Document and Entity Information
Document and Entity Information Document - shares | 6 Months Ended | |
Jun. 27, 2015 | Jul. 31, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | RAYONIER ADVANCED MATERIALS INC. | |
Trading Symbol | RYAM | |
Entity Central Index Key | 1,597,672 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 27, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 42,884,443 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2015 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Sales | $ 220,892 | $ 212,531 | $ 442,240 | $ 456,031 |
Cost of Sales | 175,871 | 160,217 | 360,347 | 348,936 |
Gross Margin | 45,021 | 52,314 | 81,893 | 107,095 |
Selling and general expenses | 9,771 | 9,010 | 22,067 | 17,237 |
Other operating expense, net (Note 8) | 26,665 | 37,094 | 27,295 | 40,284 |
Operating Income | 8,585 | 6,210 | 32,531 | 49,574 |
Interest expense | 9,299 | 3,225 | 18,623 | 3,225 |
Interest and miscellaneous expense (income), net | (50) | 5 | (78) | 4 |
Income (Loss) Before Income Taxes | (664) | 2,980 | 13,986 | 46,345 |
Income tax expense (benefit) (Note 9) | (352) | (1,581) | 3,778 | 10,836 |
Net Income (Loss) | $ (312) | $ 4,561 | $ 10,208 | $ 35,509 |
Earnings Per Share of Common Stock (Note 7) | ||||
Basic earnings per share (in dollars per share) | $ (0.01) | $ 0.11 | $ 0.24 | $ 0.84 |
Diluted earnings per share (in dollars per share) | (0.01) | 0.11 | 0.24 | 0.84 |
Dividends Declared Per Share | $ 0.07 | $ 0 | $ 0.14 | $ 0 |
Comprehensive Income (Loss): | ||||
Net Income (Loss) | $ (312) | $ 4,561 | $ 10,208 | $ 35,509 |
Other Comprehensive Income (Loss) | ||||
Amortization of pension and postretirement plans, net of income tax (expense) benefit of ($1,348), $3,756, ($2,646) and $3,279 | 2,396 | (6,535) | 4,704 | (5,705) |
Total other comprehensive income (loss) | 2,396 | (6,535) | 4,704 | (5,705) |
Comprehensive Income (Loss) | $ 2,084 | $ (1,974) | $ 14,912 | $ 29,804 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2015 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net gain (loss) from pension and postretirement plans, income tax (expense) benefit | $ (1,348) | $ 3,756 | $ (2,646) | $ 3,279 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 27, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash and cash equivalents | $ 73,348 | $ 65,977 |
Accounts receivable, less allowance for doubtful accounts of $151 and $151 | 43,449 | 69,263 |
Inventory (Note 2) | 124,794 | 140,209 |
Deferred tax assets | 8,555 | 8,275 |
Prepaid and other current assets | 58,514 | 36,267 |
Total current assets | 308,660 | 319,991 |
Property, Plant and Equipment, Gross | 2,011,939 | 2,010,644 |
Less — Accumulated Depreciation | (1,198,800) | (1,167,269) |
Property, Plant and Equipment, Net | 813,139 | 843,375 |
Deferred Tax Assets | 79,179 | 78,547 |
Other Assets | 60,006 | 61,967 |
Total Assets | 1,260,984 | 1,303,880 |
Current Liabilities | ||
Accounts payable | 61,713 | 64,697 |
Current maturities of long-term debt (Note 3) | 8,225 | 8,400 |
Accrued income and other taxes | 3,200 | 4,643 |
Accrued payroll and benefits | 14,517 | 23,124 |
Accrued interest | 2,718 | 2,684 |
Accrued customer incentives | 11,243 | 12,743 |
Other current liabilities | 6,557 | 7,913 |
Dividends payable | 2,954 | 0 |
Current liabilities for disposed operations (Note 5) | 8,899 | 7,241 |
Total current liabilities | 120,026 | 131,445 |
Long-Term Debt (Note 3) | 899,603 | 936,416 |
Non-Current Liabilities for Disposed Operations (Note 5) | 145,061 | 149,488 |
Pension and Other Postretirement Benefits (Note 11) | 139,629 | 141,338 |
Other Non-Current Liabilities | $ 7,769 | $ 7,605 |
Commitments and Contingencies | ||
Stockholders’ Deficit | ||
Preferred stock, 10,000,000 shares authorized at $0.01 par value, 0 issued and outstanding as of June 27, 2015 and December 31, 2014 | $ 0 | $ 0 |
Common stock, 140,000,000 shares authorized at $0.01 par value, 42,884,871 and 42,616,319 issued and outstanding, as of June 27, 2015 and December 31, 2014, respectively | 429 | 426 |
Additional paid-in capital | 64,442 | 62,082 |
Accumulated deficit | (17,235) | (21,476) |
Accumulated other comprehensive loss | (98,740) | (103,444) |
Total Stockholders’ Deficit | (51,104) | (62,412) |
Total Liabilities and Stockholders’ Deficit | $ 1,260,984 | $ 1,303,880 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 27, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 151 | $ 151 |
Common shares, shares authorized | 140,000,000 | 140,000,000 |
Common shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares, shares issued | 42,884,871 | 42,616,319 |
Common shares, shares outstanding | 42,884,871 | 42,616,319 |
Preferred shares, shares authorized | 10,000,000 | 10,000,000 |
Preferred shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred shares, shares issued | 0 | 0 |
Preferred shares, shares outstanding | 0 | 0 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 27, 2015 | Jun. 28, 2014 | ||
Operating Activities | |||
Net income | $ 10,208 | $ 35,509 | |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Depreciation and amortization | 42,442 | 38,182 | |
Stock-based incentive compensation expense | 5,061 | 3,562 | |
Amortization of capitalized debt costs | 1,213 | 90 | |
Deferred income taxes | (6,103) | 5,110 | |
Increase in liabilities for disposed operations | 49 | 18,419 | |
Impairment charge | [1] | 28,462 | 0 |
Amortization of losses and prior service costs from pension and postretirement plans | 7,351 | 2,550 | |
Loss from sale/disposal of property, plant and equipment | 647 | 717 | |
Other | 111 | 0 | |
Changes in operating assets and liabilities: | |||
Receivables | 25,814 | 5,811 | |
Inventories | 15,415 | 7,002 | |
Accounts payable | (2,179) | 3,043 | |
Accrued liabilities | (12,932) | 7,960 | |
All other operating activities | (23,982) | (24,936) | |
Expenditures for disposed operations | (2,818) | 0 | |
Cash Provided by Operating Activities | 88,759 | 103,019 | |
Investing Activities | |||
Capital expenditures | (41,343) | (50,720) | |
Purchase of timber deeds | 0 | (12,677) | |
Other | 0 | (482) | |
Cash Used for Investing Activities | (41,343) | (63,879) | |
Financing Activities | |||
Issuance of debt | 0 | 950,000 | |
Repayment of debt | (37,100) | 0 | |
Dividends paid | (2,953) | 0 | |
Proceeds from the issuance of common stock | 8 | 0 | |
Debt issuance costs | 0 | (12,928) | |
Net payments to Rayonier | 0 | (956,579) | |
Cash Used for Financing Activities | (40,045) | (19,507) | |
Cash and Cash Equivalents | |||
Change in cash and cash equivalents | 7,371 | 19,633 | |
Balance, beginning of year | 65,977 | 0 | |
Balance, end of period | 73,348 | 19,633 | |
Cash paid during the period: | |||
Interest | 19,017 | 0 | |
Income taxes | 13,099 | 0 | |
Non-cash investing and financing activities: | |||
Capital assets purchased on account | 15,831 | 9,722 | |
Accrued debt issuance costs | $ 0 | $ 1,877 | |
[1] | In light of the persistent imbalance of supply and demand in the cellulose specialties markets, the Company announced a strategic asset realignment at its Jesup, Georgia plant to better align its production assets to current market conditions, improve efficiency and restore commodity production throughput to approach historical levels. This realignment resulted in the abandonment of certain long-lived assets, primarily at the Jesup plant. As a result, the abandoned assets were written down to salvage value and a $28 million pre-tax, non-cash impairment charge was recorded during the second quarter of 2015. The abandonment led management to conduct an impairment analysis on all long-lived assets being held and used on a combined plant level. Based on the impairment analysis performed, management concluded the assets were recoverable. |
BASIS OF PRESENTATION AND NEW A
BASIS OF PRESENTATION AND NEW ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 27, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and New Accounting Pronouncements | Basis of Presentation and New Accounting Pronouncements Basis of Presentation The unaudited condensed consolidated financial statements and notes thereto of Rayonier Advanced Materials Inc. (“Rayonier Advanced Materials” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, these financial statements and notes reflect all adjustments (all of which are normal recurring adjustments) necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. These statements and notes should be read in conjunction with the financial statements and supplementary data included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 , as filed with the SEC. On June 27, 2014 , the Company was separated from its former parent, Rayonier Inc. (“Rayonier”) through the distribution to its stockholders of 42,176,565 shares of common stock (the “Separation”). For periods prior to the Separation, the financial information presented consists of the performance fibers segment of Rayonier and an allocable portion of its corporate costs (together, the “performance fibers business”). These financial statements have been presented as if the Company and performance fibers business had been combined for all prior periods presented. All intercompany transactions are eliminated. The statements of income for periods prior to June 27, 2014 include allocations of certain costs from Rayonier related to the operations of the Company. These corporate administrative costs were charged to the Company based on employee headcount and payroll costs. The combined statements of income also include expense allocations for certain corporate functions historically performed by Rayonier and not allocated to its operating segments. These allocations were based on revenues and specific identification of time and/or activities associated with the Company. Management believes the methodologies employed for the allocation of costs were reasonable in relation to the historical reporting of Rayonier, but may not necessarily be indicative of costs had the Company operated on a stand-alone basis during the periods prior to the Separation, nor what the costs may be in the future. The results of operations for periods prior to June 27, 2014 are not necessarily indicative or predictive of the results to be expected for the post-spin Company. New or Recently Adopted Accounting Pronouncements In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, Simplifying the Presentation of Debt Issuance Costs . The update requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. It is effective for fiscal years beginning after December 15, 2015 with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements. As of June 27, 2015 , approximately $12 million in debt issuance costs are capitalized in “Other Assets.” In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , a comprehensive new revenue recognition standard. This standard will supersede virtually all current revenue recognition guidance. The core principle is that a company will recognize revenue when it transfers goods or services to customers for an amount that reflects consideration to which the company expects to be entitled to in exchange for those goods or services. This standard will be effective for the Company’s first quarter 2018 Form 10-Q filing with full or modified retrospective adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements. Subsequent Events Events and transactions subsequent to the balance sheet date have been evaluated for potential recognition and disclosure through August 6, 2015 , the date these financial statements were available to be issued. One subsequent event warranting disclosure was identified. On July 17, 2015, the Company declared a third quarter 2015 cash dividend of $0.07 per share of common stock. The dividend is payable on September 30, 2015 to stockholders of record on September 16, 2015. |
INVENTORY
INVENTORY | 6 Months Ended |
Jun. 27, 2015 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory As of June 27, 2015 and December 31, 2014 , the Company’s inventory included the following: June 27, 2015 December 31, 2014 Finished goods $ 103,243 $ 120,221 Work-in-progress 5,059 2,418 Raw materials 13,947 14,670 Manufacturing and maintenance supplies 2,545 2,900 Total inventory $ 124,794 $ 140,209 |
DEBT
DEBT | 6 Months Ended |
Jun. 27, 2015 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company’s debt consisted of the following: June 27, 2015 December 31, 2014 Term A-1 Loan Facility borrowings maturing through 2019 at a variable interest rate of 1.69% (a) $ 71,379 $ 106,973 Term A-2 Loan Facility borrowings maturing through 2021 at a variable interest rate of 1.27% (b) 286,449 287,843 Senior Notes due 2024 at a fixed interest rate of 5.50% 550,000 550,000 Total debt 907,828 944,816 Less: Current maturities of long-term debt (8,225 ) (8,400 ) Long-term debt $ 899,603 $ 936,416 (a) The Term A-1 Loan includes an unamortized issue discount of approximately $0.2 million at June 27, 2015 . The face amount of the liability is $71.6 million . (b) The Term A-2 Loan includes an unamortized issue discount of approximately $0.7 million at June 27, 2015 . The face amount of the liability is $287.1 million . During the first six months of 2015 , the Company made $37.1 million in principal debt repayments on the Term Loan Facilities. There were no other significant changes to the Company’s outstanding debt as reported in Note 6 — Debt of the Company’s 2014 Annual Report on Form 10-K. Principal payments due during the next five years and thereafter are as follows: Remaining 2015 $ 4,200 2016 8,400 2017 9,775 2018 11,150 2019 51,125 Thereafter 824,050 Total principal payments $ 908,700 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 27, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following table presents the carrying amount, estimated fair values and categorization under the fair value hierarchy for financial instruments held by the Company at June 27, 2015 and December 31, 2014 , using market information and what management believes to be appropriate valuation methodologies: June 27, 2015 December 31, 2014 Carrying Amount Fair Value Carrying Amount Fair Value Asset (liability) Level 1 Level 2 Level 1 Level 2 Cash and cash equivalents $ 73,348 $ 73,348 $ — $ 65,977 $ 65,977 $ — Current maturities of long-term debt (8,225 ) — (8,400 ) (8,400 ) — (8,400 ) Fixed-rate long-term debt (550,000 ) — (493,625 ) (550,000 ) — (453,063 ) Variable-rate long-term debt (349,603 ) — (350,300 ) (386,416 ) — (387,400 ) The Company uses the following methods and assumptions in estimating the fair value of its financial instruments: Cash and cash equivalents — The carrying amount is equal to fair market value. Debt — The fair value of fixed rate debt is based upon quoted market prices for debt with similar terms and maturities. The variable rate debt adjusts with changes in the market rate, therefore the carrying value approximates fair value. |
LIABILITIES FOR DISPOSED OPERAT
LIABILITIES FOR DISPOSED OPERATIONS | 6 Months Ended |
Jun. 27, 2015 | |
Environmental Remediation Obligations [Abstract] | |
Liabilities for Disposed Operations | Liabilities for Disposed Operations An analysis of the liabilities for disposed operations follows: June 27, 2015 Balance, beginning of period $ 156,729 Expenditures charged to liabilities (2,818 ) Increase to liabilities 49 Balance, end of period 153,960 Less: Current portion (8,899 ) Non-current portion $ 145,061 In addition to the estimated liabilities, the Company is subject to the risk of reasonably possible additional liabilities in excess of the established reserves due to potential changes in circumstances and future events, including, without limitation, changes to current laws and regulations; changes in governmental agency personnel, direction, philosophy and/or enforcement policies; developments in remediation technologies; increases in the cost of remediation, operation, maintenance and monitoring of its disposed operations sites; changes in the volume, nature or extent of contamination to be remediated or monitoring to be undertaken; the outcome of negotiations with governmental agencies or non-governmental parties; and changes in accounting rules or interpretations. Based on information available as of June 27, 2015 , the Company estimates this exposure could range up to approximately $64 million , although no assurances can be given that this amount will not be exceeded given the factors described above. These potential additional costs are attributable to several of the above sites and other applicable liabilities. Further, this estimate excludes reasonably possible liabilities which are not currently estimable primarily due to the factors discussed above. Subject to the previous paragraph, the Company believes established liabilities are sufficient for probable costs expected to be incurred over the next 20 years with respect to its disposed operations. However, no assurances are given they will be sufficient for the reasons described above, and additional liabilities could have a material adverse effect on the Company’s financial position, results of operations and cash flows. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 6 Months Ended |
Jun. 27, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Accumulated Other Comprehensive Loss was comprised of the following: Six Months Ended Unrecognized components of employee benefit plans, net of tax June 27, 2015 June 28, 2014 Balance, beginning of period $ (103,444 ) $ (39,699 ) Amounts reclassified from accumulated other comprehensive loss (a) 4,704 1,620 Other comprehensive loss before reclassifications — (7,325 ) Net other comprehensive income (loss) 4,704 (5,705 ) Net transfer from Rayonier (b) — (35,419 ) Balance, end of period $ (98,740 ) $ (80,823 ) (a) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 11 — Employee Benefit Plans for additional information. (b) Prior to the Separation, certain of the Company’s employees participated in employee benefit plans sponsored by Rayonier. The Company did not record an asset, liability or accumulated other comprehensive loss to recognize the funded status of the Rayonier plans on the consolidated balance sheet until the Separation. |
EARNINGS PER SHARE OF COMMON ST
EARNINGS PER SHARE OF COMMON STOCK | 6 Months Ended |
Jun. 27, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share of Common Stock | Earnings Per Share of Common Stock The following table provides details of the calculations of basic and diluted earnings per share: Three Months Ended Six Months Ended June 27, 2015 June 28, 2014 June 27, 2015 June 28, 2014 Net income (loss) $ (312 ) $ 4,561 $ 10,208 $ 35,509 Shares used for determining basic earnings per share of common stock (a) 42,192,913 42,176,565 42,189,598 42,176,565 Dilutive effect of: Stock options — 876 2,770 433 Performance and restricted shares — 1,021 108,754 505 Shares used for determining diluted earnings per share of common stock 42,192,913 42,178,462 42,301,122 42,177,503 Basic earnings per share (not in thousands) $ (0.01 ) $ 0.11 $ 0.24 $ 0.84 Diluted earnings per share (not in thousands) $ (0.01 ) $ 0.11 $ 0.24 $ 0.84 (a) On June 27, 2014, 42,176,565 shares of our common stock were distributed to Rayonier shareholders in conjunction with the Separation. For comparative purposes, and to provide a more meaningful calculation of weighted-average shares outstanding, this amount is assumed to be outstanding for the entire quarter and year-to-date periods ending June 28, 2014. Anti-dilutive shares excluded from the computation of diluted earnings per share: Three Months Ended Six Months Ended June 27, 2015 June 28, 2014 June 27, 2015 June 28, 2014 Stock options 457,350 — 392,645 — Restricted stock 397,171 — 219,463 — Performance shares 357,659 — 142,166 — Total 1,212,180 — 754,274 — |
OTHER OPERATING EXPENSE, NET
OTHER OPERATING EXPENSE, NET | 6 Months Ended |
Jun. 27, 2015 | |
Other Income and Expenses [Abstract] | |
Other Operating Expense, Net | Other Operating Expense, Net Other operating expense, net was comprised of the following: Three Months Ended Six Months Ended June 27, 2015 June 28, 2014 June 27, 2015 June 28, 2014 Non-cash impairment charge (a) $ 28,462 $ — $ 28,462 $ — Loss (gain) on sale or disposal of property, plant and equipment (102 ) 185 280 717 Increase to liabilities for disposed operations resulting from separation from Rayonier (b) — 18,419 — 18,419 One-time separation and legal costs (802 ) 17,914 (802 ) 20,680 Insurance settlement (1,000 ) — (1,000 ) — Miscellaneous expense 107 576 355 468 Total $ 26,665 $ 37,094 $ 27,295 $ 40,284 (a) In light of the persistent imbalance of supply and demand in the cellulose specialties markets, the Company announced a strategic asset realignment at its Jesup, Georgia plant to better align its production assets to current market conditions, improve efficiency and restore commodity production throughput to approach historical levels. This realignment resulted in the abandonment of certain long-lived assets, primarily at the Jesup plant. As a result, the abandoned assets were written down to salvage value and a $28 million pre-tax, non-cash impairment charge was recorded during the second quarter of 2015. The abandonment led management to conduct an impairment analysis on all long-lived assets being held and used on a combined plant level. Based on the impairment analysis performed, management concluded the assets were recoverable. (b) The Company is subject to certain legal requirements relating to the provision of annual financial assurance regarding environmental remediation and post closure care at certain disposed sites. To comply with these requirements, the Company purchased surety bonds from an insurer, with the Company’s repayment obligations (if the bonds are drawn upon) secured by the issuance of a letter of credit by the Company’s revolving credit facility lender. As a result of the Separation and the Company’s obligations to procure financial assurance annually for the foreseeable future, the Company recorded a corresponding increase to liabilities for disposed operations. See Note 5 — Liabilities for Disposed Operations and Note 13 — Guarantees for additional information. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 27, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s effective tax rate for the second quarter 2015 was 53.0 percent compared to (53.3) percent for the second quarter 2014. For the six months ended June 27, 2015 and June 28, 2014 the effective tax rates were 27.0 percent and 23.4 percent , respectively. The 2014 effective tax rates were favorably impacted by the reversal of a tax reserve related to the taxability of the cellulosic biofuel producer credit. The effective tax rates also differ from the federal statutory rate of 35.0 percent due to the manufacturing tax deduction and state tax credits. The impact of these deductions and credits on the effective tax rate is greater in periods that include expenses that reduce pre-tax income but are not currently deductible for income tax purposes. The provision for income taxes for periods prior to June 27, 2014, the date of the Separation from Rayonier, has been computed as if the Company were a stand-alone company. |
INCENTIVE STOCK PLANS
INCENTIVE STOCK PLANS | 6 Months Ended |
Jun. 27, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Incentive Stock Plans | Incentive Stock Plans The Company’s total stock based compensation cost, including allocated amounts, for the six months ended June 27, 2015 and June 28, 2014 was $5.1 million and $3.6 million , respectively. During the first quarter of 2015, performance shares granted in 2012 were cancelled as the Company did not meet the performance criteria for payout on these shares. The cancellation of these shares resulted in an excess tax deficit of $2.5 million . The Company also made new grants of restricted and performance shares to certain employees during the first quarter of 2015. The 2015 restricted shares vest over three to four years. The 2015 performance share awards are measured against an internal return on invested capital target and, depending on performance against the target, the awards will payout between 0 and 200 percent of target. The total number of performance shares earned will be adjusted up or down 25 percent , for certain participants, based on stock price performance relative to a peer group over the term of the plan, which would result in a final payout range of 0 to 250 percent . The following table summarizes the activity on the Company’s incentive stock awards for the period ended June 27, 2015 : Stock Options Restricted Stock Performance Shares Performance-Based Restricted Stock Options Weighted Average Exercise Price Awards Weighted Average Grant Date Fair Value Awards Weighted Average Grant Date Fair Value Awards Weighted Average Grant Date Fair Value Outstanding at December 31, 2014 466,015 $ 31.73 145,085 $ 41.66 47,977 $ 42.27 143,369 $ 40.52 Granted — — 265,551 21.43 214,403 17.51 — — Forfeited (5,430 ) 38.41 (265 ) 22.54 (113 ) 18.56 — — Exercised or settled (460 ) 17.34 (13,200 ) 38.43 — — — — Expired or cancelled (2,775 ) 26.33 — — (47,977 ) 42.27 — — Outstanding at June 27, 2015 457,350 $ 31.69 397,171 $ 28.95 214,290 $ 17.51 143,369 $ 40.52 On March 23, 2015, the Company converted the $4.0 million fixed value retention award granted to the Chief Executive Officer in connection with the Company’s separation from Rayonier from a stock settled award to a cash settled award. As such, the award will have no dilutive effect on the Company’s stock. All other significant terms remain unchanged. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Jun. 27, 2015 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The Company has a qualified non-contributory defined benefit pension plan covering a significant majority of its employees and an unfunded plan that provides benefits in excess of amounts allowable in the qualified plans under current tax law. Both the qualified plan and the unfunded excess plan are closed to new participants. Employee benefit plan liabilities are calculated using actuarial estimates and management assumptions. These estimates are based on historical information, along with certain assumptions about future events. Changes in assumptions, as well as changes in actual experience, could cause the estimates to change. The net pension and postretirement benefit costs that have been recorded are shown in the following tables: Pension Postretirement Three Months Ended Three Months Ended Components of Net Periodic Benefit Cost June 27, 2015 June 28, 2014 June 27, 2015 June 28, 2014 Service cost $ 1,494 $ 526 $ 298 $ 157 Interest cost 3,807 1,854 229 153 Expected return on plan assets (5,809 ) (3,151 ) — — Amortization of prior service cost 188 277 4 4 Amortization of losses 3,358 972 211 122 Amortization of negative plan amendment — — (17 ) (134 ) Total net periodic benefit cost $ 3,038 $ 478 $ 725 $ 302 Pension Postretirement Six Months Ended Six Months Ended Components of Net Periodic Benefit Cost June 27, 2015 June 28, 2014 June 27, 2015 June 28, 2014 Service cost $ 2,988 $ 1,079 $ 503 $ 314 Interest cost 7,614 3,803 459 306 Expected return on plan assets (11,617 ) (6,465 ) — — Amortization of prior service cost 375 569 8 8 Amortization of losses 6,717 1,997 338 244 Amortization of negative plan amendment — — (87 ) (268 ) Total net periodic benefit cost $ 6,077 $ 983 $ 1,221 $ 604 The Company does not have any mandatory pension contribution requirements and does not expect to make any discretionary contributions in 2015 . |
CONTINGENCIES
CONTINGENCIES | 6 Months Ended |
Jun. 27, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies The Company is engaged in various legal and regulatory actions and proceedings, and has been named as a defendant in various lawsuits and claims arising in the normal course of business. While the Company has procured reasonable and customary insurance covering risks normally occurring in connection with its businesses, it has in certain cases retained some risk through the operation of self-insurance, primarily in the areas of workers’ compensation, property insurance and general liability. These other lawsuits and claims, either individually or in the aggregate, are not expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows. |
GUARANTEES
GUARANTEES | 6 Months Ended |
Jun. 27, 2015 | |
Guarantees [Abstract] | |
Guarantees | Guarantees The Company provides financial guarantees as required by creditors, insurance programs and various governmental agencies. As of June 27, 2015 , the following financial guarantees were outstanding: Financial Commitments Maximum Potential Payment Standby letters of credit (a) $ 15,158 Surety bonds (b) 57,151 Total financial commitments $ 72,309 (a) The letters of credit primarily provide credit support for surety bonds issued to comply with financial assurance requirements relating to environmental remediation of disposed sites. The letters of credit will expire during 2015 and 2016 and will be renewed as required. (b) Rayonier Advanced Materials purchases surety bonds primarily to comply with financial assurance requirements relating to environmental remediation and post closure care and to provide collateral for the Company’s workers’ compensation program. These surety bonds expire at various dates between 2015 and 2019. They are expected to be renewed annually as required. |
BASIS OF PRESENTATION AND NEW20
BASIS OF PRESENTATION AND NEW ACCOUNTING PRONOUNCEMENTS (Policies) | 6 Months Ended |
Jun. 27, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements and notes thereto of Rayonier Advanced Materials Inc. (“Rayonier Advanced Materials” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, these financial statements and notes reflect all adjustments (all of which are normal recurring adjustments) necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. These statements and notes should be read in conjunction with the financial statements and supplementary data included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 , as filed with the SEC. On June 27, 2014 , the Company was separated from its former parent, Rayonier Inc. (“Rayonier”) through the distribution to its stockholders of 42,176,565 shares of common stock (the “Separation”). For periods prior to the Separation, the financial information presented consists of the performance fibers segment of Rayonier and an allocable portion of its corporate costs (together, the “performance fibers business”). These financial statements have been presented as if the Company and performance fibers business had been combined for all prior periods presented. All intercompany transactions are eliminated. The statements of income for periods prior to June 27, 2014 include allocations of certain costs from Rayonier related to the operations of the Company. These corporate administrative costs were charged to the Company based on employee headcount and payroll costs. The combined statements of income also include expense allocations for certain corporate functions historically performed by Rayonier and not allocated to its operating segments. These allocations were based on revenues and specific identification of time and/or activities associated with the Company. Management believes the methodologies employed for the allocation of costs were reasonable in relation to the historical reporting of Rayonier, but may not necessarily be indicative of costs had the Company operated on a stand-alone basis during the periods prior to the Separation, nor what the costs may be in the future. The results of operations for periods prior to June 27, 2014 are not necessarily indicative or predictive of the results to be expected for the post-spin Company. |
New or Recently Adopted Accounting Pronouncements | New or Recently Adopted Accounting Pronouncements In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, Simplifying the Presentation of Debt Issuance Costs . The update requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. It is effective for fiscal years beginning after December 15, 2015 with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements. As of June 27, 2015 , approximately $12 million in debt issuance costs are capitalized in “Other Assets.” In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , a comprehensive new revenue recognition standard. This standard will supersede virtually all current revenue recognition guidance. The core principle is that a company will recognize revenue when it transfers goods or services to customers for an amount that reflects consideration to which the company expects to be entitled to in exchange for those goods or services. This standard will be effective for the Company’s first quarter 2018 Form 10-Q filing with full or modified retrospective adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements. |
Fair Value Measurements | The Company uses the following methods and assumptions in estimating the fair value of its financial instruments: Cash and cash equivalents — The carrying amount is equal to fair market value. Debt — The fair value of fixed rate debt is based upon quoted market prices for debt with similar terms and maturities. The variable rate debt adjusts with changes in the market rate, therefore the carrying value approximates fair value. |
INVENTORY (Tables)
INVENTORY (Tables) | 6 Months Ended |
Jun. 27, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | As of June 27, 2015 and December 31, 2014 , the Company’s inventory included the following: June 27, 2015 December 31, 2014 Finished goods $ 103,243 $ 120,221 Work-in-progress 5,059 2,418 Raw materials 13,947 14,670 Manufacturing and maintenance supplies 2,545 2,900 Total inventory $ 124,794 $ 140,209 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 27, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The Company’s debt consisted of the following: June 27, 2015 December 31, 2014 Term A-1 Loan Facility borrowings maturing through 2019 at a variable interest rate of 1.69% (a) $ 71,379 $ 106,973 Term A-2 Loan Facility borrowings maturing through 2021 at a variable interest rate of 1.27% (b) 286,449 287,843 Senior Notes due 2024 at a fixed interest rate of 5.50% 550,000 550,000 Total debt 907,828 944,816 Less: Current maturities of long-term debt (8,225 ) (8,400 ) Long-term debt $ 899,603 $ 936,416 (a) The Term A-1 Loan includes an unamortized issue discount of approximately $0.2 million at June 27, 2015 . The face amount of the liability is $71.6 million . (b) The Term A-2 Loan includes an unamortized issue discount of approximately $0.7 million at June 27, 2015 . The face amount of the liability is $287.1 million . |
Schedule of Maturities of Long-term Debt | Principal payments due during the next five years and thereafter are as follows: Remaining 2015 $ 4,200 2016 8,400 2017 9,775 2018 11,150 2019 51,125 Thereafter 824,050 Total principal payments $ 908,700 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 27, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | The following table presents the carrying amount, estimated fair values and categorization under the fair value hierarchy for financial instruments held by the Company at June 27, 2015 and December 31, 2014 , using market information and what management believes to be appropriate valuation methodologies: June 27, 2015 December 31, 2014 Carrying Amount Fair Value Carrying Amount Fair Value Asset (liability) Level 1 Level 2 Level 1 Level 2 Cash and cash equivalents $ 73,348 $ 73,348 $ — $ 65,977 $ 65,977 $ — Current maturities of long-term debt (8,225 ) — (8,400 ) (8,400 ) — (8,400 ) Fixed-rate long-term debt (550,000 ) — (493,625 ) (550,000 ) — (453,063 ) Variable-rate long-term debt (349,603 ) — (350,300 ) (386,416 ) — (387,400 ) |
LIABILITIES FOR DISPOSITIONS AN
LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS (Tables) | 6 Months Ended |
Jun. 27, 2015 | |
Environmental Remediation Obligations [Abstract] | |
Schedule of Change in Environmental Loss Contingencies | An analysis of the liabilities for disposed operations follows: June 27, 2015 Balance, beginning of period $ 156,729 Expenditures charged to liabilities (2,818 ) Increase to liabilities 49 Balance, end of period 153,960 Less: Current portion (8,899 ) Non-current portion $ 145,061 |
ACCUMULATED OTHER COMPREHENSI25
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 6 Months Ended |
Jun. 27, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Loss was comprised of the following: Six Months Ended Unrecognized components of employee benefit plans, net of tax June 27, 2015 June 28, 2014 Balance, beginning of period $ (103,444 ) $ (39,699 ) Amounts reclassified from accumulated other comprehensive loss (a) 4,704 1,620 Other comprehensive loss before reclassifications — (7,325 ) Net other comprehensive income (loss) 4,704 (5,705 ) Net transfer from Rayonier (b) — (35,419 ) Balance, end of period $ (98,740 ) $ (80,823 ) (a) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 11 — Employee Benefit Plans for additional information. (b) Prior to the Separation, certain of the Company’s employees participated in employee benefit plans sponsored by Rayonier. The Company did not record an asset, liability or accumulated other comprehensive loss to recognize the funded status of the Rayonier plans on the consolidated balance sheet until the Separation. |
EARNINGS PER SHARE OF COMMON 26
EARNINGS PER SHARE OF COMMON STOCK (Tables) | 6 Months Ended |
Jun. 27, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table provides details of the calculations of basic and diluted earnings per share: Three Months Ended Six Months Ended June 27, 2015 June 28, 2014 June 27, 2015 June 28, 2014 Net income (loss) $ (312 ) $ 4,561 $ 10,208 $ 35,509 Shares used for determining basic earnings per share of common stock (a) 42,192,913 42,176,565 42,189,598 42,176,565 Dilutive effect of: Stock options — 876 2,770 433 Performance and restricted shares — 1,021 108,754 505 Shares used for determining diluted earnings per share of common stock 42,192,913 42,178,462 42,301,122 42,177,503 Basic earnings per share (not in thousands) $ (0.01 ) $ 0.11 $ 0.24 $ 0.84 Diluted earnings per share (not in thousands) $ (0.01 ) $ 0.11 $ 0.24 $ 0.84 (a) On June 27, 2014, 42,176,565 shares of our common stock were distributed to Rayonier shareholders in conjunction with the Separation. For comparative purposes, and to provide a more meaningful calculation of weighted-average shares outstanding, this amount is assumed to be outstanding for the entire quarter and year-to-date periods ending June 28, 2014. |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Anti-dilutive shares excluded from the computation of diluted earnings per share: Three Months Ended Six Months Ended June 27, 2015 June 28, 2014 June 27, 2015 June 28, 2014 Stock options 457,350 — 392,645 — Restricted stock 397,171 — 219,463 — Performance shares 357,659 — 142,166 — Total 1,212,180 — 754,274 — |
OTHER OPERATING EXPENSE, NET (T
OTHER OPERATING EXPENSE, NET (Tables) | 6 Months Ended |
Jun. 27, 2015 | |
Other Income and Expenses [Abstract] | |
Other Operating Expense, Net | Other operating expense, net was comprised of the following: Three Months Ended Six Months Ended June 27, 2015 June 28, 2014 June 27, 2015 June 28, 2014 Non-cash impairment charge (a) $ 28,462 $ — $ 28,462 $ — Loss (gain) on sale or disposal of property, plant and equipment (102 ) 185 280 717 Increase to liabilities for disposed operations resulting from separation from Rayonier (b) — 18,419 — 18,419 One-time separation and legal costs (802 ) 17,914 (802 ) 20,680 Insurance settlement (1,000 ) — (1,000 ) — Miscellaneous expense 107 576 355 468 Total $ 26,665 $ 37,094 $ 27,295 $ 40,284 (a) In light of the persistent imbalance of supply and demand in the cellulose specialties markets, the Company announced a strategic asset realignment at its Jesup, Georgia plant to better align its production assets to current market conditions, improve efficiency and restore commodity production throughput to approach historical levels. This realignment resulted in the abandonment of certain long-lived assets, primarily at the Jesup plant. As a result, the abandoned assets were written down to salvage value and a $28 million pre-tax, non-cash impairment charge was recorded during the second quarter of 2015. The abandonment led management to conduct an impairment analysis on all long-lived assets being held and used on a combined plant level. Based on the impairment analysis performed, management concluded the assets were recoverable. (b) The Company is subject to certain legal requirements relating to the provision of annual financial assurance regarding environmental remediation and post closure care at certain disposed sites. To comply with these requirements, the Company purchased surety bonds from an insurer, with the Company’s repayment obligations (if the bonds are drawn upon) secured by the issuance of a letter of credit by the Company’s revolving credit facility lender. As a result of the Separation and the Company’s obligations to procure financial assurance annually for the foreseeable future, the Company recorded a corresponding increase to liabilities for disposed operations. See Note 5 — Liabilities for Disposed Operations and Note 13 — Guarantees for additional information. |
INCENTIVE STOCK PLANS (Tables)
INCENTIVE STOCK PLANS (Tables) | 6 Months Ended |
Jun. 27, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Outstanding Awards | The following table summarizes the activity on the Company’s incentive stock awards for the period ended June 27, 2015 : Stock Options Restricted Stock Performance Shares Performance-Based Restricted Stock Options Weighted Average Exercise Price Awards Weighted Average Grant Date Fair Value Awards Weighted Average Grant Date Fair Value Awards Weighted Average Grant Date Fair Value Outstanding at December 31, 2014 466,015 $ 31.73 145,085 $ 41.66 47,977 $ 42.27 143,369 $ 40.52 Granted — — 265,551 21.43 214,403 17.51 — — Forfeited (5,430 ) 38.41 (265 ) 22.54 (113 ) 18.56 — — Exercised or settled (460 ) 17.34 (13,200 ) 38.43 — — — — Expired or cancelled (2,775 ) 26.33 — — (47,977 ) 42.27 — — Outstanding at June 27, 2015 457,350 $ 31.69 397,171 $ 28.95 214,290 $ 17.51 143,369 $ 40.52 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 27, 2015 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Schedule of Net Benefit Costs | The net pension and postretirement benefit costs that have been recorded are shown in the following tables: Pension Postretirement Three Months Ended Three Months Ended Components of Net Periodic Benefit Cost June 27, 2015 June 28, 2014 June 27, 2015 June 28, 2014 Service cost $ 1,494 $ 526 $ 298 $ 157 Interest cost 3,807 1,854 229 153 Expected return on plan assets (5,809 ) (3,151 ) — — Amortization of prior service cost 188 277 4 4 Amortization of losses 3,358 972 211 122 Amortization of negative plan amendment — — (17 ) (134 ) Total net periodic benefit cost $ 3,038 $ 478 $ 725 $ 302 Pension Postretirement Six Months Ended Six Months Ended Components of Net Periodic Benefit Cost June 27, 2015 June 28, 2014 June 27, 2015 June 28, 2014 Service cost $ 2,988 $ 1,079 $ 503 $ 314 Interest cost 7,614 3,803 459 306 Expected return on plan assets (11,617 ) (6,465 ) — — Amortization of prior service cost 375 569 8 8 Amortization of losses 6,717 1,997 338 244 Amortization of negative plan amendment — — (87 ) (268 ) Total net periodic benefit cost $ 6,077 $ 983 $ 1,221 $ 604 |
GUARANTEES (Tables)
GUARANTEES (Tables) | 6 Months Ended |
Jun. 27, 2015 | |
Guarantees [Abstract] | |
Schedule of Guarantor Obligations | The Company provides financial guarantees as required by creditors, insurance programs and various governmental agencies. As of June 27, 2015 , the following financial guarantees were outstanding: Financial Commitments Maximum Potential Payment Standby letters of credit (a) $ 15,158 Surety bonds (b) 57,151 Total financial commitments $ 72,309 (a) The letters of credit primarily provide credit support for surety bonds issued to comply with financial assurance requirements relating to environmental remediation of disposed sites. The letters of credit will expire during 2015 and 2016 and will be renewed as required. (b) Rayonier Advanced Materials purchases surety bonds primarily to comply with financial assurance requirements relating to environmental remediation and post closure care and to provide collateral for the Company’s workers’ compensation program. These surety bonds expire at various dates between 2015 and 2019. They are expected to be renewed annually as required. |
BASIS OF PRESENTATION AND NEW31
BASIS OF PRESENTATION AND NEW ACCOUNTING PRONOUNCEMENTS (Details) $ / shares in Units, $ in Millions | Jul. 17, 2015$ / shares | Jun. 27, 2014shares | Jun. 27, 2015USD ($)$ / shares | Jun. 28, 2014$ / shares | Jun. 27, 2015USD ($)$ / shares | Jun. 28, 2014$ / shares |
Subsequent Event [Line Items] | ||||||
Issuance of common stock at the separation (shares) | shares | 42,176,565 | |||||
Debt issuance costs | $ | $ 12 | $ 12 | ||||
Third quarter dividend declared (in dollars per share) | $ 0.07 | $ 0 | $ 0.14 | $ 0 | ||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Number of subsequent events | 1 | |||||
Third quarter dividend declared (in dollars per share) | $ 0.07 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Jun. 27, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 103,243 | $ 120,221 |
Work-in-progress | 5,059 | 2,418 |
Raw materials | 13,947 | 14,670 |
Manufacturing and maintenance supplies | 2,545 | 2,900 |
Total inventory | $ 124,794 | $ 140,209 |
DEBT - Summary of Debt (Details
DEBT - Summary of Debt (Details) - USD ($) $ in Thousands | Jun. 27, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Total debt | $ 907,828 | $ 944,816 | |
Less: Current maturities of long-term debt | (8,225) | (8,400) | |
Long-term debt | $ 899,603 | 936,416 | |
Line of Credit [Member] | Term A-1 Due 2019 [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [1] | 1.69% | |
Total debt | [1] | $ 71,379 | 106,973 |
Discount | 200 | ||
Face Amount | $ 71,600 | ||
Line of Credit [Member] | Term A-2 Due 2021 [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | [2] | 1.27% | |
Total debt | [2] | $ 286,449 | 287,843 |
Discount | 700 | ||
Face Amount | $ 287,100 | ||
Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | 5.50% | ||
Total debt | $ 550,000 | $ 550,000 | |
[1] | The Term A-1 Loan includes an unamortized issue discount of approximately $0.2 million at June 27, 2015. The face amount of the liability is $71.6 million. | ||
[2] | The Term A-2 Loan includes an unamortized issue discount of approximately $0.7 million at June 27, 2015. The face amount of the liability is $287.1 million. |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 27, 2015 | Jun. 28, 2014 | |
Debt Disclosure [Abstract] | ||
Principal debt repayments | $ 37,100 | $ 0 |
DEBT - Schedule of Maturities o
DEBT - Schedule of Maturities of Long-term Debt (Details) $ in Thousands | Jun. 27, 2015USD ($) |
Debt Disclosure [Abstract] | |
Remaining 2,015 | $ 4,200 |
2,016 | 8,400 |
2,017 | 9,775 |
2,018 | 11,150 |
2,019 | 51,125 |
Thereafter | 824,050 |
Total principal payments | $ 908,700 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Values Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 27, 2015 | Dec. 31, 2014 | Jun. 28, 2014 | Dec. 31, 2013 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Carrying Amount, Cash and cash equivalents | $ 73,348 | $ 65,977 | $ 19,633 | $ 0 |
Carrying Value [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Carrying Amount, Cash and cash equivalents | 73,348 | 65,977 | ||
Current maturities of long-term debt | (8,225) | (8,400) | ||
Fixed-rate long-term debt | (550,000) | (550,000) | ||
Variable-rate long-term debt | (349,603) | (386,416) | ||
Estimate of Fair Value, Fair Value Disclosure [Member] | Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair Value, Cash and cash equivalents | 73,348 | 65,977 | ||
Current maturities of long-term debt | 0 | 0 | ||
Fixed-rate long-term debt | 0 | 0 | ||
Variable-rate long-term debt | 0 | 0 | ||
Estimate of Fair Value, Fair Value Disclosure [Member] | Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair Value, Cash and cash equivalents | 0 | 0 | ||
Current maturities of long-term debt | (8,400) | (8,400) | ||
Fixed-rate long-term debt | (493,625) | (453,063) | ||
Variable-rate long-term debt | $ (350,300) | $ (387,400) |
LIABILITIES FOR DISPOSED OPER37
LIABILITIES FOR DISPOSED OPERATIONS - Analysis of Activity (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 27, 2015 | Dec. 31, 2014 | |
Accrual for Environmental Loss Contingencies [Roll Forward] | ||
Balance, beginning of period | $ 156,729 | |
Expenditures charged to liabilities | (2,818) | |
Increase to liabilities | 49 | |
Balance, end of period | 153,960 | |
Less: Current portion | (8,899) | $ (7,241) |
Non-current portion | $ 145,061 | $ 149,488 |
LIABILITIES FOR DISPOSED OPER38
LIABILITIES FOR DISPOSED OPERATIONS - Narrative (Details) - 6 months ended Jun. 27, 2015 - USD ($) $ in Millions | Total |
Environmental Remediation Obligations [Abstract] | |
Loss exposure in excess of accrual, high estimate | $ 64 |
Environmental Loss Contingencies Term | 20 years |
ACCUMULATED OTHER COMPREHENSI39
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 27, 2015 | Jun. 28, 2014 | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Balance, beginning of period | $ (103,444) | ||
Net other comprehensive income (loss) | 4,704 | $ (5,705) | |
Balance, end of period | (98,740) | ||
Accumulated Defined Benefit Plans Adjustment [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Balance, beginning of period | (103,444) | (39,699) | |
Amounts reclassified from accumulated other comprehensive loss | [1] | 4,704 | 1,620 |
Other comprehensive loss before reclassifications | 0 | (7,325) | |
Net transfers (to) from Rayonier | [2] | 0 | (35,419) |
Balance, end of period | $ (98,740) | $ (80,823) | |
[1] | These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 11 — Employee Benefit Plans for additional information. | ||
[2] | Prior to the Separation, certain of the Company’s employees participated in employee benefit plans sponsored by Rayonier. The Company did not record an asset, liability or accumulated other comprehensive loss to recognize the funded status of the Rayonier plans on the consolidated balance sheet until the Separation. |
EARNINGS PER SHARE OF COMMON 40
EARNINGS PER SHARE OF COMMON STOCK - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 27, 2014 | Jun. 27, 2015 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 | |
Earnings Per Share [Abstract] | ||||||
Net Income (Loss) | $ (312) | $ 4,561 | $ 10,208 | $ 35,509 | ||
Stock Issued During Period, Shares, New Issues | [1] | 42,192,913 | 42,176,565 | 42,189,598 | 42,176,565 | |
Dilutive effect of: | ||||||
Stock options | 0 | 876 | 2,770 | 433 | ||
Performance and restricted shares | 0 | 1,021 | 108,754 | 505 | ||
Shares used for determining diluted earnings per share of common stock | 42,192,913 | 42,178,462 | 42,301,122 | 42,177,503 | ||
Basic earnings per share (in dollars per share) | $ (0.01) | $ 0.11 | $ 0.24 | $ 0.84 | ||
Diluted earnings per share (in dollars per share) | $ (0.01) | $ 0.11 | $ 0.24 | $ 0.84 | ||
Number of common shares distributed in conjunction with the Distribution | 42,176,565 | |||||
[1] | On June 27, 2014, 42,176,565 shares of our common stock were distributed to Rayonier shareholders in conjunction with the Separation. For comparative purposes, and to provide a more meaningful calculation of weighted-average shares outstanding, this amount is assumed to be outstanding for the entire quarter and year-to-date periods ending June 28, 2014. |
EARNINGS PER SHARE OF COMMON 41
EARNINGS PER SHARE OF COMMON STOCK - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2015 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted earnings per share | 1,212,180 | 0 | 754,274 | 0 |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted earnings per share | 457,350 | 0 | 392,645 | 0 |
Restricted Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted earnings per share | 397,171 | 0 | 219,463 | 0 |
Performance Shares [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted earnings per share | 357,659 | 0 | 142,166 | 0 |
OTHER OPERATING EXPENSE, NET (D
OTHER OPERATING EXPENSE, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 27, 2015 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 | ||
Related Party Transaction [Line Items] | |||||
Non-cash impairment charge | [1] | $ 28,462 | $ 0 | $ 28,462 | $ 0 |
Loss (gain) on sale or disposal of property, plant and equipment | (102) | 185 | 280 | 717 | |
One-time separation and legal costs | (802) | 17,914 | (802) | 20,680 | |
Insurance settlement | (1,000) | 0 | (1,000) | 0 | |
Miscellaneous expense | 107 | 576 | 355 | 468 | |
Total | 26,665 | 37,094 | 27,295 | 40,284 | |
Affiliated Entity [Member] | |||||
Related Party Transaction [Line Items] | |||||
Increase to liabilities for disposed operations resulting from separation from Rayonier | [2] | $ 0 | $ 18,419 | $ 0 | $ 18,419 |
[1] | In light of the persistent imbalance of supply and demand in the cellulose specialties markets, the Company announced a strategic asset realignment at its Jesup, Georgia plant to better align its production assets to current market conditions, improve efficiency and restore commodity production throughput to approach historical levels. This realignment resulted in the abandonment of certain long-lived assets, primarily at the Jesup plant. As a result, the abandoned assets were written down to salvage value and a $28 million pre-tax, non-cash impairment charge was recorded during the second quarter of 2015. The abandonment led management to conduct an impairment analysis on all long-lived assets being held and used on a combined plant level. Based on the impairment analysis performed, management concluded the assets were recoverable. | ||||
[2] | The Company is subject to certain legal requirements relating to the provision of annual financial assurance regarding environmental remediation and post closure care at certain disposed sites. To comply with these requirements, the Company purchased surety bonds from an insurer, with the Company’s repayment obligations (if the bonds are drawn upon) secured by the issuance of a letter of credit by the Company’s revolving credit facility lender. As a result of the Separation and the Company’s obligations to procure financial assurance annually for the foreseeable future, the Company recorded a corresponding increase to liabilities for disposed operations. See Note 5 — Liabilities for Disposed Operations and Note 13 — Guarantees for additional information. |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2015 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Effective rate | 53.00% | (53.30%) | 27.00% | 23.40% |
Federal statutory rate | 35.00% |
INCENTIVE STOCK PLANS - Narrati
INCENTIVE STOCK PLANS - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 27, 2015 | Jun. 28, 2014 | Mar. 23, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based incentive compensation expense | $ 5,061 | $ 3,562 | |
Excess tax deficit | $ 2,500 | ||
TSR Adjustment for Performance Shares Payout | 25.00% | ||
Cash conversion of fixed stock award issued at separation | $ 4,000 | ||
Minimum [Member] | Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award Vesting Period | 3 years | ||
Maximum [Member] | Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award Vesting Period | 4 years | ||
Performance Share Awards 2015 [Member] | Minimum [Member] | Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Target payout percentage | 0.00% | ||
Share-based Compensation Arrangements by Share-based Payment Award, Conversion Ratio, Percent of Target with TSR Adjustment | 0.00% | ||
Performance Share Awards 2015 [Member] | Maximum [Member] | Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Target payout percentage | 200.00% | ||
Share-based Compensation Arrangements by Share-based Payment Award, Conversion Ratio, Percent of Target with TSR Adjustment | 250.00% |
INCENTIVE STOCK PLANS - Schedul
INCENTIVE STOCK PLANS - Schedule of Outstanding Awards (Details) - 6 months ended Jun. 27, 2015 - $ / shares | Total |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Beginning Balance, Stock Options, Outstanding | 466,015 |
Stock Options, Granted | 0 |
Stock Options, Forfeited | (5,430) |
Stock Options, Exercised or settled | (460) |
Stock Options, Expired or cancelled | (2,775) |
Ending Balance, Stock Options, Outstanding | 457,350 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Beginning Balance, Stock Options, Weighted Average Exercise Price | $ 31.73 |
Stock Options, Granted, Weighted Average Exercise Price | 0 |
Stock Options, Forfeited, Weighted Average Exercise Price | 38.41 |
Stock Options, Exercised or settled, Weighted Average Exercise Price | 17.34 |
Stock Options, Expired or cancelled, Weighted Average Exercise Price | 26.33 |
Ending Balance, Stock Options, Weighted Average Exercise Price | $ 31.69 |
Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Beginning Balance, Awards, Outstanding, Number | 145,085 |
Awards, Granted, Number | 265,551 |
Awards, Forfeited, Number | (265) |
Awards, Exercised or settled, Number | (13,200) |
Awards, Expired or cancelled, Number | 0 |
Ending Balance, Awards, Outstanding, Number | 397,171 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning Balance, Awards, Weighted Average Grant Date Fair Value | $ 41.66 |
Awards, Granted, Weighted Average Grant Date Fair Value | 21.43 |
Awards, Forfeited, Weighted Average Grant Date Fair Value | 22.54 |
Awards, Exercised or settled, Weighted Average Grant Date Fair Value | 38.43 |
Awards, Expired or cancelled, Weighted Average Grant Date Fair Value | 0 |
Ending Balance, Awards, Weighted Average Grant Date Fair Value | $ 28.95 |
Performance Shares [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Beginning Balance, Awards, Outstanding, Number | 47,977 |
Awards, Granted, Number | 214,403 |
Awards, Forfeited, Number | (113) |
Awards, Exercised or settled, Number | 0 |
Awards, Expired or cancelled, Number | (47,977) |
Ending Balance, Awards, Outstanding, Number | 214,290 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning Balance, Awards, Weighted Average Grant Date Fair Value | $ 42.27 |
Awards, Granted, Weighted Average Grant Date Fair Value | 17.51 |
Awards, Forfeited, Weighted Average Grant Date Fair Value | 18.56 |
Awards, Exercised or settled, Weighted Average Grant Date Fair Value | 0 |
Awards, Expired or cancelled, Weighted Average Grant Date Fair Value | 42.27 |
Ending Balance, Awards, Weighted Average Grant Date Fair Value | $ 17.51 |
Performance-Based Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Beginning Balance, Awards, Outstanding, Number | 143,369 |
Awards, Granted, Number | 0 |
Awards, Forfeited, Number | 0 |
Awards, Exercised or settled, Number | 0 |
Awards, Expired or cancelled, Number | 0 |
Ending Balance, Awards, Outstanding, Number | 143,369 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning Balance, Awards, Weighted Average Grant Date Fair Value | $ 40.52 |
Awards, Granted, Weighted Average Grant Date Fair Value | 0 |
Awards, Forfeited, Weighted Average Grant Date Fair Value | 0 |
Awards, Exercised or settled, Weighted Average Grant Date Fair Value | 0 |
Awards, Expired or cancelled, Weighted Average Grant Date Fair Value | 0 |
Ending Balance, Awards, Weighted Average Grant Date Fair Value | $ 40.52 |
EMPLOYEE BENEFIT PLANS - Net Pe
EMPLOYEE BENEFIT PLANS - Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2015 | Jun. 28, 2014 | Jun. 27, 2015 | Jun. 28, 2014 | |
Pension [Member] | ||||
Components of Net Periodic Benefit Cost | ||||
Service cost | $ 1,494 | $ 526 | $ 2,988 | $ 1,079 |
Interest cost | 3,807 | 1,854 | 7,614 | 3,803 |
Expected return on plan assets | (5,809) | (3,151) | (11,617) | (6,465) |
Amortization of prior service cost | 188 | 277 | 375 | 569 |
Amortization of losses | 3,358 | 972 | 6,717 | 1,997 |
Amortization of negative plan amendment | 0 | 0 | 0 | 0 |
Total net periodic benefit cost | 3,038 | 478 | 6,077 | 983 |
Postretirement [Member] | ||||
Components of Net Periodic Benefit Cost | ||||
Service cost | 298 | 157 | 503 | 314 |
Interest cost | 229 | 153 | 459 | 306 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service cost | 4 | 4 | 8 | 8 |
Amortization of losses | 211 | 122 | 338 | 244 |
Amortization of negative plan amendment | (17) | (134) | (87) | (268) |
Total net periodic benefit cost | $ 725 | $ 302 | $ 1,221 | $ 604 |
GUARANTEES (Details)
GUARANTEES (Details) $ in Thousands | Jun. 27, 2015USD ($) | |
Financial Commitments | ||
Maximum Potential Payment | $ 72,309 | |
Standby letters of credit [Member] | ||
Financial Commitments | ||
Maximum Potential Payment | [1] | 15,158 |
Surety bonds [Member] | ||
Financial Commitments | ||
Maximum Potential Payment | [2] | $ 57,151 |
[1] | The letters of credit primarily provide credit support for surety bonds issued to comply with financial assurance requirements relating to environmental remediation of disposed sites. The letters of credit will expire during 2015 and 2016 and will be renewed as required. | |
[2] | Rayonier Advanced Materials purchases surety bonds primarily to comply with financial assurance requirements relating to environmental remediation and post closure care and to provide collateral for the Company’s workers’ compensation program. These surety bonds expire at various dates between 2015 and 2019. They are expected to be renewed annually as required. |