Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
(State or other jurisdiction of incorporation of organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
OCTQX Best Market |
Large accelerated filer | ☐ | Accelerated filer | ☐ | ||||||||
☒ | Smaller reporting company | ||||||||||
Emerging growth company |
Page | ||||||||
A.M. Castle & Co. Condensed Consolidated Balance Sheets | |||||||||||
As of | |||||||||||
June 30, 2020 | December 31, 2019 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, less allowances of $ | |||||||||||
Inventories | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Income tax receivable | |||||||||||
Total current assets | |||||||||||
Goodwill and intangible assets | |||||||||||
Prepaid pension cost | |||||||||||
Deferred income taxes | |||||||||||
Operating right-of-use assets | |||||||||||
Other noncurrent assets | |||||||||||
Property, plant and equipment: | |||||||||||
Land | |||||||||||
Buildings | |||||||||||
Machinery and equipment | |||||||||||
Property, plant and equipment, at cost | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
Property, plant and equipment, net | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued and other current liabilities | |||||||||||
Operating lease liabilities | |||||||||||
Income tax payable | |||||||||||
Short-term borrowings | |||||||||||
Current portion of finance leases | |||||||||||
Current portion of long-term debt | |||||||||||
Total current liabilities | |||||||||||
Long-term debt, less current portion | |||||||||||
Deferred income taxes | |||||||||||
Finance leases, less current portion | |||||||||||
Other noncurrent liabilities | |||||||||||
Pension and postretirement benefit obligations | |||||||||||
Noncurrent operating lease liabilities | |||||||||||
Commitments and contingencies (see Note 12) | |||||||||||
Stockholders’ equity (deficit): | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Treasury stock, at cost — | ( | ( | |||||||||
Total stockholders’ equity (deficit) | ( | ||||||||||
$ | $ |
A.M. Castle & Co. Condensed Consolidated Statements of Operations and Comprehensive Loss | |||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of materials (exclusive of depreciation) | |||||||||||||||||||||||
Warehouse, processing and delivery expense | |||||||||||||||||||||||
Sales, general and administrative expense | |||||||||||||||||||||||
Depreciation expense | |||||||||||||||||||||||
Total costs and expenses | |||||||||||||||||||||||
Operating loss | ( | ( | ( | ( | |||||||||||||||||||
Interest expense, net | |||||||||||||||||||||||
Unrealized gain on embedded debt conversion option | ( | ( | |||||||||||||||||||||
Other (income) expense, net | ( | ( | ( | ( | |||||||||||||||||||
Loss before income taxes | ( | ( | ( | ( | |||||||||||||||||||
Income tax benefit | ( | ( | ( | ( | |||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Basic and diluted loss per common share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Comprehensive loss: | |||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Change in unrecognized pension and postretirement benefit costs, net of tax | |||||||||||||||||||||||
Foreign currency translation adjustments, net of tax | ( | ( | ( | ||||||||||||||||||||
Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( |
A.M. Castle & Co. Condensed Consolidated Statements of Cash Flows | |||||||||||
Six Months Ended | |||||||||||
June 30, | |||||||||||
2020 | 2019 | ||||||||||
Operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization of deferred financing costs and debt discount | |||||||||||
Loss on sale of property, plant and equipment | |||||||||||
Unrealized foreign currency loss (gain) | ( | ||||||||||
Unrealized gain on embedded debt conversion option | ( | ||||||||||
Noncash interest paid in kind | |||||||||||
Noncash rent expense | |||||||||||
Noncash compensation expense | |||||||||||
Deferred income taxes | ( | ( | |||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | ( | ||||||||||
Inventories | ( | ||||||||||
Prepaid expenses and other current assets | |||||||||||
Other noncurrent assets | ( | ||||||||||
Prepaid pension costs | ( | ( | |||||||||
Accounts payable | |||||||||||
Income tax payable and receivable | ( | ( | |||||||||
Accrued and other current liabilities | ( | ( | |||||||||
Pension and postretirement benefit obligations and other noncurrent liabilities | ( | ||||||||||
Net cash provided by (used in) operating activities | ( | ||||||||||
Investing activities: | |||||||||||
Capital expenditures | ( | ( | |||||||||
Proceeds from sale of property, plant and equipment | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Financing activities: | |||||||||||
Proceeds from long-term debt including credit facilities | |||||||||||
Repayments of long-term debt including credit facilities | ( | ||||||||||
(Repayments of) proceeds from short-term borrowings, net | ( | ||||||||||
Principal paid on financing leases | ( | ( | |||||||||
Payments of debt restructuring costs | ( | ||||||||||
Net cash provided by financing activities | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | |||||||||||
Net change in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents - beginning of year | |||||||||||
Cash and cash equivalents - end of period | $ | $ |
A.M. Castle & Co. Consolidated Statements of Stockholders' Equity (Deficit) | |||||||||||||||||||||||||||||||||||||||||||||||
Common Shares | Treasury Shares | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2019 | ( | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Foreign currency translation, net of tax | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Change in unrecognized pension and postretirement benefit costs, $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Reclassification to equity of interest paid in kind attributable to conversion option, net of $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Vesting of restricted shares and other | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2019 | ( | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2020 | ( | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Foreign currency translation, net of tax | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Change in unrecognized pension and postretirement benefit costs, net of $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Reclassification to equity of interest paid in kind attributable to conversion option, net of $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Reclassification of conversion option to equity, net of $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Conversion of debt (Note 6) | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2020 | ( | $ | $ | ( | $ | $ | ( | $ | ( | $ |
A.M. Castle & Co. Consolidated Statements of Stockholders' Equity (Deficit) | |||||||||||||||||||||||||||||||||||||||||||||||
Common Shares | Treasury Shares | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2018 | $ | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||
Cumulative effect from adoption of the new lease standard (Leases: Topic 842) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Foreign currency translation, net of tax | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Change in unrecognized pension and postretirement benefit costs, $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Reclassification to equity of interest paid in kind attributable to conversion option, net of $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Vesting of restricted shares and other | ( | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2019 | ( | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | ( | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Foreign currency translation, net of tax | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Change in unrecognized pension and postretirement benefit costs, $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Reclassification to equity of interest paid in kind attributable to conversion option, net of $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Reclassification of conversion option to equity, net of $0 tax effect (Note 8) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Conversion of debt (Note 6) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Vesting of restricted shares and other | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2020 | ( | $ | $ | ( | $ | $ | ( | $ | ( | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Add Provision charged to expense(a) | |||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||
Less Charges against allowance | ( | ( | ( | ( | |||||||||||||||||||
Balance, end of period | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net sales | |||||||||||||||||||||||
United States | $ | $ | $ | $ | |||||||||||||||||||
Canada | |||||||||||||||||||||||
Mexico | |||||||||||||||||||||||
France | |||||||||||||||||||||||
China | |||||||||||||||||||||||
All other countries | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted average common shares outstanding | |||||||||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||
Outstanding common stock equivalents | |||||||||||||||||||||||
Denominator for diluted loss per common share | |||||||||||||||||||||||
Basic loss per common share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Diluted loss per common share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Excluded outstanding share-based awards having an anti-dilutive effect |
As of | |||||||||||
June 30, 2020 | December 31, 2019 | ||||||||||
LONG-TERM DEBT | |||||||||||
Floating rate Revolving A Credit Facility due February 28, 2022 | $ | $ | |||||||||
due August 31, 2024(b) | |||||||||||
due August 31, 2022(c) | |||||||||||
France Term Loan | |||||||||||
Total principal balance of long-term debt | |||||||||||
Less: unvested restricted | ( | ||||||||||
Less: unvested restricted | ( | ||||||||||
Less: unamortized discount | ( | ( | |||||||||
Less: unamortized debt issuance costs | ( | ( | |||||||||
Total long-term debt | |||||||||||
Less: current portion of long-term debt | |||||||||||
Total long-term portion | $ | $ |
Risk-free interest rate | % | ||||
Credit spread | % | ||||
PIK premium spread | % | ||||
Volatility | % |
Fair value as of December 31, 2019 | $ | ||||
Fair value at issuance date | |||||
Mark-to-fair value adjustment on embedded conversion feature | ( | ||||
Reclassification of embedded conversion feature to additional paid-in capital | ( | ||||
Fair value as of June 30, 2020 | $ |
As of | |||||||||||
June 30, 2020 | December 31, 2019 | ||||||||||
Unrecognized pension and postretirement benefit costs, net of tax | $ | ( | $ | ( | |||||||
Foreign currency translation losses, net of tax | ( | ( | |||||||||
Total accumulated other comprehensive loss | $ | ( | $ | ( |
Defined Benefit Pension and Postretirement Items | Foreign Currency Items | Total | |||||||||||||||||||||||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||||||
June 30, | June 30, | June 30, | |||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||
Beginning Balance | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||
Other comprehensive loss before reclassifications, net of tax | ( | ( | |||||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax (a) | |||||||||||||||||||||||||||||||||||
Net current period other comprehensive income (loss) | ( | ( | |||||||||||||||||||||||||||||||||
Ending Balance | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( |
Defined Benefit Pension and Postretirement Items | Foreign Currency Items | Total | |||||||||||||||||||||||||||||||||
Six Months Ended | Six Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||
June 30, | June 30, | June 30, | |||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||
Beginning Balance | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||
Other comprehensive loss before reclassifications, net of tax | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax (a) | |||||||||||||||||||||||||||||||||||
Net current period other comprehensive income (loss) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Ending Balance | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Unrecognized pension and postretirement benefit items: | |||||||||||||||||||||||
Prior service cost (a) | $ | $ | $ | $ | |||||||||||||||||||
Actuarial loss (a) | |||||||||||||||||||||||
Total before tax | |||||||||||||||||||||||
Tax effect | |||||||||||||||||||||||
Total reclassifications for the period, net of tax | $ | $ | $ | $ |
Shares | Weighted-Average Grant Date Fair Value | ||||||||||
Outstanding at January 1, 2020 | $ | ||||||||||
Issued upon exchange of Restricted 5.00%/7.00% Convertible Notes | |||||||||||
Forfeited | |||||||||||
Vested | ( | ||||||||||
Outstanding at June 30, 2020 | |||||||||||
Expected to vest after June 30, 2020 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Service cost | $ | $ | $ | $ | |||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Expected return on assets | ( | ( | ( | ( | |||||||||||||||||||
Amortization of prior service cost | |||||||||||||||||||||||
Amortization of actuarial loss | |||||||||||||||||||||||
Net periodic pension and postretirement benefit credit | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Contributions paid | $ | $ | $ | $ |
Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | Favorable/ (Unfavorable) | |||||||||||||||||||||||||||||||||
(Dollar amounts in millions) | $ | % of Net Sales | $ | % of Net Sales | Three Month $ Change | Three Month % Change | |||||||||||||||||||||||||||||
Net sales | $ | 84.7 | 100.0 | % | $ | 147.9 | 100.0 | % | $ | (63.2) | (42.7) | % | |||||||||||||||||||||||
Cost of materials (exclusive of depreciation) | 60.9 | 71.9 | % | 109.9 | 74.3 | % | 49.0 | 44.6 | % | ||||||||||||||||||||||||||
Operating costs and expenses | 28.3 | 33.4 | % | 39.1 | 26.5 | % | 10.8 | 27.6 | % | ||||||||||||||||||||||||||
Operating loss | $ | (4.5) | (5.3) | % | $ | (1.2) | (0.8) | % | $ | (3.3) | n/m | ||||||||||||||||||||||||
Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | Favorable/ (Unfavorable) | |||||||||||||||||||||||||||||||||
(Dollar amounts in millions) | $ | % of Net Sales | $ | % of Net Sales | Six Month $ Change | Six Month % Change | |||||||||||||||||||||||||||||
Net sales | $ | 211.3 | 100.0 | % | $ | 297.5 | 100.0 | % | $ | (86.2) | (29.0) | % | |||||||||||||||||||||||
Cost of materials (exclusive of depreciation) | 153.2 | 72.5 | % | 220.9 | 74.3 | % | 67.7 | 30.6 | % | ||||||||||||||||||||||||||
Operating costs and expenses | 64.6 | 30.6 | % | 78.1 | 26.2 | % | 13.5 | 17.3 | % | ||||||||||||||||||||||||||
Operating loss | $ | (6.5) | (3.1) | % | $ | (1.5) | (0.5) | % | $ | (5.0) | n/m | ||||||||||||||||||||||||
Three Months Ended June 30, | Favorable/(Unfavorable) | ||||||||||||||||||||||
(Dollar amounts in millions) | 2020 | 2019 | Three Month $ Change | Three Month % Change | |||||||||||||||||||
Warehouse, processing and delivery expense | $ | 14.2 | $ | 20.5 | $ | 6.3 | 30.7 | % | |||||||||||||||
Sales, general and administrative expense | 12.1 | 16.5 | 4.4 | 26.7 | % | ||||||||||||||||||
Depreciation expense | 2.0 | 2.1 | 0.1 | 4.8 | % | ||||||||||||||||||
Total operating costs and expenses | $ | 28.3 | $ | 39.1 | $ | 10.8 | 27.6 | % |
Six Months Ended June 30, | Favorable/(Unfavorable) | ||||||||||||||||||||||
(Dollar amounts in millions) | 2020 | 2019 | Three Month $ Change | Three Month % Change | |||||||||||||||||||
Warehouse, processing and delivery expense | $ | 32.2 | $ | 40.8 | $ | 8.6 | 21.1 | % | |||||||||||||||
Sales, general and administrative expense | 28.3 | 33.0 | 4.7 | 14.2 | % | ||||||||||||||||||
Depreciation expense | 4.1 | 4.3 | 0.2 | 4.7 | % | ||||||||||||||||||
Total operating costs and expenses | $ | 64.6 | $ | 78.1 | $ | 13.5 | 17.3 | % |
Six Months Ended | |||||||||||
June 30, | |||||||||||
(Dollar amounts in millions) | 2020 | 2019 | |||||||||
Net cash provided by (used in) operating activities | $ | 15.9 | $ | (5.3) | |||||||
Net cash used in investing activities | (1.3) | (2.6) | |||||||||
Net cash provided by financing activities | 5.3 | 5.7 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | — | 0.1 | |||||||||
Net change in cash and cash equivalents | $ | 19.9 | $ | (2.1) |
As of | |||||||||||||||||
(Dollar amounts in millions) | June 30, 2020 | December 31, 2019 | Working Capital Increase (Decrease) | ||||||||||||||
Working capital | $ | 173.2 | $ | 173.7 | $ | (0.5) | |||||||||||
Cash and cash equivalents | 26.4 | 6.4 | 20.0 | ||||||||||||||
Accounts receivable | 55.0 | 74.7 | (19.7) | ||||||||||||||
Inventories | 149.6 | 144.4 | 5.2 | ||||||||||||||
Accounts payable | 48.8 | 41.7 | (7.1) | ||||||||||||||
Accrued and other current liabilities | 8.6 | 11.2 | 2.6 | ||||||||||||||
Operating lease liabilities | 5.9 | 6.5 | 0.6 |
Maximum borrowing capacity | $ | 125.0 | |||
Collateral reserves | (19.7) | ||||
Letters of credit and other reserves | (2.5) | ||||
Current maximum borrowing capacity | 102.8 | ||||
Current borrowings | (96.4) | ||||
Additional unrestricted borrowing capacity(a) | $ | 6.4 | |||
(a) Subject to the cash dominion threshold noted above |
Obligors | |||||||||||
(in millions) | As of and for the Six Months Ended June 30, 2020 | As of and for the Year Ended December 31, 2019 | |||||||||
Total current assets | $ | 189.2 | $ | 192.4 | |||||||
Total non-current assets (1) | 133.2 | 134.4 | |||||||||
Total current liabilities | 60.8 | 54.9 | |||||||||
Total non-current liabilities (1) | 257.9 | 313.0 | |||||||||
Net sales | 178.0 | 453.1 | |||||||||
Total costs and expenses | 185.7 | 467.1 | |||||||||
Operating loss | 7.7 | 14.0 | |||||||||
Net loss | 15.8 | 38.5 |
Exhibit No. | Description | ||||||||||
3.1 | |||||||||||
10.1 | |||||||||||
22.1 | |||||||||||
31.1 | |||||||||||
31.2 | |||||||||||
32.1 | |||||||||||
101 | The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in Inline XBRL: (i) Condensed Consolidated Statements of Operations and Comprehensive Loss, (ii) Condensed Consolidated Balance Sheets, (iii) Condensed Consolidated Statements of Cash Flows, (v) Condensed Consolidated Statements of Stockholders’ Deficit, and (vi) Notes to the Condensed Consolidated Financial Statements. | ||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | ||||||||||
A. M. Castle & Co. | |||||||||||
(Registrant) | |||||||||||
Date: | August 14, 2020 | By: | /s/ Edward M. Quinn | ||||||||
Edward M. Quinn, Vice President, Controller and Chief Accounting Officer | |||||||||||
(Principal Accounting Officer) |
Entity | Jurisdiction of Incorporation or Organization | 3.00% / 5.00% Convertible Senior Secured Paid In Kind Toggle Notes due 2024 | ||||||
A.M. Castle & Co. | Maryland | Issuer | ||||||
HY-Alloy Steels Company | Delaware | Guarantor | ||||||
Keystone Service Inc. | Indiana | Guarantor | ||||||
Keystone Tube Company, LLC | Delaware | Guarantor | ||||||
Total Plastics, Inc. | Michigan | Guarantor | ||||||
A.M. Castle & Co. (Canada) Inc. | British Columbia | Guarantor | ||||||
Castle Metals de Mexico, S.A. de C.V. | Mexico | Guarantor | ||||||
Castle Metals de Mexicali, S.A. de C.V. | Mexico | Guarantor |
Date: | August 14, 2020 | /s/ Marec E. Edgar | |||||||||
Marec E. Edgar | |||||||||||
President and Chief Executive Officer | |||||||||||
(Principal Executive Officer) |
Date: | August 14, 2020 | /s/ Patrick R. Anderson | |||||||||
Patrick R. Anderson | |||||||||||
Executive Vice President, Finance & Administration | |||||||||||
(Principal Financial Officer) |
/s/ Marec E. Edgar | ||||||||
Marec E. Edgar | ||||||||
President and Chief Executive Officer | ||||||||
August 14, 2020 | ||||||||
/s/ Patrick R. Anderson | ||||||||
Patrick R. Anderson | ||||||||
Executive Vice President, Finance and Administration | ||||||||
August 14, 2020 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for accounts receivable | $ 1,912 | $ 1,766 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares issued (in shares) | 74,079,000 | 3,818,000 |
Common stock, shares outstanding (in shares) | 73,911,000 | 3,650,000 |
Treasury stock, at cost (in shares) | 168,000 | 168,000 |
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net sales | $ 84,712 | $ 147,930 | $ 211,322 | $ 297,457 |
Costs and expenses: | ||||
Cost of materials (exclusive of depreciation) | 60,900 | 109,941 | 153,196 | 220,899 |
Warehouse, processing and delivery expense | 14,154 | 20,541 | 32,190 | 40,818 |
Sales, general and administrative expense | 12,086 | 16,477 | 28,300 | 32,979 |
Depreciation expense | 2,038 | 2,130 | 4,114 | 4,251 |
Total costs and expenses | 89,178 | 149,089 | 217,800 | 298,947 |
Operating loss | (4,466) | (1,159) | (6,478) | (1,490) |
Interest expense, net | 5,093 | 9,850 | 15,069 | 19,299 |
Unrealized gain on embedded debt conversion option | (2,010) | 0 | (2,010) | 0 |
Other (income) expense, net | (2,048) | (2,480) | (1,852) | (4,082) |
Loss before income taxes | (5,501) | (8,529) | (17,685) | (16,707) |
Income tax benefit | (1,448) | (225) | (2,591) | (400) |
Net loss | $ (4,053) | $ (8,304) | $ (15,094) | $ (16,307) |
Basic and diluted loss per common share (in usd per share) | $ (0.06) | $ (3.77) | $ (0.38) | $ (7.58) |
Comprehensive loss: | ||||
Net loss | $ (4,053) | $ (8,304) | $ (15,094) | $ (16,307) |
Change in unrecognized pension and postretirement benefit costs, net of tax | 25 | 23 | 50 | 46 |
Foreign currency translation adjustments, net of tax | 36 | (279) | (912) | (743) |
Comprehensive loss | $ (3,992) | $ (8,560) | $ (15,956) | $ (17,004) |
Consolidated Statements of Stockholders' (Deficit) Equity (Parenthetical) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Change in unrecognized pension and postretirement benefit costs, $0 tax effect | $ 0 | $ 0 | $ 0 | $ 0 |
Reclassification of equity of interest paid in kind attributable to conversion option, tax effect | $ 635,000 | $ 109,000 | ||
Reclassification to equity of interest paid in kind attributable to conversion option, tax effect | 109,000 | $ 320,000 | ||
Reclassification of conversion option to equity, tax effect | $ 0 |
Basis of Presentation |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of PresentationThe Condensed Consolidated Financial Statements of A.M. Castle & Co. and its consolidated subsidiaries (collectively, the "Company") included herein and the notes thereto have been prepared by the Company, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), and accounting principles generally accepted in the United States of America (“GAAP”). The Condensed Consolidated Balance Sheet at December 31, 2019 is derived from the audited financial statements at that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. In the opinion of the Company's management, the unaudited statements included herein contain all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of financial results for the interim period. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The operating results for the three and six months ended June 30, 2020, as reported herein, may not necessarily be indicative of the Company’s operating results for the full year. |
New Accounting Standards |
6 Months Ended |
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Jun. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Standards | New Accounting Standards Standards Updates Adopted In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” ASU No. 2018-13 amends Fair Value Measurement (Topic 820) to add, remove, and modify fair value measurement disclosure requirements. The ASU’s changes to disclosures aim to improve the effectiveness of Topic 820's disclosure requirements under the aforementioned FASB disclosure framework project. The Company adopted the disclosure requirements of ASU No. 2018-13 in the first quarter of 2020. The Company determined the adoption of the disclosure requirements had no impact on its fair value disclosures herein. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU 2019-12 amends ASC 740 to simplify the accounting for income taxes by removing certain exceptions for investments, intraperiod allocations and interim calculations, and adding guidance to reduce complexity in the accounting standard under the FASB’s simplification initiative. ASU 2019-12 is effective for public entities for fiscal years beginning after December 15, 2020. Upon adoption, the amendments in ASU 2019-12 should be applied on a prospective basis to all periods presented. Early adoption is permitted. The Company adopted the new guidance under ASU 2019-12 in the first quarter of 2020 and removed the exception for intraperiod allocations from its interim period tax provision calculation, accordingly. On March 2, 2020, the SEC issued Final Rule Release No. 33-10762, "Financial Disclosures About Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities" (the “final rule”). The final rule simplifies the disclosure requirements related to certain registered securities under SEC Regulation S-X, Rules 3-10 and 3-16, which currently require separate financial statements for (1) subsidiary issuers and guarantors of registered debt securities unless certain exceptions are met and (2) affiliates that collateralize registered securities offerings if the affiliates’ securities are a substantial portion of the collateral. Under the final rule, alternative financial disclosures or narrative disclosures (referred to collectively as “Alternative Disclosures”) may be provided in lieu of separate financial statements of the guarantors or affiliates. The amendments in the final rule are generally effective for filings on or after January 4, 2021, with early application permitted. The Company has elected to adopt the amendments of the final rule for the quarter ended March 31, 2020 and accordingly, has elected to present the alternative disclosures of the guarantors of its registered securities in Part I Item 2, Management's Discussion and Analysis, of this Form 10-Q. Standards Updates Issued Not Yet Effective In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 adds a current expected credit loss (“CECL”) impairment model to U.S. GAAP that is based on expected losses rather than incurred losses. Modified retrospective adoption is required with any cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. ASU 2016-13 is effective for smaller reporting companies for fiscal years beginning after December 15, 2022, including interim periods within the year of adoption. Early adoption is permitted. The Company will adopt the guidance and disclosure requirements of ASU 2016-13 in fiscal year 2023. In August 2018, the FASB issued ASU No. 2018-14, “Compensation – Retirement Benefits – Defined Benefit Plans - General (Topic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plan.” ASU No. 2018-14 amends Compensation - Retirement Benefits (Topic 715) to add or remove certain disclosure requirements related to defined benefit pension and other postretirement plans. The ASU’s changes to disclosures aim to improve the effectiveness of Topic 715's disclosure requirements under the FASB’s disclosure framework project. ASU No. 2018-14 is effective for public entities for fiscal years beginning after December 15, 2020. ASU No. 2018-14 does not impact the interim disclosure requirements of Topic 715. Early adoption is permitted. The Company will adopt the disclosure requirements of this new guidance in fiscal year 2021. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The purpose of ASU 2020-04 is to provide optional guidance for a limited time to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting. In response to concerns about structural risks of interbank offered rates, and, in particular, the risk of cessation of the London Interbank Offered Rate (LIBOR), reference rate reform refers to a global initiative to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for contract modifications by topic or industry subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a topic or an industry subtopic, the amendments in ASU 2020-04 must be applied prospectively for all eligible contract modifications for that topic or industry subtopic. The Company is currently assessing the accounting and financial impact of reference rate reform and will consider applying the optional guidance of ASU 2020-04 accordingly.
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Revenue |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue The Company recognizes revenue from the sale of products 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 represented less than 1% of the Company’s consolidated net sales in the three and six months ended June 30, 2020 and June 30, 2019, respectively. Customer payment terms are established prior to the time of shipment. 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. The Company utilizes historical information and the current sales trends of the Company's 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 Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company records revenue from shipping and handling charges 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. In the three months ended June 30, 2020 and June 30, 2019, shipping and handling costs included in warehouse, processing and delivery expenses were $4,841 and $6,160, respectively. In the six months ended June 30, 2020 and June 30, 2019, shipping and handling costs included in warehouse, processing and delivery expenses were $10,448 and $12,296, respectively. As a practical expedient under Accounting Standards Codification No. 606, "Revenue from Contracts with Customers (Topic 606)" ("ASC 606"), the Company has elected to account for shipping and handling activities as fulfillment costs and not a promised good or service. As a result, there is no change to the Company's accounting for revenue from shipping and handling charges under ASC 606. The Company maintains an allowance for doubtful accounts related to the potential 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 provision for doubtful accounts is recorded in sales, general and administrative expense in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Loss. Estimates of doubtful accounts are based on historical write-off experience as a percentage of net sales and judgments about the probable effects of economic conditions on certain customers. The Company considered the economic impact of the novel coronavirus ("COVID-19") pandemic on the collectibility of customer accounts receivable. Although the Company has detected some slowing in payments from customers due to the financial uncertainties resulting from the COVID-19 pandemic, it determined that no additional allowance for doubtful accounts specific to customer accounts receivable impacted by COVID-19 was required as of June 30, 2020. The full impact of the COVID-19 pandemic is unknown and rapidly evolving. The Company will continue to analyze any financial and commercial impacts of the COVID-19 pandemic, including any adverse impact the COVID-19 pandemic may have on the collectibility of customer accounts receivable. 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 for doubtful accounts and credit memos activity is as follows:
(a) Includes the net amount of credit memos reserved and issued. The Company operates primarily in North America. Net sales are attributed to countries based on the location of the Company’s subsidiary that is selling direct to the customer. Net sales exclude assessed taxes such as sales and excise tax. Company-wide geographic data is as follows:
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Loss Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss Per Share | Loss Per ShareDiluted loss per common share is computed by dividing net loss by the weighted average number of shares of the common stock of A.M. Castle & Co. outstanding plus outstanding common stock equivalents. Common stock equivalents consist of restricted stock awards and other share-based payment awards, and shares that may be issued upon conversion of the Company’s outstanding 5.00% / 7.00% Convertible Senior Secured Paid-in-Kind ("PIK") Toggle Notes due 2022 (the “5.00%/7.00% Convertible Notes”) and the Company's outstanding 3.00% / 5.00% Convertible Senior Secured PIK Toggle Notes due 2024 (the “3.00%/5.00% Convertible Notes”), which are included in the calculation of weighted average shares outstanding using the if-converted method. Refer to Note 6 - Debt, for further description of the 5.00%/7.00% Convertible Notes and the 3.00%/5.00% Convertible Notes. The following table is a reconciliation of the basic and diluted loss per common share calculations:
The computation of diluted loss per common share does not include common shares issuable upon conversion of the Company’s 5.00%/7.00% Convertible Notes or 3.00%/5.00% Convertible Notes, as they were anti-dilutive under the if-converted method. The 5.00%/7.00% Convertible Notes are convertible into shares of the Company’s common stock at any time at the initial conversion price of $3.77 per share. The 3.00%/5.00% Convertible Notes are convertible into shares of the Company’s common stock at any time at the initial conversion price of $0.46 per share. In future periods, absent a fundamental change as described in Note 6 - Debt, the outstanding 5.00%/7.00% Convertible Notes and 3.00%/5.00% Convertible Notes could increase diluted average shares outstanding by a maximum of approximately 212,400 shares.
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Goodwill and Intangible Asset |
6 Months Ended |
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Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Asset | Goodwill and Intangible Asset As of both June 30, 2020 and December 31, 2019, the Company had goodwill with a carrying value of $2,676, none of which is tax deductible. There were no changes in the amount of goodwill recognized in the six months ended June 30, 2020. The Company's other intangible asset is comprised of an indefinite-lived trade name, which is not subject to amortization. The gross carrying value of the trade name intangible asset was $5,500 at both June 30, 2020 and December 31, 2019. The Company tests both its goodwill and intangible asset for impairment on an annual basis and more often if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. As a result of the recent outbreak of the COVID-19 pandemic, which has spread across the globe to many countries in which the Company does business and is impacting worldwide economic activity, the Company has determined that the potential impact on its business, including, but not limited to, a potential decrease in revenue, supply chain disruptions and/or facility closures, represented a triggering event requiring an interim impairment test of its goodwill and indefinite-lived trade name assets. Based on the results of these interim impairment tests, the Company determined its one reporting unit's goodwill and indefinite-lived trade name asset were not impaired as of June 30, 2020. While the Company considered the impact the COVID-19 pandemic may have on its future cash flows when preparing its interim goodwill and intangible asset impairment tests, the full extent of the impact that the COVID-19 pandemic will have on the Company's business, operations and financial condition is currently unknown. The Company will continue to assess its goodwill and intangible asset for impairment as events and circumstances change. Any further deterioration in the Company's forecasted revenue, gross material margin, and/or costs and expenses, or an increase in the Company's assumed discount rate, could result in an impairment of a portion or all of its goodwill or a portion or all of its intangible asset. The amount of such impairment would be recognized as a noncash expense in the period the goodwill and/or intangible asset is impaired.
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Debt |
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Debt | Debt Long-term debt consisted of the following:
(a) Included in balance is interest paid in kind of $5,876 as of June 30, 2020 and $4,288 as of December 31, 2019. (b) Included in balance is interest paid in kind of $1,229 as of June 30, 2020. (c) Included in balance is interest paid in kind of $131 as of June 30, 2020 and $28,991 as of December 31, 2019. (d) Represents the unvested portion of restricted 3.00% / 5.00% Convertible Senior Secured PIK Toggle Notes due August 31, 2024 issued to certain members of management and the unvested portion of restricted 5.00% / 7.00% Convertible Senior Secured PIK Toggle Notes due August 31, 2022 issued to certain members of management (see Note 9 - Share-based compensation). Credit Facilities On August 31, 2017, the Company entered into the Revolving Credit and Security Agreement with PNC Bank, National Association ("PNC") as lender and as administrative and collateral agent (the “Agent”), and other lenders party thereto (the "Original ABL Credit Agreement"). The Original ABL Credit Agreement provided for a $125,000 senior secured, revolving credit facility (the "Revolving A Credit Facility") under which the Company and four of its subsidiaries each are borrowers (collectively, in such capacity, the “Borrowers”). The obligations of the Borrowers have been guaranteed by the subsidiaries of the Company named therein as guarantors. On June 1, 2018, the Company entered into an Amendment No. 1 to Original ABL Credit Agreement (the “Credit Agreement Amendment No. 1”) by and among the Company, the Borrowers and guarantors party thereto and the Agent and the other lenders party thereto, which amended the Original ABL Credit Agreement to provide for additional borrowing capacity. On March 27, 2020, the Company entered into an Amendment No. 2 to the Original ABL Credit Agreement (the "Credit Agreement Amendment No. 2") by and among the Company, the Borrowers and guarantors party thereto and the Agent and the other lenders party thereto, which amended the Original ABL Credit Agreement (as amended by the Credit Agreement Amendment No. 1 and Credit Agreement No. 2, the “ABL Credit Agreement”) to permit the Exchange Offer (defined below) to proceed. The ABL Credit Agreement provides for an additional $25,000 last out Revolving B Credit Facility (the "Revolving B Credit Facility" and together with the Revolving A Credit Facility, the "Credit Facility"). The Credit Facility was made available in part by way of a participation in the Revolving B Credit Facility by certain of the Company’s stockholders. Borrowings under the Credit Facility will mature on February 28, 2022. Subject to certain exceptions and permitted encumbrances, the obligations under the ABL Credit Agreement are secured by a first priority security interest in substantially all of the assets of each of the Borrowers and certain subsidiaries of the Company that are named as guarantors. The proceeds of the advances under the ABL Credit Agreement may only be used to (i) pay certain fees and expenses to the Agent and the lenders under the ABL Credit Agreement, (ii) provide for the Borrowers' working capital needs and reimburse drawings under letters of credit, (iii) repay the obligations under the Debtor-in-Possession Revolving Credit and Security Agreement dated as of July 10, 2017, by and among the Company, the lenders party thereto, and PNC, and certain other existing indebtedness, and (iv) provide for the Borrowers' capital expenditure needs, in accordance with the ABL Credit Agreement. The Company may prepay its obligations under the ABL Credit Agreement at any time without premium or penalty, and must apply the net proceeds of material sales of collateral in prepayment of such obligations. Payments made must be applied to the Company's obligations under the Revolving A Credit Facility, if any, prior to its obligations under the Revolving B Credit Facility. In connection with an early termination or permanent reduction of the Revolving A Credit Facility prior to March 27, 2021, a 0.50% fee shall be due and, for the period from March 28, 2021 through September 27, 2021, a 0.25% fee shall be due, in each case in the amount of such commitment reduction, subject to reduction as set forth in the ABL Credit Agreement. Indebtedness for borrowings under the ABL Credit Agreement is subject to acceleration upon the occurrence of specified defaults or events of default, including (i) failure to pay principal or interest, (ii) the inaccuracy of any representation or warranty of a loan party, (iii) failure by a loan party to perform certain covenants, (iv) defaults under indebtedness owed to third parties, (v) certain liability producing events relating to ERISA, (vi) the invalidity or impairment of the Agent’s lien on its collateral or of any applicable guarantee, and (vii) certain adverse bankruptcy-related and other events. Interest on indebtedness under the Revolving A Credit Facility accrues at a variable rate based on a grid with the highest interest rate being the applicable LIBOR-based rate plus a margin of 3.0%, as set forth in the ABL Credit Agreement. Interest on indebtedness under the Revolving B Credit Facility accrues at a rate of 12.0% per annum, which will be paid in kind unless the Company elects to pay such interest in cash and the Revolving B payment conditions specified in the ABL Credit Agreement are satisfied. Additionally, the Company must pay a monthly facility fee equal to the product of (i) 0.25% per annum (or, if the average daily revolving facility usage is less than 50% of the maximum revolving advance amount, 0.375% per annum) multiplied by (ii) the amount by which the maximum revolving advance amount exceeds such average daily revolving facility usage for such month. The weighted average interest rate on outstanding borrowings under the Revolving A Credit Facility for the three and six months ended June 30, 2020 was 3.52% and 4.11%, respectively, and 5.72% and 5.65% for the three and six months ended June 30, 2019, respectively. The weighted average facility fee for each such period was 0.25%. The Company pays certain customary recurring fees with respect to the ABL Credit Agreement. Interest expense related to the Revolving B Credit Facility of $806 and $1,588 was paid in kind in the three and six months ended June 30, 2020. Interest expense related to the Revolving B Credit Facility of $715 and $1,401 was paid in kind in the three and six months ended June 30, 2019, respectively. The ABL Credit Agreement includes negative covenants customary for an asset-based revolving loan. Such covenants include limitations on the ability of the Borrowers to, among other things, (i) effect mergers and consolidations, (ii) sell assets, (iii) create or suffer to exist any lien, (iv) make certain investments, (v) incur debt and (vi) transact with affiliates. In addition, the ABL Credit Agreement includes customary affirmative covenants for an asset-based revolving loan, including covenants regarding the delivery of financial statements, reports and notices to the Agent. The ABL Credit Agreement also contains customary representations and warranties and event of default provisions for a secured term loan. The Company's ABL Credit Agreement contains a springing financial maintenance covenant requiring the Company to maintain a Fixed Charge Coverage Ratio of 1.0 to 1.0 in any Covenant Testing Period (as defined in the ABL Credit Agreement) when the Company's cash liquidity (as defined in the ABL Credit Agreement) is less than $12,500. The Company was not in a Covenant Testing Period as of and for the three and six months ended June 30, 2020. Unamortized debt issuance costs of $222 associated with the ABL Credit Agreement were recorded as a reduction in long-term debt as of June 30, 2020. Convertible Senior Secured Notes On March 27, 2020, the Company completed an exchange offer and consent solicitation (the “Exchange Offer”) to issue its 3.00%/5.00% Convertible Notes and shares of its common stock in exchange for its 5.00%/7.00% Convertible Notes, including any accrued and unpaid interest on the 5.00%/7.00% Convertible Notes as of the date in which the Exchange Offer was completed. Pursuant to the terms of the Exchange Offer, $190,200 in aggregate principal amount of the 5.00%/7.00% Convertible Notes were tendered and accepted and in exchange, the Company issued $95,135 in aggregate principal amount of its 3.00%/5.00% Convertible Notes and 70,261 shares of its common stock. The 3.00%/5.00% Convertible Notes are guaranteed on a senior basis by all current and future domestic subsidiaries (other than those designated as "unrestricted subsidiaries") of the Company (the "Guarantors"). An aggregate principal amount of 5.00%/7.00% Convertible Notes in the amount of $3,693 were not tendered and remained outstanding at the date of Exchange Offer. The 3.00%/5.00% Convertible Notes have substantially the same terms that the 5.00%/7.00% Convertible Notes had prior to the completion of the Exchange Offer except for the following primary differences: (i) the 3.00%/5.00% Convertible Notes are not exempt from the registration requirements of the Securities Act of 1933, as amended, and have the benefit of registration rights to the holders of the 3.00%/5.00% Convertible Notes, (ii) the interest on the 3.00%/5.00% Convertible Notes accrues at the rate of 3.00% per annum if paid in cash and at the rate of 5.00% per annum if paid in kind, compared to interest on the 5.00%/7.00% Convertible Notes, which accrues at the rate of 5.00% per annum if paid in cash and at the rate of 7.00% per annum if paid in kind, and (iii) the 3.00%/5.00% Convertible Notes have a maturity date of August 31, 2024, compared to the 5.00%/7.00% Convertible Notes, which have a maturity date of August 31, 2022. In conjunction with the Exchange Offer, on March 27, 2020, the Company, the guarantors of the 5.00%/7.00% Convertible Notes and the trustee for the 5.00%/7.00% Convertible Notes entered into a supplemental indenture to the indenture governing the 5.00%/7.00% Convertible Notes (the “5.00%/7.00% Convertible Notes Indenture”) to provide for, among other things, the elimination or amendment of substantially all of the restrictive covenants, the release of all collateral securing the Company’s obligations under the 5.00%/7.00% Convertible Notes Indenture, and the modification of certain of the events of default and various other provisions contained in the 5.00%/7.00% Convertible Notes Indenture (the "Supplemental Indenture"). Also on March 27, 2020, PNC (in its capacity as “First Lien Agent”), the trustee for the 5.00%/7.00% Convertible Notes and the Company and certain of its subsidiaries executed an intercreditor agreement (the “New Intercreditor Agreement”) providing for the lien priority of the first lien facility over the 3.00%/5.00% Convertible Notes. The terms and conditions of the New Intercreditor Agreement are substantially consistent with those applicable to the intercreditor agreement between the First Lien Agent and the trustee for the 5.00%/7.00% Convertible Notes prior to the completion of the Exchange Offer (the “5.00%/7.00% Convertible Notes Intercreditor Agreement”). PNC and the trustee for the 5.00%/7.00% Convertible Notes also entered into an amendment of the 5.00%/7.00% Convertible Notes Intercreditor Agreement to, among other things, remove certain limitations and rights of the 5.00%/7.00% Convertible Notes with respect to the first lien facility. The 3.00%/5.00% Convertible Notes were issued pursuant to an indenture (the “3.00%/5.00% Convertible Notes Indenture”), which the Company and the Guarantors entered into with Wilmington Savings Fund Society, FSB, as trustee and collateral agent ("Indenture Agent"), on March 27, 2020. The 3.00%/5.00% Convertible Notes are, secured by a lien on all or substantially all of the assets of the Company, its domestic subsidiaries and certain of its foreign subsidiaries, which lien the Indenture Agent has agreed will be junior to the lien of the Agent under the ABL Credit Agreement. The 3.00%/5.00% Convertible Notes are convertible into shares of the Company’s common stock at any time at the initial conversion price of $0.46 per share, which rate is subject to adjustment as set forth in the 3.00%/5.00% Convertible Notes Indenture. Under the 3.00%/5.00% Convertible Notes Indenture, upon the conversion of the 3.00%/5.00% Convertible Notes in connection with a Fundamental Change (as defined in the 3.00%/5.00% Convertible Notes Indenture), for each $1.00 principal amount of the 3.00%/5.00% Convertible Notes, that number of shares of the Company’s common stock issuable upon conversion shall equal the greater of (a) $1.00 divided by the then applicable conversion price or (b) $1.00 divided by the price paid per share of the Company's common stock in connection with such Fundamental Change calculated in accordance with the 3.00%/5.00% Convertible Notes Indenture, subject to other provisions of the 3.00%/5.00% Convertible Notes Indenture. Subject to certain exceptions, under the 3.00%/5.00% Convertible Notes Indenture a “Fundamental Change” includes, but is not limited to, the following: (i) the acquisition of more than 50% of the voting power of the Company’s common equity by a “person” or “group” within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended; (ii) the consummation of any recapitalization, reclassification, share exchange, consolidation or merger of the Company pursuant to which the Company’s common stock will be converted into cash, securities or other property; (iii) the “Continuing Directors” (as defined in the 3.00%/5.00% Convertible Notes Indenture) cease to constitute at least a majority of the board of directors; and (iv) the approval of any plan or proposal for the liquidation or dissolution of the Company by the Company’s stockholders. The 5.00%/7.00% Convertible Notes are convertible into shares of the Company’s common stock at any time at the initial conversion price of $3.77 per share, which rate is subject to adjustment as set forth in the Supplemental Indenture. Under the Supplemental Indenture, the conversion of the 5.00%/7.00% Convertible Notes in connection with a Fundamental Change (as defined in the Supplemental Indenture) is substantially the same as under the 3.00%/5.00% Convertible Notes Indenture, other than the applicable conversion price. Upon conversion of the 3.00%/5.00% Convertible Notes and/or the 5.00%/7.00% Convertible Notes, the Company will pay and/or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, together with cash in lieu of fractional shares. The value of shares of the Company’s common stock for purposes of the settlement of the conversion right, if the Company elects to settle in cash, will be calculated as provided in the 3.00%/5.00% Convertible Notes Indenture or Supplemental Indenture, as applicable, using a 20 trading day observation period. As discussed previously, the 3.00%/5.00% Convertible Notes are convertible into common stock at the option of the holder. As of March 27, 2020, the date of the Exchange Offer, the Company determined that the conversion option was not clearly and closely related to the economic characteristics of the 3.00%/5.00% Convertible Notes, nor did the conversion option meet the own equity scope exception as the Company did not have sufficient authorized and unissued common stock shares to satisfy the maximum number of common stock shares that could be required to be issued upon conversion. As a result, the Company concluded that the embedded conversion option must be bifurcated from the 3.00%/5.00% Convertible Notes, separately valued, and accounted for as a derivative liability, which was classified in long term debt and marked to fair value through earnings. On June 30, 2020, the Company filed articles of amendment to increase the number of shares of common stock authorized (see Note 8 - Stockholders' Equity). As a result of this increase, the number of the Company's common stock shares available for issuance upon conversion of the 3.00%/5.00% Convertible Notes is sufficient to allow the conversion option to be share-settled in full. The Company has concluded that as of June 30, 2020 the conversion option qualifies for equity classification and the bifurcated derivative liability will no longer need to be accounted for as a separate derivative on a prospective basis from the date of reassessment. As of June 30, 2020, the fair value of the conversion option of $36,952 was classified to equity as additional paid-in capital. The remaining debt discount that arose at the date of debt issuance from the original bifurcation will continue to be amortized through interest expense. The 3.00%/5.00% Convertible Notes are fully and unconditionally guaranteed, jointly and severally, by certain subsidiaries of the Company. The 3.00%/5.00% Convertible Notes and the related guarantees are secured by a lien on substantially all of the Company’s and the guarantors’ assets, subject to certain exceptions pursuant to certain collateral documents pursuant to the 3.00%/5.00% Convertible Notes Indenture. The terms of the 3.00%/5.00% Convertible Notes contain numerous covenants imposing financial and operating restrictions on the Company's business. These covenants place restrictions on the Company’s ability and the ability of its subsidiaries to, among other things, pay dividends, redeem stock or make other distributions or restricted payments; incur indebtedness or issue certain stock; make certain investments; create liens; agree to certain payment restrictions affecting certain subsidiaries; sell or otherwise transfer or dispose assets; enter into transactions with affiliates; and enter into sale and leaseback transactions. Neither the 3.00%/5.00% Convertible Notes nor the 5.00%/7.00% Convertible Notes may be redeemed by the Company in whole or in part at any time prior to maturity, except the Company may be required to make an offer to purchase the 3.00%/5.00% Convertible Notes using the proceeds of certain material asset sales involving the Company or one of its restricted subsidiaries, as described more particularly in the 3.00%/5.00% Convertible Notes Indenture. In addition, if a Fundamental Change (as defined in the 3.00%/5.00% Convertible Notes Indenture and the Supplemental Indenture, as applicable) occurs at any time, each holder of any 3.00%/5.00% Convertible Notes or 5.00%/7.00% Convertible Notes has the right to require the Company to repurchase such holder’s notes for cash at a repurchase price equal to 100% of the principal amount thereof, together with accrued and unpaid interest thereon, subject to certain exceptions. The Company must use the net proceeds of material sales of collateral, which proceeds are not used for other permissible purposes, to make an offer of repurchase to holders of the 3.00%/5.00% Convertible Notes. Indebtedness for borrowings under the 3.00%/5.00% Convertible Notes Indenture and the Supplemental Indenture is subject to acceleration upon the occurrence of specified defaults or events of default as set forth under each such indenture, including failure to pay principal or interest, the inaccuracy of any representation or warranty of any obligor, failure by an obligor to perform certain covenants, the invalidity or impairment of the Agent’s lien on its collateral under the 3.00%/5.00% Convertible Notes Indenture, the invalidity or impairment of any applicable guarantee, and certain adverse bankruptcy-related and other events. Upon satisfaction of certain conditions more particularly described in the 3.00%/5.00% Convertible Notes Indenture, including the deposit in trust of cash or securities sufficient to pay the principal of and interest and any premium on the 3.00%/5.00% Convertible Notes, the Company may effect a covenant defeasance of certain of the covenants imposing financial and operating restrictions on the Company’s business. In addition, and subject to certain exceptions as more particularly described in the 3.00%/5.00% Convertible Notes Indenture, the Company may amend, supplement or waive provisions of the 3.00%/5.00% Convertible Notes Indenture with the consent of holders representing a majority in aggregate principal amount of the 3.00%/5.00% Convertible Notes, and may in effect release collateral from the liens securing the 3.00%/5.00% Convertible Notes with the consent of holders representing 66.67% in aggregate principal amount of the 3.00%/5.00% Convertible Notes. Interest on the 3.00%/5.00% Convertible Notes accrues at the rate of 3.00% per annum if paid in cash and at the rate of 5.00% per annum if paid in kind, payable quarterly beginning with the quarter ending June 30, 2020. Interest on the 5.00%/7.00% Convertible Notes continues to accrue at the rate of 5.00% per annum if paid in cash and at the rate of 7.00% per annum if paid in kind, payable quarterly. Pursuant to the terms of both the 3.00%/5.00% Convertible Notes Indenture and the Supplemental Indenture, the Company is currently paying interest on both the 3.00%/5.00% Convertible Notes and the 5.00%/7.00% Convertible Notes in kind. Interest expense related to the 5.00%/7.00% Convertible Notes of $66 and $3,348 was paid in kind in the three and six months ended June 30, 2020 respectively. Interest expense related to the 5.00%/7.00% Convertible Notes of $3,221 and $6,387 was paid in kind in the three and the six months ended June 30, 2019, respectively. Interest expense related to the 3.00%/5.00% Convertible Notes of $1,229 was paid in kind in both the three and six months ended June 30, 2020. The Company determined that the Exchange Offer was considered to be a troubled debt restructuring within the scope of ASC No. 470-60, "Debt-Troubled Debt Restructurings". Accordingly, for the three and six months ended June 30, 2020, the Company has expensed legal and other direct costs incurred in conjunction with the Exchange Offer in the amount of $639 and $1,376, respectively, in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss and recognized additional legal and other direct costs incurred also in the amount $639 and $1,376 as a decrease to additional paid-in capital for the three and six months ended June 30, 2020, respectively. Other long-term debt The Company qualified under the “alternative size standard” for a forgivable loan under the Paycheck Protection Program (“PPP”) administered by the Small Business Association (SBA) pursuant to the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act. On April 28, 2020, the Company entered into an unsecured PPP loan in the aggregate principal amount of $10,000, which is to be used only for payroll expenses, rent, utilities, mortgage interest, and interest on other pre-existing indebtedness (the "PPP Loan"). After taking into account, among other things, the disruptions to the Company’s business activities caused by the COVID-19 pandemic, the completed Exchange Offer, its available, committed primary sources of liquidity, and its lack of access to alternative sources of liquidity, current economic conditions made this loan request necessary and appropriate to support the Company’s ongoing U.S. operations and mitigate potentially significant detriment to the Company’s business. The PPP Loan, which is evidenced by a Paycheck Protection Program Term Note, matures on April 28, 2022 and bears interest at a fixed rate of 1.0% per annum, with the first six months of interest deferred. The PPP Loan is payable in 17 monthly payments commencing on November 16, 2020 and may be prepaid at any time prior to maturity with no prepayment penalties. Under the terms of the CARES Act and the Paycheck Protection Program Flexibility Act passed on June 5, 2020 (the "PPPFA"), the PPP Loan, and interest accrued thereon, is forgivable, partially or in full, subject to certain conditions, including the extent to which the PPP Loan proceeds are used for permissible purposes within the 24 week period following loan disbursement (which period was extended by the PPPFA from the 8 week period originally allowed by the CARES Act). The Company believes it has used the PPP Loan proceeds for permissible purposes only and intends to apply for forgiveness of the PPP Loan in accordance with the terms of the PPP, the CARES Act and the PPPFA. As of June 30, 2020, the Company has recorded the amount of the PPP Loan due within one year in the current portion of long-term debt and the remainder in long-term debt on the Condensed Consolidated Balance Sheets. On June 24, 2020, the Company's French subsidiary entered into a €6,000 term loan (the "France Term Loan"). The France Term Loan, which is fully guaranteed by the French government, is part of a relief program related to the COVID-19 pandemic. Similar to the PPP Loan, economic conditions resulting from the COVID-19 pandemic made this France Term Loan necessary and appropriate to support the Company’s ongoing operations in France and mitigate potentially significant detriment to the Company’s business in France. The France Term Loan, which is evidenced by a term note with HSBC Bank, matures on June 24, 2021 and bears no interest. However, in connection with the government guarantee of the France Term Loan, the Company must pay a commission to the French government of 0.5% per annum of the principal loan balance. Under the terms of the France Term Loan, the Company has the option to extend the maturity of the loan for a period of up to five years. As of June 30, 2020, the Company has the intent and ability to extend the maturity of the France Term Loan beyond twelve months and has therefore included the entire outstanding principal balance of the France Term Loan in long-term debt at the Condensed Consolidated Balance Sheets. Short-term borrowings The Company's French subsidiary is party to a local credit facility under which it may borrow against 100% of the eligible accounts receivable factored, with recourse, up to 6,500 Euros. The French subsidiary is charged a factoring fee of 0.16% of the gross amount of accounts receivable factored. Local currency borrowings on the French subsidiary's credit facility are charged interest at the daily 3-months Euribor rate plus a 1.0% margin and U.S dollar borrowings on the credit facility are 3-months LIBOR plus a 1.0% margin. The French subsidiary utilizes the local credit facility to support its operating cash needs. As of June 30, 2020, the French subsidiary had no borrowings under the local credit facility and had borrowings under the local credit facility of $2,888 as of December 31, 2019. The Company records borrowings under the local credit facility as short-term borrowings in the Condensed Consolidated Balance Sheets.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The three-tier value hierarchy used by the Company, which prioritizes the inputs used in the valuation methodologies, is: Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. The fair value of cash, accounts receivable and accounts payable approximate their carrying values. The fair value of cash equivalents are determined using the fair value hierarchy described above. The Company’s pension plan asset portfolio as of June 30, 2020 and December 31, 2019 is primarily invested in fixed income securities, which generally fall within Level 2 of the fair value hierarchy. Fixed income securities are valued based on evaluated prices provided to the trustee of the pension plan by independent pricing services. Such prices may be determined by various factors which include, but are not limited to, market quotations, yields, maturities, call features, ratings, institutional size trading in similar groups of securities and developments related to specific securities. Fair Value Measurements of Debt As of June 30, 2020, the fair value of the Company's 3.00%/5.00% Convertible Notes, including the conversion option, was estimated to be $109,640, compared to a face value of $96,364. As of June 30, 2020, the fair value of the Company's 5.00%/7.00% Convertible Notes, including the conversion option, was estimated to be $3,350 compared to a face value of $3,823. As of December 31, 2019, the fair value of the Company's 5.00%/7.00% Convertible Notes, including the conversion option, was estimated to be $136,085 compared to a face value of $193,660. The fair value of the 3.00%/5.00% Convertible Notes as of June 30, 2020 and the 5.00%/7.00% Convertible Notes as of December 31, 2019 was determined using a binomial lattice model using assumptions based on market information and historical data, and a review of prices and terms available for similar debt instruments that do not contain a conversion feature, as well as other factors related to the callable nature of the 3.00%/5.00% Convertible Notes, which is a Level 3 input as defined by the fair value hierarchy. The fair value of the 5.00%/7.00% Convertible Notes as of June 30, 2020 was estimated based on a model that discounted future principal and interest payments at interest rates available to the Company at the end of the period for similar debt of the same maturity, which is a Level 2 input as defined by the fair value hierarchy. The following valuation assumptions were used in determining the fair value of the 3.00%/5.00% Convertible Notes, including the conversion option, as of June 30, 2020:
As of June 30, 2020, the fair value of the Company's Revolving B Credit Facility was estimated to be $26,707 compared to a face value of $27,376. As of December 31, 2019, the fair value of the Company's Revolving B Credit Facility was estimated to be $25,082 compared to a face value of $25,788. Also as of June 30, 2020, the fair value of the Company's PPP Loan was estimated to be $8,571 compared to a face value of $10,000 and the fair value of the Company's France Term Loan was estimated to be $3,271 compared to a face value of $6,721. The fair value of the Revolving B Credit Facility, the PPP Loan and the France Term Loan was estimated based on a model that discounted future principal and interest payments at interest rates available to the Company at the end of the period for similar debt of the same maturity, which is a Level 2 input as defined by the fair value hierarchy. Given the short-term nature and/or the variable interest rates, the fair value of borrowings under the Revolving A Credit Facility approximated the carrying value as of June 30, 2020. Fair Value Measurement of Embedded Conversion Feature On June 30, 2020, the Company filed articles of amendment to increase the number of shares of common stock authorized (see Note 8 - Stockholders' Equity). As a result of this increase, the number the Company's common stock shares available for issuance upon conversion of the 3.00%/5.00% Convertible Notes is sufficient to allow the conversion option to be share-settled in full. The Company has concluded that as of June 30, 2020, the conversion option qualifies for equity classification and the bifurcated derivative liability will no longer need to be accounted for as a separate derivative on a prospective basis from the date of reassessment. As of June 30, 2020, the fair value of the conversion option of $36,952 was classified to equity as additional paid-in capital. There was no tax impact of the reclassification of the conversion option to equity. The estimated fair value of the derivative liability for the embedded conversion feature of the 3.00%/5.00% Convertible Notes, which falls within Level 3 of the fair value hierarchy, is measured on a recurring basis using a binomial lattice model using the same assumptions as the 3.00%/5.00% Convertible Notes. The following reconciliation represents the change in fair value of the embedded conversion feature of the 3.00%/5.00% Convertible Notes for the six months ended June 30, 2020. Prior to the reclassification of the embedded conversion feature to additional paid-in capital on June 30, 2020, the Company recognized a gain of $2,010 on the mark-to-fair value adjustment on the embedded debt conversion option.
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Stockholders' Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity Authorized Shares of Common Stock On June 30, 2020, the Company's shareholders approved a proposal to amend the Company's charter to authorize an increase in the Company's authorized shares of common stock. Subsequent to this approval, also on June 30, 2020, the Company filed articles of amendment with the Secretary of State of the State of Maryland, which amended its Articles of Amendment and Restatement effective on such date to increase the Company's authorized common stock shares from 200,000 shares of common stock at $0.01 par value per share to 400,000 shares of common stock at $0.01 par value per share. The Company has concluded that as of June 30, 2020 the conversion option qualifies for equity classification and the bifurcated derivative liability will no longer need to be accounted for as a separate derivative on a prospective basis from the date of reassessment. As of June 30, 2020, the fair value of the conversion option of $36,952 was classified to equity as additional paid-in capital. Exchange Offer The Company issued 70,261 shares of its common stock on March 27, 2020 in connection with the Exchange Offer (see Note 6 - Debt). The issuance of these shares was recorded using the fair value of the Company's common stock on the date the shares were issued and resulted in an increase in the par value of common stock and additional paid-in capital of $703 and $24,606, respectively. The shares were issued in exchange for 5.00%/7.00% Convertible Notes, and, as such, the Company received no cash proceeds as part of the exchange. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss are as follows:
Changes in accumulated other comprehensive loss by component in the three months ended June 30, 2020 and June 30, 2019 are as follows:
(a) See reclassifications from accumulated other comprehensive loss table below for details of reclassification from accumulated other comprehensive loss in the three months ended June 30, 2020 and June 30, 2019. Changes in accumulated other comprehensive loss by component in the six months ended June 30, 2020 and June 30, 2019 are as follows:
(a) See reclassifications from accumulated other comprehensive loss table below for details of reclassification from accumulated other comprehensive loss in the six months ended June 30, 2020 and June 30, 2019. Reclassifications from accumulated other comprehensive loss are as follows:
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Share-based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation | Share-based Compensation Restricted Shares The Company's Board of Directors (the "Board") has issued restricted shares of the Company's common stock ("Restricted Shares") and restricted 5.00%/7.00% Convertible Notes (the "Restricted 5.00%/7.00% Convertible Notes") to certain officers of the Company, as well as Restricted Shares to certain members of the Board. On March 27, 2020, in conjunction with the Exchange Offer, the Company issued restricted 3.00%/5.00% Convertible Notes (the "Restricted 3.00%/5.00% Convertible Notes") and Restricted Shares in exchange for all of the outstanding Restricted 5.00%/7.00% Convertible Notes, including any accrued and unpaid interest on the Restricted 5.00%/7.00% Convertible Notes as of the date in which the Exchange Offer was completed (the "Restricted Note Exchange"). Pursuant to the Restricted Note Exchange, $1,613 in aggregate principal amount of the Restricted 5.00%/7.00% Convertible Notes were tendered and accepted and in exchange, the Company issued $793 in aggregate principal amount of Restricted 3.00%/5.00% Convertible Notes and 586 shares of Restricted Shares. The Restricted 3.00%/5.00% Convertible Notes outstanding were convertible into an additional 1,740 shares of the Company's common stock as of June 30, 2020. The Restricted Shares granted to certain officers of the Company on September 1, 2017 cliff vest three years from the date of grant, subject to the conditions set forth in the MIP. As they relate to the first tranche of Restricted 5.00%/7.00% Convertible Notes, the Restricted 3.00%/5.00% Convertible Notes and Restricted Shares issued as a result of the Restricted Note Exchange cliff vest three years from the original date of grant, September 31, 2017. As they relate to the second tranche of Restricted 5.00%/7.00% Convertible Notes, which were made available as lapsed incentive awards and awarded to certain officers of the Company on March 25, 2020, the Restricted 3.00%/5.00% Convertible Notes, and Restricted Shares issued as a result of the Restricted Note Exchange cliff vest on August 31, 2024. A summary of the activity of the Company's Restricted Shares as of June 30, 2020 and in the six months then ended follows:
Performance Share Units The Board has granted performance share units ("PSUs") as awards under the MIP to non-executive senior level managers and other select personnel. The PSUs contain a performance-based condition tied to the enterprise value of the Company. Each PSU that vests entitles the participant to receive, at the discretion of the Company's Board, one share of the Company's common stock or cash equal to the fair market value of one share of the Company's common stock. Vesting occurs upon achievement of a defined enterprise value of the Company, with 50% vesting upon achievement of the defined enterprise value between the performance period September 30, 2020 and September 30, 2022, and the remaining 50% vesting upon the achievement of the defined enterprise value as a result of a specified transaction, as defined in the PSU agreement, on or before September 30, 2022. As of June 30, 2020, there were 783 PSUs outstanding. Share-Based Compensation Expense Compensation expense recognized related to the PSUs 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. As of June 30, 2020, no compensation expense was recognized for these awards to date as the threshold for expense recognition for the performance-based condition had not been met. As of June 30, 2020, the unrecognized share-based compensation expense related to unvested Restricted Shares was $202 and is expected to be recognized over a weighted-average period of approximately 0.7 years. Forfeitures are accounted for as they occur. As of June 30, 2020, the unrecognized share-based compensation expense related to the outstanding Restricted 3.00%/5.00% Convertible Notes was $159 and is expected to be recognized over a weighted-average period of approximately 1.7 years. The Company will recognize this compensation expense on a straight-line basis over the remaining vesting period using the fair value of the Restricted 3.00%/5.00% Convertible Notes at the Restricted Note Exchange date.
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Employee Benefit Plans |
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Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans Components of the net periodic pension and postretirement benefit credit are as follows:
The Company anticipates making no additional cash contributions to its pension plans in the remainder of 2020. The Company was party to a multi-employer pension plan from which the Company determined to withdraw. At June 30, 2020, the total estimated liability to withdraw from the plan was $3,064. The current liability associated with the Company's withdrawal from the multi-employer pension plan of $240 is included in accrued and other current liabilities in the Condensed Consolidated Balance Sheets and the long-term liability of $2,824 is included in other noncurrent liabilities in the Condensed Consolidated Balance Sheets.
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Income Taxes |
6 Months Ended |
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Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items. The Company’s effective tax rate is expressed as income tax benefit as a percentage of loss before income taxes. On March 27, 2020, the U.S. federal government signed into law the CARES Act, to provide economic relief to U.S. companies impacted by the COVID-19 pandemic. Pursuant to the provisions of the CARES Act, the Company will carryback its net operating losses from 2019 to offset taxable net income realized in 2018. In the three months ended June 30, 2020, the Company recorded income tax benefit of $1,448 on a loss before income taxes of $5,501, for an effective tax rate of 26.3%. In the three months ended June 30, 2019, the Company recorded income tax benefit of $225 on a loss before income taxes of $8,529, for an effective tax rate of 2.6%. In the six months ended June 30, 2020, the Company recorded income tax benefit of $2,591 on a loss before income taxes of $17,685, for an effective tax rate of 14.7%. In the six months ended June 30, 2019, the Company recorded income tax benefit of $400 on a loss before income taxes of $16,707, for an effective tax rate of 2.4%. The most significant factors impacting the effective tax rate in the three months ended June 30, 2020 were (i) the recording of the period expense associated with the quasi territorial tax regime called the Global Intangible Low Taxed Income Inclusion (“GILTI”), (ii) the foreign rate differential, and (iii) changes in valuation allowances in the United States and Canada. Also impacting the effective tax rate in the six months ended June 30, 2020 was the increase in net operating loss carrybacks due to the CARES Act. The Company's U.S. federal corporate income tax rate is 21%.
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Commitments and Contingent Liabilities |
6 Months Ended |
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Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Commitments and Contingent LiabilitiesFrom time to time, the Company is party to a variety of legal proceedings, claims, and inquiries, including proceedings or inquiries by governmental authorities, which arise from the operation of its business. These proceedings, claims, and inquiries are incidental to and occur in the normal course of the Company's business affairs. The majority of these proceedings, claims, and inquiries relate to commercial disputes with customers, suppliers, and others; employment and employee benefits-related disputes; product quality disputes with vendors and/or customers; and environmental, health and safety claims. Although the outcome of these proceedings is inherently difficult to predict, management believes that the amount of any judgment, settlement or other outcome of these proceedings, claims and inquiries, after taking into account recorded accruals and the availability and limits of our insurance coverage, will not have a material adverse effect on the Company’s consolidated results of operations, financial condition or cash flows. |
Subsequent Events |
6 Months Ended |
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Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent EventOn July 20, 2020, the Company's China subsidiary entered into a $3,000 local banking line of credit with the Bank of Communication Shanghai (the "China Credit Facility"). The China Credit Facility has an initial maturity date of January 20, 2021 and accrues interest at a rate of 3.6% per annum. |
New Accounting Standards (Policies) |
6 Months Ended |
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Jun. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Standards Updates Adopted and Standards Updates Issued Not Yet Effective | Standards Updates Adopted In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” ASU No. 2018-13 amends Fair Value Measurement (Topic 820) to add, remove, and modify fair value measurement disclosure requirements. The ASU’s changes to disclosures aim to improve the effectiveness of Topic 820's disclosure requirements under the aforementioned FASB disclosure framework project. The Company adopted the disclosure requirements of ASU No. 2018-13 in the first quarter of 2020. The Company determined the adoption of the disclosure requirements had no impact on its fair value disclosures herein. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU 2019-12 amends ASC 740 to simplify the accounting for income taxes by removing certain exceptions for investments, intraperiod allocations and interim calculations, and adding guidance to reduce complexity in the accounting standard under the FASB’s simplification initiative. ASU 2019-12 is effective for public entities for fiscal years beginning after December 15, 2020. Upon adoption, the amendments in ASU 2019-12 should be applied on a prospective basis to all periods presented. Early adoption is permitted. The Company adopted the new guidance under ASU 2019-12 in the first quarter of 2020 and removed the exception for intraperiod allocations from its interim period tax provision calculation, accordingly. On March 2, 2020, the SEC issued Final Rule Release No. 33-10762, "Financial Disclosures About Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities" (the “final rule”). The final rule simplifies the disclosure requirements related to certain registered securities under SEC Regulation S-X, Rules 3-10 and 3-16, which currently require separate financial statements for (1) subsidiary issuers and guarantors of registered debt securities unless certain exceptions are met and (2) affiliates that collateralize registered securities offerings if the affiliates’ securities are a substantial portion of the collateral. Under the final rule, alternative financial disclosures or narrative disclosures (referred to collectively as “Alternative Disclosures”) may be provided in lieu of separate financial statements of the guarantors or affiliates. The amendments in the final rule are generally effective for filings on or after January 4, 2021, with early application permitted. The Company has elected to adopt the amendments of the final rule for the quarter ended March 31, 2020 and accordingly, has elected to present the alternative disclosures of the guarantors of its registered securities in Part I Item 2, Management's Discussion and Analysis, of this Form 10-Q. Standards Updates Issued Not Yet Effective In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 adds a current expected credit loss (“CECL”) impairment model to U.S. GAAP that is based on expected losses rather than incurred losses. Modified retrospective adoption is required with any cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. ASU 2016-13 is effective for smaller reporting companies for fiscal years beginning after December 15, 2022, including interim periods within the year of adoption. Early adoption is permitted. The Company will adopt the guidance and disclosure requirements of ASU 2016-13 in fiscal year 2023. In August 2018, the FASB issued ASU No. 2018-14, “Compensation – Retirement Benefits – Defined Benefit Plans - General (Topic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plan.” ASU No. 2018-14 amends Compensation - Retirement Benefits (Topic 715) to add or remove certain disclosure requirements related to defined benefit pension and other postretirement plans. The ASU’s changes to disclosures aim to improve the effectiveness of Topic 715's disclosure requirements under the FASB’s disclosure framework project. ASU No. 2018-14 is effective for public entities for fiscal years beginning after December 15, 2020. ASU No. 2018-14 does not impact the interim disclosure requirements of Topic 715. Early adoption is permitted. The Company will adopt the disclosure requirements of this new guidance in fiscal year 2021. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The purpose of ASU 2020-04 is to provide optional guidance for a limited time to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting. In response to concerns about structural risks of interbank offered rates, and, in particular, the risk of cessation of the London Interbank Offered Rate (LIBOR), reference rate reform refers to a global initiative to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for contract modifications by topic or industry subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a topic or an industry subtopic, the amendments in ASU 2020-04 must be applied prospectively for all eligible contract modifications for that topic or industry subtopic. The Company is currently assessing the accounting and financial impact of reference rate reform and will consider applying the optional guidance of ASU 2020-04 accordingly.
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Revenue (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable and Allowance for Doubtful Accounts | Accounts receivable allowance for doubtful accounts and credit memos activity is as follows:
(a) Includes the net amount of credit memos reserved and issued.
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Schedule of Company-wide Geographic Data | Company-wide geographic data is as follows:
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Loss Per Share - (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliations of Basic and Diluted Earnings (Loss) Per Common Share | The following table is a reconciliation of the basic and diluted loss per common share calculations:
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Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt | Long-term debt consisted of the following:
(a) Included in balance is interest paid in kind of $5,876 as of June 30, 2020 and $4,288 as of December 31, 2019. (b) Included in balance is interest paid in kind of $1,229 as of June 30, 2020. (c) Included in balance is interest paid in kind of $131 as of June 30, 2020 and $28,991 as of December 31, 2019. (d) Represents the unvested portion of restricted 3.00% / 5.00% Convertible Senior Secured PIK Toggle Notes due August 31, 2024 issued to certain members of management and the unvested portion of restricted 5.00% / 7.00% Convertible Senior Secured PIK Toggle Notes due August 31, 2022 issued to certain members of management (see Note 9 - Share-based compensation).
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||
Schedule of Valuation Assumptions used in Determining Fair Value | The following valuation assumptions were used in determining the fair value of the 3.00%/5.00% Convertible Notes, including the conversion option, as of June 30, 2020:
|
Stockholders' Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss are as follows:
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Schedule of Change In Accumulated Other Comprehensive Loss |
(a) See reclassifications from accumulated other comprehensive loss table below for details of reclassification from accumulated other comprehensive loss in the three months ended June 30, 2020 and June 30, 2019. Changes in accumulated other comprehensive loss by component in the six months ended June 30, 2020 and June 30, 2019 are as follows:
(a) See reclassifications from accumulated other comprehensive loss table below for details of reclassification from accumulated other comprehensive loss in the six months ended June 30, 2020 and June 30, 2019.
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Reclassifications From Accumulated Other Comprehensive Loss | Reclassifications from accumulated other comprehensive loss are as follows:
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Share-based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Nonvested Restricted Stock Units Activity | A summary of the activity of the Company's Restricted Shares as of June 30, 2020 and in the six months then ended follows:
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Employee Benefit Plans (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | Components of the net periodic pension and postretirement benefit credit are as follows:
|
Revenue - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Accounting Policies [Line Items] | ||||
Description of revenue timing | Substantially all of the Company's customer contracts are for a duration of less than one year and individual customer purchase orders for contractual customers are fulfilled within one year of the purchase order date. | |||
Warehouse Processing and Delivery Expense | $ 14,154 | $ 20,541 | $ 32,190 | $ 40,818 |
Maximum | ||||
Accounting Policies [Line Items] | ||||
Percentage sales revenue not recognized at shipment (less than) | 1.00% | 1.00% | ||
Shipping and Handling | ||||
Accounting Policies [Line Items] | ||||
Warehouse Processing and Delivery Expense | $ 4,841 | $ 6,160 | ||
Cost of Goods and Services Sold | $ 10,448 | $ 12,296 |
Revenue - Schedule of Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance, beginning of period | $ 1,979 | $ 1,507 | $ 1,766 | $ 1,364 |
Changes to receivable allowance | ||||
Add Provision charged to expense | 0 | 195 | 222 | 387 |
Recoveries | 0 | 0 | 0 | 11 |
Less Charges against allowance | (67) | (1) | (76) | (61) |
Balance, end of period | $ 1,912 | $ 1,701 | $ 1,912 | $ 1,701 |
Revenue - Schedule of Company-wide Geographic Data (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 84,712 | $ 147,930 | $ 211,322 | $ 297,457 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 59,615 | 93,891 | 145,052 | 189,023 |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 5,027 | 11,708 | 15,050 | 23,548 |
Mexico | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 6,758 | 12,865 | 17,880 | 25,521 |
France | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 4,997 | 13,527 | 16,709 | 28,625 |
China | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 5,847 | 11,167 | 10,672 | 21,578 |
All other countries | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 2,468 | $ 4,772 | $ 5,959 | $ 9,162 |
Loss Per Share - Reconciliations of Basic and Diluted Earnings (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Numerator: | ||||
Net loss | $ (4,053) | $ (8,304) | $ (15,094) | $ (16,307) |
Denominator: | ||||
Weighted average common shares outstanding (in shares) | 72,503 | 2,203 | 39,376 | 2,150 |
Effect of dilutive securities: | ||||
Outstanding common stock equivalents (in shares) | 0 | 0 | 0 | 0 |
Denominator for diluted loss per common share (in shares) | 72,503 | 2,203 | 39,376 | 2,150 |
Basic and diluted earnings (loss) per common share: | ||||
Basic loss per common share (in dollars per share) | $ (0.06) | $ (3.77) | $ (0.38) | $ (7.58) |
Diluted loss per common share (in dollars per shares) | $ (0.06) | $ (3.77) | $ (0.38) | $ (7.58) |
Excluded outstanding share-based awards having an anti-dilutive effect (in shares) | 1,407 | 1,437 | 1,132 | 1,518 |
Goodwill and Intangible Asset - Narrative (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | $ 2,676,000 | $ 2,676,000 |
Changes in amount of goodwill recognized | 0 | |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets not subject to amortization | $ 5,500,000 | $ 5,500,000 |
Fair Value Measurements - Schedule of Valuation Assumptions used in Determining Fair Value (Details) - Convertible Debt - Level 3 - 3.00% / 5.00% Convertible Senior Secured PIK Toggle Notes Due August 31, 2024 |
Jun. 30, 2020 |
---|---|
Risk-free interest rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs (as a percent) | 0.0024 |
Credit spread | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs (as a percent) | 0.0947 |
PIK premium spread | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs (as a percent) | 0.0200 |
Volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs (as a percent) | 0.5000 |
Stockholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Mar. 27, 2020 |
Jun. 30, 2020 |
Jun. 30, 2020 |
Jun. 29, 2020 |
Dec. 31, 2019 |
|
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Common shares issued upon conversion of debt (in shares) | 70,261,000 | ||||
Stock issued during period, value, conversion of debt | $ (639) | $ 25,309 | |||
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 | 200,000,000 | 400,000,000 | |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |
Common Stock | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Common shares issued upon conversion of debt (in shares) | 70,261,000 | ||||
Stock issued during period, value, conversion of debt | $ 703 | ||||
Additional Paid-in Capital | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Stock issued during period, value, conversion of debt | $ (639) | $ 24,606 |
Stockholders' Equity - Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Stockholders' Equity Note [Abstract] | ||
Unrecognized pension and postretirement benefit costs, net of tax | $ (7,021) | $ (7,071) |
Foreign currency translation losses, net of tax | (7,215) | (6,303) |
Total accumulated other comprehensive loss | $ (14,236) | $ (13,374) |
Stockholders' Equity - Reclassifications From Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total reclassifications for the period, net of tax | $ 25 | $ 23 | $ 50 | $ 46 |
Prior service cost | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total before tax | 13 | 13 | 26 | 26 |
Actuarial loss | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total before tax | 12 | 10 | 24 | 20 |
Defined Benefit Pension and Postretirement Items | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total before tax | 25 | 23 | 50 | 46 |
Tax effect | $ 0 | $ 0 | 0 | 0 |
Total reclassifications for the period, net of tax | $ 50 | $ 46 |
Share-based Compensation - Summary of Restricted Shares (Details) - A.M. Castle & Co. 2017 Management Incentive Plan - Restricted Stock shares in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2020
$ / shares
shares
| |
Shares | |
Outstanding at beginning of period (in shares) | shares | 1,429 |
Granted (in shares) | shares | 586 |
Forfeited (in shares) | shares | 0 |
Vested (in shares) | shares | (607) |
Outstanding at end of period (in shares) | shares | 1,408 |
Expected to Vest (in shares) | shares | 1,408 |
Weighted-Average Grant Date Fair Value | |
Outstanding beginning balance (in dollars per share) | $ / shares | $ 3.13 |
Granted (in dollars per share) | $ / shares | 0.38 |
Forfeited (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 3.14 |
Outstanding ending balance (in dollars per share) | $ / shares | 1.98 |
Expected to vest (in dollars per share) | $ / shares | $ 1.98 |
Employee Benefit Plans - Schedule of Net Benefit Costs (Details) - Pension and Other Postretirement Plans, Defined Benefit - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | $ 112 | $ 106 | $ 224 | $ 212 |
Interest cost | 1,015 | 1,322 | 2,029 | 2,644 |
Expected return on assets | (1,681) | (1,531) | (3,362) | (3,062) |
Amortization of prior service cost | 13 | 13 | 26 | 26 |
Amortization of actuarial loss | 12 | 10 | 24 | 20 |
Net periodic pension and postretirement benefit credit | (529) | (80) | (1,059) | (160) |
Contributions paid | $ 0 | $ 0 | $ 0 | $ 0 |
Employee Benefit Plans - Narrative (Details) |
Jun. 30, 2020
USD ($)
|
---|---|
Retirement Benefits [Abstract] | |
Anticipated cash contributions to pension plan in remaining fiscal year | $ 0 |
Estimated liability to withdraw from plan | 3,064,000 |
Estimated liability to withdraw from plan, current | 240,000 |
Estimated liability to withdraw from plan, noncurrent | $ 2,824,000 |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 1,448 | $ 225 | $ 2,591 | $ 400 |
Pre-tax loss from continuing operations | $ (5,501) | $ (8,529) | $ (17,685) | $ (16,707) |
Effective tax rate (as a percent) | 26.30% | 2.60% | 14.70% | 2.40% |
Subsequent Events (Details) - China Credit Facility [Member] - Subsequent Event - Line of Credit $ in Millions |
Jul. 20, 2020
USD ($)
|
---|---|
Subsequent Event [Line Items] | |
Aggregate principal amount | $ 3 |
Stated interest rate (as a percent) | 3.60% |
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