Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 02, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | Neenah Paper Inc | |
Entity Central Index Key | 1,296,435 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 16,788,000 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Net sales | $ 242.1 | $ 242.1 |
Cost of products sold | 190.1 | 183.3 |
Gross profit | 52 | 58.8 |
Selling, general and administrative expenses | 24.9 | 26.4 |
Integration/restructuring costs | 0 | 1.1 |
Other expense (income) - net | 0.1 | (0.1) |
Operating income | 27 | 31.4 |
Interest expense - net | 3.2 | 2.9 |
Income from continuing operations before income taxes | 23.8 | 28.5 |
Provision for income taxes | 6.2 | 9.3 |
Net income | $ 17.6 | $ 19.2 |
Basic | ||
Basic (in dollars per share) | $ 1.04 | $ 1.13 |
Diluted | ||
Diluted (in dollars per share) | $ 1.03 | $ 1.11 |
Weighted Average Common Shares Outstanding (in thousands) | ||
Basic (in shares) | 16,779 | 16,778 |
Diluted (in shares) | 17,025 | 17,051 |
Cash Dividends Declared Per Share of Common Stock (in dollars per share) | $ 0.37 | $ 0.33 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 17.6 | $ 19.2 |
Unrealized foreign currency translation gain | 1.7 | 3.7 |
Reclassification of amortization of adjustments to pension and other postretirement benefit liabilities recognized in net periodic benefit cost (Note 5) | 2 | 1.8 |
Unrealized gain on “available-for-sale” securities | 0.1 | 0 |
Income from other comprehensive income items | 3.8 | 5.5 |
Provision for income taxes | 0.8 | 0.7 |
Other comprehensive income | 3 | 4.8 |
Comprehensive income | $ 20.6 | $ 24 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 5.5 | $ 3.1 |
Accounts receivable (less allowances of $1.6 million and $1.5 million) | 111.5 | 96.5 |
Inventories | 117.1 | 116.3 |
Prepaid and other current assets | 18.3 | 20.4 |
Total Current Assets | 252.4 | 236.3 |
Property, Plant and Equipment | ||
Property, Plant and Equipment, at cost | 761.6 | 755.6 |
Less accumulated depreciation | 398.4 | 391 |
Property, plant and equipment—net | 363.2 | 364.6 |
Deferred Income Taxes | 10 | 6.1 |
Goodwill | 70.8 | 70.4 |
Intangible Assets—net | 73.4 | 74 |
Other Noncurrent Assets | 17.6 | 14.2 |
TOTAL ASSETS | 787.4 | 765.6 |
Current Liabilities | ||
Debt payable within one year | 1.2 | 1.2 |
Accounts payable | 56.4 | 55.6 |
Accrued expenses | 44.7 | 51.2 |
Total Current Liabilities | 102.3 | 108 |
Long-term Debt | 225.1 | 219.7 |
Deferred Income Taxes | 18.3 | 10.1 |
Noncurrent Employee Benefits | 87 | 86.7 |
Other Noncurrent Obligations | 6.2 | 2.8 |
TOTAL LIABILITIES | 438.9 | 427.3 |
Contingencies and Legal Matters (Note 8) | 0 | 0 |
TOTAL STOCKHOLDERS’ EQUITY | 348.5 | 338.3 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 787.4 | $ 765.6 |
CONDENSED CONSOLIDATED BALANCE5
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 1.6 | $ 1.5 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
OPERATING ACTIVITIES | ||
Net income | $ 17.6 | $ 19.2 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 7.8 | 8.2 |
Stock-based compensation | 2.5 | 2.5 |
Deferred income tax provision | 3.3 | 3.5 |
Increase in working capital | (11.3) | (18.8) |
Pension and other postretirement benefits | 1.9 | 1.7 |
Other | 0.2 | (0.2) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 22 | 16.1 |
INVESTING ACTIVITIES | ||
Capital expenditures | (11.5) | (11.3) |
Other | (0.2) | (0.4) |
NET CASH USED IN INVESTING ACTIVITIES | (11.7) | (11.7) |
FINANCING ACTIVITIES | ||
Long-term borrowings (Note 4) | 81.8 | 89.1 |
Repayments of long-term debt (Note 4) | (76.9) | (81.8) |
Cash dividends paid | (6.3) | (5.6) |
Shares purchased (Note 7) | (6.8) | (5.3) |
Proceeds from exercise of stock options | 0.3 | 0.1 |
NET CASH USED IN FINANCING ACTIVITIES | (7.9) | (3.5) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 2.4 | 0.9 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 3.1 | 4.2 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 5.5 | 5.1 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid during period for interest, net of interest expense capitalized | 0.6 | 0.2 |
Cash paid during period for income taxes | 1.7 | 5.3 |
Non-cash investing activities: | ||
Liability for equipment acquired | $ 3.5 | $ 5.5 |
Background and Basis of Present
Background and Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | Background and Basis of Presentation Background Neenah Paper, Inc. (“Neenah” or the “Company”), is a Delaware corporation incorporated in April 2004. The Company has two primary operations: its technical products business and its fine paper and packaging business. See Note 9, “Business Segment Information.” Basis of Consolidation and Presentation These statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and, in accordance with those rules and regulations, do not include all information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management believes that the disclosures made are adequate for a fair presentation of the Company’s results of operations, financial position and cash flows. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the results of operations, financial position and cash flows for the interim periods presented herein. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make extensive use of estimates and assumptions that affect the reported amounts and disclosures. Actual results may vary from these estimates. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year. The condensed consolidated financial statements of Neenah and its subsidiaries included herein are unaudited. The condensed consolidated financial statements include the financial statements of the Company and its wholly owned and majority owned subsidiaries. Intercompany balances and transactions have been eliminated. Earnings per Share (“EPS”) The following table presents the computation of basic and diluted EPS (dollars in millions except per share amounts, shares in thousands): Earnings Per Basic Common Share Three Months Ended March 31, 2017 2016 Income from continuing operations $ 17.6 $ 19.2 Amounts attributable to participating securities (0.1 ) (0.2 ) Net income available to common stockholders $ 17.5 $ 19.0 Weighted-average basic shares outstanding 16,779 16,778 Basic earnings per share $ 1.04 $ 1.13 Earnings Per Diluted Common Share Three Months Ended March 31, 2017 2016 Income from continuing operations $ 17.6 $ 19.2 Amounts attributable to participating securities (0.1 ) (0.2 ) Net income available to common stockholders $ 17.5 $ 19.0 Weighted-average basic shares outstanding 16,779 16,778 Add: Assumed incremental shares under stock compensation plans (a) 246 273 Weighted-average diluted shares 17,025 17,051 Diluted earnings per share $ 1.03 $ 1.11 (a) For the three months ended March 31, 2017 and 2016 , there were 72,000 and 140,000 potentially dilutive options excluded from the computation of dilutive common shares because the exercise price of such options exceeded the average market price of the Company’s common stock. Fair Value of Financial Instruments The Company measures the fair value of financial instruments in accordance with Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”) which establishes a framework for measuring fair value. ASC Topic 820 provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The following table presents the carrying value and the fair value of the Company’s debt. March 31, 2017 December 31, 2016 Carrying Value Fair Value (a)(b) Carrying Value Fair Value (a)(b) 2021 Senior Notes (5.25% fixed rate) $ 175.0 $ 169.6 $ 175.0 $ 169.5 Global Revolving Credit Facilities (variable rates) 48.3 48.3 42.9 42.9 German loan agreement (2.45% fixed rate) 6.6 6.6 6.8 6.8 Total debt $ 229.9 $ 224.5 $ 224.7 $ 219.2 (a) The fair value for all debt instruments was estimated from Level 2 measurements. (b) The fair value of short and long-term debt is estimated using rates currently available to the Company for debt of the same remaining maturities. As of March 31, 2017 , the Company had $3.5 million in marketable securities classified as “Other Assets” on the condensed consolidated balance sheet. The cost of such marketable securities was $3.4 million . Fair value for the Company’s marketable securities was estimated from Level 1 inputs. The Company’s marketable securities are designated for the payment of benefits under its supplemental employee retirement plan (“SERP”). As of March 31, 2017 , Neenah Germany had investments of $1.6 million that were restricted to the payment of certain post-retirement employee benefits of which $0.6 million and $1.0 million are classified as “Prepaid and other current assets” and “Other Assets”, respectively, on the condensed consolidated balance sheet. |
Accounting Standard Changes
Accounting Standard Changes | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Standard Changes | Accounting Standard Changes In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This guidance specifies how and when an entity will recognize revenue arising from contracts with customers and requires entities to disclose information about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has subsequently issued additional, clarifying standards to address issues arising from implementation of the new revenue recognition standard. The new revenue recognition standard and clarifying standards are effective for interim and annual periods beginning on January 1, 2018. The Company has substantially completed its assessment of the new standards and does not believe there will be a material impact from adoption on its consolidated financial statements. The Company will continue to evaluate any additional changes, modifications or interpretations of the standard which may impact its current conclusions, and believes it will adopt the new standards using the modified retrospective method as of January 1, 2018. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires lessees to put most leases on their balance sheets but recognize expenses on their income statements in a manner similar to current lease accounting. The guidance also eliminates current real estate-specific provisions for all entities. ASU 2016-09 is effective for fiscal years beginning after December 15, 2018, although early adoption is permitted. The Company is currently assessing the impact of the adoption of ASU 2016-02 on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This ASU clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This ASU will be effective for annual periods beginning after December 15, 2017. The Company does not expect the adoption of ASU 2017-01 to have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350). This ASU eliminates step two of the impairment test, the performance of a hypothetical purchase price allocation to measure goodwill impairment. Instead, impairment will be measured using the difference between the carrying amount and the fair value of the reporting unit. This ASU will be effective for annual periods beginning after December 15, 2019, with early adoption permitted for goodwill impairment tests with measurement dates after January 1, 2017. The Company does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial statements. In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (Topic 715). ASU 2017-07 requires entities to (1) disaggregate the current-service-cost component from the other components of net benefit cost (the “other components”) and present it with other current compensation costs for related employees in the income statement and (2) present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented. In addition, only the service-cost component of net benefit cost is eligible for capitalization. This ASU will be effective for annual periods beginning after December 15, 2017, with early adoption permitted in the first quarter only. The Company is currently assessing the impact of the adoption of ASU 2017-07 on its consolidated financial statements. As of March 31, 2017 , no other amendments to the ASC have been issued that will have or are reasonably likely to have a material effect on the Company’s financial position, results of operations or cash flows. |
Supplemental Balance Sheet Data
Supplemental Balance Sheet Data | 3 Months Ended |
Mar. 31, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental Balance Sheet Data | Supplemental Balance Sheet Data The following table presents inventories by major class: March 31, 2017 December 31, 2016 Raw materials $ 32.1 $ 31.6 Work in progress 30.7 26.8 Finished goods 59.3 63.0 Supplies and other 3.2 3.1 125.3 124.5 Adjust FIFO inventories to LIFO cost (8.2 ) (8.2 ) Total $ 117.1 $ 116.3 The FIFO values of inventories valued on the LIFO method were $111.5 million and $106.8 million as of March 31, 2017 and December 31, 2016 , respectively. For the three months ended March 31, 2017 , income from continuing operations before income taxes was increased by less than $0.1 million due to a decrease in certain LIFO inventory quantities. The following table presents changes in accumulated other comprehensive income (“AOCI”) for the three months ended March 31, 2017 : Net unrealized foreign currency translation gain (loss) Net gain (loss) from pension and other postretirement liabilities Unrealized gain (loss) on “available-for-sale” securities Accumulated other comprehensive income (loss) AOCI — December 31, 2016 $ (27.4 ) $ (64.5 ) $ (0.1 ) $ (92.0 ) Other comprehensive income before reclassifications 1.7 — 0.1 1.8 Amounts reclassified from AOCI — 2.0 — 2.0 Income from other comprehensive income items 1.7 2.0 0.1 3.8 Provision for income taxes 0.1 0.7 — 0.8 Other comprehensive income 1.6 1.3 0.1 3.0 AOCI — March 31, 2017 $ (25.8 ) $ (63.2 ) $ — $ (89.0 ) For the three months ended March 31, 2017 and 2016 , the Company reclassified $2.0 million and $1.8 million , respectively, of costs from accumulated other comprehensive income to cost of products sold and selling, general and administrative expenses on the condensed consolidated statements of operations. For each of the three months ended March 31, 2017 and 2016 , the Company recognized an income tax benefit of $0.7 million , related to such reclassifications classified as "Provision for income taxes" on the condensed consolidated statements of operations. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt consisted of the following: March 31, 2017 December 31, 2016 2021 Senior Notes (5.25% fixed rate) due May 2021 $ 175.0 $ 175.0 Global Revolving Credit Facilities (variable rates) due December 2019 48.3 42.9 German loan agreement (2.45% fixed rate) due in 32 equal quarterly installments ending September 2022 6.6 6.8 Deferred financing costs (3.6 ) (3.8 ) Total debt 226.3 220.9 Less: Debt payable within one year 1.2 1.2 Long-term debt $ 225.1 $ 219.7 2021 Senior Notes In May 2013, the Company completed an underwritten offering of eight -year senior unsecured notes (the “2021 Senior Notes”) at a face amount of $175 million . The 2021 Senior Notes contain terms, covenants and events of default with which the Company must comply, which the Company believes are ordinary and standard for notes of this nature. As of March 31, 2017 , the Company was in compliance with all terms of the indenture for the 2021 Senior Notes. Amended and Restated Secured Revolving Credit Facility In December 2014, the Company amended and restated its existing credit facility by entering into the Third Amended and Restated Credit Agreement (the “Third Amended Credit Agreement”). The Third Amended Credit Agreement contains covenants with which the Company and its subsidiaries must comply during the term of the agreement, which the Company believes are ordinary and standard for agreements of this nature. As of March 31, 2017 , the Company was in compliance with all terms of the Third Amended Credit Agreement. Availability under the Global Revolving Credit Facilities varies over time depending on the value of the Company’s inventory, receivables and various capital assets. As of March 31, 2017 , the Company had $48.3 million of borrowings and $1.2 million in letters of credit outstanding under the Global Revolving Credit Facilities and $120.8 million of available credit (based on exchange rates at March 31, 2017 ). As of March 31, 2017 , the weighted-average interest rate on outstanding Global Revolving Credit Facility borrowings was 3.1 percent per annum. As of December 31, 2016 , the weighted-average interest rate under the Global Revolving Credit Facilities was 2.8 percent per annum. Under the terms of the 2021 Senior Notes and the Third Amended Credit Agreement, the Company has limitations on its ability to repurchase shares of and pay dividends on its Common Stock. These limitations are triggered depending on the Company’s credit availability under the Third Amended Credit Agreement and leverage levels under the Senior Notes. As of March 31, 2017 , none of these covenants were restrictive to the Company’s ability to repurchase shares of and pay dividends on its Common Stock. For additional information about our debt agreements, see Note 7 of the Notes to Consolidated Financial Statements in our 2016 Form 10-K. Borrowings and Repayments of Long-Term Debt The condensed consolidated statements of cash flows present borrowings and repayments under the Global Revolving Credit Facilities using a gross approach. This approach presents not only discrete borrowings for transactions such as a business acquisition, but also reflects all borrowings and repayments that occur as part of daily management of cash receipts and disbursements. For the three months ended March 31, 2017 , the Company made scheduled debt repayments of $0.3 million and net long-term debt repayments of $5.2 million related to daily cash management activities. For the three months ended March 31, 2016 , the Company made scheduled debt repayments of $0.3 million and net long-term debt borrowings of $7.6 million related to daily cash management activities. |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 3 Months Ended |
Mar. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Pension and Other Postretirement Benefits | Pension and Other Postretirement Benefits Pension Plans Substantially all active employees of the Company’s U.S. operations participate in defined benefit pension plans and/or defined contribution retirement plans. The Company has defined benefit plans designed to provide a monthly pension upon retirement for substantially all its employees in Germany and the United Kingdom. In addition, the Company maintains a SERP which is a non-qualified defined benefit plan and a supplemental retirement contribution plan (the “SRCP”) which is a non-qualified, unfunded defined contribution plan. The Company provides benefits under the SERP and SRCP to the extent necessary to fulfill the intent of its retirement plans without regard to the limitations set by the Internal Revenue Code on qualified and non-qualified retirement benefit plans. The following table presents the components of net periodic benefit cost for the Company’s defined benefit plans and postretirement plans other than pensions: Components of Net Periodic Benefit Cost for Defined Benefit Plans Pension Benefits Postretirement Benefits Other than Pensions Three Months Ended March 31, 2017 2016 2017 2016 Service cost $ 1.3 $ 1.2 $ 0.3 $ 0.3 Interest cost 3.7 4.0 0.4 0.4 Expected return on plan assets (a) (4.8 ) (4.7 ) — — Recognized net actuarial loss 1.9 1.7 — 0.1 Amortization of prior service benefit 0.1 — — (0.1 ) Net periodic benefit cost $ 2.2 $ 2.2 $ 0.7 $ 0.7 (a) The expected return on plan assets is determined by multiplying the fair value of plan assets at the prior year-end (adjusted for estimated current year cash benefit payments and contributions) by the expected long-term rate of return. The Company expects to make aggregate contributions to qualified and nonqualified defined benefit pension trusts and to pay pension benefits for unfunded pension plans of approximately $16 million in calendar 2017. For the three months ended March 31, 2017 , the Company made $1.2 million of such payments. The Company made similar payments of $0.5 million and $18.4 million for the three months ended March 31, 2016 and for the year ended December 31, 2016, respectively. |
Stock Compensation Plan
Stock Compensation Plan | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Compensation Plan | Stock Compensation Plan Stock Options and Stock Appreciation Rights (“Options”) The following table presents information regarding Options awarded during the three months ended March 31, 2017 : Options granted 143,726 Per share weighted average exercise price $ 82.11 Per share weighted average grant date fair value $ 13.54 The weighted-average grant date fair value for Options granted during the three months ended March 31, 2017 was estimated using the Black-Scholes option valuation model with the following assumptions: Expected term in years 5.7 Risk free interest rate 2.1 % Volatility 22.9 % Dividend yield 3.0 % The following table presents information regarding Options that vested during the three months ended March 31, 2017 : Options vested 92,107 Aggregate grant date fair value of Options vested (in millions) $ 1.4 The following table presents information regarding outstanding Options: March 31, 2017 December 31, 2016 Options outstanding 534,885 530,462 Aggregate intrinsic value (in millions) $ 12.4 $ 25.0 Per share weighted average exercise price $ 53.51 $ 38.35 Exercisable Options 289,140 336,336 Aggregate intrinsic value (in millions) $ 10.7 $ 19.3 Unvested Options 245,745 194,126 Per share weighted average grant date fair value $ 14.31 $ 15.15 Performance Share Units (“PSUs”) and Restricted Share Units (“RSUs”) For the three months ended March 31, 2017 , the Company granted target awards of 41,748 PSUs. The measurement period for three fourths of the PSUs is January 1, 2017 through December 31, 2017, and for the remaining fourth of the PSUs is January 1, 2017 through December 31, 2019. The PSUs vest on December 31, 2019. Common Stock equal to not less than 40 percent and not more than 200 percent of the PSUs target will be awarded based on the Company’s return on invested capital, consolidated revenue growth, adjusted EPS and total return to shareholders relative to the companies in the Russell 2000® Value small cap index. The market price on the date of grant for the PSUs was $82.15 per share. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock As of March 31, 2017 and December 31, 2016 , the Company had 16,787,202 shares and 16,771,000 shares of Common Stock outstanding, respectively. In May 2016, the Company’s Board of Directors authorized a program that would allow the Company to repurchase up to $25 million of its outstanding Common Stock over the next 12 months (the “2016 Stock Purchase Plan”). The Company also had $25 million repurchase programs in place during the preceding two years that expired in May 2016 (the “2015 Stock Purchase Plan”) and May 2015 (the “2014 Stock Purchase Plan”), respectively. The following table shows shares purchased under the respective stock purchase plans: Three Months Ended March 31, 2017 2016 Shares $ Shares $ 2016 Stock Purchase Plan 85,354 $ 6.8 — $ — 2015 Stock Purchase Plan — — 93,600 5.2 |
Contingencies and Legal Matters
Contingencies and Legal Matters | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Legal Matters | Contingencies and Legal Matters Litigation The Company is involved in certain legal actions and claims arising in the ordinary course of business. While the outcome of these legal actions and claims cannot be predicted with certainty, it is the opinion of management that the outcome of any such claim which is pending or threatened, either individually or on a combined basis, will not have a material effect on the consolidated financial condition, results of operations or cash flows of the Company. Income Taxes The Company periodically undergoes examination by the Internal Revenue Service (the “IRS”) as well as various state and foreign jurisdictions. These tax authorities routinely challenge certain deductions and credits reported by the Company on its income tax returns. No significant tax audit findings are being contested at this time with either the IRS or any state or foreign tax authority. Employees and Labor Relations The Company’s U.S. union employees are represented by the United Steelworkers Union (the “USW”). Approximately 50 percent of salaried employees and 80 percent of hourly employees of Neenah Germany are eligible to be represented by the Mining, Chemicals and Energy Trade Union, Industriegewerkschaft Bergbau, Chemie and Energie (the “IG BCE”). As of March 31, 2017 , the Company had approximately 196 U.S. employees covered under collective bargaining agreements that will expire in the next 12 months. The following table shows the expiration dates of the Company’s various bargaining agreements and the number of employees covered under each of these agreements. Contract Expiration Date Location Union Number of Employees June 2017 Neenah Germany IG BCE (a) January 2018 Whiting, WI (b) USW 196 June 2018 Neenah, WI (b) USW 267 July 2018 Munising, MI (b) USW 199 May 2019 Appleton, WI (b) USW 74 August 2021 Brattleboro, VT USW 70 November 2021 Lowville, NY USW 104 (a) Under German law union membership is voluntary and does not need to be disclosed to the Company. As a result, the number of employees covered by the collective bargaining agreement with the IG BCE cannot be determined. The collective pay agreement is currently being negotiated between the Association of Bavarian Paper Mills and IG BCE. Generally, the agreement is renewed every 12-24 months. (b) The Whiting, Neenah, Munising and Appleton mills have bargained jointly with the USW on pension matters. The current agreements will remain in effect until September 2019. The Company’s United Kingdom salaried and hourly employees are eligible to participate in Unite the Union (“UNITE”) on an individual basis, but not under a collective bargaining agreement. |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information The Company’s reportable operating segments consist of Technical Products, Fine Paper and Packaging and Other. • The Technical Products segment is an aggregation of the Company’s filtration and performance materials businesses which are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods and is an international producer of fiber-formed, coated and/or saturated specialized media that delivers high performance benefits to customers. Included in this segment are filtration media, tape and abrasives backings products, and durable label and specialty substrate products. • The Fine Paper and Packaging business is a leading supplier of premium printing and other high-end specialty papers, premium packaging and specialty office papers primarily in North America. • The Other segment is composed of papers sold to converters for end uses such as covering materials for datebooks, diaries, yearbooks and traditional photo albums. These product lines represent an operating segment which does not meet the quantitative threshold for a reportable segment, however, due to the dissimilar nature of these products, they are not managed as part of either the Fine Paper and Packaging or Technical Products businesses. Each segment employs different technologies and marketing strategies. Disclosure of segment information is on the same basis that management uses internally for evaluating segment performance and allocating resources. Transactions between segments are eliminated in consolidation. The costs of shared services, and other administrative functions managed on a common basis, are allocated to the segments based on usage, where possible, or other factors based on the nature of the activity. General corporate expenses that do not directly support the operations of the business segments are shown as Unallocated corporate costs. The following table summarizes the net sales and operating income for each of the Company’s business segments. Three Months Ended March 31, 2017 2016 Net sales Technical Products $ 121.9 $ 121.5 Fine Paper and Packaging 114.3 113.8 Other 5.9 6.8 Consolidated $ 242.1 $ 242.1 Three Months Ended March 31, 2017 2016 Operating income (loss) Technical Products $ 12.5 $ 19.2 Fine Paper and Packaging 20.3 17.5 Other (0.3 ) — Unallocated corporate costs (5.5 ) (5.3 ) Consolidated $ 27.0 $ 31.4 |
Background and Basis of Prese16
Background and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Consolidation and Presentation | Basis of Consolidation and Presentation These statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and, in accordance with those rules and regulations, do not include all information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management believes that the disclosures made are adequate for a fair presentation of the Company’s results of operations, financial position and cash flows. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the results of operations, financial position and cash flows for the interim periods presented herein. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make extensive use of estimates and assumptions that affect the reported amounts and disclosures. Actual results may vary from these estimates. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year. The condensed consolidated financial statements of Neenah and its subsidiaries included herein are unaudited. The condensed consolidated financial statements include the financial statements of the Company and its wholly owned and majority owned subsidiaries. Intercompany balances and transactions have been eliminated. |
Earnings per Share (“EPS”) | Earnings per Share (“EPS”) The following table presents the computation of basic and diluted EPS (dollars in millions except per share amounts, shares in thousands): Earnings Per Basic Common Share Three Months Ended March 31, 2017 2016 Income from continuing operations $ 17.6 $ 19.2 Amounts attributable to participating securities (0.1 ) (0.2 ) Net income available to common stockholders $ 17.5 $ 19.0 Weighted-average basic shares outstanding 16,779 16,778 Basic earnings per share $ 1.04 $ 1.13 Earnings Per Diluted Common Share Three Months Ended March 31, 2017 2016 Income from continuing operations $ 17.6 $ 19.2 Amounts attributable to participating securities (0.1 ) (0.2 ) Net income available to common stockholders $ 17.5 $ 19.0 Weighted-average basic shares outstanding 16,779 16,778 Add: Assumed incremental shares under stock compensation plans (a) 246 273 Weighted-average diluted shares 17,025 17,051 Diluted earnings per share $ 1.03 $ 1.11 (a) For the three months ended March 31, 2017 and 2016 , there were 72,000 and 140,000 potentially dilutive options excluded from the computation of dilutive common shares because the exercise price of such options exceeded the average market price of the Company’s common stock. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures the fair value of financial instruments in accordance with Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”) which establishes a framework for measuring fair value. ASC Topic 820 provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). As of March 31, 2017 , the Company had $3.5 million in marketable securities classified as “Other Assets” on the condensed consolidated balance sheet. The cost of such marketable securities was $3.4 million . Fair value for the Company’s marketable securities was estimated from Level 1 inputs. The Company’s marketable securities are designated for the payment of benefits under its supplemental employee retirement plan (“SERP”). As of March 31, 2017 , Neenah Germany had investments of $1.6 million that were restricted to the payment of certain post-retirement employee benefits of which $0.6 million and $1.0 million are classified as “Prepaid and other current assets” and “Other Assets”, respectively, on the condensed consolidated balance sheet. |
Accounting Standard Changes | Accounting Standard Changes In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This guidance specifies how and when an entity will recognize revenue arising from contracts with customers and requires entities to disclose information about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has subsequently issued additional, clarifying standards to address issues arising from implementation of the new revenue recognition standard. The new revenue recognition standard and clarifying standards are effective for interim and annual periods beginning on January 1, 2018. The Company has substantially completed its assessment of the new standards and does not believe there will be a material impact from adoption on its consolidated financial statements. The Company will continue to evaluate any additional changes, modifications or interpretations of the standard which may impact its current conclusions, and believes it will adopt the new standards using the modified retrospective method as of January 1, 2018. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires lessees to put most leases on their balance sheets but recognize expenses on their income statements in a manner similar to current lease accounting. The guidance also eliminates current real estate-specific provisions for all entities. ASU 2016-09 is effective for fiscal years beginning after December 15, 2018, although early adoption is permitted. The Company is currently assessing the impact of the adoption of ASU 2016-02 on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This ASU clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This ASU will be effective for annual periods beginning after December 15, 2017. The Company does not expect the adoption of ASU 2017-01 to have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350). This ASU eliminates step two of the impairment test, the performance of a hypothetical purchase price allocation to measure goodwill impairment. Instead, impairment will be measured using the difference between the carrying amount and the fair value of the reporting unit. This ASU will be effective for annual periods beginning after December 15, 2019, with early adoption permitted for goodwill impairment tests with measurement dates after January 1, 2017. The Company does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial statements. In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (Topic 715). ASU 2017-07 requires entities to (1) disaggregate the current-service-cost component from the other components of net benefit cost (the “other components”) and present it with other current compensation costs for related employees in the income statement and (2) present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented. In addition, only the service-cost component of net benefit cost is eligible for capitalization. This ASU will be effective for annual periods beginning after December 15, 2017, with early adoption permitted in the first quarter only. The Company is currently assessing the impact of the adoption of ASU 2017-07 on its consolidated financial statements. As of March 31, 2017 , no other amendments to the ASC have been issued that will have or are reasonably likely to have a material effect on the Company’s financial position, results of operations or cash flows. |
Business Segment Information | The Company’s reportable operating segments consist of Technical Products, Fine Paper and Packaging and Other. • The Technical Products segment is an aggregation of the Company’s filtration and performance materials businesses which are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods and is an international producer of fiber-formed, coated and/or saturated specialized media that delivers high performance benefits to customers. Included in this segment are filtration media, tape and abrasives backings products, and durable label and specialty substrate products. • The Fine Paper and Packaging business is a leading supplier of premium printing and other high-end specialty papers, premium packaging and specialty office papers primarily in North America. • The Other segment is composed of papers sold to converters for end uses such as covering materials for datebooks, diaries, yearbooks and traditional photo albums. These product lines represent an operating segment which does not meet the quantitative threshold for a reportable segment, however, due to the dissimilar nature of these products, they are not managed as part of either the Fine Paper and Packaging or Technical Products businesses. Each segment employs different technologies and marketing strategies. Disclosure of segment information is on the same basis that management uses internally for evaluating segment performance and allocating resources. Transactions between segments are eliminated in consolidation. The costs of shared services, and other administrative functions managed on a common basis, are allocated to the segments based on usage, where possible, or other factors based on the nature of the activity. General corporate expenses that do not directly support the operations of the business segments are shown as Unallocated corporate costs. |
Background and Basis of Prese17
Background and Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of computation of basic and diluted EPS | The following table presents the computation of basic and diluted EPS (dollars in millions except per share amounts, shares in thousands): Earnings Per Basic Common Share Three Months Ended March 31, 2017 2016 Income from continuing operations $ 17.6 $ 19.2 Amounts attributable to participating securities (0.1 ) (0.2 ) Net income available to common stockholders $ 17.5 $ 19.0 Weighted-average basic shares outstanding 16,779 16,778 Basic earnings per share $ 1.04 $ 1.13 Earnings Per Diluted Common Share Three Months Ended March 31, 2017 2016 Income from continuing operations $ 17.6 $ 19.2 Amounts attributable to participating securities (0.1 ) (0.2 ) Net income available to common stockholders $ 17.5 $ 19.0 Weighted-average basic shares outstanding 16,779 16,778 Add: Assumed incremental shares under stock compensation plans (a) 246 273 Weighted-average diluted shares 17,025 17,051 Diluted earnings per share $ 1.03 $ 1.11 (a) For the three months ended March 31, 2017 and 2016 , there were 72,000 and 140,000 potentially dilutive options excluded from the computation of dilutive common shares because the exercise price of such options exceeded the average market price of the Company’s common stock. |
Schedule of the carrying value and fair value of the Company's debt | The following table presents the carrying value and the fair value of the Company’s debt. March 31, 2017 December 31, 2016 Carrying Value Fair Value (a)(b) Carrying Value Fair Value (a)(b) 2021 Senior Notes (5.25% fixed rate) $ 175.0 $ 169.6 $ 175.0 $ 169.5 Global Revolving Credit Facilities (variable rates) 48.3 48.3 42.9 42.9 German loan agreement (2.45% fixed rate) 6.6 6.6 6.8 6.8 Total debt $ 229.9 $ 224.5 $ 224.7 $ 219.2 (a) The fair value for all debt instruments was estimated from Level 2 measurements. (b) The fair value of short and long-term debt is estimated using rates currently available to the Company for debt of the same remaining maturities. |
Supplemental Balance Sheet Da18
Supplemental Balance Sheet Data (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of inventories by major class | The following table presents inventories by major class: March 31, 2017 December 31, 2016 Raw materials $ 32.1 $ 31.6 Work in progress 30.7 26.8 Finished goods 59.3 63.0 Supplies and other 3.2 3.1 125.3 124.5 Adjust FIFO inventories to LIFO cost (8.2 ) (8.2 ) Total $ 117.1 $ 116.3 |
Schedule of changes in accumulated other comprehensive income | The following table presents changes in accumulated other comprehensive income (“AOCI”) for the three months ended March 31, 2017 : Net unrealized foreign currency translation gain (loss) Net gain (loss) from pension and other postretirement liabilities Unrealized gain (loss) on “available-for-sale” securities Accumulated other comprehensive income (loss) AOCI — December 31, 2016 $ (27.4 ) $ (64.5 ) $ (0.1 ) $ (92.0 ) Other comprehensive income before reclassifications 1.7 — 0.1 1.8 Amounts reclassified from AOCI — 2.0 — 2.0 Income from other comprehensive income items 1.7 2.0 0.1 3.8 Provision for income taxes 0.1 0.7 — 0.8 Other comprehensive income 1.6 1.3 0.1 3.0 AOCI — March 31, 2017 $ (25.8 ) $ (63.2 ) $ — $ (89.0 ) |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consisted of the following: March 31, 2017 December 31, 2016 2021 Senior Notes (5.25% fixed rate) due May 2021 $ 175.0 $ 175.0 Global Revolving Credit Facilities (variable rates) due December 2019 48.3 42.9 German loan agreement (2.45% fixed rate) due in 32 equal quarterly installments ending September 2022 6.6 6.8 Deferred financing costs (3.6 ) (3.8 ) Total debt 226.3 220.9 Less: Debt payable within one year 1.2 1.2 Long-term debt $ 225.1 $ 219.7 |
Pension and Other Postretirem20
Pension and Other Postretirement Benefits (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of components of net periodic benefit cost for defined benefit plans and postretirement plans other than pensions | Pension Benefits Postretirement Benefits Other than Pensions Three Months Ended March 31, 2017 2016 2017 2016 Service cost $ 1.3 $ 1.2 $ 0.3 $ 0.3 Interest cost 3.7 4.0 0.4 0.4 Expected return on plan assets (a) (4.8 ) (4.7 ) — — Recognized net actuarial loss 1.9 1.7 — 0.1 Amortization of prior service benefit 0.1 — — (0.1 ) Net periodic benefit cost $ 2.2 $ 2.2 $ 0.7 $ 0.7 (a) The expected return on plan assets is determined by multiplying the fair value of plan assets at the prior year-end (adjusted for estimated current year cash benefit payments and contributions) by the expected long-term rate of return. |
Stock Compensation Plan (Tables
Stock Compensation Plan (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock options awarded | The following table presents information regarding Options awarded during the three months ended March 31, 2017 : Options granted 143,726 Per share weighted average exercise price $ 82.11 Per share weighted average grant date fair value $ 13.54 |
Schedule of assumptions used to determine the grant date fair value of options granted | The weighted-average grant date fair value for Options granted during the three months ended March 31, 2017 was estimated using the Black-Scholes option valuation model with the following assumptions: Expected term in years 5.7 Risk free interest rate 2.1 % Volatility 22.9 % Dividend yield 3.0 % |
Schedule of stock options vested during the period | The following table presents information regarding Options that vested during the three months ended March 31, 2017 : Options vested 92,107 Aggregate grant date fair value of Options vested (in millions) $ 1.4 |
Schedule of outstanding stock options | The following table presents information regarding outstanding Options: March 31, 2017 December 31, 2016 Options outstanding 534,885 530,462 Aggregate intrinsic value (in millions) $ 12.4 $ 25.0 Per share weighted average exercise price $ 53.51 $ 38.35 Exercisable Options 289,140 336,336 Aggregate intrinsic value (in millions) $ 10.7 $ 19.3 Unvested Options 245,745 194,126 Per share weighted average grant date fair value $ 14.31 $ 15.15 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of shares purchased under the respective stock purchase plans | The following table shows shares purchased under the respective stock purchase plans: Three Months Ended March 31, 2017 2016 Shares $ Shares $ 2016 Stock Purchase Plan 85,354 $ 6.8 — $ — 2015 Stock Purchase Plan — — 93,600 5.2 |
Contingencies and Legal Matte23
Contingencies and Legal Matters (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of bargaining agreements | The following table shows the expiration dates of the Company’s various bargaining agreements and the number of employees covered under each of these agreements. Contract Expiration Date Location Union Number of Employees June 2017 Neenah Germany IG BCE (a) January 2018 Whiting, WI (b) USW 196 June 2018 Neenah, WI (b) USW 267 July 2018 Munising, MI (b) USW 199 May 2019 Appleton, WI (b) USW 74 August 2021 Brattleboro, VT USW 70 November 2021 Lowville, NY USW 104 (a) Under German law union membership is voluntary and does not need to be disclosed to the Company. As a result, the number of employees covered by the collective bargaining agreement with the IG BCE cannot be determined. The collective pay agreement is currently being negotiated between the Association of Bavarian Paper Mills and IG BCE. Generally, the agreement is renewed every 12-24 months. (b) The Whiting, Neenah, Munising and Appleton mills have bargained jointly with the USW on pension matters. The current agreements will remain in effect until September 2019. |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of net sales and operating income for each of the Company's business segment | The following table summarizes the net sales and operating income for each of the Company’s business segments. Three Months Ended March 31, 2017 2016 Net sales Technical Products $ 121.9 $ 121.5 Fine Paper and Packaging 114.3 113.8 Other 5.9 6.8 Consolidated $ 242.1 $ 242.1 Three Months Ended March 31, 2017 2016 Operating income (loss) Technical Products $ 12.5 $ 19.2 Fine Paper and Packaging 20.3 17.5 Other (0.3 ) — Unallocated corporate costs (5.5 ) (5.3 ) Consolidated $ 27.0 $ 31.4 |
Background and Basis of Prese25
Background and Basis of Presentation - EPS (Details) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2017USD ($)segment$ / sharesshares | Mar. 31, 2016USD ($)$ / sharesshares | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of primary operations | segment | 2 | |
Potentially dilutive stock-based compensation awards excluded from computation of dilutive common shares | shares | 72,000 | 140,000 |
Earnings (Loss) Per Basic Common Share | ||
Income from continuing operations | $ 17.6 | $ 19.2 |
Amounts attributable to participating securities | (0.1) | (0.2) |
Net income available to common stockholders | $ 17.5 | $ 19 |
Weighted-average basic shares outstanding (in shares) | shares | 16,779,000 | 16,778,000 |
Basic earnings (loss) per share | ||
Basic (in dollars per share) | $ / shares | $ 1.04 | $ 1.13 |
Earnings (Loss) Per Diluted Common Share | ||
Income from continuing operations | $ 17.6 | $ 19.2 |
Amounts attributable to participating securities | (0.1) | (0.2) |
Net income available to common stockholders | $ 17.5 | $ 19 |
Weighted-average basic shares outstanding (in shares) | shares | 16,779,000 | 16,778,000 |
Add: Assumed incremental shares under stock compensation plans (in shares) | shares | 246,000 | 273,000 |
Weighted-average diluted shares (in shares) | shares | 17,025,000 | 17,051,000 |
Diluted earnings (loss) per share | ||
Diluted (in dollars per share) | $ / shares | $ 1.03 | $ 1.11 |
Background and Basis of Prese26
Background and Basis of Presentation - Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Senior notes | 2021 Senior Notes (5.25% fixed rate) due May 2021 | ||
Fair Value of Financial Instruments | ||
Fixed rate of interest (as a percent) | 5.25% | |
Secured debt | German loan agreement (2.45% fixed rate) due in 32 equal quarterly installments ending September 2022 | ||
Fair Value of Financial Instruments | ||
Fixed rate of interest (as a percent) | 2.45% | |
Carrying Value | ||
Fair Value of Financial Instruments | ||
Total debt | $ 229.9 | $ 224.7 |
Carrying Value | Senior notes | 2021 Senior Notes (5.25% fixed rate) due May 2021 | ||
Fair Value of Financial Instruments | ||
Total debt | 175 | 175 |
Carrying Value | Secured debt | Global Revolving Credit Facilities (variable rates) due December 2019 | ||
Fair Value of Financial Instruments | ||
Total debt | 48.3 | 42.9 |
Carrying Value | Secured debt | German loan agreement (2.45% fixed rate) due in 32 equal quarterly installments ending September 2022 | ||
Fair Value of Financial Instruments | ||
Total debt | 6.6 | 6.8 |
Level 2 | Fair Value | ||
Fair Value of Financial Instruments | ||
Total debt | 224.5 | 219.2 |
Level 2 | Fair Value | Senior notes | 2021 Senior Notes (5.25% fixed rate) due May 2021 | ||
Fair Value of Financial Instruments | ||
Total debt | 169.6 | 169.5 |
Level 2 | Fair Value | Secured debt | Global Revolving Credit Facilities (variable rates) due December 2019 | ||
Fair Value of Financial Instruments | ||
Total debt | 48.3 | 42.9 |
Level 2 | Fair Value | Secured debt | German loan agreement (2.45% fixed rate) due in 32 equal quarterly installments ending September 2022 | ||
Fair Value of Financial Instruments | ||
Total debt | $ 6.6 | $ 6.8 |
Background and Basis of Prese27
Background and Basis of Presentation - Marketable Securities (Details) $ in Millions | Mar. 31, 2017USD ($) |
Marketable securities | |
Cost of marketable securities | $ 3.4 |
Pension Benefits | |
Held to maturity | |
Investments restricted to the payment of post-retirement employee benefits | 1.6 |
Other Assets | Pension Benefits | |
Held to maturity | |
Investments restricted to the payment of post-retirement employee benefits | 1 |
Prepaid Expenses and Other Current Assets | Pension Benefits | |
Held to maturity | |
Investments restricted to the payment of post-retirement employee benefits | 0.6 |
Fair Value | Level 1 | Other Assets | |
Marketable securities | |
Fair value of marketable securities | $ 3.5 |
Supplemental Balance Sheet Da28
Supplemental Balance Sheet Data - Inventories (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Inventories by major class: | ||
Raw materials | $ 32.1 | $ 31.6 |
Work in progress | 30.7 | 26.8 |
Finished goods | 59.3 | 63 |
Supplies and other | 3.2 | 3.1 |
Inventories, gross | 125.3 | 124.5 |
Adjust FIFO inventories to LIFO cost | (8.2) | (8.2) |
Total | 117.1 | 116.3 |
FIFO values of inventories valued on the LIFO method | 111.5 | $ 106.8 |
Maximum | ||
Inventories by major class: | ||
Decrease in LIFO inventory (less than) | $ 0.1 |
Supplemental Balance Sheet Da29
Supplemental Balance Sheet Data - AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
AOCI, Balance at the beginning of the period | $ 338.3 | |
Income from other comprehensive income items | 3.8 | $ 5.5 |
Provision for income taxes | 0.8 | 0.7 |
Other comprehensive income | 3 | 4.8 |
AOCI, Balance at the end of the period | 348.5 | |
Income tax benefit | (6.2) | (9.3) |
Accumulated other comprehensive income (loss) | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Cost of products sold and selling, general and administrative expenses | 2 | 1.8 |
Income tax benefit | 0.7 | $ 0.7 |
Net unrealized foreign currency translation gain (loss) | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
AOCI, Balance at the beginning of the period | (27.4) | |
Other comprehensive income before reclassifications | 1.7 | |
Amounts reclassified from AOCI | 0 | |
Income from other comprehensive income items | 1.7 | |
Provision for income taxes | 0.1 | |
Other comprehensive income | 1.6 | |
AOCI, Balance at the end of the period | (25.8) | |
Net gain (loss) from pension and other postretirement liabilities | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
AOCI, Balance at the beginning of the period | (64.5) | |
Other comprehensive income before reclassifications | 0 | |
Amounts reclassified from AOCI | 2 | |
Income from other comprehensive income items | 2 | |
Provision for income taxes | 0.7 | |
Other comprehensive income | 1.3 | |
AOCI, Balance at the end of the period | (63.2) | |
Unrealized gain (loss) on “available-for-sale” securities | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
AOCI, Balance at the beginning of the period | (0.1) | |
Other comprehensive income before reclassifications | 0.1 | |
Amounts reclassified from AOCI | 0 | |
Income from other comprehensive income items | 0.1 | |
Provision for income taxes | 0 | |
Other comprehensive income | 0.1 | |
AOCI, Balance at the end of the period | 0 | |
Accumulated other comprehensive income (loss) | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
AOCI, Balance at the beginning of the period | (92) | |
Other comprehensive income before reclassifications | 1.8 | |
Amounts reclassified from AOCI | 2 | |
Income from other comprehensive income items | 3.8 | |
Provision for income taxes | 0.8 | |
Other comprehensive income | 3 | |
AOCI, Balance at the end of the period | $ (89) |
Debt (Details)
Debt (Details) | 1 Months Ended | 3 Months Ended | ||
May 31, 2013USD ($) | Mar. 31, 2017USD ($)installment | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Principal Payments | ||||
Total debt | $ 226,300,000 | $ 220,900,000 | ||
Deferred financing costs | (3,600,000) | (3,800,000) | ||
Less: Debt payable within one year | 1,200,000 | 1,200,000 | ||
Long-term debt | 225,100,000 | $ 219,700,000 | ||
Scheduled debt repayment | 300,000 | $ 300,000 | ||
Repayment of daily cash management activities | 5,200,000 | |||
Long-term debt borrowings | $ 7,600,000 | |||
Global Revolving Credit Facilities (variable rates) due December 2019 | ||||
Principal Payments | ||||
Letters of credit outstanding | 1,200,000 | |||
Available credit | $ 120,800,000 | |||
Weighted-average interest rate (as a percent) | 3.10% | 2.80% | ||
Senior notes | 2021 Senior Notes (5.25% fixed rate) due May 2021 | ||||
Principal Payments | ||||
Total debt | $ 175,000,000 | $ 175,000,000 | ||
Debt instrument, interest rate, stated percentage | 5.25% | |||
Total term of notes | 8 years | |||
Face amount | $ 175,000,000 | |||
Line of credit | Global Revolving Credit Facilities (variable rates) due December 2019 | ||||
Principal Payments | ||||
Total debt | $ 48,300,000 | 42,900,000 | ||
Secured debt | German loan agreement (2.45% fixed rate) due in 32 equal quarterly installments ending September 2022 | ||||
Principal Payments | ||||
Total debt | $ 6,600,000 | $ 6,800,000 | ||
Debt instrument, interest rate, stated percentage | 2.45% | |||
Debt instrument, due number of equal quarterly installments | installment | 32 |
Pension and Other Postretirem31
Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Pension and other postretirement benefits | |||
Aggregate contributions to qualified and non-qualified pension trusts and payments of pension benefits for unfunded pension plans | $ 1.2 | $ 0.5 | $ 18.4 |
Pension Benefits | |||
Pension and other postretirement benefits | |||
Service cost | 1.3 | 1.2 | |
Interest cost | 3.7 | 4 | |
Expected return on plan assets | (4.8) | (4.7) | |
Recognized net actuarial loss | 1.9 | 1.7 | |
Amortization of prior service benefit | 0.1 | 0 | |
Net periodic benefit cost | 2.2 | 2.2 | |
Expected 2017 aggregate contributions to qualified and non-qualified pension trusts and payments of pension benefits for unfunded pension plans | 16 | ||
Postretirement Benefits Other than Pensions | |||
Pension and other postretirement benefits | |||
Service cost | 0.3 | 0.3 | |
Interest cost | 0.4 | 0.4 | |
Expected return on plan assets | 0 | 0 | |
Recognized net actuarial loss | 0 | 0.1 | |
Amortization of prior service benefit | 0 | (0.1) | |
Net periodic benefit cost | $ 0.7 | $ 0.7 |
Stock Compensation Plan (Detail
Stock Compensation Plan (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Options | ||
Stock options awarded | ||
Options granted (in shares) | 143,726 | |
Per share weighted average exercise price (in dollars per share) | $ 82.11 | |
Per share weighted average grant date fair value (in dollars per share) | $ 13.54 | |
Fair value assumptions | ||
Expected term in years | 5 years 8 months 12 days | |
Risk free interest rate (as a percent) | 2.10% | |
Volatility (as a percent) | 22.90% | |
Dividend yield (as a percent) | 3.00% | |
Stock options and Stock Appreciation Rights vested | ||
Options vested (in shares) | 92,107 | |
Aggregate grant date fair value of Options vested | $ 1.4 | |
Outstanding Stock Options and Stock Appreciation Rights | ||
Options outstanding (in shares) | 534,885 | 530,462 |
Aggregate intrinsic value (in dollars) | $ 12.4 | $ 25 |
Per share weighted average exercise price (in dollars per share) | $ 53.51 | $ 38.35 |
Exercisable Options (in shares) | 289,140 | 336,336 |
Aggregate intrinsic value (in dollars) | $ 10.7 | $ 19.3 |
Unvested Options (in shares) | 245,745 | 194,126 |
Per share weighted average grant date fair value (in dollars per share) | $ 14.31 | $ 15.15 |
Performance Share Units ("PSUs") | ||
Additional disclosures | ||
Granted (in shares) | 41,748 | |
Percentage of target to be awarded, low end of range (not less than) | 40.00% | |
Percentage of target to be awarded, high end of range (not more than) | 200.00% | |
Market price at grant date of performance units (in dollars per share) | $ 82.15 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
May 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | May 31, 2015 | May 31, 2014 | |
Stockholders' equity | ||||||
Common stock, outstanding shares (in shares) | 16,787,202 | 16,771,000 | ||||
2016 Stock Purchase Plan | ||||||
Stockholders' equity | ||||||
Period over which repurchases allowed under the plan | 12 months | |||||
Common stock purchased under the stock purchase plan (in shares) | 85,354 | 0 | ||||
Cost of shares of common stock acquired | $ 6,800,000 | $ 0 | ||||
2016 Stock Purchase Plan | Maximum | ||||||
Stockholders' equity | ||||||
Authorized amount of repurchase under the stock purchase plan (up to) | $ 25,000,000 | |||||
2015 Stock Purchase Plan | ||||||
Stockholders' equity | ||||||
Common stock purchased under the stock purchase plan (in shares) | 0 | 93,600 | ||||
Cost of shares of common stock acquired | $ 0 | $ 5,200,000 | ||||
2015 Stock Purchase Plan | Maximum | ||||||
Stockholders' equity | ||||||
Authorized amount of repurchase under the stock purchase plan (up to) | $ 25,000,000 | |||||
Stock Purchase 2014 Plan | ||||||
Stockholders' equity | ||||||
Authorized amount of repurchase under the stock purchase plan (up to) | $ 25,000,000 |
Contingencies and Legal Matte34
Contingencies and Legal Matters (Details) | 3 Months Ended |
Mar. 31, 2017employee | |
Workforce Subject to Collective Bargaining Arrangements Expiring within One Year | |
Concentrations | |
Number of Employees | 196 |
IG BCE | Germany | Workforce Subject to Collective Bargaining Arrangements | |
Concentrations | |
Percentage of salaried employees eligible to be represented by Mining, Chemicals and Energy Trade Union (IG BCE) | 50.00% |
Percentage of hourly employees eligible to be represented by Mining, Chemicals and Energy Trade Union (IG BCE) | 80.00% |
USW | Whiting, WI | January 2018 | Workforce Subject to Collective Bargaining Arrangements | |
Concentrations | |
Number of Employees | 196 |
USW | Neenah, WI | June 2018 | Workforce Subject to Collective Bargaining Arrangements | |
Concentrations | |
Number of Employees | 267 |
USW | Munising, MI | July 2018 | Workforce Subject to Collective Bargaining Arrangements | |
Concentrations | |
Number of Employees | 199 |
USW | Appleton, WI | May 2019 | Workforce Subject to Collective Bargaining Arrangements | |
Concentrations | |
Number of Employees | 74 |
USW | Brattleboro, VT | August 2021 | |
Concentrations | |
Number of Employees | 70 |
USW | Lowville, NY | November 2021 | |
Concentrations | |
Number of Employees | 104 |
Business Segment Information (D
Business Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Business segment | ||
Net sales | $ 242.1 | $ 242.1 |
Operating income (loss) | 27 | 31.4 |
Unallocated corporate costs | ||
Business segment | ||
Operating income (loss) | (5.5) | (5.3) |
Technical Products | Operating segments | ||
Business segment | ||
Net sales | 121.9 | 121.5 |
Operating income (loss) | 12.5 | 19.2 |
Fine Paper and Packaging | Operating segments | ||
Business segment | ||
Net sales | 114.3 | 113.8 |
Operating income (loss) | 20.3 | 17.5 |
Other | Operating segments | ||
Business segment | ||
Net sales | 5.9 | 6.8 |
Operating income (loss) | $ (0.3) | $ 0 |