||||||
Balance at December 31, 2011, 400 units | 7,042,411 | 102,058,281 | (32,661,153 | ) | (5,240,092 | ) | — | 71,199,447 | |||||||||||||||
Net earnings | — | 14,602,680 | — | — | — | 14,602,680 | |||||||||||||||||
Distributions | — | — | (9,457,600 | ) | — | — | (9,457,600 | ) | |||||||||||||||
Foreign currency translation adjustment | — | — | — | — | 15,544 | 15,544 | |||||||||||||||||
Balance at December 31, 2012, 400 units | $ | 7,042,411 | $ | 116,660,961 | $ | (42,118,753 | ) | $ | (5,240,092 | ) | $ | 15,544 | $ | 76,360,071 |
Kreher Steel Company, LLC and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS Years ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Cash flows from operating activities | |||||||||||
Net earnings | $ | 14,602,680 | $ | 23,643,409 | $ | 11,035,051 | |||||
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities | |||||||||||
Depreciation and amortization | 2,033,956 | 1,602,925 | 1,720,133 | ||||||||
Deferred taxes | 726,671 | 390,341 | 84,362 | ||||||||
Bad debt expense | 2,595,710 | 34,779 | 178,911 | ||||||||
(Gain) loss on sale of property and equipment | (4,851 | ) | 9,790 | 59,676 | |||||||
Changes in assets and liabilities | |||||||||||
Accounts receivable | 10,129,971 | (8,508,956 | ) | (8,488,036 | ) | ||||||
Inventory | 2,339,061 | (27,383,374 | ) | (11,823,574 | ) | ||||||
Prepaid expenses and other assets | (1,400,121 | ) | (58,839 | ) | 182,962 | ||||||
Accounts payable | (9,557,992 | ) | 3,900,243 | 1,739,501 | |||||||
Accrued expenses | (1,075,536 | ) | 1,215,113 | 388,680 | |||||||
Net cash provided by (used in) operating activities | 20,389,549 | (5,154,569 | ) | (4,922,334 | ) | ||||||
Cash flows from investing activities | |||||||||||
Purchases of property and equipment | (5,258,846 | ) | (6,735,595 | ) | (2,271,435 | ) | |||||
Proceeds from sale of property and equipment | 145,605 | 19,843 | 256,132 | ||||||||
Net cash used in investing activities | (5,113,241 | ) | (6,715,752 | ) | (2,015,303 | ) | |||||
Cash flows from financing activities | |||||||||||
Net (decrease) increase in line of credit | (11,000,000 | ) | 22,163,000 | 10,837,000 | |||||||
Repayment of long-term debt | (217,310 | ) | (268,089 | ) | (360,000 | ) | |||||
Distributions to member | (9,457,600 | ) | (6,234,790 | ) | (2,519,593 | ) | |||||
Net cash (used in) provided by financing activities | (20,674,910 | ) | 15,660,121 | 7,957,407 | |||||||
Effect of exchange rate changes on cash and cash equivalents | 28,137 | — | — | ||||||||
Net (decrease) increase in cash and cash equivalents | (5,370,465 | ) | 3,789,800 | 1,019,770 | |||||||
Cash and cash equivalents at beginning of year | 8,743,820 | 4,954,020 | 3,934,250 | ||||||||
Cash and cash equivalents at end of year | $ | 3,373,355 | $ | 8,743,820 | $ | 4,954,020 | |||||
Supplemental disclosures of cash flow information | |||||||||||
Cash paid during the year for | |||||||||||
Interest | $ | 422,074 | $ | 350,341 | $ | 171,525 | |||||
Income taxes, net of refunds | 4,855,764 | 2,910,000 | 1,097,409 | ||||||||
Supplemental disclosures of non-cash investing and financing activities | |||||||||||
Acquisition of machinery and equipment through capital leases | $ | — | $ | — | $ | 150,019 |
2012 | 2011 | ||||||
Beginning balance | $ | 583,346 | $ | 1,778,365 | |||
Provision (release of provision) | 307,440 | (1,140,966 | ) | ||||
Write-offs | (81,119 | ) | (54,053 | ) | |||
Total inventory reserve | $ | 809,667 | $ | 583,346 |
Asset description | Life | |
Furniture and fixtures | 5 - 7 years | |
Office equipment | 5 - 7 years | |
Machinery and equipment | 7 - 10 years | |
Automobiles and trucks | 3 - 5 years | |
Building and leasehold improvements | 7 - 40 years |
Remaining | ||
Asset description | useful life | |
Non-contractual customer relationships | 2.25 years |
2012 | 2011 | ||||||
Intangible assets | |||||||
Finite life | |||||||
Non-compete agreements | $ | 220,000 | $ | 220,000 | |||
Non-contractual customer relationships | 980,000 | 980,000 | |||||
1,200,000 | 1,200,000 | ||||||
Less accumulated amortization | 924,384 | 801,888 | |||||
Net intangible assets | $ | 275,616 | $ | 398,112 |
Years ending December 31, | |||
2013 | $ | 122,496 | |
2014 | 122,496 | ||
2015 | 30,624 |
2012 | 2011 | ||||||
Beginning balance | $ | 1,335,000 | $ | 1,340,000 | |||
Bad debt expense | 2,595,710 | 34,779 | |||||
Recoveries | 20,125 | 536 | |||||
Accounts written off | (2,515,835 | ) | (40,315 | ) | |||
Total allowance for doubtful accounts | $ | 1,435,000 | $ | 1,335,000 |
2012 | 2011 | ||||||
Revolving lines of credit | $ | 24,000,000 | $ | 35,000,000 | |||
Notes payable | |||||||
Michigan Strategic Fund Limited Obligation Revenue Bonds (2000) | $ | 875,000 | $ | 950,000 | |||
Michigan Strategic Fund Limited Obligation Revenue Bonds (2006) | 1,150,000 | 1,245,000 | |||||
Capitalized leases | 54,601 | 101,911 | |||||
Total notes payable | 2,079,601 | 2,296,911 | |||||
Current portion of long-term debt | 211,894 | 215,918 | |||||
Long-term debt | $ | 1,867,707 | $ | 2,080,993 |
Years ending December 31, | |||
2013 | $ | 211,894 | |
2014 | 205,778 | ||
2015 | 226,929 | ||
2016 | 725,000 | ||
2017 | 24,125,000 | ||
Thereafter | 585,000 | ||
Total | $ | 26,079,601 |
2012 | 2011 | ||||||
Deferred tax assets | |||||||
Accounts receivable and inventory reserves | $ | 271,553 | $ | 29,699 | |||
Deferred tax liabilities | |||||||
Amortization of intangibles | (110,246 | ) | (159,245 | ) | |||
Depreciation and other | (1,867,027 | ) | (849,503 | ) | |||
Total deferred tax liabilities | (1,977,273 | ) | (1,008,748 | ) | |||
Net deferred tax liabilities | $ | (1,705,720 | ) | $ | (979,049 | ) |
2012 | 2011 | ||||||
Net current assets | $ | 271,553 | $ | 29,699 | |||
Net long-term liabilities | (1,977,273 | ) | (1,008,748 | ) | |||
Total net deferred tax liabilities | $ | (1,705,720 | ) | $ | (979,049 | ) |
2012 | 2011 | 2010 | |||||||
Current | |||||||||
Federal | $ | 2,673,070 | $ | 2,667,703 | $ | 1,845,850 | |||
State | 398,649 | 495,338 | 225,738 | ||||||
Foreign | (90,289 | ) | — | — | |||||
Deferred | 726,671 | 390,341 | 84,362 | ||||||
Total income tax expense | $ | 3,708,101 | $ | 3,553,382 | $ | 2,155,950 |
2012 | 2011 | 2010 | ||||
U.S. statutory tax rate | 34 | % | 34 | % | 34 | % |
Non-taxable LLC income | (16.2 | ) | (21.1 | ) | (20.4 | ) |
State and local taxes - net of federal tax expense | 2.2 | 0.5 | 2.1 | |||
Foreign taxes | (0.2 | ) | 0.0 | 0.0 | ||
Other, net | 0.4 | (0.3 | ) | 0.6 | ||
Effective tax rate | 20.2 | % | 13.1 | % | 16.3 | % |
Years ending December 31, | |||
2,013 | $ | 1,001,042 | |
2,014 | 629,844 | ||
2,015 | 596,404 | ||
2,016 | 538,668 | ||
2017 and thereafter | 421,401 |
Page | |
Exhibit Index |
Exhibit Number | Description of Exhibit | |
2.1 | Stock Purchase Agreement dated as of August 12, 2006 by and among A. M. Castle & Co. and Transtar Holdings #2, LLC. Filed as Exhibit 2.1 to Form 8-K filed August 17, 2006. Commission File No. 1-5415. | |
2.2 | Stock Purchase Agreement, dated November 9, 2011, by and among A.M. Castle & Co., Mr. Paul Sorensen, Mr. Jerry Willeford, and Tube Supply, Inc. Filed as Exhibit 2.1 to Form 8-K filed November 15, 2011. Commission File No. 1-5415. | |
2.3 | Agreement and Amendment, dated December 15, 2011, by and among A.M. Castle & Co., Mr. Paul Sorensen, Mr. Jerry Willeford, Tube Supply, Inc. and A.M. Castle & Co. (Canada) Inc. Filed as Exhibit 2.2 to Form 8-K filed November 15, 2011. Commission File No. 1-5415. | |
2.4 | Second Amendment to the Stock Purchase Agreement, dated January 13, 2012, by and among A. M. Castle & Co., Mr. Paul Sorensen, Mr. Jerry Willeford, and Tube Supply, LLC (as successor in interest to Tube Supply Inc.). Incorporated by reference to Exhibit 2.3 to the Company's Form S-4/A filed with the SEC on May 25, 2012. Commission File No. 333-180662. | |
2.5 | Third Amendment to the Stock Purchase Agreement, dated May 11, 2012, by and among A. M. Castle & Co., Mr. Paul Sorensen, Mr. Jerry Willeford, and Tube Supply, LLC (as successor in interest to Tube Supply Inc.). Incorporated by reference to Exhibit 2.4 to the Company's Form S-4/A filed with the SEC on May 25, 2012. Commission File No. 333-180662. | |
2.6 | Fourth Amendment to the Stock Purchase Agreement, dated September 13, 2012 by and among A. M. Castle & Co., Mr. Paul Sorensen, Mr. Jerry Willeford, and Tube Supply, LLC (as successor in interest to Tube Supply Inc.). | |
2.7 | Fifth Amendment to the Stock Purchase Agreement, dated November 14, 2012 by and among A. M. Castle & Co., Mr. Paul Sorensen, Mr. Jerry Willeford, and Tube Supply, LLC (as successor in interest to Tube Supply Inc.). | |
3.1 | Articles of Restatement of the Charter of the Company filed with the State Department of Assessments and Taxation of Maryland on April 27, 2012. Filed as Exhibit 3.1 to Quarterly Report on Form 10-Q for the period ended March 31, 2012, which was filed on May 3, 2012. Commission File No. 1-5415. | |
3.2 | By-Laws of the Company as amended on October 28, 2010. Filed as Exhibit 3.2 to Quarterly Report on Form 10-Q for the period ended September 30, 2010, which was filed on November 5, 2010. Commission File No. 1-5415. | |
3.3 | Articles Supplementary of the Company. Filed as Exhibit 3.1 to Form 8-A filed on September 6, 2012. Commission File No. 1-5415. | |
4.1 | Indenture, dated as of December 15, 2011, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent. Filed as Exhibit 4.1 to Form 8-K filed November 15, 2011. Commission File No. 1-5415. | |
4.2 | Indenture, dated as of December 15, 2011, between A.M. Castle & Co., the Guarantors and U.S. Bank National Association, as trustee. Filed as Exhibit 4.2 to Form 8-K filed November 15, 2011. Commission File No. 1-5415. | |
4.3 | Rights Agreement, dated as of August 31, 2012, by and between A.M. Castle & Co. and American Stock Transfer & Trust Company, LLC, as Rights Agent. Filed as Exhibit 4.1 to Form 8-K filed on August 31, 2012. Commission File No. 1-05415. | |
10.1* | A. M. Castle & Co. 1995 Director Stock Option Plan. Filed as Exhibit A to Proxy Statement filed March 7, 1995. Commission File No. 1-5415. | |
10.2* | A. M. Castle & Co. 1996 Restricted Stock and Stock Option Plan. Filed as Exhibit A to Proxy Statement filed March 8, 2006. Commission File No. 1-5415. | |
10.3* | A. M. Castle & Co. 2000 Restricted Stock and Stock Option Plan. Filed as Appendix B to Proxy Statement filed March 23, 2001. Commission File No. 1-5415. | |
Exhibit Number | Description of Exhibit | |
10.4* | A. M. Castle & Co. 2004 Restricted Stock, Stock Option and Equity Compensation Plan. Filed as Exhibit D to Proxy Statement filed March 12, 2004. Commission File No. 1-5415. | |
10.5* | A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan, as amended and restated as of December 9, 2010. Filed as Exhibit 10.25 to Annual Report on Form 8-K filed on December 15, 2010. Commission File No. 1-5415. | |
10.6* | Form of Restricted Stock Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan. Filed as Exhibit 10.11 to Annual Report on Form 10-K for the period ended December 31, 2008, which was filed on March 12, 2009. Commission File No. 1-5415. | |
10.7* | Form of Performance Share Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan. Filed as Exhibit 10.12 to Annual Report on Form 10-K for the period ended December 31, 2008, which was filed on March 12, 2009. Commission File No. 1-5415. | |
10.8* | A. M. Castle & Co. Directors Deferred Compensation Plan, as amended and restated as of October 22, 2008. Filed as Exhibit 10.13 to Annual Report on Form 10-K for the period ended December 31, 2008, which was filed on March 12, 2009. Commission File No. 1-5415. | |
10.9* | A. M. Castle & Co. Supplemental 401(k) Savings and Retirement Plan, as amended and restated, effective as of January 1, 2009. Filed as Exhibit 10.14 to Annual Report on Form 10-K for the period ended December 31, 2008, which was filed on March 12, 2009. Commission File No. 1-5415. | |
10.10* | A. M. Castle & Co. Supplemental Pension Plan, as amended and restated, effective as of January 1, 2009. Filed as Exhibit 10.15 to Annual Report on Form 10-K for the period ended December 31, 2008, which was filed on March 12, 2009. Commission File No. 1-5415. | |
10.11* | First Amendment to the A. M. Castle & Co. Supplemental 401(k) Savings and Retirement Plan, executed April 15, 2009 (as effective April 27, 2009). Filed as Exhibit 10.1 to Form 8-K filed on April 16, 2009. Commission File No. 1-5415. | |
10.12* | Form of A.M. Castle & Co. Indemnification Agreement to be executed with all directors and executive officers. Filed as Exhibit 10.16 to Form 8-K filed on July 29, 2009. Commission File No. 1-5415. | |
10.13* | Form of Restricted Stock Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan. Filed as Exhibit 10.20 to Form 8-K filed on March 24, 2010. Commission File No. 1-5415. | |
10.14* | Form of Performance Share Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan. Filed as Exhibit 10.21 to Form 8-K filed on March 24, 2010. Commission File No. 1-5415. | |
10.15* | Form of Incentive Stock Option Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan. Filed as Exhibit 10.22 to Form 8-K filed on March 24, 2010. Commission File No. 1-5415. | |
10.16* | Form of Non-Qualified Stock Option Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan. Filed as Exhibit 10.23 to Form 8-K filed on March 24, 2010. Commission File No. 1-5415. | |
10.17* | Form of Non-Employee Director Restricted Stock Award Agreement. Filed as Exhibit 10.1 to Form 8-K filed on April 27, 2010. Commission File No. 1-5415. | |
10.18* | Form of Amended and Restated Change of Control Agreement for all executive officers other than the CEO. Filed as Exhibit 10.24 to Form 8-K filed on September 21, 2010. Commission File No. 1-5415. | |
10.19* | Form of Amended and Restated Severance Agreement for executive officers other than the CEO. Filed as Exhibit 10.26 to Form 8-K filed on December 23, 2010. Commission File No. 1-5415. | |
10.20* | CEO Change in Control Agreement, as amended and restated December 22, 2010. Filed as Exhibit 10.27 to Form 8-K filed on December 23, 2010. Commission File No. 1-5415. | |
Exhibit Number | Description of Exhibit | |
10.21* | CEO Employment/Non-Competition Agreement, as amended and restated December 22, 2010. Filed as Exhibit 10.28 to Form 8-K filed on December 23, 2010. Commission File No. 1-5415. | |
10.22* | Form of Performance Share Award Agreement, adopted March 2, 2011, under A.M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan. Filed as Exhibit 10.29 to Form 8-K filed March 8, 2011. Commission File No. 1-5415. | |
10.23* | 2008 A. M. Castle & Co. Omnibus Incentive Plan, as amended and restated as of April 28, 2011. Filed as Exhibit 10.30 to Form 8-K filed May 3, 2011. Commission File No. 1-5415. | |
10.24* | Stephen V. Hooks Executive Retention and Severance Agreement, dated October 27, 2011. Filed as Exhibit 10.31 to Form 8-K filed November 1, 2011. Commission File No. 1-5415. | |
10.25 | Pledge and Security Agreement, dated as of December 15, 2011, by A.M. Castle & Co., and its subsidiaries that are party thereto, in favor of U.S. Bank National Association, as collateral agent, for the benefit of the Secured Parties. Filed as Exhibit 10.1 to Form 8-K filed November 15, 2011. Commission File No. 1-5415. | |
10.26 | Intercreditor Agreement, dated as of December 15, 2011, among Wells Fargo Bank, National Association, in its capacity as administrative and collateral agent for the First Lien Secured Parties and U.S. Bank National Association, a national banking association, in its capacity as trustee and collateral agend for the Second Lien Secured Parties. Filed as Exhibit 10.2 to Form 8-K filed November 15, 2011. Commission File No. 1-5415. | |
10.27 | Registration Rights Agreement, dated as of December 15, 2011, between A.M. Castle & Co., the Guarantors and Jefferies & Company, Inc., as initial purchaser, for the benefit of the Holders of the Notes. Filed as Exhibit 10.3 to Form 8-K filed November 15, 2011. Commission File No. 1-5415. | |
10.28 | Loan and Security Agreement, dated December 15, 2011, by and among A.M. Castle & Co., Transtar Metals Corp., Advanced Fabricating Technology, LLC, Oliver Steel Plate Co., Paramont Machine Company, LLC, Total Plastics, Inc., Tube Supply, LLC, A.M. Castle & Co. (Canada) Inc., Tube Supply Canada ULC, the other Loan Parties party thereto, the lenders which are now or which hereafter become a party thereto, and Wells Fargo Bank, National Association, a national banking association, in its capacity as administrative agent and collateral agent for Secured Parties. Filed as Exhibit 10.4 to Form 8-K filed November 15, 2011. Commission File No. 1-5415. | |
10.29* | Employment Agreement, dated November 9, 2011, by and between A. M. Castle & Co. and Mr. Paul Sorensen. Filed as Exhibit 10.29 to Quarterly Report on Form 10-Q for the period ended June 30, 2012, which was filed on August 7, 2012. Commission File No. 1-5415. | |
10.30* | Form of Retention Bonus Agreement for certain executive officers in connection with CEO leadership transition, dated May 14, 2012. Filed as Exhibit 10.30 to Quarterly Report on Form 10-Q for the period ended June 30, 2012, which was filed on August 7, 2012. Commission File No. 1-5415. | |
10.31* | Amendment to Employment Agreement, dated May 30, 2012, by and between A. M. Castle & Co. and Mr. Paul Sorensen. Filed as Exhibit 10.31 to Quarterly Report on Form 10-Q for the period ended June 30, 2012, which was filed on August 7, 2012. Commission File No. 1-5415. | |
10.32* | Employment Offer Letter dated October 10, 2012, between A.M. Castle & Co. and Mr. Scott Dolan. Filed as Exhibit 10.32 to Form 8-K/A filed October 15, 2012. Commission File No. 1-5415. | |
10.33* | Form of Restricted Stock Unit Award Agreement between A.M. Castle & Co. and Mr. Scott Dolan. Filed as Exhibit 10.33 to Form 8-K/A filed October 15, 2012. Commission File No. 1-5415. | |
10.34* | Form of Severance Agreement between A.M. Castle & Co. and Mr. Scott Dolan. Filed as Exhibit 10.34 to Form 8-K/A filed October 15, 2012. Commission File No. 1-5415. | |
10.35* | Form of Change of Control Agreement between A.M. Castle & Co. and Mr. Scott Dolan. Filed as Exhibit 10.35 to Form 8-K/A filed October 15, 2012. Commission File No. 1-5415. | |
Exhibit Number | Description of Exhibit | |
10.36* | Offer of Chief Commercial Officer dated December 28, 2012, between A.M. Castle & Co. and Mr. Blain Tiffany. Filed as Exhibit 10.36 to Form 8-K filed January 22, 2013. Commission File No. 1-5415. | |
21.1 | Subsidiaries of Registrant | |
23.1 | Consent of Deloitte & Touche LLP | |
23.2 | Consent of Grant Thornton LLP | |
31.1 | CEO Certification Pursuant to Section 302 of the Sarbanes Oxley Act of 2002. | |
31.2 | CFO Certification Pursuant to Section 302 of the Sarbanes Oxley Act of 2002. | |
32.1 | CEO and CFO Certification Pursuant to Section 906 of the Sarbanes Oxley Act of 2002. | |
101.INS | XBRL Instance Document (1) | |
101.SCH | XBRL Taxonomy Extension Schema Document (1) | |
101.CAL | XBRL Taxonomy Calculation Linkbase Document (1) | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document(1) | |
101.LAB | XBRL Taxonomy Label Linkbase Document (1) | |
101.PRE | XBRL Taxonomy Presentation Linkbase Document (1) |
(1) | Furnished with this report. In accordance with Rule 406T of Regulation S-T, the information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing. |
* | These agreements are considered a compensatory plan or arrangement. |
A. M. Castle & Co. |
(Registrant) |
By: | /s/ Patrick R. Anderson | |
Patrick R. Anderson, Vice President—Controller and Chief Accounting Officer | ||
(Principal Accounting Officer) | ||
Date: | March 11, 2013 |
/s/ Brian P. Anderson | /s/ Gary A. Masse | /s/ Ann M. Drake | ||
Brian P. Anderson, Chairman of the Board | Gary A. Masse, Director | Ann M. Drake, Director | ||
/s/ Scott J. Dolan | /s/ Scott F. Stephens | /s/ Reuben S. Donnelley | ||
Scott J. Dolan, President, | Scott F. Stephens, Vice President | Reuben S. Donnelley, Director | ||
Chief Executive Officer and | and Chief Financial Officer | |||
Director | (Principal Financial Officer) | |||
(Principal Executive Officer) | ||||
/s/ Patrick J. Herbert, III | /s/ Terrence J. Keating | /s/ James D. Kelly | ||
Patrick J. Herbert, III, Director | Terrence J. Keating, Director | James D. Kelly, Director | ||
/s/ Pamela Forbes Lieberman | ||||
Pamela Forbes Lieberman, Director | John McCartney, Director |
Exhibit No. | Description | Page | ||
2.1 | Stock Purchase Agreement dated as of August 12, 2006 by and among A. M. Castle & Co. and Transtar Holdings #2, LLC. Filed as Exhibit 2.1 to Form 8-K filed August 17, 2006. Commission File No. 1-5415. | — | ||
2.2 | Stock Purchase Agreement, dated November 9, 2011, by and among A.M. Castle & Co., Mr. Paul Sorensen, Mr. Jerry Willeford, and Tube Supply, Inc. Filed as Exhibit 2.1 to Form 8-K filed November 15, 2011. Commission File No. 1-5415. | — | ||
2.3 | Agreement and Amendment, dated December 15, 2011, by and among A.M. Castle & Co., Mr. Paul Sorensen, Mr. Jerry Willeford, Tube Supply, Inc. and A.M. Castle & Co. (Canada) Inc. Filed as Exhibit 2.2 to Form 8-K filed November 15, 2011. Commission File No. 1-5415. | — | ||
2.4 | Second Amendment to the Stock Purchase Agreement, dated January 13, 2012, by and among A. M. Castle & Co., Mr. Paul Sorensen, Mr. Jerry Willeford, and Tube Supply, LLC (as successor in interest to Tube Supply Inc.). Incorporated by reference to Exhibit 2.3 to the Company's Form S-4/A filed with the SEC on May 25, 2012. Commission File No. 333-180662. | — | ||
2.5 | Third Amendment to the Stock Purchase Agreement, dated May 11, 2012, by and among A. M. Castle & Co., Mr. Paul Sorensen, Mr. Jerry Willeford, and Tube Supply, LLC (as successor in interest to Tube Supply Inc.). Incorporated by reference to Exhibit 2.4 to the Company's Form S-4/A filed with the SEC on May 25, 2012. Commission File No. 333-180662. | — | ||
2.6 | Fourth Amendment to the Stock Purchase Agreement, dated September 13, 2012 by and among A. M. Castle & Co., Mr. Paul Sorensen, Mr. Jerry Willeford, and Tube Supply, LLC (as successor in interest to Tube Supply Inc.). | E-1 | ||
2.7 | Fifth Amendment to the Stock Purchase Agreement, dated November 14, 2012 by and among A. M. Castle & Co., Mr. Paul Sorensen, Mr. Jerry Willeford, and Tube Supply, LLC (as successor in interest to Tube Supply Inc.). | E-3 | ||
3.1 | Articles of Restatement of the Charter of the Company filed with the State Department of Assessments and Taxation of Maryland on April 27, 2012. Filed as Exhibit 3.1 to Quarterly Report on Form 10-Q for the period ended March 31, 2012, which was filed on May 3, 2012. Commission File No. 1-5415. | — | ||
3.2 | By-Laws of the Company as amended on October 28, 2010. Filed as Exhibit 3.2 to Quarterly Report on Form 10-Q for the period ended September 30, 2010, which was filed on November 5, 2010. Commission File No. 1-5415. | — | ||
3.3 | Articles Supplementary of the Company. Filed as Exhibit 3.1 to Form 8-A filed on September 6, 2012. Commission File No. 1-5415. | — | ||
4.1 | Indenture, dated as of December 15, 2011, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent. Filed as Exhibit 4.1 to Form 8-K filed November 15, 2011. Commission File No. 1-5415. | — | ||
4.2 | Indenture, dated as of December 15, 2011, between A.M. Castle & Co., the Guarantors and U.S. Bank National Association, as trustee. Filed as Exhibit 4.2 to Form 8-K filed November 15, 2011. Commission File No. 1-5415. | — | ||
4.3 | Rights Agreement, dated as of August 31, 2012, by and between A.M. Castle & Co. and American Stock Transfer & Trust Company, LLC, as Rights Agent. Filed as Exhibit 4.1 to Form 8-K filed on August 31, 2012. Commission File No. 1-05415. | — | ||
10.1* | A. M. Castle & Co. 1995 Director Stock Option Plan. Filed as Exhibit A to Proxy Statement filed March 7, 1995. Commission File No. 1-5415. | — | ||
10.2* | A. M. Castle & Co. 1996 Restricted Stock and Stock Option Plan. Filed as Exhibit A to Proxy Statement filed March 8, 2006. Commission File No. 1-5415. | — | ||
Exhibit No. | Description | Page | ||
10.3* | A. M. Castle & Co. 2000 Restricted Stock and Stock Option Plan. Filed as Appendix B to Proxy Statement filed March 23, 2001. Commission File No. 1-5415. | — | ||
10.4* | A. M. Castle & Co. 2004 Restricted Stock, Stock Option and Equity Compensation Plan. Filed as Exhibit D to Proxy Statement filed March 12, 2004. Commission File No. 1-5415. | — | ||
10.5* | A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan, as amended and restated as of December 9, 2010. Filed as Exhibit 10.25 to Annual Report on Form 8-K filed on December 15, 2010. Commission File No. 1-5415. | — | ||
10.6* | Form of Restricted Stock Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan. Filed as Exhibit 10.11 to Annual Report on Form 10-K for the period ended December 31, 2008, which was filed on March 12, 2009. Commission File No. 1-5415. | — | ||
10.7* | Form of Performance Share Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan. Filed as Exhibit 10.12 to Annual Report on Form 10-K for the period ended December 31, 2008, which was filed on March 12, 2009. Commission File No. 1-5415. | — | ||
10.8* | A. M. Castle & Co. Directors Deferred Compensation Plan, as amended and restated as of October 22, 2008. Filed as Exhibit 10.13 to Annual Report on Form 10-K for the period ended December 31, 2008, which was filed on March 12, 2009. Commission File No. 1-5415. | — | ||
10.9* | A. M. Castle & Co. Supplemental 401(k) Savings and Retirement Plan, as amended and restated, effective as of January 1, 2009. Filed as Exhibit 10.14 to Annual Report on Form 10-K for the period ended December 31, 2008, which was filed on March 12, 2009. Commission File No. 1-5415. | — | ||
10.10* | A. M. Castle & Co. Supplemental Pension Plan, as amended and restated, effective as of January 1, 2009. Filed as Exhibit 10.15 to Annual Report on Form 10-K for the period ended December 31, 2008, which was filed on March 12, 2009. Commission File No. 1-5415. | — | ||
10.11* | First Amendment to the A. M. Castle & Co. Supplemental 401(k) Savings and Retirement Plan, executed April 15, 2009 (as effective April 27, 2009). Filed as Exhibit 10.1 to Form 8-K filed on April 16, 2009. Commission File No. 1-5415. | — | ||
10.12* | Form of A.M. Castle & Co. Indemnification Agreement to be executed with all directors and executive officers. Filed as Exhibit 10.16 to Form 8-K filed on July 29, 2009. Commission File No. 1-5415. | — | ||
10.13* | Form of Restricted Stock Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan. Filed as Exhibit 10.20 to Form 8-K filed on March 24, 2010. Commission File No. 1-5415. | — | ||
10.14* | Form of Performance Share Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan. Filed as Exhibit 10.21 to Form 8-K filed on March 24, 2010. Commission File No. 1-5415. | — | ||
10.15* | Form of Incentive Stock Option Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan. Filed as Exhibit 10.22 to Form 8-K filed on March 24, 2010. Commission File No. 1-5415. | — | ||
10.16* | Form of Non-Qualified Stock Option Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan. Filed as Exhibit 10.23 to Form 8-K filed on March 24, 2010. Commission File No. 1-5415. | — | ||
10.17* | Form of Non-Employee Director Restricted Stock Award Agreement. Filed as Exhibit 10.1 to Form 8-K filed on April 27, 2010. Commission File No. 1-5415. | — | ||
10.18* | Form of Amended and Restated Change of Control Agreement for all executive officers other than the CEO. Filed as Exhibit 10.24 to Form 8-K filed on September 21, 2010. Commission File No. 1-5415. | — | ||
Exhibit No. | Description | Page | ||
10.19* | Form of Amended and Restated Severance Agreement for executive officers other than the CEO. Filed as Exhibit 10.26 to Form 8-K filed on December 23, 2010. Commission File No. 1-5415. | — | ||
10.20* | CEO Change in Control Agreement, as amended and restated December 22, 2010. Filed as Exhibit 10.27 to Form 8-K filed on December 23, 2010. Commission File No. 1-5415. | — | ||
10.21* | CEO Employment/Non-Competition Agreement, as amended and restated December 22, 2010. Filed as Exhibit 10.28 to Form 8-K filed on December 23, 2010. Commission File No. 1-5415. | — | ||
10.22* | Form of Performance Share Award Agreement, adopted March 2, 2011, under A.M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan. Filed as Exhibit 10.29 to Form 8-K filed March 8, 2011. Commission File No. 1-5415. | — | ||
10.23* | 2008 A. M. Castle & Co. Omnibus Incentive Plan, as amended and restated as of April 28, 2011. Filed as Exhibit 10.30 to Form 8-K filed May 3, 2011. Commission File No. 1-5415. | — | ||
10.24* | Stephen V. Hooks Executive Retention and Severance Agreement, dated October 27, 2011. Filed as Exhibit 10.31 to Form 8-K filed November 1, 2011. Commission File No. 1-5415. | — | ||
10.25 | Pledge and Security Agreement, dated as of December 15, 2011, by A.M. Castle & Co., and its subsidiaries that are party thereto, in favor of U.S. Bank National Association, as collateral agent, for the benefit of the Secured Parties. Filed as Exhibit 10.1 to Form 8-K filed November 15, 2011. Commission File No. 1-5415. | — | ||
10.26 | Intercreditor Agreement, dated as of December 15, 2011, among Wells Fargo Bank, National Association, in its capacity as administrative and collateral agent for the First Lien Secured Parties and U.S. Bank National Association, a national banking association, in its capacity as trustee and collateral agend for the Second Lien Secured Parties. Filed as Exhibit 10.2 to Form 8-K filed November 15, 2011. Commission File No. 1-5415. | — | ||
10.27 | Registration Rights Agreement, dated as of December 15, 2011, between A.M. Castle & Co., the Guarantors and Jefferies & Company, Inc., as initial purchaser, for the benefit of the Holders of the Notes. Filed as Exhibit 10.3 to Form 8-K filed November 15, 2011. Commission File No. 1-5415. | — | ||
10.28 | Loan and Security Agreement, dated December 15, 2011, by and among A.M. Castle & Co., Transtar Metals Corp., Advanced Fabricating Technology, LLC, Oliver Steel Plate Co., Paramont Machine Company, LLC, Total Plastics, Inc., Tube Supply, LLC, A.M. Castle & Co. (Canada) Inc., Tube Supply Canada ULC, the other Loan Parties party thereto, the lenders which are now or which hereafter become a party thereto, and Wells Fargo Bank, National Association, a national banking association, in its capacity as administrative agent and collateral agent for Secured Parties. Filed as Exhibit 10.4 to Form 8-K filed November 15, 2011. Commission File No. 1-5415. | — | ||
10.29* | Employment Agreement, dated November 9, 2011, by and between A. M. Castle & Co. and Mr. Paul Sorensen. Filed as Exhibit 10.29 to Quarterly Report on Form 10-Q for the period ended June 30, 2012, which was filed on August 7, 2012. Commission File No. 1-5415. | — | ||
10.30* | Form of Retention Bonus Agreement for certain executive officers in connection with CEO leadership transition, dated May 14, 2012. Filed as Exhibit 10.30 to Quarterly Report on Form 10-Q for the period ended June 30, 2012, which was filed on August 7, 2012. Commission File No. 1-5415. | — | ||
10.31* | Amendment to Employment Agreement, dated May 30, 2012, by and between A. M. Castle & Co. and Mr. Paul Sorensen. Filed as Exhibit 10.31 to Quarterly Report on Form 10-Q for the period ended June 30, 2012, which was filed on August 7, 2012. Commission File No. 1-5415. | — | ||
10.32* | Employment Offer Letter dated October 10, 2012, between A.M. Castle & Co. and Mr. Scott Dolan. Filed as Exhibit 10.32 to Form 8-K/A filed October 15, 2012. Commission File No. 1-5415. | — | ||
Exhibit No. | Description | Page | ||
10.33* | Form of Restricted Stock Unit Award Agreement between A.M. Castle & Co. and Mr. Scott Dolan. Filed as Exhibit 10.33 to Form 8-K/A filed October 15, 2012. Commission File No. 1-5415. | — | ||
10.34* | Form of Severance Agreement between A.M. Castle & Co. and Mr. Scott Dolan. Filed as Exhibit 10.34 to Form 8-K/A filed October 15, 2012. Commission File No. 1-5415. | — | ||
10.35* | Form of Change of Control Agreement between A.M. Castle & Co. and Mr. Scott Dolan. Filed as Exhibit 10.35 to Form 8-K/A filed October 15, 2012. Commission File No. 1-5415. | — | ||
10.36* | Offer of Chief Commercial Officer dated December 28, 2012, between A.M. Castle & Co. and Mr. Blain Tiffany. Filed as Exhibit 10.36 to Form 8-K filed January 22, 2013. Commission File No. 1-5415. | — | ||
21.1 | Subsidiaries of Registrant | E-5 | ||
23.1 | Consent of Deloitte & Touche LLP | E-6 | ||
23.2 | Consent of Grant Thornton LLP | E-7 | ||
31.1 | CEO Certification Pursuant to Section 302 of the Sarbanes Oxley Act of 2002. | E-8 | ||
31.2 | CFO Certification Pursuant to Section 302 of the Sarbanes Oxley Act of 2002. | E-9 | ||
32.1 | CEO and CFO Certification Pursuant to Section 906 of the Sarbanes Oxley Act of 2002. | E-10 | ||
101.INS | XBRL Instance Document (1) | — | ||
101.SCH | XBRL Taxonomy Extension Schema Document (1) | — | ||
101.CAL | XBRL Taxonomy Calculation Linkbase Document (1) | — | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document(1) | — | ||
101.LAB | XBRL Taxonomy Label Linkbase Document (1) | — | ||
101.PRE | XBRL Taxonomy Presentation Linkbase Document (1) | — |
(1) | Furnished with this report. In accordance with Rule 406T of Regulation S-T, the information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing. |
* | These agreements are considered a compensatory plan or arrangement. |
(a) | Section 1.6(c) of the SPA is hereby amended by deleting the first sentence thereof in its entirety and replacing it with the following sentence: |
(b) | Giving effect to the SPA amendment described in subsection (a) above, the SPA is hereby further amended to the extent necessary, and no further, to provide that if, as a result of the Parties resolution of the Disputed Items on or before November 14, 2012, any of the Certificate Amounts that solely relate to the Koppel Product Recall Matter (including, for the avoidance of doubt, Closing Working Capital, the Closing Working Capital Adjustment and the Deferred Working Capital Amount, in each case giving full effect, as applicable, to the agreed amounts regarding any post-Closing supplier and customer adjustments and/or settlements in respect of the Koppel Product Recall Matter) are ultimately determined to be different than those set forth in the Certificate, the December Amount shall be adjusted dollar-for-dollar, up or down, to give effect to any such differences on a net basis (in accordance with the definitions, provisions and methodologies set forth in Article I of the SPA), but without interest on any agreed amounts regarding any post- |
(a) | Section 1.6(c) of the SPA is hereby amended by deleting the first sentence thereof in its entirety and replacing it with the following sentence: |
(b) | Giving effect to the SPA amendment described in subsection (a) above, the SPA is hereby further amended to the extent necessary, and no further, to provide that if, as a result of the Parties resolution of the Disputed Items on or before December 14, 2012, any of the Certificate Amounts that solely relate to the Koppel Product Recall Matter (including, for the avoidance of doubt, Closing Working Capital, the Closing Working Capital Adjustment and the Deferred Working Capital Amount, in each case giving full effect, as applicable, to the agreed amounts regarding any post-Closing supplier and customer adjustments and/or settlements in respect of the Koppel Product Recall Matter) are ultimately determined to be different than those set forth in the Certificate, the December Amount shall be adjusted dollar-for-dollar, up or down, to give effect to any such differences on a net basis (in accordance with the definitions, provisions and methodologies set forth in Article I of the SPA), but without interest on any agreed amounts regarding any post- |
Subsidiary | Registered in | Acquired | ||
A. M. Castle & Co. (Canada) Inc. | Ontario | July 31, 1990 | ||
Total Plastics, Inc. | Michigan | January 2, 1996 | ||
Oliver Steel Plate Co. | Delaware | July 15, 1998 | ||
Paramont Machine Company, LLC | Delaware | April 1, 1999 | ||
Advanced Fabricating Technology LLC. | Delaware | May 1, 2000 | ||
Keystone Tube Company, LLC* | Delaware | October 1, 2000 | ||
Castle Metals de Mexico S.A. de C.V. | Mexico | February 27, 2004 | ||
Transtar Inventory Corp. | Delaware | September 5, 2006 | ||
Transtar Metals Corp. | Delaware | September 5, 2006 | ||
Transtar Metals Limited | United Kingdom | September 5, 2006 | ||
Transtar Metals (France) | France | September 5, 2006 | ||
A. M. Castle & Co. (Singapore) Pte. Ltd. | Singapore | October 13, 2006 | ||
A.M. Castle Metal Materials (Shanghai) Co., Ltd. | Pu Dong Province, Peoples Republic of China | November 22, 2007 | ||
A. M. Castle Metals UK, Limited* | United Kingdom | October 11, 2007 | ||
Castle Metals UK Limited | United Kingdom | January 2, 2008 |
* | Subsidiary was not acquired. |
1. | I have reviewed this Annual Report on Form 10-K of A. M. Castle & Co. (the “Company”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
4. | The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures [as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)] and internal control over financial reporting [as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)] for the Company and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, the Company’s internal control over financial reporting; and |
5. | The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. |
Date: March 11, 2013 | /s/ Scott J. Dolan | |
Scott J. Dolan | ||
President and Chief Executive Officer | ||
(Principal Exectutive Officer) |
1. | I have reviewed this Annual Report on Form 10-K of A. M. Castle & Co. (the “Company”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
4. | The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures [as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)] and internal control over financial reporting [as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)] for the Company and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, the Company’s internal control over financial reporting; and |
5. | The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. |
Date: March 11, 2013 | /s/ Scott F. Stephens | |
Scott F Stephens | ||
Vice President and Chief Financial Officer | ||
(Principal Financial Officer) |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material aspects, the financial condition and results of operations of the Company. |
/s/ Scott J. Dolan | ||
Scott J. Dolan | ||
President and Chief Executive Officer | ||
March 11, 2013 | ||
/s/ Scott F. Stephens | ||
Scott F Stephens | ||
Vice President and Chief Financial Officer | ||
March 11, 2013 |
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Selected Quarterly Data (Unaudited) (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
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Quarterly Financial Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Select Quarterly Data (Unaudited) | The results of Tube Supply, acquired during December 2011, were included in the 2012 selected quarterly data in the table below.
|
Employee Benefit Plans Employee Benefit Plans and Components of Net Periodic Postretirement Benefit Cost (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Pension Plans, Defined Benefit
|
|||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | $ 608 | $ 539 | $ 623 |
Interest cost | 6,832 | 7,393 | 7,456 |
Expected return on assets | (9,855) | (10,054) | (9,342) |
Amortization of prior service cost | 324 | 324 | 231 |
Amortization of actuarial loss | 594 | 229 | 237 |
Net periodic pension credit | (1,497) | (1,569) | (795) |
Other Postretirement Benefit Plans, Defined Benefit
|
|||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | 161 | 164 | 177 |
Interest cost | 170 | 222 | 219 |
Amortization of prior service cost | 0 | 0 | 29 |
Amortization of actuarial loss | 0 | 0 | (16) |
Net periodic pension credit | $ 331 | $ 386 | $ 409 |
Segment Reporting - (Textual) (Details)
|
12 Months Ended |
---|---|
Dec. 31, 2012
Segment
|
|
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Income Taxes - Deferred Tax Assets and Deferred Tax Liabilities (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Deferred tax assets: | ||
Postretirement benefits | $ 3,830 | $ 3,675 |
Deferred compensation | 1,940 | 1,916 |
Deferred gain | 0 | 271 |
Impairments | 1,452 | 1,311 |
Alternative minimum tax and net operating loss carryforward | 3,487 | 2,635 |
Total deferred tax assets | 10,709 | 9,808 |
Deferred tax liabilities: | ||
Depreciation | 8,032 | 8,307 |
Inventory | 1,146 | 1,695 |
Pension | 4,240 | 5,742 |
Intangible assets and goodwill | 24,224 | 16,486 |
Other, net | 1,665 | 1,475 |
Total deferred tax liabilities | 39,307 | 33,705 |
Net deferred tax liabilities | $ 28,598 | $ 23,897 |
Debt Textual (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2012
Convertible Notes due December 15, 2017 [Member]
|
Dec. 20, 2011
Convertible Notes due December 15, 2017 [Member]
|
Dec. 15, 2011
Convertible Notes due December 15, 2017 [Member]
|
Dec. 31, 2012
Senior Secured Notes Due in 2016 [Member]
|
Dec. 31, 2011
Senior Secured Notes Due in 2016 [Member]
|
Dec. 31, 2012
Senior Convertible Notes Due in 2017 [Member]
|
Dec. 31, 2011
Senior Convertible Notes Due in 2017 [Member]
|
Dec. 31, 2011
New Revolving Credit Facility [Member]
|
Dec. 31, 2012
Domestic Subsidiaries [Member]
|
|
Debt Instrument [Line Items] | ||||||||||||
Consolidated Domestic Subsidiaries, Ownership Percentage | 100.00% | |||||||||||
Aggregate principal amount issued | $ 225,000 | $ 225,000 | $ 225,000 | |||||||||
Stated interest rate on debt | 7.00% | 12.75% | 7.00% | |||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 100,000 | |||||||||||
Aggregate principal amount of Convertible Notes issued | 57,500 | 57,500 | 7,500 | 50,000 | 57,500 | |||||||
Origination fee | 18,136 | |||||||||||
Underwriting fees associated with debt financing | 3,375 | |||||||||||
Loss on extinguishment of debt | $ 0 | $ (6,153) | $ 0 |
Acquisitions - Pro-Forma Information (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
12 Months Ended | |
---|---|---|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Business Combinations [Abstract] | ||
Pro forma net sales | $ 1,332,176 | $ 1,069,564 |
Pro forma net income (loss) | $ 7,033 | $ (24,268) |
Pro forma basic net income (loss) per share | $ 0.31 | $ (1.06) |
Pro forma diluted net income (loss) per share | $ 0.28 | $ (1.06) |
Goodwill and Intangible Assets (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in carrying amounts of goodwill | The changes in carrying amounts of goodwill during the years ended December 31, 2012 and 2011 were as follows:
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Summary of the components of intangible assets | The following summarizes the components of intangible assets at December 31, 2012 and 2011 :
|
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Summary of the estimated annual amortization expense | The following is a summary of the estimated annual amortization expense for each of the next 5 years:
|
Debt Secured Notes (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | 12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2012
New Revolving Credit Facility [Member]
|
Dec. 31, 2012
Secured Notes Due in 2016 - New [Member]
|
Jun. 12, 2012
Secured Notes Due in 2016 - New [Member]
|
Dec. 31, 2011
Secured Notes Due in 2016 - New [Member]
|
Jun. 12, 2012
Secured Notes Due in 2016 - Old [Member]
|
Dec. 31, 2011
Secured Notes Due in 2016 - Old [Member]
|
Dec. 31, 2012
Senior Secured Notes Due in 2016 [Member]
|
Dec. 31, 2011
Senior Secured Notes Due in 2016 [Member]
|
Dec. 31, 2012
Indenture Agreement, December 15 2011
|
Dec. 31, 2012
Redemption Date Range 1 [Member]
Secured Notes Due in 2016 - New [Member]
|
Dec. 31, 2012
Redemption Date Range 2 [Member]
Secured Notes Due in 2016 - New [Member]
|
Dec. 31, 2012
Redemption Date Range 3 [Member]
Secured Notes Due in 2016 - New [Member]
|
|
Debt Instrument [Line Items] | |||||||||||||||
Aggregate principal amount issued | $ 225,000 | $ 225,000 | $ 225,000 | $ 225,000 | $ 225,000 | ||||||||||
Stated interest rate on debt | 12.75% | 12.75% | 12.75% | 12.75% | 7.00% | ||||||||||
Maturity date | Dec. 15, 2015 | Dec. 15, 2016 | Dec. 15, 2017 | ||||||||||||
Date of redemption | On or after December 15, 2014 | On or after December 20, 2015 | |||||||||||||
Redemption percentage after disclosed date | 112.75% | 106.375% | 100.00% | ||||||||||||
Maximum redemption of secured notes, states as a percentage | 35.00% | ||||||||||||||
Redemption price stated as a percentage of principal | 101.00% | ||||||||||||||
Redemption price on principal amount, percentage, upon certain asset sales | 100.00% | ||||||||||||||
Offer to purchase secured notes with certain of its excess cash flow | 95 days | ||||||||||||||
Requirement to purchase secured notes with excess cash flows as a percentage of outstanding principal | 103.00% | ||||||||||||||
Interest | 34,051 | 7,234 | 4,392 | 28,688 | 4,025 | ||||||||||
Excess Cash Flow Per Seniot Secured Note Agreement | $ 17,000 |
Share-based Compensation Stock Options (Details) (Stock Options, USD $)
In Thousands, except Per Share data, unless otherwise specified |
12 Months Ended |
---|---|
Dec. 31, 2012
|
|
Stock Options
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares - Stock options outstanding at January 1, 2012 | 418 |
Shares - Exercised | (16) |
Shares - Forfeited | (113) |
Shares - Expired | (19) |
Shares - Stock options exercisable at December 31, 2012 | 270 |
Shares - Stock options exercisable at December 31, 2012 | 111 |
Shares - Stock options vested or expected to vest as of December 31, 2012 | 259 |
Weighted Average Exercise Price - Stock options outstanding at January 1, 2012 | $ 12.44 |
Weighted Average Exercise Price - Exercised | $ 9.11 |
Weighted Average Exercise Price - Forfeited | $ 15.56 |
Weighted Average Exercise Price - Expired | $ 12.60 |
Weighted Average Exercise Price - Stock options outstanding at December 31, 2012 | $ 11.34 |
Weighted Average Exercise Price - Stock options exercisable at December 31, 2012 | $ 9.25 |
Weighted Average Exercise Price - Stock options vested or expected to vest as of December 31, 2012 | $ 11.28 |
Intrinsic Value - Stock options outstanding at December 31, 2012 | $ 937 |
Intrinsic Value - Stock options exercisable at December 31, 2012 | 621 |
Intrinsic Value - Stock options vested or expected to vest as of December 31, 2012 | $ 915 |
Weighted Average Remaining Contractual Life - Stock options outstanding at December 31, 2012 | 3 years 9 months 18 days |
Weighted Average Remaining Contractual Life - Stock options exercisable at December 31, 2012 | 1 year 6 months |
Weighted Average Remaining Contractual Life - Stock options vested or expected to vest as of December 31, 2012 | 3 years 8 months 12 days |
Employee Benefit Plans Assumptions Used to Determine Net Periodic Pension Benefit Costs (Details)
|
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Discount rate | 4.25% | 5.25% | 5.75% |
Expected long-term rate of return on plan assets | 5.75% | 6.50% | 6.50% |
Minimum | Pension Plans
|
|||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Projected annual salary increases | 0.00% | 0.00% | 0.00% |
Maximum | Pension Plans
|
|||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Projected annual salary increases | 3.00% | 3.00% | |
Pension Plans | Maximum
|
|||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Projected annual salary increases | 3.00% |
Goodwill and Intangible Assets Amortization (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Summary of the estimated annual amortization expense | |||
Amortization expense | $ 11,843 | $ 6,867 | $ 7,071 |
2013 | 11,775 | ||
2014 | 11,742 | ||
2015 | 10,975 | ||
2016 | 10,975 | ||
2017 | $ 8,951 |
Share-based Compensation Restricted Stock Activity (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Restricted Stock
|
|||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Shares/Units Outstanding at January 1, 2012 | 38 | ||
Shares/Units Granted | 73 | ||
Shares/Units Forfeited | (5) | ||
Shares/Units Vested | (33) | ||
Shares/Units Outstanding at December 31, 2012 | 73 | ||
Shares/Units Expected to vest at December 31, 2012 | 73 | ||
Weighted-Average Grant Date Fair Value, Outstanding at January 1, 2012 | $ 18.74 | ||
Grant Date Fair Value per Share | $ 12.22 | ||
Weighted-Average Grant Date Fair Value, Forfeited | $ 17.02 | ||
Weighted-Average Grant Date Fair Value, Vested | $ 18.95 | ||
Weighted-Average Grant Date Fair Value, Outstanding at December 31, 2012 | $ 12.22 | ||
Weighted-Average Grant Date Fair Value, Expected to vest at December 31, 2012 | $ 12.22 | ||
Restricted Stock Units (RSUs)
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Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Shares/Units Outstanding at January 1, 2012 | 232 | ||
Shares/Units Granted | 309 | ||
Shares/Units Forfeited | (158) | ||
Shares/Units Vested | (85) | ||
Shares/Units Outstanding at December 31, 2012 | 298 | ||
Shares/Units Expected to vest at December 31, 2012 | 256 | ||
Weighted-Average Grant Date Fair Value, Outstanding at January 1, 2012 | $ 14.39 | ||
Grant Date Fair Value per Share | $ 10.60 | ||
Weighted-Average Grant Date Fair Value, Forfeited | $ 12.44 | ||
Weighted-Average Grant Date Fair Value, Vested | $ 12.45 | ||
Weighted-Average Grant Date Fair Value, Outstanding at December 31, 2012 | $ 12.05 | ||
Weighted-Average Grant Date Fair Value, Expected to vest at December 31, 2012 | $ 12.36 | ||
Restricted Stock and RSU
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Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | $ 2,758 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Total Fair Value | $ 1,685 | $ 2,166 | $ 600 |
Debt New Revolving Credit Agreement (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
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Dec. 31, 2011
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Dec. 31, 2010
|
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Debt Instrument [Line Items] | |||
Interest income from investment of excess cash balances | $ 222 | $ 254 | $ 201 |
New Revolving Credit Facility [Member]
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Debt Instrument [Line Items] | |||
Senior secured asset-based revolving credit facility | 100,000 | ||
Aggregate principal amount available for a Canadian subfacility | 20,000 | ||
Aggregate principal amount available for letters of credit | 20,000 | ||
Aggregate principal amount available for swingline loans | 10,000 | ||
Maturity date | Dec. 15, 2015 | ||
Weighted average interest rate for borrowings | 2.71% | 1.63% | |
Provision to increase aggregate amount of commitments under certain conditions, amount | 50,000 | ||
Ratio of EBITDA to fixed charges | 1.1 | ||
Excess availability | 50,543 | ||
Minimum | New Revolving Credit Facility [Member]
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Debt Instrument [Line Items] | |||
Customary base rate plus an applicable margin percentage | 0.50% | ||
Adjusted LIBOR rate plus an applicable margin | 1.50% | ||
Percentage of maximum calculated borrowing base to fixed charge of EBITDA | 10.00% | ||
Calculated borrowing base | 10,000 | ||
Maximum | New Revolving Credit Facility [Member]
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Debt Instrument [Line Items] | |||
Customary base rate plus an applicable margin percentage | 1.00% | ||
Adjusted LIBOR rate plus an applicable margin | 2.00% | ||
Percentage of maximum calculated borrowing base to fixed charge of EBITDA | 12.50% | ||
Calculated borrowing base | $ 12,500 |
Share-based Compensation Assumptions Used for Determining the Grant Date Fair Values of Performance Shares Awarded (Details) (USD $)
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12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
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Dec. 31, 2011
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Dec. 31, 2010
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Plan With the RSTR Market-Based Performance Condition
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grant Date Fair Value per Share | $ 13.78 | $ 23.89 | $ 12.26 |
Expected volatility | 85.00% | 62.00% | 61.60% |
Risk-free interest rate | 0.40% | 1.10% | 1.45% |
Expected life (in years) | 2 years 9 months 22 days | 2 years 10 months 2 days | 2 years 9 months 18 days |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Stock Options | Long-Term Compensation Plan - 2010
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 58.50% | ||
Risk-free interest rate | 2.30% | ||
Expected life (in years) | 5 years 6 months | ||
Expected dividend yield | 1.20% | ||
Chief Executive Officer | Plan With the RSTR Market-Based Performance Condition
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grant Date Fair Value per Share | $ 16.65 | $ 10.61 | $ 5.57 |
Expected volatility | 60.70% | 60.70% | 60.70% |
Risk-free interest rate | 0.34% | 0.34% | 0.34% |
Expected life (in years) | 2 years 2 months 16 days | 1 year 2 months 16 days | 0 years 2 months 16 days |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Short-term and Long-term Debt (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
SHORT-TERM DEBT | ||
Total short-term debt | $ 500 | $ 500 |
LONG-TERM DEBT | ||
Senior Secured Notes due December 15, 2016 | 225,000 | 225,000 |
Convertible Notes Principal Amount | 57,500 | 57,500 |
New Revolving Credit Facility due December 15, 2015 | 39,500 | 35,500 |
Other, primarily capital leases | 1,400 | 244 |
Total long-term debt | 323,400 | 318,244 |
Plus: derivative liability for conversion feature associated with convertible debt | 26,440 | |
Less: unamortized discount | (26,831) | (30,252) |
Current portion of long-term debt | (415) | (192) |
Total long-term portion | 296,154 | 314,240 |
TOTAL SHORT-TERM AND LONG-TERM DEBT | 297,069 | 314,932 |
Foreign
|
||
SHORT-TERM DEBT | ||
Total short-term debt | $ 500 | $ 500 |
Income Taxes - Changes in Unrecognized Tax Benefits (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
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Income Tax Disclosure [Abstract] | |||
Balance as of January 1 | $ 861 | $ 1,465 | $ 726 |
Increases (decreases) in unrecognized tax benefits: | |||
Due to tax positions taken in prior years | 0 | 91 | 729 |
Due to tax positions taken during the current year | 45 | 60 | 44 |
Due to settlement with tax authorities | (757) | 0 | (34) |
Due to expiration of statute | (44) | (755) | 0 |
Balance as of December 31 | $ 105 | $ 861 | $ 1,465 |
Basis of Presentation and Significant Accounting Policies - (Policies)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of presentation — The consolidated financial statements include the accounts of A. M. Castle & Co. and its subsidiaries over which the Company exhibits a controlling interest. The equity method of accounting is used for the Company’s 50% owned joint venture, Kreher Steel Company, LLC (“Kreher”). All inter-company accounts and transactions have been eliminated. |
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Use of estimates | Use of estimates — The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure 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. The principal areas of estimation reflected in the consolidated financial statements are accounts receivable allowances, inventory reserves, goodwill and intangible assets, income taxes, pension and other post-employment benefits and share-based compensation and convertible debt feature mark-to-mark adjustments. |
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Revenue recognition | Revenue recognition — Revenue from the sales of products is recognized when the earnings process is complete and when the title and risk and rewards of ownership have passed to the customer, which is primarily at the time of shipment. Revenue recognized other than at the time of shipment represents less than 3% of the Company’s consolidated net sales for the years ended December 31, 2012, 2011 and 2010. Provisions for allowances related to sales discounts and rebates are recorded based on terms of the sale in the period that the sale is recorded. Management utilizes historical information and the current sales trends of the business to estimate such provisions. The provisions related to discounts and rebates due to customers are recorded as a reduction within net sales in the Company’s consolidated statements of operations and comprehensive loss. The Company maintains an allowance for doubtful accounts resulting from the inability of customers to make required payments. The allowance for doubtful accounts is maintained at a level considered appropriate based on historical experience and specific identification of customer receivable balances for which collection is unlikely. The provisions for doubtful accounts is recorded in sales, general and administrative expense in the Company’s consolidated statements of operations and comprehensive loss. Estimates of doubtful accounts are based upon historical write-off experience as a percentage of net sales and judgments about the probable effects of economic conditions on certain customers. The Company also maintains an allowance for credit memos for estimated credit memos to be issued against current sales. Estimates of allowance for credit memos are based upon the application of a historical issuance lag period to the average credit memos issued each month. Accounts receivable allowance activity is presented in the table below:
Revenue from shipping and handling charges is recorded in net sales. Costs incurred in connection with shipping and handling the Company’s products, which are related to third-party carriers or performed by Company personnel are included in warehouse, processing and delivery expenses. For the years ended December 31, 2012, 2011 and 2010, shipping and handling costs included in warehouse, processing and delivery expenses were $36,585, $35,214, and $31,067, respectively. |
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Cost of materials | Cost of materials — Cost of materials consists of the costs the Company pays for metals, plastics and related inbound freight charges. It excludes depreciation and amortization which are discussed below. The Company accounts for the majority of its inventory on a last-in, first-out (“LIFO”) basis and LIFO adjustments are recorded in cost of materials. |
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Operating Expenses | Operating expenses — Operating costs and expenses primarily consist of:
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Cash equivalents | Cash equivalents — Cash equivalents are highly liquid, short-term investments that have an original maturity of 90 days or less. |
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Inventories | Inventories — Inventories consist of finished goods. Approximately eighty percent of the Company’s inventories are valued at the lower of LIFO cost or market at December 31, 2012 and 2011. Final inventory determination under the LIFO costing method is made at the end of each fiscal year based on the actual inventory levels and costs at that time. The Company values its LIFO increments using the cost of its latest purchases during the years reported. Current replacement cost of inventories exceeded book value by $139,940 and $138,882 at December 31, 2012 and 2011, respectively. Income taxes would become payable on any realization of this excess from reductions in the level of inventories. During 2010, a reduction in inventories resulted in a liquidation of applicable LIFO inventory quantities carried at lower costs in prior years. Cost of materials for 2010 were lower by $12,500, as a result of the liquidations. The Company maintains allowances for excess and obsolete inventory and physical inventory losses. The excess and obsolete inventory allowance is determined based on specific identification of material, adjusted for expected scrap value to be received. The allowance for physical inventory losses is determined based on historical physical inventory experience. |
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Insurance plans | Insurance plans — In August 2009, the Company became a member of a group captive insurance company (the “Captive”) domiciled in Grand Cayman Island. The Captive reinsures losses related to certain of the Company’s workers’ compensation, automobile and general liability risks that occur subsequent to August 2009. Premiums are based on the Company’s loss experience and are accrued as expenses for the period to which the premium relates. Premiums are credited to the Company’s “loss fund” and earn investment income until claims are actually paid. For workers’ compensation, automobile and general liability claims that were incurred prior to August 2009, the Company is self-insured. Self-insurance amounts are capped, for individual claims and in the aggregate, for each policy year by an insurance company. Self-insurance reserves are based on unpaid, known claims (including related administrative fees assessed by the insurance company for claims processing) and a reserve for incurred but not reported claims based on the Company’s historical claims experience and development. The Company is self-insured for medical insurance for its domestic operations. Self-insurance reserves are maintained based on incurred but not paid claims based on a historical lag. |
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Property, plant and equipment | Property, plant and equipment — Property, plant and equipment are stated at cost and include assets held under capital leases. Expenditures for major additions and improvements are capitalized, while maintenance and repair costs that do not substantially improve or extend the useful lives of the respective assets are expensed in the period in which they are incurred. When items are disposed, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is reflected in income. The Company provides for depreciation of plant and equipment sufficient to amortize the cost over their estimated useful lives as follows:
Leasehold improvements are depreciated over the shorter of their useful lives or the remaining term of the lease. Depreciation is calculated using the straight-line method and depreciation expense for 2012, 2011 and 2010 was $14,024, $13,605 and $13,578, respectively. |
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Long-lived assets | Long-lived assets — The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to future net cash flows (undiscounted and without interest charges) expected to be generated by the asset or asset group. If future net cash flows are less than the carrying value, the asset or asset group may be impaired. If such assets are impaired, the impairment charge is calculated as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Determining whether impairment has occurred typically requires various estimates and assumptions, including determining which undiscounted cash flows are directly related to the potentially impaired asset, the useful life over which cash flows will occur, their amount, and the asset’s residual value, if any. The Company derives the required undiscounted cash flow estimates from historical experience and internal business plans. |
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Goodwill and intangible assets | Goodwill and intangible assets — The carrying value of the Company’s goodwill is evaluated annually on January 1st of each fiscal year or when certain triggering events occur which require a more current valuation. The Company assesses, at least quarterly, whether any triggering events have occurred. A two-step method is used for determining goodwill impairment. The first step is performed to identify whether a potential impairment exists by comparing each reporting unit’s fair value to its carrying value. If the carrying value of a reporting unit exceeds its fair value, the next step is to measure the amount of impairment loss, if any. The majority of the Company’s recorded intangible assets were acquired as part of the Transtar and Tube Supply, Inc. (“Tube Supply”) acquisitions in September 2006 and December 2011, respectively, and consist of customer relationships, non-compete agreements, trade names and developed technology. The initial values of the intangible assets were based on a discounted cash flow valuation using assumptions made by management as to future revenues from select customers, the level and pace of attrition in such revenues over time and assumed operating income amounts generated from such revenues. These intangible assets are amortized over their useful lives, which are 4 to 12 years for customer relationships, 3 years for non-compete agreements, 1 to 10 years for trade names, and 3 years for developed technology. Useful lives are estimated by management and determined based on the timeframe over which a significant portion of the estimated future cash flows are expected to be realized from the respective intangible assets. Furthermore, when certain conditions or certain triggering events occur, a separate test of impairment, similar to the impairment test for long-lived assets, is performed. If the intangible asset is deemed to be impaired, such asset will be written down to its fair value. |
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Income taxes | Income taxes — The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records valuation allowances against its deferred tax assets when it is more likely than not that the amounts will not be realized, which will increase the provision for income taxes in the period in which that determination is made. The Company has undistributed earnings of foreign subsidiaries of approximately $83,352 at December 31, 2012, for which deferred taxes have not been provided. Such earnings are considered indefinitely invested in the foreign subsidiaries. If such earnings were repatriated, additional tax expense may result, although due to the potential availability of foreign tax credits and other items, the calculation of such additional taxes is not practicable. The Company's 50% ownership interest in Kreher (see Note 6) is through a 50% interest in a limited liability corporation (LLC) taxed as a partnership. Kreher has two subsidiaries organized as individually taxed C-Corporations. The Company includes in its income tax provision the income tax liability on its share of Kreher income. The income tax liability of Kreher itself is generally treated as a current income tax expense and the income tax liability associated with the profits of the two subsidiaries of Kreher is treated as a deferred income tax expense. The Company can not independently cause a dividend to be declared by one of Kreher's subsidiaries, therefore no benefit of a dividend received deduction can be recognized in the Company's tax provision until a dividend is declared. If one of Kreher's C-Corporation subsidiaries declares a dividend payable to Kreher, the Company recognizes a benefit for the 80% dividends received deduction on its 50% share of the dividend. The Company recognizes the tax benefits of uncertain tax positions only if those benefits will more likely than not be sustained upon examination by the relevant tax authorities. Unrecognized tax benefits are subsequently recognized at the time the recognition threshold is met, the tax matter is effectively settled or the statute of limitations expires for the return containing the tax position, whichever is earlier. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that differs from the current estimate. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Accrued interest and penalties are included within other long-term liabilities in the consolidated balance sheets. |
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Foreign currency | Foreign currency — For the majority of the Company’s non-U.S. operations, the functional currency is the local currency. Assets and liabilities of those operations are translated into U.S. dollars using year-end exchange rates, and income and expenses are translated using the average exchange rates for the reporting period. The currency effects of translating financial statements of the Company’s non-U.S. operations which operate in local currency environments are recorded in accumulated other comprehensive income (loss), a separate component of stockholders’ equity. Transaction gains or losses resulting from foreign currency transactions were not material for any of the years presented. |
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Earnings per share | Earnings per share — Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock plus common stock equivalents. Common stock equivalents consist of employee and director stock options, restricted stock awards, other share-based payment awards, and contingently issuable shares related to the Company’s convertible debt which are included in the calculation of weighted average shares outstanding using the treasury stock method, if dilutive. The following table is a reconciliation of the basic and diluted earnings per share calculations:
The Convertible Notes are dilutive to the extent the Company generates net income and the average stock price during the period is greater than $10.28, the conversion price of the Convertible Notes. The Convertible Notes are only dilutive for the “in the money” portion of the Convertible Notes that could be settled with the Company’s stock. In future periods, absent a fundamental change, (as defined in the Convertible Notes agreement), the outstanding Convertible Notes could increase diluted average shares outstanding by a maximum of approximately 5,600 shares. As of December 31, 2012 and 2011, 1,416 and 1,734 shares, respectively, were excluded from diluted average shares outstanding as there would have been an anti-dilutive effect. For the years ended December 31, 2012, 2011 and 2010, the participating securities, which represent certain non-vested shares granted by the Company, were less than one percent of total securities. These securities do not participate in the Company’s net losses. |
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Concentrations | Concentrations — The Company serves a wide range of customers within the producer durable equipment, oil and gas, aerospace, heavy industrial equipment, industrial goods, construction equipment, retail, marine and automotive sectors of the economy from locations throughout the United States, Canada, Mexico, France, the United Kingdom, Spain, China and Singapore. Its customer base includes many Fortune 500 companies as well as thousands of medium and smaller sized firms spread across the entire spectrum of metals and plastics using industries. The Company’s customer base is well diversified and, therefore, the Company does not have dependence upon any single customer or a few customers. No single customer represents more than 3% of the Company’s total net sales. Approximately 78% of the Company’s business is conducted from locations in the United States. |
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Share-based compensation | Share-based compensation — The Company offers share-based compensation to executive and other key employees, as well as its directors. Share-based compensation expense is recorded over the vesting period based on the grant date fair value of the stock award. Stock options have an exercise price equal to the market price of the Company’s stock on the grant date (options granted prior to 2010) or the average closing price of the Company’s stock for the 10 trading days preceding the grant date (options granted in 2010) and have a contractual life of eight to ten years. Options and restricted stock generally vest in one to five years for executives and employees and three years for directors. The Company may either issue shares from treasury or new shares upon share option exercise. Management estimates the probable number of shares which will ultimately vest when calculating the share-based compensation expense for the long-term compensation plans ("LTC Plans"). As of December 31, 2012, the Company’s weighted average forfeiture rate is approximately 33%. The actual number of shares that vest may differ from management’s estimate. Stock options are valued based on the market price of the Company’s stock on the grant date, using a Black-Scholes option-pricing model. The expense associated with stock option awards is recorded on a straight-line basis over the vesting period, net of estimated forfeitures. Share-based compensation expense for restricted share units and non-vested shares in the LTC Plans is established using the market price of the Company’s common stock on the date of grant. Final award vesting and distribution of performance awards granted under the LTC Plans are determined based on the Company’s actual performance versus the target goals for a three-year consecutive period as defined in each plan. Partial awards can be earned for performance less than the target goal, but in excess of minimum goals; and award distributions above the target can be achieved if the maximum goals are met or exceeded. Under the 2012, 2011, and 2010 LTC Plans, the potential award for the performance shares granted is partially dependent on the Company’s relative total shareholder return (“RTSR”), which represents a market condition. RTSR is measured against a group of peer companies either in the metals industry or in the industrial products distribution industry. Compensation expense for performance awards containing a market condition is recognized regardless of whether the market condition is achieved to the extent the requisite service period condition is met. The grant date fair value of performance shares containing a market-based performance condition awarded under the LTC Plans was estimated using a Monte Carlo simulation. Under the 2012 and 2011 LTC Plans, the potential award for performance share units containing a non-market-based performance condition is determined based on the Company's actual performance versus Company-specific target goals for Return on Invested Capital (“ROIC”), as defined in the 2012 and 2011 LTC Plans. Under the 2012 LTC Plan, the non-market-based performance condition is determined based on the Company's average actual performance versus Company-specific goals for ROIC for the three-year performance period beginning on January 1st of the year of grant. Under the 2011 LTC Plan, the non-market-based performance condition is determined for any one or more fiscal years during the three-year performance period beginning on January 1st of the year of grant. Partial performance awards can be earned for performance less than the target goal, but in excess of minimum goals and award distributions twice the target can be achieved if the maximum goals are met or exceeded. The number of performance shares, if any, that vest based on the performance achieved during the three-year performance period, will vest at the end of the three-year performance period. Compensation expense recognized is based on management's expectation of future performance compared to the pre-established performance goals. If the performance goals are not expected to be met, no compensation expense is recognized and any previously recognized compensation expense is reversed. Unless covered by a specific change-in-control or severance arrangement, participants to whom restricted stock units, performance shares and other non-vested shares have been granted must be employed by the Company on the vesting date or at the end of the performance period, respectively, or the award will be forfeited. |
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Standards Updates Adopted | Standards Updates Adopted Effective January 1, 2012, the Company adopted ASU No. 2011-08, “Intangibles – Goodwill and Other.” The objective of this ASU is to simplify how entities test goodwill for impairment. The amendments allow entities to assess qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test per Topic 350, “Intangibles – Goodwill and Other.” The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. The adoption of this ASU impacts the way the Company tests goodwill for impairment. As allowed by this ASU for its January 1, 2012 annual impairment test, the Company did not elect the option to perform a qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of a reporting unit. Instead the Company followed the two-step method. Refer to Note 8 for the results of the annual goodwill impairment test. Effective January 1, 2012, the Company adopted ASU No. 2011-05, “Presentation of Comprehensive Income.” The amendments in this ASU impact all entities that report items of other comprehensive (loss) income and are effective retrospectively for public entities. The amendments in this ASU eliminate the option to present the components of other comprehensive (loss) income as part of the statement of changes in stockholders’ equity. The amendments provide the entity with the option to present the total of comprehensive (loss) income, the components of net (loss) income and the components of other comprehensive (loss) income either in a single continuous statement of comprehensive (loss) income or in two separate but consecutive statements. Both options require an entity to present each component of net (loss) income along with total net (loss) income, each component of other comprehensive (loss) income along with total other comprehensive (loss) income and a total amount for comprehensive (loss) income. The subsequent issuance of ASU 2011-12, “Comprehensive Income” in December 2011 deferred the changes in ASU 2011-05 that relate to the presentation of reclassification adjustments out of accumulated other comprehensive (loss) income. All other provisions in ASU 2011-05 were effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The presentation requirements associated with the adoption of ASU 2011-05 are reflected in the consolidated statements of operations and comprehensive loss herein. Effective January 1, 2012, the Company adopted ASU No. 2011-04, “Fair Value Measurement.” The amendments in this ASU apply to all reporting entities that are required or permitted to measure or disclose the fair value of an asset, a liability, or an instrument classified in a reporting entity’s shareholders’ equity in the financial statements. The amendments in this ASU clarify the requirements of the existing standard and include some changes to principles or requirements for measuring or disclosing information about fair value measurements. The adoption of this ASU did not have an impact on the Company's financial condition, liquidity or operating results. The disclosure requirements associated with the adoption of ASU 2011-04 are reflected in Note 10. |
Segment Reporting - Information by Reportable Segment (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 12 Months Ended | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
Sep. 30, 2012
|
Jun. 30, 2012
|
Mar. 31, 2012
|
Dec. 31, 2011
|
Sep. 30, 2011
|
Jun. 30, 2011
|
Mar. 31, 2011
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
||||||||||
Summary of segment information | ||||||||||||||||||||
Net Sales | $ 274,021 | $ 304,039 | $ 329,392 | $ 362,916 | $ 282,150 | $ 294,860 | $ 282,568 | $ 272,788 | $ 1,270,368 | $ 1,132,366 | $ 943,706 | |||||||||
Operating Income (Loss) | 41,145 | 5,194 | (9,338) | |||||||||||||||||
Total Assets | 788,806 | 822,323 | 788,806 | 822,323 | 529,352 | |||||||||||||||
Capital Expenditures | 11,650 | 12,867 | 7,572 | |||||||||||||||||
Depreciation and amortization expense | 25,867 | 20,472 | 20,649 | |||||||||||||||||
Metals Segment
|
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Summary of segment information | ||||||||||||||||||||
Net Sales | 1,143,884 | [1] | 1,014,130 | [1] | 841,067 | |||||||||||||||
Operating Income (Loss) | 49,822 | [1] | 13,524 | [1] | (5,478) | |||||||||||||||
Total Assets | 693,803 | [1] | 729,692 | [1] | 693,803 | [1] | 729,692 | [1] | 454,345 | |||||||||||
Capital Expenditures | 9,819 | [1] | 10,639 | [1] | 6,815 | |||||||||||||||
Depreciation and amortization expense | 24,480 | [1] | 19,329 | [1] | 19,392 | |||||||||||||||
Plastics Segment
|
||||||||||||||||||||
Summary of segment information | ||||||||||||||||||||
Net Sales | 126,484 | 118,236 | 102,639 | |||||||||||||||||
Operating Income (Loss) | 3,188 | 2,860 | 3,559 | |||||||||||||||||
Total Assets | 56,149 | 56,171 | 56,149 | 56,171 | 47,128 | |||||||||||||||
Capital Expenditures | 1,831 | 2,228 | 757 | |||||||||||||||||
Depreciation and amortization expense | 1,387 | 1,143 | 1,257 | |||||||||||||||||
Other
|
||||||||||||||||||||
Summary of segment information | ||||||||||||||||||||
Net Sales | 0 | [2] | 0 | [2] | 0 | [2] | ||||||||||||||
Operating Income (Loss) | (11,865) | [2] | (11,190) | [2] | (7,419) | [2] | ||||||||||||||
Total Assets | 38,854 | [2] | 36,460 | [2] | 38,854 | [2] | 36,460 | [2] | 27,879 | [2] | ||||||||||
Capital Expenditures | 0 | [2] | 0 | [2] | 0 | [2] | ||||||||||||||
Depreciation and amortization expense | $ 0 | [2] | $ 0 | [2] | $ 0 | [2] | ||||||||||||||
|
Basis of Presentation and Significant Accounting Policies - Estimated Useful Lives of Plant and Equipment (Details)
|
12 Months Ended |
---|---|
Dec. 31, 2012
|
|
Buildings and building improvements | Minimum
|
|
Property, Plant and Equipment [Line Items] | |
Useful Lives | 3 years |
Buildings and building improvements | Maximum
|
|
Property, Plant and Equipment [Line Items] | |
Useful Lives | 40 years |
Plant equipment | Minimum
|
|
Property, Plant and Equipment [Line Items] | |
Useful Lives | 3 years |
Plant equipment | Maximum
|
|
Property, Plant and Equipment [Line Items] | |
Useful Lives | 25 years |
Furniture and fixtures | Minimum
|
|
Property, Plant and Equipment [Line Items] | |
Useful Lives | 2 years |
Furniture and fixtures | Maximum
|
|
Property, Plant and Equipment [Line Items] | |
Useful Lives | 10 years |
Vehicles and office equipment | Minimum
|
|
Property, Plant and Equipment [Line Items] | |
Useful Lives | 3 years |
Vehicles and office equipment | Maximum
|
|
Property, Plant and Equipment [Line Items] | |
Useful Lives | 7 years |
Goodwill and Intangible Assets Intangibles (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |
---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years 9 months 18 days | |
Gross Carrying Amount | $ 132,703 | $ 132,104 |
Accumulated Amortization | 50,226 | 38,291 |
Transtar
|
||
Finite-Lived Intangible Assets [Line Items] | ||
Date of acquisition | Sep. 05, 2006 | |
Tube Supply
|
||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 11 years 5 months | |
Date of acquisition | Dec. 15, 2011 | |
Customer relationships
|
||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 11 years 3 months 18 days | |
Gross Carrying Amount | 119,118 | 118,567 |
Accumulated Amortization | 45,317 | 34,960 |
Non-compete agreements
|
||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years | |
Gross Carrying Amount | 3,888 | 3,888 |
Accumulated Amortization | 3,235 | 2,902 |
Trade name
|
||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years 4 months 24 days | |
Gross Carrying Amount | 8,297 | 8,249 |
Accumulated Amortization | 1,188 | 410 |
Developed technology
|
||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years | |
Gross Carrying Amount | 1,400 | 1,400 |
Accumulated Amortization | $ 486 | $ 19 |
Selected Quarterly Data (Unaudited) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
Sep. 30, 2012
|
Jun. 30, 2012
|
Mar. 31, 2012
|
Dec. 31, 2011
|
Sep. 30, 2011
|
Jun. 30, 2011
|
Mar. 31, 2011
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|||||||||||||||
Quarterly Financial Data [Abstract] | |||||||||||||||||||||||||
Net Sales | $ 274,021 | $ 304,039 | $ 329,392 | $ 362,916 | $ 282,150 | $ 294,860 | $ 282,568 | $ 272,788 | $ 1,270,368 | $ 1,132,366 | $ 943,706 | ||||||||||||||
Gross profit (a) | 28,518 | [1] | 42,867 | [1] | 43,763 | [1] | 53,810 | [1] | 29,770 | [1] | 33,233 | [1] | 35,165 | [1] | 33,219 | [1] | |||||||||
Net (loss) income | (5,643) | 3,173 | (2,978) | [2] | (4,300) | [2] | (11,963) | [3] | 3,803 | 3,697 | 2,703 | (9,748) | (1,760) | (5,640) | |||||||||||
Basic (loss) earnings per share | $ (0.24) | $ 0.14 | $ (0.13) | $ (0.19) | $ (0.52) | $ 0.17 | $ 0.16 | $ 0.12 | $ (0.42) | $ (0.08) | $ (0.25) | ||||||||||||||
Diluted (loss) earnings per share | $ (0.24) | $ 0.13 | $ (0.13) | $ (0.19) | $ (0.52) | $ 0.16 | $ 0.16 | $ 0.12 | $ (0.42) | $ (0.08) | $ (0.25) | ||||||||||||||
Common stock dividends declared | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Interest expense - unrealized loss on debt conversion option | $ (4,257) | $ (11,340) | $ (3,991) | $ (15,597) | $ (3,991) | $ 0 | |||||||||||||||||||
|
Stockholders' Equity (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Components of accumulated other comprehensive loss | Accumulated other comprehensive loss as reported in the consolidated balance sheets as of December 31, 2012 and 2011 was comprised of the following:
|
Lease Agreements - Future minimum rental payments uder operating anc capital leases (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
---|---|
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
Capital leases minimum payments for 2013 | $ 415 |
Capital leases minimum payments for 2014 | 396 |
Capital leases minimum payments for 2015 | 392 |
Capital leases minimum payments for 2016 | 197 |
Capital leases minimum payments for 2017 | 0 |
Capital leases minimum payments for later years | 0 |
Capital leases minimum payments total | 1,400 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
Operating leases minimum payments for 2013 | 14,401 |
Operating leases minimum payments for 2014 | 11,375 |
Operating leases minimum payments for 2015 | 10,091 |
Operating leases minimum payments for 2016 | 8,702 |
Operating leases minimum payments for 2017 | 8,007 |
Operating leases minimum payments for later years | 24,130 |
Operating leases minimum payments total | $ 76,706 |
Income Taxes - Domestic and Foreign Income (loss) before income taxes (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Domestic and Foreign Income (Loss) before Income Taxes and income (loss) in equity method investments. [Line Items] | |||
Loss before income taxes and equity in earnings of joint venture | $ (15,542) | $ (14,613) | $ (14,326) |
U.S.
|
|||
Domestic and Foreign Income (Loss) before Income Taxes and income (loss) in equity method investments. [Line Items] | |||
Loss before income taxes and equity in earnings of joint venture | (28,398) | (26,321) | (19,420) |
Non-U.S.
|
|||
Domestic and Foreign Income (Loss) before Income Taxes and income (loss) in equity method investments. [Line Items] | |||
Loss before income taxes and equity in earnings of joint venture | $ 12,856 | $ 11,708 | $ 5,094 |
Employee Benefit Plans Weighted Average Discount Rate Used to Determine the Net Periodic Postretirement Benefit Costs (Details)
|
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Defined Benefit Plan Disclosure [Line Items] | |||
Net periodic postretirement benefit costs | 4.25% | 5.25% | 5.75% |
Other Postretirement Benefit Plans, Defined Benefit
|
|||
Defined Benefit Plan Disclosure [Line Items] | |||
Net periodic postretirement benefit costs | 3.75% | 5.25% | 5.75% |
Accumulated postretirement benefit obligations | 3.50% | 3.75% | 5.25% |
Acquisitions - Narrative (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
Service_Center
|
Sep. 30, 2012
|
Jun. 30, 2012
|
Mar. 31, 2012
|
Dec. 31, 2011
|
Sep. 30, 2011
|
Jun. 30, 2011
|
Mar. 31, 2011
|
Dec. 31, 2012
Service_Center
|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2012
Trade name
|
Dec. 31, 2012
Customer relationships
|
Dec. 31, 2012
Non-compete agreements
|
Dec. 31, 2012
Developed technology
|
Dec. 31, 2011
Tube Supply
|
Dec. 31, 2012
Tube Supply
Service_Center
|
Dec. 15, 2011
Tube Supply
|
Dec. 31, 2012
Tube Supply
Trade name
|
Dec. 31, 2012
Tube Supply
Customer relationships
|
Dec. 31, 2012
Tube Supply
Non-compete agreements
|
Dec. 31, 2012
Tube Supply
Developed technology
|
Dec. 31, 2011
Expense Related to Distribution or Servicing and Underwriting Fees
|
|
Business Acquisition [Line Items] | |||||||||||||||||||||||
Business Acquisition, Percentage of Outstanding Common Shares Acquired | 100.00% | ||||||||||||||||||||||
Service centers | 49 | 49 | 2 | ||||||||||||||||||||
Total purchase price | $ 184,385 | $ 184,385 | |||||||||||||||||||||
Business Acquisition, Cost of Acquired Entity, Transaction Costs | 4,260 | 4,260 | 4,260 | ||||||||||||||||||||
Acquired Intangible Assets, Weighted Average Useful Life | 10 years 9 months 18 days | 9 years 4 months 24 days | 11 years 3 months 18 days | 3 years | 3 years | 11 years 5 months | |||||||||||||||||
Intangible assets useful lives | 3 years | 3 years | 10 years | 12 years | 3 years | 3 years | |||||||||||||||||
Off-market lease unfavorable noncurrent | 2,168 | 2,871 | 2,168 | 2,871 | |||||||||||||||||||
Off-market Lease, Current | 645 | 645 | 645 | 645 | |||||||||||||||||||
Business combination, sales of acquiree since acquisition date, actual | 7,648 | ||||||||||||||||||||||
Business combination, earnings or loss of acquiree since acquisition date, actual | 901 | ||||||||||||||||||||||
Loss on extinguishment of debt | 0 | (6,153) | 0 | ||||||||||||||||||||
Net Sales | 274,021 | 304,039 | 329,392 | 362,916 | 282,150 | 294,860 | 282,568 | 272,788 | 1,270,368 | 1,132,366 | 943,706 | ||||||||||||
Interest Expense | $ 7,366 |
Basis of Presentation and Significant Accounting Policies
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Nature of operations — A.M. Castle & Co. and its subsidiaries (the “Company”) is a specialty metals and plastics distribution company serving principally the North American market, but with a growing global presence. The Company has operations in the United States, Canada, Mexico, France, the United Kingdom, Spain, China and Singapore. The Company provides a broad range of product inventories as well as value-added processing and supply chain services to a wide array of customers, principally within the producer durable equipment, oil and gas, aerospace, heavy industrial equipment, industrial goods, construction equipment, retail, marine and automotive sectors of the global economy. Particular focus is placed on the aerospace and defense, oil and gas, power generation, mining, heavy industrial equipment, marine, office furniture and fixtures, safety products, life science applications, automotive and general manufacturing industries as well as general engineering applications. The Company’s corporate headquarters are located in Oak Brook, Illinois. The Company has 49 operational service centers located throughout North America (44), Europe (4) and Asia (1). The Company purchases metals and plastics from many producers. Purchases are made in large lots and held in distribution centers until sold, usually in smaller quantities and often with value-added processing services performed. Orders are primarily filled with materials shipped from Company stock. The materials required to fill the balance of sales are obtained from other sources, such as direct mill shipments to customers or purchases from other distributors. Thousands of customers from a wide array of industries are serviced primarily through the Company’s own sales organization. Basis of presentation — The consolidated financial statements include the accounts of A. M. Castle & Co. and its subsidiaries over which the Company exhibits a controlling interest. The equity method of accounting is used for the Company’s 50% owned joint venture, Kreher Steel Company, LLC (“Kreher”). All inter-company accounts and transactions have been eliminated. Reclassification — For comparability, certain 2011 amounts have been reclassified to conform to presentation adopted in 2012. Use of estimates — The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure 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. The principal areas of estimation reflected in the consolidated financial statements are accounts receivable allowances, inventory reserves, goodwill and intangible assets, income taxes, pension and other post-employment benefits and share-based compensation and convertible debt feature mark-to-mark adjustments. Revenue recognition — Revenue from the sales of products is recognized when the earnings process is complete and when the title and risk and rewards of ownership have passed to the customer, which is primarily at the time of shipment. Revenue recognized other than at the time of shipment represents less than 3% of the Company’s consolidated net sales for the years ended December 31, 2012, 2011 and 2010. Provisions for allowances related to sales discounts and rebates are recorded based on terms of the sale in the period that the sale is recorded. Management utilizes historical information and the current sales trends of the business to estimate such provisions. The provisions related to discounts and rebates due to customers are recorded as a reduction within net sales in the Company’s consolidated statements of operations and comprehensive loss. The Company maintains an allowance for doubtful accounts resulting from the inability of customers to make required payments. The allowance for doubtful accounts is maintained at a level considered appropriate based on historical experience and specific identification of customer receivable balances for which collection is unlikely. The provisions for doubtful accounts is recorded in sales, general and administrative expense in the Company’s consolidated statements of operations and comprehensive loss. Estimates of doubtful accounts are based upon historical write-off experience as a percentage of net sales and judgments about the probable effects of economic conditions on certain customers. The Company also maintains an allowance for credit memos for estimated credit memos to be issued against current sales. Estimates of allowance for credit memos are based upon the application of a historical issuance lag period to the average credit memos issued each month. Accounts receivable allowance activity is presented in the table below:
Revenue from shipping and handling charges is recorded in net sales. Costs incurred in connection with shipping and handling the Company’s products, which are related to third-party carriers or performed by Company personnel are included in warehouse, processing and delivery expenses. For the years ended December 31, 2012, 2011 and 2010, shipping and handling costs included in warehouse, processing and delivery expenses were $36,585, $35,214, and $31,067, respectively. Cost of materials — Cost of materials consists of the costs the Company pays for metals, plastics and related inbound freight charges. It excludes depreciation and amortization which are discussed below. The Company accounts for the majority of its inventory on a last-in, first-out (“LIFO”) basis and LIFO adjustments are recorded in cost of materials. Operating expenses — Operating costs and expenses primarily consist of:
Cash equivalents — Cash equivalents are highly liquid, short-term investments that have an original maturity of 90 days or less. Statement of cash flows — Non-cash investing and financing activities and supplemental disclosures of consolidated cash flow information are as follows:
Inventories — Inventories consist of finished goods. Approximately eighty percent of the Company’s inventories are valued at the lower of LIFO cost or market at December 31, 2012 and 2011. Final inventory determination under the LIFO costing method is made at the end of each fiscal year based on the actual inventory levels and costs at that time. The Company values its LIFO increments using the cost of its latest purchases during the years reported. Current replacement cost of inventories exceeded book value by $139,940 and $138,882 at December 31, 2012 and 2011, respectively. Income taxes would become payable on any realization of this excess from reductions in the level of inventories. During 2010, a reduction in inventories resulted in a liquidation of applicable LIFO inventory quantities carried at lower costs in prior years. Cost of materials for 2010 were lower by $12,500, as a result of the liquidations. The Company maintains allowances for excess and obsolete inventory and physical inventory losses. The excess and obsolete inventory allowance is determined based on specific identification of material, adjusted for expected scrap value to be received. The allowance for physical inventory losses is determined based on historical physical inventory experience. Insurance plans — In August 2009, the Company became a member of a group captive insurance company (the “Captive”) domiciled in Grand Cayman Island. The Captive reinsures losses related to certain of the Company’s workers’ compensation, automobile and general liability risks that occur subsequent to August 2009. Premiums are based on the Company’s loss experience and are accrued as expenses for the period to which the premium relates. Premiums are credited to the Company’s “loss fund” and earn investment income until claims are actually paid. For workers’ compensation, automobile and general liability claims that were incurred prior to August 2009, the Company is self-insured. Self-insurance amounts are capped, for individual claims and in the aggregate, for each policy year by an insurance company. Self-insurance reserves are based on unpaid, known claims (including related administrative fees assessed by the insurance company for claims processing) and a reserve for incurred but not reported claims based on the Company’s historical claims experience and development. The Company is self-insured for medical insurance for its domestic operations. Self-insurance reserves are maintained based on incurred but not paid claims based on a historical lag. Property, plant and equipment — Property, plant and equipment are stated at cost and include assets held under capital leases. Expenditures for major additions and improvements are capitalized, while maintenance and repair costs that do not substantially improve or extend the useful lives of the respective assets are expensed in the period in which they are incurred. When items are disposed, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is reflected in income. The Company provides for depreciation of plant and equipment sufficient to amortize the cost over their estimated useful lives as follows:
Leasehold improvements are depreciated over the shorter of their useful lives or the remaining term of the lease. Depreciation is calculated using the straight-line method and depreciation expense for 2012, 2011 and 2010 was $14,024, $13,605 and $13,578, respectively. Long-lived assets — The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to future net cash flows (undiscounted and without interest charges) expected to be generated by the asset or asset group. If future net cash flows are less than the carrying value, the asset or asset group may be impaired. If such assets are impaired, the impairment charge is calculated as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Determining whether impairment has occurred typically requires various estimates and assumptions, including determining which undiscounted cash flows are directly related to the potentially impaired asset, the useful life over which cash flows will occur, their amount, and the asset’s residual value, if any. The Company derives the required undiscounted cash flow estimates from historical experience and internal business plans. Goodwill and intangible assets — The carrying value of the Company’s goodwill is evaluated annually on January 1st of each fiscal year or when certain triggering events occur which require a more current valuation. The Company assesses, at least quarterly, whether any triggering events have occurred. A two-step method is used for determining goodwill impairment. The first step is performed to identify whether a potential impairment exists by comparing each reporting unit’s fair value to its carrying value. If the carrying value of a reporting unit exceeds its fair value, the next step is to measure the amount of impairment loss, if any. The majority of the Company’s recorded intangible assets were acquired as part of the Transtar and Tube Supply, Inc. (“Tube Supply”) acquisitions in September 2006 and December 2011, respectively, and consist of customer relationships, non-compete agreements, trade names and developed technology. The initial values of the intangible assets were based on a discounted cash flow valuation using assumptions made by management as to future revenues from select customers, the level and pace of attrition in such revenues over time and assumed operating income amounts generated from such revenues. These intangible assets are amortized over their useful lives, which are 4 to 12 years for customer relationships, 3 years for non-compete agreements, 1 to 10 years for trade names, and 3 years for developed technology. Useful lives are estimated by management and determined based on the timeframe over which a significant portion of the estimated future cash flows are expected to be realized from the respective intangible assets. Furthermore, when certain conditions or certain triggering events occur, a separate test of impairment, similar to the impairment test for long-lived assets, is performed. If the intangible asset is deemed to be impaired, such asset will be written down to its fair value. Income taxes — The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records valuation allowances against its deferred tax assets when it is more likely than not that the amounts will not be realized, which will increase the provision for income taxes in the period in which that determination is made. The Company has undistributed earnings of foreign subsidiaries of approximately $83,352 at December 31, 2012, for which deferred taxes have not been provided. Such earnings are considered indefinitely invested in the foreign subsidiaries. If such earnings were repatriated, additional tax expense may result, although due to the potential availability of foreign tax credits and other items, the calculation of such additional taxes is not practicable. The Company's 50% ownership interest in Kreher (see Note 6) is through a 50% interest in a limited liability corporation (LLC) taxed as a partnership. Kreher has two subsidiaries organized as individually taxed C-Corporations. The Company includes in its income tax provision the income tax liability on its share of Kreher income. The income tax liability of Kreher itself is generally treated as a current income tax expense and the income tax liability associated with the profits of the two subsidiaries of Kreher is treated as a deferred income tax expense. The Company can not independently cause a dividend to be declared by one of Kreher's subsidiaries, therefore no benefit of a dividend received deduction can be recognized in the Company's tax provision until a dividend is declared. If one of Kreher's C-Corporation subsidiaries declares a dividend payable to Kreher, the Company recognizes a benefit for the 80% dividends received deduction on its 50% share of the dividend. The Company recognizes the tax benefits of uncertain tax positions only if those benefits will more likely than not be sustained upon examination by the relevant tax authorities. Unrecognized tax benefits are subsequently recognized at the time the recognition threshold is met, the tax matter is effectively settled or the statute of limitations expires for the return containing the tax position, whichever is earlier. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that differs from the current estimate. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Accrued interest and penalties are included within other long-term liabilities in the consolidated balance sheets. Foreign currency — For the majority of the Company’s non-U.S. operations, the functional currency is the local currency. Assets and liabilities of those operations are translated into U.S. dollars using year-end exchange rates, and income and expenses are translated using the average exchange rates for the reporting period. The currency effects of translating financial statements of the Company’s non-U.S. operations which operate in local currency environments are recorded in accumulated other comprehensive income (loss), a separate component of stockholders’ equity. Transaction gains or losses resulting from foreign currency transactions were not material for any of the years presented. Earnings per share — Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock plus common stock equivalents. Common stock equivalents consist of employee and director stock options, restricted stock awards, other share-based payment awards, and contingently issuable shares related to the Company’s convertible debt which are included in the calculation of weighted average shares outstanding using the treasury stock method, if dilutive. The following table is a reconciliation of the basic and diluted earnings per share calculations:
The Convertible Notes are dilutive to the extent the Company generates net income and the average stock price during the period is greater than $10.28, the conversion price of the Convertible Notes. The Convertible Notes are only dilutive for the “in the money” portion of the Convertible Notes that could be settled with the Company’s stock. In future periods, absent a fundamental change, (as defined in the Convertible Notes agreement), the outstanding Convertible Notes could increase diluted average shares outstanding by a maximum of approximately 5,600 shares. As of December 31, 2012 and 2011, 1,416 and 1,734 shares, respectively, were excluded from diluted average shares outstanding as there would have been an anti-dilutive effect. For the years ended December 31, 2012, 2011 and 2010, the participating securities, which represent certain non-vested shares granted by the Company, were less than one percent of total securities. These securities do not participate in the Company’s net losses. Concentrations — The Company serves a wide range of customers within the producer durable equipment, oil and gas, aerospace, heavy industrial equipment, industrial goods, construction equipment, retail, marine and automotive sectors of the economy from locations throughout the United States, Canada, Mexico, France, the United Kingdom, Spain, China and Singapore. Its customer base includes many Fortune 500 companies as well as thousands of medium and smaller sized firms spread across the entire spectrum of metals and plastics using industries. The Company’s customer base is well diversified and, therefore, the Company does not have dependence upon any single customer or a few customers. No single customer represents more than 3% of the Company’s total net sales. Approximately 78% of the Company’s business is conducted from locations in the United States. Share-based compensation — The Company offers share-based compensation to executive and other key employees, as well as its directors. Share-based compensation expense is recorded over the vesting period based on the grant date fair value of the stock award. Stock options have an exercise price equal to the market price of the Company’s stock on the grant date (options granted prior to 2010) or the average closing price of the Company’s stock for the 10 trading days preceding the grant date (options granted in 2010) and have a contractual life of eight to ten years. Options and restricted stock generally vest in one to five years for executives and employees and three years for directors. The Company may either issue shares from treasury or new shares upon share option exercise. Management estimates the probable number of shares which will ultimately vest when calculating the share-based compensation expense for the long-term compensation plans ("LTC Plans"). As of December 31, 2012, the Company’s weighted average forfeiture rate is approximately 33%. The actual number of shares that vest may differ from management’s estimate. Stock options are valued based on the market price of the Company’s stock on the grant date, using a Black-Scholes option-pricing model. The expense associated with stock option awards is recorded on a straight-line basis over the vesting period, net of estimated forfeitures. Share-based compensation expense for restricted share units and non-vested shares in the LTC Plans is established using the market price of the Company’s common stock on the date of grant. Final award vesting and distribution of performance awards granted under the LTC Plans are determined based on the Company’s actual performance versus the target goals for a three-year consecutive period as defined in each plan. Partial awards can be earned for performance less than the target goal, but in excess of minimum goals; and award distributions above the target can be achieved if the maximum goals are met or exceeded. Under the 2012, 2011, and 2010 LTC Plans, the potential award for the performance shares granted is partially dependent on the Company’s relative total shareholder return (“RTSR”), which represents a market condition. RTSR is measured against a group of peer companies either in the metals industry or in the industrial products distribution industry. Compensation expense for performance awards containing a market condition is recognized regardless of whether the market condition is achieved to the extent the requisite service period condition is met. The grant date fair value of performance shares containing a market-based performance condition awarded under the LTC Plans was estimated using a Monte Carlo simulation. Under the 2012 and 2011 LTC Plans, the potential award for performance share units containing a non-market-based performance condition is determined based on the Company's actual performance versus Company-specific target goals for Return on Invested Capital (“ROIC”), as defined in the 2012 and 2011 LTC Plans. Under the 2012 LTC Plan, the non-market-based performance condition is determined based on the Company's average actual performance versus Company-specific goals for ROIC for the three-year performance period beginning on January 1st of the year of grant. Under the 2011 LTC Plan, the non-market-based performance condition is determined for any one or more fiscal years during the three-year performance period beginning on January 1st of the year of grant. Partial performance awards can be earned for performance less than the target goal, but in excess of minimum goals and award distributions twice the target can be achieved if the maximum goals are met or exceeded. The number of performance shares, if any, that vest based on the performance achieved during the three-year performance period, will vest at the end of the three-year performance period. Compensation expense recognized is based on management's expectation of future performance compared to the pre-established performance goals. If the performance goals are not expected to be met, no compensation expense is recognized and any previously recognized compensation expense is reversed. Unless covered by a specific change-in-control or severance arrangement, participants to whom restricted stock units, performance shares and other non-vested shares have been granted must be employed by the Company on the vesting date or at the end of the performance period, respectively, or the award will be forfeited. New Accounting Standards Updates Standards Updates Adopted Effective January 1, 2012, the Company adopted ASU No. 2011-08, “Intangibles – Goodwill and Other.” The objective of this ASU is to simplify how entities test goodwill for impairment. The amendments allow entities to assess qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test per Topic 350, “Intangibles – Goodwill and Other.” The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. The adoption of this ASU impacts the way the Company tests goodwill for impairment. As allowed by this ASU for its January 1, 2012 annual impairment test, the Company did not elect the option to perform a qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of a reporting unit. Instead the Company followed the two-step method. Refer to Note 8 for the results of the annual goodwill impairment test. Effective January 1, 2012, the Company adopted ASU No. 2011-05, “Presentation of Comprehensive Income.” The amendments in this ASU impact all entities that report items of other comprehensive (loss) income and are effective retrospectively for public entities. The amendments in this ASU eliminate the option to present the components of other comprehensive (loss) income as part of the statement of changes in stockholders’ equity. The amendments provide the entity with the option to present the total of comprehensive (loss) income, the components of net (loss) income and the components of other comprehensive (loss) income either in a single continuous statement of comprehensive (loss) income or in two separate but consecutive statements. Both options require an entity to present each component of net (loss) income along with total net (loss) income, each component of other comprehensive (loss) income along with total other comprehensive (loss) income and a total amount for comprehensive (loss) income. The subsequent issuance of ASU 2011-12, “Comprehensive Income” in December 2011 deferred the changes in ASU 2011-05 that relate to the presentation of reclassification adjustments out of accumulated other comprehensive (loss) income. All other provisions in ASU 2011-05 were effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The presentation requirements associated with the adoption of ASU 2011-05 are reflected in the consolidated statements of operations and comprehensive loss herein. Effective January 1, 2012, the Company adopted ASU No. 2011-04, “Fair Value Measurement.” The amendments in this ASU apply to all reporting entities that are required or permitted to measure or disclose the fair value of an asset, a liability, or an instrument classified in a reporting entity’s shareholders’ equity in the financial statements. The amendments in this ASU clarify the requirements of the existing standard and include some changes to principles or requirements for measuring or disclosing information about fair value measurements. The adoption of this ASU did not have an impact on the Company's financial condition, liquidity or operating results. The disclosure requirements associated with the adoption of ASU 2011-04 are reflected in Note 10. Standards Updates Issued Not Yet Effective During December 2011, the FASB issued ASU No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.” The amendments in this ASU require an entity to disclose information to enable users of its financial statements to evaluate the effect or potential effect of netting arrangements on its financial position, including the effect or potential effect of rights of set off associated with an entity’s recognized assets and recognized liabilities within the scope of Topic 210. The ASU is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The adoption of this ASU may impact the Company’s disclosures in future interim and annual financial statements issued. |
Employee Benefit Plans Amounts Expensed (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
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Dec. 31, 2012
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Dec. 31, 2011
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Dec. 31, 2010
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Compensation and Retirement Disclosure [Abstract] | |||
Supplemental contributions and 401(k) match | $ 5,260 | $ 4,414 | $ 1,634 |