Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 18, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ESND | |
Entity Registrant Name | ESSENDANT INC | |
Entity Central Index Key | 355,999 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 37,153,988 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 35,430 | $ 29,983 |
Accounts receivable, less allowance for doubtful accounts of $17,686 in 2016 and $17,810 in 2015 | 741,625 | 716,537 |
Inventories | 894,350 | 922,162 |
Other current assets | 35,153 | 27,310 |
Total current assets | 1,706,558 | 1,695,992 |
Property, plant and equipment, net | 132,452 | 133,751 |
Goodwill | 299,147 | 299,355 |
Intangible assets, net | 93,657 | 96,413 |
Other long-term assets | 54,004 | 37,348 |
Total assets | 2,285,818 | 2,262,859 |
Current liabilities: | ||
Accounts payable | 521,132 | 531,949 |
Accrued liabilities | 178,858 | 177,472 |
Current maturities of long-term debt | 48 | 51 |
Total current liabilities | 700,038 | 709,472 |
Deferred income taxes | 7,508 | 11,901 |
Long-term debt | 753,854 | 716,264 |
Other long-term liabilities | 89,904 | 101,488 |
Total liabilities | 1,551,304 | 1,539,125 |
Stockholders’ equity: | ||
Common stock, $0.10 par value; authorized - 100,000,000 shares, issued - 74,435,628 shares in 2016 and 2015 | 7,444 | 7,444 |
Additional paid-in capital | 411,485 | 410,927 |
Treasury stock, at cost – 37,312,864 shares in 2016 and 37,178,394 shares in 2015 | (1,105,119) | (1,100,867) |
Retained earnings | 1,475,216 | 1,463,821 |
Accumulated other comprehensive loss | (54,512) | (57,591) |
Total stockholders’ equity | 734,514 | 723,734 |
Total liabilities and stockholders’ equity | $ 2,285,818 | $ 2,262,859 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 17,686 | $ 17,810 |
Common stock, par value | $ 0.10 | $ 0.10 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 74,435,628 | 74,435,628 |
Treasury stock, shares | 37,312,864 | 37,178,394 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | [1] | |
Income Statement [Abstract] | |||
Net sales | $ 1,352,296 | $ 1,332,375 | |
Cost of goods sold | 1,152,214 | 1,131,980 | |
Gross profit | 200,082 | 200,395 | |
Operating expenses: | |||
Warehousing, marketing and administrative expenses | 167,678 | 197,581 | |
Operating income | 32,404 | 2,814 | |
Interest expense, net | 5,897 | 4,839 | |
Income (loss) before income taxes | 26,507 | (2,025) | |
Income tax expense | 9,977 | 3,982 | |
Net income (loss) | $ 16,530 | $ (6,007) | |
Net income (loss) per share - basic: | $ 0.45 | $ (0.16) | |
Average number of common shares outstanding - basic | 36,593 | 38,115 | |
Net income (loss) per share - diluted: | $ 0.45 | $ (0.16) | |
Average number of common shares outstanding - diluted | 36,875 | 38,115 | |
Dividends declared per share | $ 0.14 | $ 0.14 | |
[1] | During the third quarter of 2015, the Company elected a change in accounting principle for the valuation method of certain inventories to the last-in, first-out (“LIFO”) method from the first-in, first out method (“FIFO”). This change required retrospective application. As such, the financial statements presented for prior periods are titled “Revised”. |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income (loss) | $ 16,530 | $ (6,007) | [1] |
Other comprehensive income (loss), net of tax | |||
Translation adjustments | 2,691 | (4,630) | |
Minimum pension liability adjustments | 915 | 932 | |
Cash flow hedge adjustments | (527) | (476) | |
Total other comprehensive income (loss), net of tax | 3,079 | (4,174) | |
Comprehensive income (loss) | $ 19,609 | $ (10,181) | |
[1] | During the third quarter of 2015, the Company elected a change in accounting principle for the valuation method of certain inventories to the last-in, first-out (“LIFO”) method from the first-in, first out method (“FIFO”). This change required retrospective application. As such, the financial statements presented for prior periods are titled “Revised”. |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Cash Flows From Operating Activities: | |||
Net income (loss) | $ 16,530 | $ (6,007) | [1] |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 11,731 | 12,223 | |
Share-based compensation | 2,911 | 2,640 | |
Gain on the disposition of property, plant and equipment | (167) | (15) | |
Amortization of capitalized financing costs | 166 | 272 | |
Excess tax cost (benefit) related to share-based compensation | 133 | (262) | |
Asset impairment charges | 23,610 | ||
Deferred income taxes | (1,881) | (1,469) | |
Changes in operating assets and liabilities: | |||
(Increase) decrease in accounts receivable, net | (24,819) | 26,217 | |
Decrease in inventory | 28,018 | 46,023 | |
Increase in other assets | (24,774) | (10,751) | |
Increase in accounts payable | 9,571 | 645 | |
Decrease in checks in-transit | (20,294) | (13,613) | |
Increase (decrease) in accrued liabilities | 1,997 | (17,534) | |
(Decrease) increase in other liabilities | (9,943) | 743 | |
Net cash (used in) provided by operating activities | (10,821) | 62,722 | |
Cash Flows From Investing Activities: | |||
Capital expenditures | (9,877) | (5,490) | |
Proceeds from the disposition of property, plant and equipment | 281 | 18 | |
Net cash used in investing activities | (9,596) | (5,472) | |
Cash Flows From Financing Activities: | |||
Net borrowing (repayments) under revolving credit facility | 37,388 | (29,630) | |
Net proceeds (disbursements) from share-based compensation arrangements | 339 | (875) | |
Acquisition of treasury stock, at cost | (6,839) | (16,028) | |
Payment of cash dividends | (5,160) | (5,396) | |
Excess tax (cost) benefit related to share-based compensation | (133) | 262 | |
Payment of debt issuance costs | (36) | ||
Net cash provided by (used in) financing activities | 25,595 | (51,703) | |
Effect of exchange rate changes on cash and cash equivalents | 269 | (1,758) | |
Transfer of cash to held for sale | (970) | ||
Net change in cash and cash equivalents | 5,447 | 2,819 | |
Cash and cash equivalents, beginning of period | 29,983 | 20,812 | |
Cash and cash equivalents, end of period | 35,430 | 23,631 | |
Other Cash Flow Information: | |||
Income tax payments, net | 1,027 | 3,183 | |
Interest paid | $ 7,292 | $ 6,213 | |
[1] | During the third quarter of 2015, the Company elected a change in accounting principle for the valuation method of certain inventories to the last-in, first-out (“LIFO”) method from the first-in, first out method (“FIFO”). This change required retrospective application. As such, the financial statements presented for prior periods are titled “Revised”. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The accompanying Condensed Consolidated Financial Statements represent Essendant Inc. (“ESND”) with its wholly owned subsidiary Essendant Co. (“ECO”), and ECO’s subsidiaries (collectively, “Essendant” or the “Company”). The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States and include the accounts of ESND and its subsidiaries. All intercompany transactions and balances have been eliminated. The Company operates in a single reportable segment as a leading distributor of workplace essentials. The accompanying Condensed Consolidated Financial Statements are unaudited. The Condensed Consolidated Balance Sheet as of December 31, 2015, was derived from the December 31, 2015 audited financial statements. The Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements, prepared in accordance with accounting principles generally accepted in the United States, have been condensed or omitted pursuant to such rules and regulations. Accordingly, the reader of this Quarterly Report on Form 10-Q should refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 for further information. In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of Essendant at March 31, 2016 and the results of operations and cash flows for the three-month periods ended March 31, 2016 and 2015. The results of operations for the three months ended March 31, 2016 should not necessarily be taken as indicative of the results of operations that may be expected for the entire year. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, Revenue from Contracts with Customers, In May 2015, he FASB issued ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) that requires lessees to recognize right-of-use assets and lease liabilities for all leases other than those that meet the definition of short-term leases. For short-term leases, lessees may elect an accounting policy by class of underlying asset under which these assets and liabilities are not recognized and lease payments are generally recognized over the lease term on a straight-line basis. This standard will be effective for annual periods beginning after December 15, 2018, including interim periods within that reporting period, and early application is permitted. The Company is currently evaluating the new guidance to determine the impact it will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting Change in Accounting Principle During the third quarter of 2015, the Company elected a change in accounting principle for the valuation method of certain inventories to the last-in, first-out (“LIFO”) method from the first-in, first out method (“FIFO”). This change required retrospective application. As such, the financial statements presented for prior periods are titled “Revised”. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 for further information. Inventory Approximately 98.5% and 98.4% of total inventory as of March 31, 2016 and December 31, 2015, respectively, has been valued under the LIFO method. An actual valuation of inventory under the LIFO method can be made only at the end of each fiscal year based on the inventory levels and costs at that time. Interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs, and are subject to the final year-end LIFO inventory valuation. Inventory valued under the LIFO accounting method is recorded at the lower of cost or market. If the Company had valued its entire inventory under the lower of FIFO cost or market, inventory would have been $148.6 million and $147.8 million higher than reported as of March 31, 2016 and December 31, 2015, respectively. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | 2. Acquisitions Nestor Sales LLC On July 31, 2015, Essendant Co. completed the acquisition of 100% of the capital stock of Nestor Sales LLC (“Nestor”), a leading wholesaler and distributor of tools, equipment and supplies to the transportation industry. This acquisition accelerates the Company’s growth in the automotive aftermarket, complements the Company’s existing industrial offerings while providing access to new customer segments, and advances a key strategic pillar to diversify into channels and categories that leverage our common platform. The purchase price was $41.8 million. This acquisition was funded through a combination of cash on hand and cash available under the Company’s revolving credit facility. The Company has developed preliminary estimates of the fair values of assets acquired and liabilities assumed for purposes of allocating the purchase price. The estimates are subject to change as the valuation activities are completed. The fair values of the assets and liabilities were estimated using various valuation methods including estimated selling prices, market approach, and discounted cash flows using both an income and cost approach. Any changes to the preliminary allocations of the purchase price, some of which may be material, will be allocated to residual goodwill. At March 31, 2016, the preliminary allocation of the purchase price was as follows (amounts in thousands): Purchase price, net of cash acquired $ 39,983 Accounts receivable 9,230 Inventories 10,542 Other current assets 338 Property, plant and equipment, net 1,251 Other assets 752 Intangible assets 17,580 Total assets acquired 39,693 Accounts payable 4,992 Accrued liabilities 1,943 Deferred income taxes 3,175 Other long-term liabilities 76 Total liabilities assumed 10,186 Goodwill $ 10,476 The purchased identifiable intangible assets were as follows (amounts in thousands): Total Estimated Life Customer relationships $ 16,220 13 years Trademark 1,360 2.5-15 years Total $ 17,580 Agreement with Staples, Inc. On February 16, 2016, the Company announced an agreement to purchase from Staples, Inc. contracts and related assets representing more than $550 million in annual sales to minority and woman-owned office supply resellers and their large corporate and other enterprise customers. The transaction is subject to the successful completion of the proposed merger of Staples and Office Depot, as well as other regulatory and customary closing conditions. A court ruling on the preliminary injunction action brought by the Federal Trade Commission to block the proposed merger is expected during the second quarter of 2016. Under the terms of the agreement, Essendant will pay Staples approximately $22.5 million. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | 3. Share-Based Compensation As of March 31, 2016, the Company has two active equity compensation plans. Under the 2015 Long-Term Incentive Plan (as amended and restated), award instruments include, but are not limited to, stock options, restricted stock awards, restricted stock units (“RSUs”), and performance-based awards. Associates and non-employee directors of the Company are eligible to become participants in the plan. The Nonemployee Directors’ Deferred Stock Compensation Plan allows non-employee directors to elect to defer receipt of all or a portion of their annual retainer in deferred stock units. The Company granted 120,376 shares of restricted stock and 247,510 RSUs during the first three months of 2016, compared to 46,229 shares of restricted stock and 145,552 RSUs during the first three months of 2015. |
Severance and Restructuring Cha
Severance and Restructuring Charges | 3 Months Ended |
Mar. 31, 2016 | |
Restructuring And Related Activities [Abstract] | |
Severance and Restructuring Charges | 4. Severance and Restructuring Charges Commencing in the first quarter of 2015, the Company began certain restructuring actions which included workforce reductions and facility closures. In the first quarter of 2015, the Company recorded $6.0 million of pre-tax expense relating to workforce reductions. During the first quarter of 2016 and 2015, the Company recorded $0.3 million and $0.4 million, respectively, of pre-tax expense relating to facility consolidations. These charges were included in “warehousing, marketing and administrative expenses.” Cash outlays for these actions occurred primarily in 2015 and were approximately $0.7 million and $0.5 million, respectively, for the three months ended March 31, 2016 and 2015. As of March 31, 2016, the Company has accrued liabilities for these actions of $1.8 million. Commencing in the fourth quarter of 2015, the Company executed actions to reduce costs through management delayering in order to achieve broader functional alignment of the organization. In the fourth quarter of 2015, the Company recorded an $11.9 million pre-tax charge relating to this workforce reduction included in “warehousing, marketing and administrative expenses.” Cash outlays associated with these charges were approximately $3.1 million in the three months ended March 31, 2016. As of March 31, 2016, the Company has accrued liabilities for these actions of $7.9 million. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 5. Goodwill and Intangible Assets The changes in the carrying amount of goodwill are noted in the following table (in thousands): Goodwill, balance as of December 31, 2015 $ 299,355 Purchase accounting adjustments (1,095 ) Currency translation adjustments 887 Goodwill, balance as of March 31, 2016 $ 299,147 The following table summarizes the intangible assets of the Company by major class of intangible assets and the cost, accumulated amortization, net carrying amount, and weighted average life, if applicable (in thousands): March 31, 2016 December 31, 2015 Weighted Weighted Average Average Gross Net Useful Gross Net Useful Carrying Accumulated Carrying Life Carrying Accumulated Carrying Life Amount Amortization Amount (years) Amount Amortization Amount (years) Intangible assets subject to amortization Customer relationships and other intangibles $ 138,422 $ (54,140 ) $ 84,282 16 $ 137,938 $ (51,357 ) $ 86,581 16 Non-compete agreements 4,654 (4,260 ) 394 4 4,644 (4,260 ) 384 4 Trademarks 13,734 (4,753 ) 8,981 14 13,688 (4,240 ) 9,448 14 Total $ 156,810 $ (63,153 ) $ 93,657 $ 156,270 $ (59,857 ) $ 96,413 In the first quarter of 2015, the Company recorded a pre-tax non-cash impairment charge of $10.2 million to write-down the trademarks of ORS Nasco and certain OKI brands to their fair value related to the corporate name change that was approved in February 2015 and effective June 1, 2015. This impairment charge was recorded in “warehousing, marketing and administrative expenses.” The Company utilized the discounted cash flow method to determine the fair value of these trademarks based upon management’s current forecasted future revenues from the trademarks. The trademarks were fully amortized as of December 31, 2015. The following table summarizes the amortization expense to be incurred in 2016 through 2020 on intangible assets (in thousands): Year Amount 2016 $ 12,314 2017 10,855 2018 8,111 2019 6,993 2020 6,990 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 6. Accumulated Other Comprehensive Income (Loss) The change in Accumulated Other Comprehensive Income (Loss) (“AOCI”) by component, net of tax, for the period ended March 31, 2016 was as follows (amounts in thousands): Foreign Currency Translation Cash Flow Hedges Defined Benefit Pension Plans Total AOCI, balance as of December 31, 2015 $ (9,866 ) $ 146 $ (47,871 ) $ (57,591 ) Other comprehensive (loss) income before reclassifications 2,691 (753 ) - 1,938 Amounts reclassified from AOCI - 226 915 1,141 Net other comprehensive (loss) income 2,691 (527 ) 915 3,079 AOCI, balance as of March 31, 2016 $ (7,175 ) $ (381 ) $ (46,956 ) $ (54,512 ) The following table details the amounts reclassified out of AOCI into the income statement during the three-month period ending March 31, 2016 (in thousands): Amount Reclassified From AOCI For the Three Months Ended March 31, Affected Line Item In The Statement Details About AOCI Components 2016 Where Net Income is Presented Realized and unrealized gains (losses) on cash flow hedges Gain on interest rate swap, before tax $ 275 Interest expense, net Gain on foreign exchange hedges, before tax 89 Cost of goods sold (138 ) Tax provision $ 226 Net of tax Defined benefit pension plan items Amortization of prior service cost and unrecognized loss $ 1,493 Warehousing, marketing and administrative expenses (578 ) Tax provision 915 Net of tax Total reclassifications for the period, net of tax $ 1,141 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 7. Earnings Per Share Basic earnings per share (“EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if dilutive securities were exercised into common stock. Stock options, restricted stock, restricted stock units and deferred stock units are considered dilutive securities. For the three-month periods ended March 31, 2016 and 2015, 0.3 million and 0.4 million shares of such securities, respectively, were outstanding but were not included in the computation of diluted earnings per share because the effect would be antidilutive. An additional 0.4 million shares of common stock outstanding at March 31, 2015 were excluded from the computation of diluted earnings per share due to the net loss. For the Three Months Ended March 31, 2016 2015 Numerator: Net income (loss) $ 16,530 $ (6,007 ) Denominator: Denominator for basic earnings per share - weighted average shares 36,593 38,115 Effect of dilutive securities: Employee stock options and restricted stock 282 - Denominator for diluted earnings per share - Adjusted weighted average shares and the effect of dilutive securities 36,875 38,115 Net income (loss) per share: Net income (loss) per share - basic $ 0.45 $ (0.16 ) Net income (loss) per share - diluted (1) $ 0.45 $ (0.16 ) (1) Diluted earnings per share for the first quarter of 2015 under GAAP equals basic earnings per share due to net loss. Common Stock Repurchases As of March 31, 2016 , the Company had Board authorization to repurchase $68.2 million of common stock. During the three-month periods ended March 31, 2016 and 2015, the Company repurchased 241,270 and 402,679 shares of the Company’s common stock at an aggregate cost of $6.8 million and $16.3 million, respectively. Depending on market and business conditions and other factors, the Company may continue or suspend purchasing its common stock at any time without notice. Acquired shares are included in the issued shares of the Company and treasury stock, but are not included in average shares outstanding when calculating earnings per share data. During the first three months of 2016 and 2015, the Company reissued 106,800 and 31,745 shares, respectively, of treasury stock to fulfill its obligations under its equity incentive plans. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt ESND is a holding company and, as a result, its primary sources of funds are cash generated from operating activities of its direct operating subsidiary, ECO, and from borrowings by ECO. The 2013 Credit Agreement, the 2013 Note Purchase Agreement, and the Receivables Securitization Program (each as defined in Note 11 of the Company’s Form 10-K for the year ended December 31, 2015) contain restrictions on the use of cash transferred from ECO to ESND. Debt consisted of the following amounts (in millions): As of As of March 31, 2016 December 31, 2015 2013 Credit Agreement $ 405.8 $ 368.4 2013 Note Purchase Agreement 150.0 150.0 Receivables Securitization Program 200.0 200.0 Mortgage & Capital Lease 0.1 0.1 Transaction Costs (2.0 ) (2.2 ) Total $ 753.9 $ 716.3 As of March 31, 2016, 80.2% of the Company’s outstanding debt, excluding capital leases and transaction costs, was priced at variable interest rates based primarily on the applicable bank prime rate or London InterBank Offered Rate (“LIBOR”). The Company had outstanding letters of credit of $11.6 million under the 2013 Credit Agreement as of March 31, 2016 and December 31, 2015. Borrowings under the 2013 Credit Agreement bear interest at LIBOR for specified interest periods or at the Alternate Base Rate (as defined in the 2013 Credit Agreement), plus, in each case, a margin determined based on the Company’s permitted debt to EBITDA ratio calculated as provided in Section 6.20 of the 2013 Credit Agreement (the “Leverage Ratio”). Depending on the Company’s Leverage Ratio, the margin on LIBOR-based loans ranges from 1.00% to 2.00% and on Alternate Base Rate loans ranges from 0.00% to 1.00%. As of March 31, 2016, the applicable margin for LIBOR-based loans was 1.50% and for Alternate Base Rate loans was 0.50%. Effective in April 2016, the applicable margin for LIBOR-based loans was 1.75% and for Alternate Base Rate loans was 0.75%. ECO is required to pay the lenders a fee on the unutilized portion of the commitments under the 2013 Credit Agreement at a rate per annum between 0.15% and 0.35%, depending on the Company’s Leverage Ratio. As of March 31, 2016 and December 31, 2015, $524.1 million and $448.6 million, respectively, of receivables had been sold to the Investors (as defined in Note 11 of the Company’s Form 10-K for the year ended December 31, 2015). ESR had $200.0 million outstanding under the Receivables Securitization Program as of March 31, 2016 and December 31, 2015. For additional information about the 2013 Credit Agreement, the 2013 Note Purchase Agreement, and the Receivables Securitization Program, see Note 11 of the Company’s Form 10-K for the year ended December 31, 2015. |
Pension and Post-Retirement Ben
Pension and Post-Retirement Benefit Plans | 3 Months Ended |
Mar. 31, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |
Pension and Post-Retirement Benefit Plans | 9. Pension and Post-Retirement Benefit Plans The Company maintains pension plans covering union and certain non-union employees. For more information on the Company’s retirement plans, see Note 13 to the Company’s Consolidated Financial Statements in the Form 10-K for the year ended December 31, 2015. A summary of net periodic pension cost related to the Company’s pension plans for the three-month periods ended March 31, 2016 and 2015 was as follows (dollars in thousands): For the Three Months Ended March 31, 2016 2015 Service cost - benefit earned during the period $ 317 $ 400 Interest cost on projected benefit obligation 2,343 2,270 Expected return on plan assets (2,718 ) (2,805 ) Amortization of prior service cost 74 75 Amortization of actuarial loss 1,419 1,450 Net periodic pension cost $ 1,435 $ 1,390 The Company made cash contributions of $10.0 million and $2.0 million to its pension plans during the three-month periods ended March 31, 2016 and 2015, respectively. Additional contributions, if any, for 2016 have not yet been determined. As of March 31, 2016 and December 31, 2015, respectively, the Company had accrued $38.4 million and $48.4 million of pension liability within “Other long-term liabilities” on the Condensed Consolidated Balance Sheets. In February 2016, as a result of an amendment to the Essendant Pension Plan, the Company announced a limited-time voluntary lump-sum pension offering to eligible, terminated, vested plan participants. The lump-sum settlement payments will be made on May 16, 2016, using assets from the Essendant Pension Plan. Defined Contribution Plan The Company has defined contribution plans covering certain salaried associates and non-union hourly paid associates (the “Plan”). The Plan permits associates to defer a portion of their pre-tax and after-tax salary as contributions to the Plan. The Plan also provides for Company-funded discretionary contributions as well as matching associates’ salary deferral contributions, at the discretion of the Board of Directors. The Company recorded expense of $1.8 million and $1.4 million, respectively, for the Company match of employee contributions to the Plan for the three-month periods ended March 31, 2016 and 2015. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | 10. Derivative Financial Instruments The Company selectively uses derivative financial instruments to reduce its exposure to changes in interest rates and foreign currency exchange rates. Under Company policy, the Company does not enter into derivative financial instruments for trading or speculative purposes. A description of each type of derivative utilized by the Company to manage risk is included in the following paragraphs. The Company selectively uses interest rate swaps to reduce market risk associated with changes in interest rates for its debt arrangements. In July 2012, the Company entered into an interest rate swap to convert a portion of the Company’s floating-rate debt to a fixed-rate basis. The fair value is determined by using quoted market forward rates (level 2 inputs) and reflects the present value of the amount that the Company would pay for contracts involving the same notional amount and maturity date. The changes in fair value of this instrument is reported in AOCI and reclassified into earnings in interest expense in the same periods during which the related interest payments on the hedged debt affect earnings. This swap matures in July 2017. As of March 31, 2016 and December 31, 2015, the fair value of the Company's interest rate swap included in the Company’s Condensed Consolidated Balance Sheet as a component of “Other long-term liabilities” was $0.9 million and $0.5 million respectively. The Company maintains a foreign currency cash flow hedge program in order to manage the volatility in exchange rates and the related impacts on the operations of its Canadian functional currency subsidiaries. The Company uses foreign currency exchange contracts to hedge certain of its foreign exchange rate exposures related to inventory purchases. The Company has currently hedged approximately 50%, or $8.1 million, of its Canadian subsidiaries’ US dollar denominated inventory purchases for the next two quarters. The fair value of the foreign currency cash flow hedge is determined by using quoted market spot rates (level 2 inputs). The changes in fair value of ASC 815 designated hedges are reported in AOCI and reclassified into earnings in cost of goods sold in the same periods during which the related inventory is sold and affects earnings. The following table depicts the effect of these derivative instruments on the statements of income and comprehensive income for the three-month periods ended March 31, 2016 and 2015 (in thousands). Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion) Derivatives in ASC 815 Cash Flow Hedging Relationships For the Three Months Ended March 31, 2016 For the Three Months Ended March 31, 2015 Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion) For the Three Months Ended March 31, 2016 For the Three Months Ended March 31, 2015 Interest Rate Swap $ (121 ) $ (124 ) Interest expense, net $ 242 $ 331 Foreign Exchange Hedges (195 ) - Cost of goods sold 89 - |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 11. Fair Value Measurements The Company measures certain financial assets and liabilities, including interest rate swap and foreign currency derivatives, at fair value on a recurring basis, based on market rates of the Company’s positions and other observable interest rates (see Note 10 “Derivative Financial Instruments”, for more information on these interest rate swaps and foreign currency derivatives). Accounting guidance on fair value establishes a hierarchy for those instruments measured at fair value which distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). The hierarchy consists of three levels: · Level 1—Quoted market prices in active markets for identical assets or liabilities; · Level 2—Inputs other than Level 1 inputs that are either directly or indirectly observable; and · Level 3—Unobservable inputs developed using estimates and assumptions developed by the Company which reflect those that a market participant would use. Determining which level to apply to an asset or liability requires significant judgment. The Company evaluates its hierarchy disclosures each quarter. The following table summarizes the financial instruments measured at fair value in the accompanying Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015 (in thousands): Fair Value Measurements as of March 31, 2016 Quoted Market Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs Total Level 1 Level 2 Level 3 Liabilities Interest rate swap $ 832 $ - $ 832 $ - Foreign exchange hedges $ 288 $ - $ 288 $ - Fair Value Measurements as of December 31, 2015 Quoted Market Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs Total Level 1 Level 2 Level 3 Assets Foreign exchange hedges $ 91 $ - $ 91 $ - Liabilities Interest rate swap $ 469 $ - $ 469 $ - The carrying amount of accounts receivable at March 31, 2016, including $524.1 million of receivables sold under the Receivables Securitization Program, approximates fair value because of the short-term nature of this item. No assets or liabilities were measured at fair value on a nonrecurring basis. |
Other Assets and Liabilities
Other Assets and Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Other Assets And Liabilities [Abstract] | |
Other Assets and Liabilities | 12. Other Assets and Liabilities Receivables related to supplier allowances totaling $92.1 million and $111.0 million were included in “Accounts receivable” in the Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015, respectively. Accrued customer rebates of $47.2 million and $63.6 million as of March 31, 2016 and December 31, 2015, respectively, were included in “Accrued liabilities” in the Condensed Consolidated Balance Sheets. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. Income Taxes The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items. For the three months ended March 31, 2016, the Company recorded income tax expense of $10.0 million on pre-tax income of $26.5 million, for an effective tax rate of 37.6%. For the three months ended March 31, 2015, the Company recorded income tax expense of $4.0 million on pre-tax loss of $2.0 million, for an effective tax rate of (196.6)%. The Company’s U.S. statutory rate is 35.0%. There were no significant discrete items impacting the effective tax rate for the three months ended March 31, 2016. The most significant factor impacting the effective tax rate for the three months ended March 31, 2015 was the discrete impact of the impairment charges for financial reporting purposes related to placing a non-strategic business for sale in the quarter. |
Legal Matters
Legal Matters | 3 Months Ended |
Mar. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Legal Matters | 14. Legal Matters The Company has been named as a defendant in two lawsuits alleging that the Company sent unsolicited fax advertisements to the named plaintiffs, as well as other persons and entities, in violation of the Telephone Consumer Protection Act of 1991, as amended by the Junk Fax Prevention Act of 2005 ("TCPA"). One lawsuit was initially filed in the United States District Court for the Central District of California on May 1, 2015 and has been refiled in an Illinois state court, subject to a motion to dismiss the California case without prejudice. The other lawsuit was filed in the United States District Court for the Northern District of Illinois on January 14, 2016. In both lawsuits the plaintiffs filed a motion asking the Court to certify a class of plaintiffs comprised of persons and entities who allegedly received fax advertisements from the Company. Under the TCPA, recipients of unsolicited fax advertisements can seek damages of $500 per fax for inadvertent violations and up to $1,500 per fax for knowing and willful violations. Other reported TCPA lawsuits have resulted in a broad range of outcomes, with each case being dependent on its own unique set of facts and circumstances. In each lawsuit, the Company is vigorously contesting class certification and denies that any violations occurred. Litigation of this kind, however, is likely to lead to settlement negotiations, including negotiations prompted by pre-trial civil court procedures. Regardless of whether the lawsuits are resolved at trial or through settlement, the Company believes that a loss associated with resolution of pending claims is probable. However, the amount of any such loss, which could be material, cannot be reasonably estimated because the Company is continuing to evaluate its defenses based on its internal review and investigation of prior events, new information and future circumstances. The Company is also involved in other legal proceedings arising in the ordinary course of or incidental to its business. The Company has established reserves, which are not material, for potential losses that are probable and reasonably estimable that may result from those proceedings. In many cases, however, it is difficult to determine whether a loss is probable or even possible or to estimate the amount or range of potential loss, particularly where proceedings may be in relatively early stages or where plaintiffs are seeking substantial or indeterminate damages. Matters frequently need to be more developed before a loss or range of loss can reasonably be estimated. The Company believes that such ordinary course legal proceedings will be resolved with no material adverse effect upon its financial condition or results of operations. 1 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Consolidation, Policy | The accompanying Condensed Consolidated Financial Statements represent Essendant Inc. (“ESND”) with its wholly owned subsidiary Essendant Co. (“ECO”), and ECO’s subsidiaries (collectively, “Essendant” or the “Company”). The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States and include the accounts of ESND and its subsidiaries. All intercompany transactions and balances have been eliminated. The Company operates in a single reportable segment as a leading distributor of workplace essentials. The accompanying Condensed Consolidated Financial Statements are unaudited. The Condensed Consolidated Balance Sheet as of December 31, 2015, was derived from the December 31, 2015 audited financial statements. The Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements, prepared in accordance with accounting principles generally accepted in the United States, have been condensed or omitted pursuant to such rules and regulations. Accordingly, the reader of this Quarterly Report on Form 10-Q should refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 for further information. In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of Essendant at March 31, 2016 and the results of operations and cash flows for the three-month periods ended March 31, 2016 and 2015. The results of operations for the three months ended March 31, 2016 should not necessarily be taken as indicative of the results of operations that may be expected for the entire year. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, Revenue from Contracts with Customers, In May 2015, he FASB issued ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) that requires lessees to recognize right-of-use assets and lease liabilities for all leases other than those that meet the definition of short-term leases. For short-term leases, lessees may elect an accounting policy by class of underlying asset under which these assets and liabilities are not recognized and lease payments are generally recognized over the lease term on a straight-line basis. This standard will be effective for annual periods beginning after December 15, 2018, including interim periods within that reporting period, and early application is permitted. The Company is currently evaluating the new guidance to determine the impact it will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting |
Change in Accounting Principle | Change in Accounting Principle During the third quarter of 2015, the Company elected a change in accounting principle for the valuation method of certain inventories to the last-in, first-out (“LIFO”) method from the first-in, first out method (“FIFO”). This change required retrospective application. As such, the financial statements presented for prior periods are titled “Revised”. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 for further information. |
Inventory | Inventory Approximately 98.5% and 98.4% of total inventory as of March 31, 2016 and December 31, 2015, respectively, has been valued under the LIFO method. An actual valuation of inventory under the LIFO method can be made only at the end of each fiscal year based on the inventory levels and costs at that time. Interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs, and are subject to the final year-end LIFO inventory valuation. Inventory valued under the LIFO accounting method is recorded at the lower of cost or market. If the Company had valued its entire inventory under the lower of FIFO cost or market, inventory would have been $148.6 million and $147.8 million higher than reported as of March 31, 2016 and December 31, 2015, respectively. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Purchase Price Allocation | At March 31, 2016, the preliminary allocation of the purchase price was as follows (amounts in thousands): Purchase price, net of cash acquired $ 39,983 Accounts receivable 9,230 Inventories 10,542 Other current assets 338 Property, plant and equipment, net 1,251 Other assets 752 Intangible assets 17,580 Total assets acquired 39,693 Accounts payable 4,992 Accrued liabilities 1,943 Deferred income taxes 3,175 Other long-term liabilities 76 Total liabilities assumed 10,186 Goodwill $ 10,476 |
Summary of Purchased Identifiable Intangible Assets | The purchased identifiable intangible assets were as follows (amounts in thousands): Total Estimated Life Customer relationships $ 16,220 13 years Trademark 1,360 2.5-15 years Total $ 17,580 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill are noted in the following table (in thousands): Goodwill, balance as of December 31, 2015 $ 299,355 Purchase accounting adjustments (1,095 ) Currency translation adjustments 887 Goodwill, balance as of March 31, 2016 $ 299,147 |
Summary of Intangible Assets of Company by Major Class | The following table summarizes the intangible assets of the Company by major class of intangible assets and the cost, accumulated amortization, net carrying amount, and weighted average life, if applicable (in thousands): March 31, 2016 December 31, 2015 Weighted Weighted Average Average Gross Net Useful Gross Net Useful Carrying Accumulated Carrying Life Carrying Accumulated Carrying Life Amount Amortization Amount (years) Amount Amortization Amount (years) Intangible assets subject to amortization Customer relationships and other intangibles $ 138,422 $ (54,140 ) $ 84,282 16 $ 137,938 $ (51,357 ) $ 86,581 16 Non-compete agreements 4,654 (4,260 ) 394 4 4,644 (4,260 ) 384 4 Trademarks 13,734 (4,753 ) 8,981 14 13,688 (4,240 ) 9,448 14 Total $ 156,810 $ (63,153 ) $ 93,657 $ 156,270 $ (59,857 ) $ 96,413 |
Summary of Amortization Expense to be Incurred in 2016 Through 2020 on Intangible Assets | The following table summarizes the amortization expense to be incurred in 2016 through 2020 on intangible assets (in thousands): Year Amount 2016 $ 12,314 2017 10,855 2018 8,111 2019 6,993 2020 6,990 |
Accumulated Other Comprehensi24
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Change in Accumulated Other Comprehensive Income (Loss) (AOCI) by Component, Net of Tax | The change in Accumulated Other Comprehensive Income (Loss) (“AOCI”) by component, net of tax, for the period ended March 31, 2016 was as follows (amounts in thousands): Foreign Currency Translation Cash Flow Hedges Defined Benefit Pension Plans Total AOCI, balance as of December 31, 2015 $ (9,866 ) $ 146 $ (47,871 ) $ (57,591 ) Other comprehensive (loss) income before reclassifications 2,691 (753 ) - 1,938 Amounts reclassified from AOCI - 226 915 1,141 Net other comprehensive (loss) income 2,691 (527 ) 915 3,079 AOCI, balance as of March 31, 2016 $ (7,175 ) $ (381 ) $ (46,956 ) $ (54,512 ) |
Amounts Reclassified Out of AOCI into Income Statement | The following table details the amounts reclassified out of AOCI into the income statement during the three-month period ending March 31, 2016 (in thousands): Amount Reclassified From AOCI For the Three Months Ended March 31, Affected Line Item In The Statement Details About AOCI Components 2016 Where Net Income is Presented Realized and unrealized gains (losses) on cash flow hedges Gain on interest rate swap, before tax $ 275 Interest expense, net Gain on foreign exchange hedges, before tax 89 Cost of goods sold (138 ) Tax provision $ 226 Net of tax Defined benefit pension plan items Amortization of prior service cost and unrecognized loss $ 1,493 Warehousing, marketing and administrative expenses (578 ) Tax provision 915 Net of tax Total reclassifications for the period, net of tax $ 1,141 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data): For the Three Months Ended March 31, 2016 2015 Numerator: Net income (loss) $ 16,530 $ (6,007 ) Denominator: Denominator for basic earnings per share - weighted average shares 36,593 38,115 Effect of dilutive securities: Employee stock options and restricted stock 282 - Denominator for diluted earnings per share - Adjusted weighted average shares and the effect of dilutive securities 36,875 38,115 Net income (loss) per share: Net income (loss) per share - basic $ 0.45 $ (0.16 ) Net income (loss) per share - diluted (1) $ 0.45 $ (0.16 ) (1) Diluted earnings per share for the first quarter of 2015 under GAAP equals basic earnings per share due to net loss. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Components | Debt consisted of the following amounts (in millions): As of As of March 31, 2016 December 31, 2015 2013 Credit Agreement $ 405.8 $ 368.4 2013 Note Purchase Agreement 150.0 150.0 Receivables Securitization Program 200.0 200.0 Mortgage & Capital Lease 0.1 0.1 Transaction Costs (2.0 ) (2.2 ) Total $ 753.9 $ 716.3 |
Pension and Post-Retirement B27
Pension and Post-Retirement Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |
Schedule of Components of Net Periodic Pension Cost | A summary of net periodic pension cost related to the Company’s pension plans for the three-month periods ended March 31, 2016 and 2015 was as follows (dollars in thousands): For the Three Months Ended March 31, 2016 2015 Service cost - benefit earned during the period $ 317 $ 400 Interest cost on projected benefit obligation 2,343 2,270 Expected return on plan assets (2,718 ) (2,805 ) Amortization of prior service cost 74 75 Amortization of actuarial loss 1,419 1,450 Net periodic pension cost $ 1,435 $ 1,390 |
Derivative Financial Instrume28
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Schedule of Effect of Derivative Instruments on Statements of Income and Comprehensive Income | The following table depicts the effect of these derivative instruments on the statements of income and comprehensive income for the three-month periods ended March 31, 2016 and 2015 (in thousands). Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion) Derivatives in ASC 815 Cash Flow Hedging Relationships For the Three Months Ended March 31, 2016 For the Three Months Ended March 31, 2015 Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion) For the Three Months Ended March 31, 2016 For the Three Months Ended March 31, 2015 Interest Rate Swap $ (121 ) $ (124 ) Interest expense, net $ 242 $ 331 Foreign Exchange Hedges (195 ) - Cost of goods sold 89 - |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Instruments Measured at Fair Value | The following table summarizes the financial instruments measured at fair value in the accompanying Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015 (in thousands): Fair Value Measurements as of March 31, 2016 Quoted Market Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs Total Level 1 Level 2 Level 3 Liabilities Interest rate swap $ 832 $ - $ 832 $ - Foreign exchange hedges $ 288 $ - $ 288 $ - Fair Value Measurements as of December 31, 2015 Quoted Market Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs Total Level 1 Level 2 Level 3 Assets Foreign exchange hedges $ 91 $ - $ 91 $ - Liabilities Interest rate swap $ 469 $ - $ 469 $ - |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Percentage inventory valued under LIFO | 98.50% | 98.40% |
Higher inventory if FIFO applied entirely | $ 148.6 | $ 147.8 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ in Millions | Jul. 31, 2015 | Feb. 16, 2016 |
Staples Inc | ||
Business Acquisition [Line Items] | ||
Agreement to purchase from Staples | $ 550 | |
Payment to be made under agreement | $ 22.5 | |
Nestor Sales LLC [Member] | ||
Business Acquisition [Line Items] | ||
Stock acquisition, percentage acquired | 100.00% | |
Business acquisition cash paid | $ 41.8 |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||
Goodwill | $ 299,147 | $ 299,355 |
Nestor Sales LLC (Preliminary) [Member] | ||
Business Acquisition [Line Items] | ||
Purchase price, net of cash acquired | 39,983 | |
Accounts receivable | 9,230 | |
Inventories | 10,542 | |
Other current assets | 338 | |
Property, plant and equipment, net | 1,251 | |
Other assets | 752 | |
Intangible assets | 17,580 | |
Total assets acquired | 39,693 | |
Accounts payable | 4,992 | |
Accrued liabilities | 1,943 | |
Deferred income taxes | 3,175 | |
Other long-term liabilities | 76 | |
Total liabilities assumed | 10,186 | |
Goodwill | $ 10,476 |
Acquisitions - Summary of Purch
Acquisitions - Summary of Purchased Identifiable Intangible Assets (Detail) - Nestor Sales LLC (Preliminary) [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Finite lived intangible assets | $ 17,580 |
Customer relationships [Member] | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Finite lived intangible assets | $ 16,220 |
Finite lived intangible assets estimated life | 13 years |
Trademarks [Member] | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Finite lived intangible assets | $ 1,360 |
Trademarks [Member] | Minimum [Member] | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Finite lived intangible assets estimated life | 2 years 6 months |
Trademarks [Member] | Maximum [Member] | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Finite lived intangible assets estimated life | 15 years |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2016Plansshares | Mar. 31, 2015shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of share-based compensation plans | Plans | 2 | |
Restricted Stock [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Restricted stock and restricted stock units granted | 120,376 | 46,229 |
Restricted Stock Units (RSUs) [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Restricted stock and restricted stock units granted | 247,510 | 145,552 |
Severance and Restructuring C35
Severance and Restructuring Charges - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | |
Workforce Reduction And Facility Closure Program First Quarter Of 2015 [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Cash outlays associated with severance | $ 0.7 | $ 0.5 | |
Accrued liabilities | 1.8 | ||
Workforce Reduction And Facility Closure Program First Quarter Of 2015 [Member] | Warehousing, Marketing and Administrative Expenses [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Pre-tax charge | 6 | ||
Facility Consolidations [Member] | Warehousing, Marketing and Administrative Expenses [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Pre-tax charge | 0.3 | $ 0.4 | |
Workforce Reduction And Facility Closure Program Fourth Quarter Of 2015 [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Cash outlays associated with severance | 3.1 | ||
Accrued liabilities | $ 7.9 | ||
Workforce Reduction And Facility Closure Program Fourth Quarter Of 2015 [Member] | Warehousing, Marketing and Administrative Expenses [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Pre-tax charge | $ 11.9 |
Goodwill and Intangible Asset36
Goodwill and Intangible Assets - Summary of Changes in Carrying Amount of Goodwill (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill, balance as of December 31, 2015 | $ 299,355 |
Purchase accounting adjustments | (1,095) |
Currency translation adjustments | 887 |
Goodwill, balance as of March 31, 2016 | $ 299,147 |
Goodwill and Intangible Asset37
Goodwill and Intangible Assets - Summary of Intangible Assets of Company by Major Class (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Schedule Of Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, Gross Carrying Amount | $ 156,810 | $ 156,270 |
Intangible assets subject to amortization, Accumulated Amortization | (63,153) | (59,857) |
Intangible assets subject to amortization, Net Carrying Amount | 93,657 | 96,413 |
Customer relationships and other intangibles [Member] | ||
Schedule Of Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, Gross Carrying Amount | 138,422 | 137,938 |
Intangible assets subject to amortization, Accumulated Amortization | (54,140) | (51,357) |
Intangible assets subject to amortization, Net Carrying Amount | $ 84,282 | $ 86,581 |
Intangible assets subject to amortization, Weighted Average Useful Life (years) | 16 years | 16 years |
Non-compete Agreements [Member] | ||
Schedule Of Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, Gross Carrying Amount | $ 4,654 | $ 4,644 |
Intangible assets subject to amortization, Accumulated Amortization | (4,260) | (4,260) |
Intangible assets subject to amortization, Net Carrying Amount | $ 394 | $ 384 |
Intangible assets subject to amortization, Weighted Average Useful Life (years) | 4 years | 4 years |
Trademarks [Member] | ||
Schedule Of Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, Gross Carrying Amount | $ 13,734 | $ 13,688 |
Intangible assets subject to amortization, Accumulated Amortization | (4,753) | (4,240) |
Intangible assets subject to amortization, Net Carrying Amount | $ 8,981 | $ 9,448 |
Intangible assets subject to amortization, Weighted Average Useful Life (years) | 14 years | 14 years |
Goodwill and Intangible Asset38
Goodwill and Intangible Assets - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2015USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Impairment of intangible assets | $ 10.2 |
Goodwill and Intangible Asset39
Goodwill and Intangible Assets - Summary of Amortization Expense to be Incurred in 2016 Through 2020 on Intangible Assets (Detail) $ in Thousands | Mar. 31, 2016USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2,016 | $ 12,314 |
2,017 | 10,855 |
2,018 | 8,111 |
2,019 | 6,993 |
2,020 | $ 6,990 |
Accumulated Other Comprehensi40
Accumulated Other Comprehensive Income (Loss) - Change in Accumulated Other Comprehensive Income (Loss) (AOCI) by Component, Net of Tax (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
AOCI, balance as of December 31, 2015 | $ (57,591) | |
Other comprehensive (loss) income before reclassifications | 1,938 | |
Amounts reclassified from AOCI | 1,141 | |
Total other comprehensive income (loss), net of tax | 3,079 | $ (4,174) |
AOCI, balance as of March 31, 2016 | (54,512) | |
Foreign Currency Translation [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
AOCI, balance as of December 31, 2015 | (9,866) | |
Other comprehensive (loss) income before reclassifications | 2,691 | |
Total other comprehensive income (loss), net of tax | 2,691 | |
AOCI, balance as of March 31, 2016 | (7,175) | |
Cash Flow Hedges [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
AOCI, balance as of December 31, 2015 | 146 | |
Other comprehensive (loss) income before reclassifications | (753) | |
Amounts reclassified from AOCI | 226 | |
Total other comprehensive income (loss), net of tax | (527) | |
AOCI, balance as of March 31, 2016 | (381) | |
Defined Benefit Pension Plans [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
AOCI, balance as of December 31, 2015 | (47,871) | |
Amounts reclassified from AOCI | 915 | |
Total other comprehensive income (loss), net of tax | 915 | |
AOCI, balance as of March 31, 2016 | $ (46,956) |
Accumulated Other Comprehensi41
Accumulated Other Comprehensive Income (Loss) - Amounts Reclassified Out of AOCI into Income Statement (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | [1] | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Interest expense, net | $ 5,897 | $ 4,839 | |
Cost of goods sold | 1,152,214 | 1,131,980 | |
Warehousing, marketing and administrative expenses | 167,678 | 197,581 | |
Tax provision | (9,977) | (3,982) | |
Net income (loss) | 16,530 | $ (6,007) | |
Amount Reclassified From AOCI [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Net income (loss) | 1,141 | ||
Amount Reclassified From AOCI [Member] | Cash Flow Hedges [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Cost of goods sold | 89 | ||
Tax provision | (138) | ||
Net income (loss) | 226 | ||
Amount Reclassified From AOCI [Member] | Defined Benefit Pension Plans [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Warehousing, marketing and administrative expenses | 1,493 | ||
Tax provision | (578) | ||
Net income (loss) | 915 | ||
Amount Reclassified From AOCI [Member] | Interest Rate Swap [Member] | Cash Flow Hedges [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Interest expense, net | $ 275 | ||
[1] | During the third quarter of 2015, the Company elected a change in accounting principle for the valuation method of certain inventories to the last-in, first-out (“LIFO”) method from the first-in, first out method (“FIFO”). This change required retrospective application. As such, the financial statements presented for prior periods are titled “Revised”. |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share amount | 300,000 | 400,000 |
Additional authorized repurchase amount | $ 68.2 | |
Number of shares repurchased | 241,270 | 402,679 |
Repurchase of common stock, value | $ 6.8 | $ 16.3 |
Treasury stock reissued, shares | 106,800 | 31,745 |
Common Stock [Member] | ||
Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share amount | 400,000 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | [1] | |
Earnings Per Share [Abstract] | |||
Net income (loss) | $ 16,530 | $ (6,007) | |
Denominator for basic earnings per share - weighted average shares | 36,593 | 38,115 | |
Effect of dilutive securities: Employee stock options and restricted stock | 282 | ||
Denominator for diluted earnings per share - Adjusted weighted average shares and the effect of dilutive securities | 36,875 | 38,115 | |
Net income (loss) per share - basic | $ 0.45 | $ (0.16) | |
Net income (loss) per share - diluted | $ 0.45 | $ (0.16) | |
[1] | During the third quarter of 2015, the Company elected a change in accounting principle for the valuation method of certain inventories to the last-in, first-out (“LIFO”) method from the first-in, first out method (“FIFO”). This change required retrospective application. As such, the financial statements presented for prior periods are titled “Revised”. |
Debt - Schedule of Long-Term De
Debt - Schedule of Long-Term Debt Components (Detail) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Mortgage & Capital Lease | $ 0.1 | $ 0.1 |
Transaction Costs | (2) | (2.2) |
Total | 753.9 | 716.3 |
2013 Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Credit Agreement | 405.8 | 368.4 |
2013 Note Purchase Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Note Purchase Agreement | 150 | 150 |
Receivables Securitization Program [Member] | ||
Debt Instrument [Line Items] | ||
Credit Agreement | $ 200 | $ 200 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) $ in Millions | Apr. 01, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | |||
Percentage of outstanding debt priced at variable interest rates | 80.20% | ||
Receivables sold to Investors | $ 524.1 | $ 448.6 | |
2013 Credit Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding letters of credit | $ 11.6 | 11.6 | |
LIBOR-based loans rates | 1.50% | ||
Alternate base rate loans rates | 0.50% | ||
Credit facility | $ 405.8 | 368.4 | |
2013 Credit Agreement [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
LIBOR-based loans rates | 1.00% | ||
Alternate base rate loans rates | 0.00% | ||
Percentage of lenders fee on unutilized portion borrowing facility | 0.15% | ||
2013 Credit Agreement [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
LIBOR-based loans rates | 2.00% | ||
Alternate base rate loans rates | 1.00% | ||
Percentage of lenders fee on unutilized portion borrowing facility | 0.35% | ||
2013 Credit Agreement [Member] | Subsequent Event [Member] | |||
Debt Instrument [Line Items] | |||
LIBOR-based loans rates | 1.75% | ||
Alternate base rate loans rates | 0.75% | ||
Receivables Securitization Program [Member] | |||
Debt Instrument [Line Items] | |||
Credit facility | $ 200 | 200 | |
Receivables Securitization Program [Member] | ESR [Member] | |||
Debt Instrument [Line Items] | |||
Credit facility | $ 200 | $ 200 |
Pension and Post-Retirement B46
Pension and Post-Retirement Benefit Plans - Schedule of Components of Net Periodic Pension Cost (Detail) - Pension Plans [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost - benefit earned during the period | $ 317 | $ 400 |
Interest cost on projected benefit obligation | 2,343 | 2,270 |
Expected return on plan assets | (2,718) | (2,805) |
Amortization of prior service cost | 74 | 75 |
Amortization of actuarial loss | 1,419 | 1,450 |
Net periodic pension cost | $ 1,435 | $ 1,390 |
Pension and Post-Retirement B47
Pension and Post-Retirement Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Compensation And Retirement Disclosure [Abstract] | |||
Cash contribution to pension plan during the period | $ 10 | $ 2 | |
Pension plan liabilities | 38.4 | $ 48.4 | |
Company contributions | $ 1.8 | $ 1.4 |
Derivative Financial Instrume48
Derivative Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Cash Flow Hedging [Member] | ||
Derivative [Line Items] | ||
Percentage of hedged inventory on Canadian purchases | 50.00% | |
Hedge on inventory purchase | $ 8.1 | |
Cash flow hedges liability | 0.3 | $ 0.1 |
Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Interest rate swap liability | $ 0.9 | $ 0.5 |
Derivative, maturity month year | 2017-07 |
Derivative Financial Instrume49
Derivative Financial Instruments - Schedule of Effect of Derivative Instruments on Statements of Income and Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Interest Rate Swap [Member] | ||
Derivative Instruments Gain Loss [Line Items] | ||
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | $ (121) | $ (124) |
Interest Rate Swap [Member] | Interest expense, net [Member] | ||
Derivative Instruments Gain Loss [Line Items] | ||
Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | 242 | $ 331 |
Foreign Exchange Hedges [Member] | ||
Derivative Instruments Gain Loss [Line Items] | ||
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | (195) | |
Foreign Exchange Hedges [Member] | Cost of goods sold [Member] | ||
Derivative Instruments Gain Loss [Line Items] | ||
Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | $ 89 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Instruments Measured at Fair Value (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap | $ 832 | $ 469 |
Foreign Exchange [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange hedges | 288 | |
Foreign exchange hedges | 91 | |
Significant Other Observable Inputs Level 2 [Member] | Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap | 832 | 469 |
Significant Other Observable Inputs Level 2 [Member] | Foreign Exchange [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange hedges | $ 288 | |
Foreign exchange hedges | $ 91 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value Disclosures [Abstract] | ||
Receivables sold to Investors | $ 524,100,000 | $ 448,600,000 |
Assets measured at fair value on a nonrecurring basis | 0 | |
Liabilities measured at fair value on a nonrecurring basis | $ 0 |
Other Assets and Liabilities -
Other Assets and Liabilities - Additional Information (Detail) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Other Assets And Liabilities [Abstract] | ||
Receivables related to supplier allowances included Accounts receivable | $ 92.1 | $ 111 |
Accrued customer rebates included in Accrued liabilities | $ 47.2 | $ 63.6 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Income Tax Disclosure [Abstract] | |||
Income tax expense | $ 9,977 | $ 3,982 | [1] |
Income (loss) before income taxes | $ 26,507 | $ (2,025) | [1] |
Effective income tax percent | 37.60% | (196.60%) | |
United States statutory income tax rate, percent | 35.00% | ||
[1] | During the third quarter of 2015, the Company elected a change in accounting principle for the valuation method of certain inventories to the last-in, first-out (“LIFO”) method from the first-in, first out method (“FIFO”). This change required retrospective application. As such, the financial statements presented for prior periods are titled “Revised”. |
Legal Matters - Additional Info
Legal Matters - Additional Information (Detail) | Jan. 14, 2016Lawsuit | May. 01, 2015Lawsuit | Mar. 31, 2016USD ($)Lawsuit |
Commitments And Contingencies [Line Items] | |||
Number of lawsuits filed | 2 | ||
Inadvertent Violation under TCPA for Unsolicited Fax Advertisement [Member] | |||
Commitments And Contingencies [Line Items] | |||
Damages sought by plaintiff per violation | $ | $ 500 | ||
Willful Violation under TCPA for Unsolicited Fax Advertisement [Member] | |||
Commitments And Contingencies [Line Items] | |||
Damages sought by plaintiff per violation | $ | $ 1,500 | ||
United States District Court California [Member] | |||
Commitments And Contingencies [Line Items] | |||
Number of lawsuits filed | 1 | ||
United States District Court Illinois [Member] | |||
Commitments And Contingencies [Line Items] | |||
Number of lawsuits filed | 1 |