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ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
26-1251958
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
3075 Highland Parkway, Suite 200 Downers Grove, Illinois
|
|
60515
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
ý
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
¨
|
Smaller reporting company
|
¨
|
Emerging growth company
|
¨
|
|
|
Part I. FINANCIAL INFORMATION
|
Page
|
Item 1. Financial Statements (unaudited)
|
|
Condensed Consolidated Statements of Operations
|
|
Condensed Consolidated Statements of Comprehensive Income
|
|
Condensed Consolidated Balance Sheets
|
|
Condensed Consolidated Statements of Cash Flows
|
|
Condensed Consolidated Statements of Changes in Stockholders’ Equity
|
|
Notes to Condensed Consolidated Statements
|
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Item 3. Quantitative and Qualitative Disclosures About Market Risk
|
|
Item 4. Controls and Procedures
|
|
Part II. OTHER INFORMATION
|
|
Item 1. Legal Proceedings
|
|
Item 1A. Risk Factors
|
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
|
Item 3. Defaults Upon Senior Securities
|
|
Item 4. Mine Safety Disclosures
|
|
Item 5. Other Information
|
|
Item 6. Exhibits
|
|
Signatures
|
Item 1.
|
Financial Statements
|
|
|
|
|
Three months ended March 31,
|
||||||
(in millions, except per share data)
|
|
Note
|
|
2018
|
|
2017
|
||||
Net sales
|
|
|
|
$
|
2,158.0
|
|
|
$
|
1,998.8
|
|
Cost of goods sold
|
|
|
|
1,671.4
|
|
|
1,559.4
|
|
||
Gross profit
|
|
|
|
$
|
486.6
|
|
|
$
|
439.4
|
|
Operating expenses:
|
|
|
|
|
|
|
||||
Outbound freight and handling
|
|
|
|
79.3
|
|
|
71.0
|
|
||
Warehousing, selling and administrative
|
|
|
|
241.0
|
|
|
228.5
|
|
||
Other operating expenses, net
|
|
4
|
|
13.6
|
|
|
19.8
|
|
||
Depreciation
|
|
|
|
31.4
|
|
|
35.9
|
|
||
Amortization
|
|
|
|
13.4
|
|
|
16.7
|
|
||
Total operating expenses
|
|
|
|
$
|
378.7
|
|
|
$
|
371.9
|
|
Operating income
|
|
|
|
$
|
107.9
|
|
|
$
|
67.5
|
|
Other (expense) income:
|
|
|
|
|
|
|
||||
Interest income
|
|
|
|
1.2
|
|
|
0.9
|
|
||
Interest expense
|
|
|
|
(36.1
|
)
|
|
(36.7
|
)
|
||
Loss on extinguishment of debt
|
|
|
|
—
|
|
|
(0.8
|
)
|
||
Other income (expense), net
|
|
6
|
|
2.6
|
|
|
(6.7
|
)
|
||
Total other expense
|
|
|
|
$
|
(32.3
|
)
|
|
$
|
(43.3
|
)
|
Income before income taxes
|
|
|
|
75.6
|
|
|
24.2
|
|
||
Income tax expense
|
|
8
|
|
10.2
|
|
|
1.6
|
|
||
Net income
|
|
|
|
$
|
65.4
|
|
|
$
|
22.6
|
|
Income per common share:
|
|
|
|
|
|
|
||||
Basic
|
|
9
|
|
$
|
0.46
|
|
|
$
|
0.16
|
|
Diluted
|
|
9
|
|
0.46
|
|
|
0.16
|
|
||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
||||
Basic
|
|
9
|
|
140.9
|
|
|
139.4
|
|
||
Diluted
|
|
9
|
|
142.0
|
|
|
140.8
|
|
|
|
|
|
Three months ended
March 31, |
||||||
(in millions)
|
|
Note
|
|
2018
|
|
2017
|
||||
Net income
|
|
|
|
$
|
65.4
|
|
|
$
|
22.6
|
|
|
|
|
|
|
|
|
||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
||||
Impact due to adoption of ASU 2017-12
(1)
|
|
10
|
|
0.5
|
|
|
—
|
|
||
Foreign currency translation
|
|
10
|
|
(7.2
|
)
|
|
18.2
|
|
||
Derivative financial instruments
|
|
10
|
|
9.1
|
|
|
—
|
|
||
Total other comprehensive income, net of tax
|
|
|
|
$
|
2.4
|
|
|
$
|
18.2
|
|
Comprehensive income
|
|
|
|
$
|
67.8
|
|
|
$
|
40.8
|
|
|
(1)
|
Adjusted due to the adoption of ASU 2017-12 “Targeted Improvements to Accounting for Hedging Activities” on January 1, 2018. Refer to “
Note 2: Significant accounting policies
” for more information.
|
(in millions, except per share data)
|
|
Note
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
|
|
$
|
115.9
|
|
|
$
|
467.0
|
|
Trade accounts receivable, net
|
|
|
|
1,288.5
|
|
|
1,062.4
|
|
||
Inventories
|
|
|
|
921.9
|
|
|
839.5
|
|
||
Prepaid expenses and other current assets
|
|
|
|
174.6
|
|
|
149.6
|
|
||
Total current assets
|
|
|
|
$
|
2,500.9
|
|
|
$
|
2,518.5
|
|
Property, plant and equipment, net
|
|
12
|
|
983.8
|
|
|
1,003.0
|
|
||
Goodwill
|
|
|
|
1,809.2
|
|
|
1,818.4
|
|
||
Intangible assets, net
|
|
12
|
|
279.0
|
|
|
287.7
|
|
||
Deferred tax assets
|
|
|
|
30.3
|
|
|
22.8
|
|
||
Other assets
|
|
|
|
91.1
|
|
|
82.3
|
|
||
Total assets
|
|
|
|
$
|
5,694.3
|
|
|
$
|
5,732.7
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
|
|
||||
Short-term financing
|
|
11
|
|
$
|
8.5
|
|
|
$
|
13.4
|
|
Trade accounts payable
|
|
|
|
1,011.7
|
|
|
941.7
|
|
||
Current portion of long-term debt
|
|
11
|
|
20.5
|
|
|
62.0
|
|
||
Accrued compensation
|
|
|
|
74.6
|
|
|
100.7
|
|
||
Other accrued expenses
|
|
|
|
330.7
|
|
|
301.6
|
|
||
Total current liabilities
|
|
|
|
$
|
1,446.0
|
|
|
$
|
1,419.4
|
|
Long-term debt
|
|
11
|
|
2,683.5
|
|
|
2,820.0
|
|
||
Pension and other postretirement benefit liabilities
|
|
|
|
252.5
|
|
|
257.1
|
|
||
Deferred tax liabilities
|
|
|
|
45.8
|
|
|
35.4
|
|
||
Other long-term liabilities
|
|
|
|
100.8
|
|
|
110.7
|
|
||
Total liabilities
|
|
|
|
$
|
4,528.6
|
|
|
$
|
4,642.6
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
||||
Preferred stock, 200.0 million shares authorized at $0.01 par value with no shares issued or outstanding as of March 31, 2018 and December 31, 2017
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Common stock, 2.0 billion shares authorized at $0.01 par value with 141.3 million and 141.1 million shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively
|
|
|
|
1.4
|
|
|
1.4
|
|
||
Additional paid-in capital
|
|
|
|
2,308.8
|
|
|
2,301.3
|
|
||
Accumulated deficit
|
|
|
|
(868.4
|
)
|
|
(934.1
|
)
|
||
Accumulated other comprehensive loss
|
|
10
|
|
(276.1
|
)
|
|
(278.5
|
)
|
||
Total stockholders’ equity
|
|
|
|
$
|
1,165.7
|
|
|
$
|
1,090.1
|
|
Total liabilities and stockholders’ equity
|
|
|
|
$
|
5,694.3
|
|
|
$
|
5,732.7
|
|
|
|
|
|
Three months ended
March 31, |
||||||
(in millions)
|
|
Note
|
|
2018
|
|
2017
|
||||
Operating activities:
|
|
|
|
|
|
|
||||
Net income
|
|
|
|
$
|
65.4
|
|
|
$
|
22.6
|
|
Adjustments to reconcile net income to net cash provided (used) by operating activities:
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
|
|
|
44.8
|
|
|
52.6
|
|
||
Amortization of deferred financing fees and debt discount
|
|
|
|
2.0
|
|
|
2.0
|
|
||
Loss on extinguishment of debt
|
|
|
|
—
|
|
|
0.8
|
|
||
Deferred income taxes
|
|
|
|
(3.0
|
)
|
|
(3.3
|
)
|
||
Stock-based compensation expense
|
|
4
|
|
9.4
|
|
|
6.4
|
|
||
Other
|
|
|
|
0.4
|
|
|
0.5
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||
Trade accounts receivable, net
|
|
|
|
(219.4
|
)
|
|
(142.4
|
)
|
||
Inventories
|
|
|
|
(80.1
|
)
|
|
(66.4
|
)
|
||
Prepaid expenses and other current assets
|
|
|
|
(14.1
|
)
|
|
(18.9
|
)
|
||
Trade accounts payable
|
|
|
|
67.3
|
|
|
79.9
|
|
||
Pensions and other postretirement benefit liabilities
|
|
|
|
(11.6
|
)
|
|
(9.0
|
)
|
||
Other, net
|
|
|
|
(0.1
|
)
|
|
(1.9
|
)
|
||
Net cash used by operating activities
|
|
|
|
$
|
(139.0
|
)
|
|
$
|
(77.1
|
)
|
Investing activities:
|
|
|
|
|
|
|
||||
Purchases of property, plant and equipment
|
|
|
|
$
|
(16.2
|
)
|
|
$
|
(20.9
|
)
|
Purchases of businesses, net of cash acquired
|
|
|
|
(8.9
|
)
|
|
(0.5
|
)
|
||
Proceeds from sale of property, plant and equipment
|
|
|
|
2.2
|
|
|
—
|
|
||
Other
|
|
|
|
—
|
|
|
(0.3
|
)
|
||
Net cash used by investing activities
|
|
|
|
$
|
(22.9
|
)
|
|
$
|
(21.7
|
)
|
Financing activities:
|
|
|
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
|
11
|
|
$
|
141.8
|
|
|
$
|
2,264.0
|
|
Payments on long-term debt and capital lease obligations
|
|
11
|
|
(320.1
|
)
|
|
(2,211.5
|
)
|
||
Short-term financing, net
|
|
11
|
|
(6.6
|
)
|
|
(5.2
|
)
|
||
Financing fees paid
|
|
|
|
—
|
|
|
(4.4
|
)
|
||
Taxes paid related to net share settlements of stock-based compensation awards
|
|
|
|
(2.7
|
)
|
|
(6.0
|
)
|
||
Stock option exercises
|
|
|
|
0.8
|
|
|
23.8
|
|
||
Contingent consideration payments
|
|
|
|
—
|
|
|
(3.2
|
)
|
||
Net cash (used) provided by financing activities
|
|
|
|
$
|
(186.8
|
)
|
|
$
|
57.5
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
$
|
(2.4
|
)
|
|
$
|
5.5
|
|
Net decrease in cash and cash equivalents
|
|
|
|
(351.1
|
)
|
|
(35.8
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
|
|
467.0
|
|
|
336.4
|
|
||
Cash and cash equivalents at end of period
|
|
|
|
$
|
115.9
|
|
|
$
|
300.6
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
||||
Non-cash activities:
|
|
|
|
|
|
|
||||
Additions of property, plant and equipment included in trade accounts payable and other accrued expenses
|
|
|
|
$
|
7.3
|
|
|
$
|
6.7
|
|
Additions of property, plant and equipment under a capital lease obligation
|
|
|
|
6.0
|
|
|
9.8
|
|
(in millions)
|
Common
stock
(shares)
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Accumulated
deficit
|
|
Accumulated
other
comprehensive
loss
|
|
Total
|
|||||||||||
Balance, December 31, 2016
|
138.8
|
|
|
$
|
1.4
|
|
|
$
|
2,251.8
|
|
|
$
|
(1,053.4
|
)
|
|
$
|
(389.9
|
)
|
|
$
|
809.9
|
|
Impact due to adoption of ASU, net of tax $0.2
(1)
|
—
|
|
|
—
|
|
|
0.7
|
|
|
(0.5
|
)
|
|
—
|
|
|
0.2
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
119.8
|
|
|
—
|
|
|
119.8
|
|
|||||
Foreign currency translation adjustment, net of tax ($2.1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
107.1
|
|
|
107.1
|
|
|||||
Pension and other postretirement benefits adjustment, net of tax $0.6
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.4
|
)
|
|
(2.4
|
)
|
|||||
Derivative financial instruments, net of tax ($4.3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.7
|
|
|
6.7
|
|
|||||
Restricted stock units vested
|
0.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Tax withholdings related to net share settlements of stock-based compensation awards
|
(0.3
|
)
|
|
—
|
|
|
(8.5
|
)
|
|
—
|
|
|
—
|
|
|
(8.5
|
)
|
|||||
Stock option exercises
|
1.8
|
|
|
—
|
|
|
36.5
|
|
|
—
|
|
|
—
|
|
|
36.5
|
|
|||||
Employee stock purchase plan
(2)
|
—
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
19.7
|
|
|
—
|
|
|
—
|
|
|
19.7
|
|
|||||
Balance, December 31, 2017
|
141.1
|
|
|
$
|
1.4
|
|
|
$
|
2,301.3
|
|
|
$
|
(934.1
|
)
|
|
$
|
(278.5
|
)
|
|
$
|
1,090.1
|
|
Impact due to adoption of ASU's, net of tax ($0.3)
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.5
|
|
|
0.8
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
65.4
|
|
|
—
|
|
|
65.4
|
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.2
|
)
|
|
(7.2
|
)
|
|||||
Derivative financial instruments, net of tax ($3.2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.1
|
|
|
9.1
|
|
|||||
Restricted stock units vested
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Tax withholdings related to net share settlements of stock-based compensation awards
|
(0.1
|
)
|
|
—
|
|
|
(2.7
|
)
|
|
—
|
|
|
—
|
|
|
(2.7
|
)
|
|||||
Stock option exercises
|
0.1
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|||||
Employee stock purchase plan
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
9.4
|
|
|
—
|
|
|
—
|
|
|
9.4
|
|
|||||
Balance, March 31, 2018
|
141.3
|
|
|
$
|
1.4
|
|
|
$
|
2,308.8
|
|
|
$
|
(868.4
|
)
|
|
$
|
(276.1
|
)
|
|
$
|
1,165.7
|
|
|
(1)
|
Adjusted due to the adoption of ASU 2016-09 “Improvement to Employee Share-Based Payment Accounting” on January 1, 2017.
|
(2)
|
During November 2016, our Board of Directors approved the Univar Employee Stock Purchase Plan, or ESPP, authorizing the issuances of up to
2.0 million
shares of the Company's common stock effective January 1, 2017. The total number of shares issued under the plan for the first two offering periods from January through December 2017 was
39,418
shares.
|
(3)
|
Adjusted due to the adoption of ASU 2014-09 “Revenue from Contracts with Customers” and ASU 2017-12 “Targeted Improvements to Accounting for Hedging Activities” on January 1, 2018. Refer to “
Note 2: Significant accounting policies
” for more information.
|
•
|
Univar USA (“USA”)
|
•
|
Univar Canada (“Canada”)
|
•
|
Univar Europe, the Middle East and Africa (“EMEA”)
|
•
|
Rest of World (“Rest of World”)
|
(in millions)
|
|
Balance at December 31, 2017
|
|
Adjustments due to ASU 2014-09
|
|
Adjustments due to ASU 2017-12
|
|
Balance at January 1, 2018
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Trade accounts receivable, net
|
|
$
|
1,062.4
|
|
|
$
|
41.3
|
|
|
$
|
—
|
|
|
$
|
1,103.7
|
|
Inventories
|
|
839.5
|
|
|
(2.1
|
)
|
|
—
|
|
|
837.4
|
|
||||
Prepaid expenses and other current assets
|
|
149.6
|
|
|
1.8
|
|
|
—
|
|
|
151.4
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Trade accounts payable
|
|
$
|
941.7
|
|
|
$
|
7.0
|
|
|
$
|
—
|
|
|
$
|
948.7
|
|
Other accrued expenses
|
|
301.6
|
|
|
33.2
|
|
|
—
|
|
|
334.8
|
|
||||
Equity
|
|
|
|
|
|
|
|
|
||||||||
Accumulated deficit
|
|
$
|
(934.1
|
)
|
|
$
|
0.8
|
|
|
$
|
(0.5
|
)
|
|
$
|
(933.8
|
)
|
Accumulated other comprehensive loss
|
|
(278.5
|
)
|
|
—
|
|
|
0.5
|
|
|
(278.0
|
)
|
|
|
Three months ended March 31, 2018
|
||||||||||
(in millions)
|
|
As reported
|
|
Balances without adoption of ASC 606
|
|
Effect of change higher/(lower)
|
||||||
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
2,158.0
|
|
|
$
|
2,151.7
|
|
|
$
|
6.3
|
|
Cost of goods sold
|
|
1,671.4
|
|
|
1,665.5
|
|
|
5.9
|
|
|||
Gross profit
|
|
$
|
486.6
|
|
|
$
|
486.2
|
|
|
$
|
0.4
|
|
|
|
|
|
|
|
|
||||||
Income tax expense
|
|
$
|
10.2
|
|
|
$
|
10.1
|
|
|
$
|
0.1
|
|
Net income
|
|
65.4
|
|
|
65.1
|
|
|
0.3
|
|
|
|
March 31, 2018
|
||||||||||
(in millions)
|
|
As reported
|
|
Balances without adoption of ASC 606
|
|
Effect of change higher/(lower)
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Trade accounts receivable, net
|
|
$
|
1,288.5
|
|
|
$
|
1,240.2
|
|
|
$
|
48.3
|
|
Inventories
|
|
921.9
|
|
|
930.3
|
|
|
(8.4
|
)
|
|||
Prepaid expenses and other current assets
|
|
174.6
|
|
|
165.8
|
|
|
8.8
|
|
|||
Liabilities
|
|
|
|
|
|
|
||||||
Trade accounts payable
|
|
$
|
1,011.7
|
|
|
$
|
997.8
|
|
|
$
|
13.9
|
|
Other accrued expenses
|
|
330.7
|
|
|
297.0
|
|
|
33.7
|
|
|||
Equity
|
|
|
|
|
|
|
||||||
Accumulated deficit
|
|
$
|
(868.4
|
)
|
|
$
|
(869.5
|
)
|
|
$
|
1.1
|
|
|
|
Three months ended March 31, 2017
|
||||||||||
(in millions)
|
|
As revised
|
|
Previously reported
|
|
Effect of change higher/(lower)
|
||||||
|
|
|
|
|
|
|
||||||
Warehousing, selling and administrative
|
|
$
|
228.5
|
|
|
$
|
226.1
|
|
|
$
|
2.4
|
|
Other income (expense), net
|
|
(6.7
|
)
|
|
(9.1
|
)
|
|
(2.4
|
)
|
Standard
|
|
Effective date
|
|
|
|
2017-09
|
Compensation - Stock Compensation - Scope of Modification Accounting
|
January 1, 2018
|
2017-04
|
Intangibles - Goodwill and Other - Simplifying the Test for Goodwill Impairment
|
January 1, 2018
|
2017-01
|
Business Combinations - Clarifying the Definition of a Business
|
January 1, 2018
|
2016-18
|
Statement of Cash Flows - Restricted Cash
|
January 1, 2018
|
2016-16
|
Income Taxes - Intra-Entity Transfers of Assets Other Than Inventory
|
January 1, 2018
|
2016-01
|
Financial Instrument - Recognition and Measurement of Financial Assets and Financial Liabilities
|
January 1, 2018
|
(in millions)
|
|
USA
|
|
Canada
|
|
EMEA
|
|
Rest of
World
|
|
Consolidated
|
||||||||||
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||
Chemical Distribution
|
|
$
|
1,160.8
|
|
|
$
|
232.0
|
|
|
$
|
538.4
|
|
|
$
|
99.9
|
|
|
$
|
2,031.1
|
|
Crop Sciences
|
|
—
|
|
|
69.4
|
|
|
—
|
|
|
—
|
|
|
69.4
|
|
|||||
Services
|
|
43.6
|
|
|
12.0
|
|
|
0.2
|
|
|
1.7
|
|
|
57.5
|
|
|||||
Total external customer net sales
|
|
$
|
1,204.4
|
|
|
$
|
313.4
|
|
|
$
|
538.6
|
|
|
$
|
101.6
|
|
|
$
|
2,158.0
|
|
(in millions)
|
|
|
||
Deferred revenue as of January 1, 2018
|
|
$
|
100.9
|
|
Deferred revenue as of March 31, 2018
|
|
80.5
|
|
|
Revenue recognized that was included in the deferred revenue balance at the beginning of the period
|
|
49.5
|
|
|
|
Three months ended
March 31, |
||||||
(in millions)
|
|
2018
|
|
2017
|
||||
Stock-based compensation expense
|
|
$
|
9.4
|
|
|
$
|
6.4
|
|
Restructuring charges
|
|
0.5
|
|
|
1.7
|
|
||
Other employee termination costs
|
|
2.4
|
|
|
1.7
|
|
||
Business transformation costs
|
|
—
|
|
|
9.1
|
|
||
Acquisition and integration related expenses
|
|
0.4
|
|
|
0.2
|
|
||
Other
|
|
0.9
|
|
|
0.7
|
|
||
Total other operating expenses, net
|
|
$
|
13.6
|
|
|
$
|
19.8
|
|
(in millions)
|
|
USA
|
|
Canada
|
|
EMEA
|
|
ROW
|
|
Other
|
|
Total
|
||||||||||||
Anticipated total costs
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee termination costs
|
|
$
|
16.5
|
|
|
$
|
5.8
|
|
|
$
|
22.5
|
|
|
$
|
6.2
|
|
|
$
|
5.8
|
|
|
$
|
56.8
|
|
Facility exit costs
|
|
24.1
|
|
|
—
|
|
|
3.7
|
|
|
0.2
|
|
|
—
|
|
|
28.0
|
|
||||||
Other exit costs
|
|
1.7
|
|
|
—
|
|
|
6.7
|
|
|
0.1
|
|
|
0.8
|
|
|
9.3
|
|
||||||
Total
|
|
$
|
42.3
|
|
|
$
|
5.8
|
|
|
$
|
32.9
|
|
|
$
|
6.5
|
|
|
$
|
6.6
|
|
|
$
|
94.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Incurred to date costs
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Inception of plans through March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee termination costs
|
|
$
|
16.5
|
|
|
$
|
5.8
|
|
|
$
|
22.5
|
|
|
$
|
6.2
|
|
|
$
|
5.8
|
|
|
$
|
56.8
|
|
Facility exit costs
|
|
22.4
|
|
|
—
|
|
|
3.7
|
|
|
0.2
|
|
|
—
|
|
|
26.3
|
|
||||||
Other exit costs
|
|
1.7
|
|
|
—
|
|
|
6.7
|
|
|
0.1
|
|
|
0.8
|
|
|
9.3
|
|
||||||
Total
|
|
$
|
40.6
|
|
|
$
|
5.8
|
|
|
$
|
32.9
|
|
|
$
|
6.5
|
|
|
$
|
6.6
|
|
|
$
|
92.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Inception of plans through December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee termination costs
|
|
$
|
16.5
|
|
|
$
|
5.7
|
|
|
$
|
22.5
|
|
|
$
|
6.2
|
|
|
$
|
5.8
|
|
|
$
|
56.7
|
|
Facility exit costs
|
|
22.2
|
|
|
—
|
|
|
3.7
|
|
|
0.2
|
|
|
—
|
|
|
26.1
|
|
||||||
Other exit costs
|
|
1.7
|
|
|
—
|
|
|
6.6
|
|
|
—
|
|
|
0.8
|
|
|
9.1
|
|
||||||
Total
|
|
$
|
40.4
|
|
|
$
|
5.7
|
|
|
$
|
32.8
|
|
|
$
|
6.4
|
|
|
$
|
6.6
|
|
|
$
|
91.9
|
|
(in millions)
|
|
January 1, 2018
|
|
Charge to
earnings
|
|
Cash
paid
|
|
Non-cash
and other
|
|
March 31, 2018
|
||||||||||
Employee termination costs
|
|
$
|
3.0
|
|
|
$
|
0.1
|
|
|
$
|
(0.9
|
)
|
|
$
|
0.1
|
|
|
$
|
2.3
|
|
Facility exit costs
|
|
10.2
|
|
|
0.2
|
|
|
(1.1
|
)
|
|
—
|
|
|
9.3
|
|
|||||
Other exit costs
|
|
(0.5
|
)
|
|
0.2
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.5
|
)
|
|||||
Total
|
|
$
|
12.7
|
|
|
$
|
0.5
|
|
|
$
|
(2.2
|
)
|
|
$
|
0.1
|
|
|
$
|
11.1
|
|
(in millions)
|
|
January 1, 2017
|
|
Charge to
earnings
|
|
Cash
paid
|
|
Non-cash
and other
|
|
December 31, 2017
|
||||||||||
Employee termination costs
|
|
$
|
6.9
|
|
|
$
|
2.9
|
|
|
$
|
(7.2
|
)
|
|
$
|
0.4
|
|
|
$
|
3.0
|
|
Facility exit costs
|
|
13.2
|
|
|
2.8
|
|
|
(5.5
|
)
|
|
(0.3
|
)
|
|
10.2
|
|
|||||
Other exit costs
|
|
—
|
|
|
(0.2
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(0.5
|
)
|
|||||
Total
|
|
$
|
20.1
|
|
|
$
|
5.5
|
|
|
$
|
(13.0
|
)
|
|
$
|
0.1
|
|
|
$
|
12.7
|
|
|
|
Three months ended
March 31, |
||||||
(in millions)
|
|
2018
|
|
2017
|
||||
Foreign currency transactions
|
|
$
|
(0.1
|
)
|
|
$
|
(2.1
|
)
|
Foreign currency denominated loans revaluation
|
|
1.2
|
|
|
(3.0
|
)
|
||
Undesignated foreign currency derivative instruments
(1)
|
|
(1.3
|
)
|
|
1.0
|
|
||
Debt amendment costs
|
|
—
|
|
|
(4.2
|
)
|
||
Non-operating retirement benefits
(2)
|
|
3.5
|
|
|
2.4
|
|
||
Other
|
|
(0.7
|
)
|
|
(0.8
|
)
|
||
Total other income (expense), net
|
|
$
|
2.6
|
|
|
$
|
(6.7
|
)
|
|
(1)
|
Refer to “
Note 14: Derivatives
” for more information.
|
(2)
|
Refer to “
Note 7: Employee benefit plans
” for more information.
|
|
|
Domestic - Defined Benefit Pension Plans
|
|
Foreign - Defined Benefit Pension Plans
|
||||||||||||
|
|
Three months ended
March 31, |
|
Three months ended
March 31, |
||||||||||||
(in millions)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Service cost
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.7
|
|
|
$
|
0.6
|
|
Interest cost
(2)
|
|
6.8
|
|
|
7.7
|
|
|
4.0
|
|
|
3.9
|
|
||||
Expected return on plan assets
(2)
|
|
(7.8
|
)
|
|
(7.7
|
)
|
|
(6.5
|
)
|
|
(6.3
|
)
|
||||
Net periodic benefit
|
|
$
|
(1.0
|
)
|
|
$
|
—
|
|
|
$
|
(1.8
|
)
|
|
$
|
(1.8
|
)
|
|
(1)
|
Service cost is included in warehouse, selling and administrative expenses.
|
(2)
|
These amounts are included in other income (expense), net.
|
|
|
Three months ended March 31,
|
||||||
(in millions, except per share data)
|
|
2018
|
|
2017
|
||||
Basic:
|
|
|
|
|
||||
Net income
|
|
$
|
65.4
|
|
|
$
|
22.6
|
|
Less: earnings allocated to participating securities
|
|
0.1
|
|
|
—
|
|
||
Earnings allocated to common shares outstanding
|
|
$
|
65.3
|
|
|
$
|
22.6
|
|
Weighted average common shares outstanding
|
|
140.9
|
|
|
139.4
|
|
||
Basic income per common share
|
|
$
|
0.46
|
|
|
$
|
0.16
|
|
Diluted:
|
|
|
|
|
||||
Net income
|
|
$
|
65.4
|
|
|
$
|
22.6
|
|
Less: earnings allocated to participating securities
|
|
—
|
|
|
—
|
|
||
Earnings allocated to common shares outstanding
|
|
$
|
65.4
|
|
|
$
|
22.6
|
|
Weighted average common shares outstanding
|
|
140.9
|
|
|
139.4
|
|
||
Effect of dilutive securities: stock compensation plans
(1)
|
|
1.1
|
|
|
1.4
|
|
||
Weighted average common shares outstanding – diluted
|
|
142.0
|
|
|
140.8
|
|
||
Diluted income per common share
|
|
$
|
0.46
|
|
|
$
|
0.16
|
|
|
(1)
|
Stock options to purchase
0.6 million
shares of common stock were outstanding during the three months ended
March 31, 2018
and
2017
, but were not included in the calculation of diluted income per share as the impact of these stock options would have been anti-dilutive.
|
(in millions)
|
|
Cash flow hedges
|
|
Defined
benefit
pension items
|
|
Currency
translation
items
|
|
Total
|
||||||||
Balance as of December 31, 2017
|
|
$
|
6.7
|
|
|
$
|
(1.2
|
)
|
|
$
|
(284.0
|
)
|
|
$
|
(278.5
|
)
|
Impact due to adoption of ASU 2017-12
(1)
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
||||
Other comprehensive income (loss) before reclassifications
|
|
9.1
|
|
|
—
|
|
|
(7.2
|
)
|
|
1.9
|
|
||||
Net current period other comprehensive income (loss)
|
|
$
|
9.6
|
|
|
$
|
—
|
|
|
$
|
(7.2
|
)
|
|
$
|
2.4
|
|
Balance as of March 31, 2018
|
|
$
|
16.3
|
|
|
$
|
(1.2
|
)
|
|
$
|
(291.2
|
)
|
|
$
|
(276.1
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2016
|
|
$
|
—
|
|
|
$
|
1.2
|
|
|
$
|
(391.1
|
)
|
|
$
|
(389.9
|
)
|
Other comprehensive income before reclassifications
|
|
—
|
|
|
—
|
|
|
18.2
|
|
|
18.2
|
|
||||
Net current period other comprehensive income (loss)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18.2
|
|
|
$
|
18.2
|
|
Balance as of March 31, 2017
|
|
$
|
—
|
|
|
$
|
1.2
|
|
|
$
|
(372.9
|
)
|
|
$
|
(371.7
|
)
|
|
(1)
|
Adjusted due to the adoption of ASU 2017-12 “Targeted Improvements to Accounting for Hedging Activities” on January 1, 2018. Refer to “
Note 2: Significant accounting policies
” for more information.
|
(in millions)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Amounts drawn under credit facilities
|
|
$
|
6.9
|
|
|
$
|
9.1
|
|
Bank overdrafts
|
|
1.6
|
|
|
4.3
|
|
||
Total short-term financing
|
|
$
|
8.5
|
|
|
$
|
13.4
|
|
(in millions)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Senior Term Loan Facilities:
|
|
|
|
|
||||
Term B Loan due 2024, variable interest rate of 4.38% and 4.07% at March 31, 2018 and December 31, 2017, respectively
|
|
$
|
1,977.8
|
|
|
$
|
2,277.8
|
|
Asset Backed Loan (ABL) Facilities:
|
|
|
|
|
||||
North American ABL Facility due 2020, variable interest rate of 3.38% and 5.00% at March 31, 2018 and December 31, 2017, respectively
|
|
296.6
|
|
|
155.0
|
|
||
North American ABL Term Loan due 2018, fully paid off at March 31, 2018 and variable interest rate of 4.44% at December 31, 2017
|
|
—
|
|
|
16.7
|
|
||
Senior Unsecured Notes:
|
|
|
|
|
||||
Senior Unsecured Notes due 2023, fixed interest rate of 6.75% at March 31, 2018 and December 31, 2017
|
|
399.5
|
|
|
399.5
|
|
||
Capital lease obligations
|
|
56.8
|
|
|
60.9
|
|
||
Total long-term debt before discount
|
|
$
|
2,730.7
|
|
|
$
|
2,909.9
|
|
Less: unamortized debt issuance costs and discount on debt
|
|
(26.7
|
)
|
|
(27.9
|
)
|
||
Total long-term debt
|
|
$
|
2,704.0
|
|
|
$
|
2,882.0
|
|
Less: current maturities
|
|
(20.5
|
)
|
|
(62.0
|
)
|
||
Total long-term debt, excluding current maturities
|
|
$
|
2,683.5
|
|
|
$
|
2,820.0
|
|
(in millions)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Property, plant and equipment, at cost
|
|
$
|
1,923.9
|
|
|
$
|
1,930.2
|
|
Less: accumulated depreciation
|
|
(940.1
|
)
|
|
(927.2
|
)
|
||
Property, plant and equipment, net
|
|
$
|
983.8
|
|
|
$
|
1,003.0
|
|
(in millions)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Capital lease assets, at cost
|
|
$
|
83.8
|
|
|
$
|
86.0
|
|
Less: accumulated depreciation
|
|
(28.9
|
)
|
|
(27.0
|
)
|
||
Capital lease assets, net
|
|
$
|
54.9
|
|
|
$
|
59.0
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
(in millions)
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
|
$
|
852.5
|
|
|
$
|
(593.0
|
)
|
|
$
|
259.5
|
|
|
$
|
853.5
|
|
|
$
|
(582.1
|
)
|
|
$
|
271.4
|
|
Other
|
|
182.8
|
|
|
(163.3
|
)
|
|
19.5
|
|
|
177.8
|
|
|
(161.5
|
)
|
|
16.3
|
|
||||||
Total intangible assets
|
|
$
|
1,035.3
|
|
|
$
|
(756.3
|
)
|
|
$
|
279.0
|
|
|
$
|
1,031.3
|
|
|
$
|
(743.6
|
)
|
|
$
|
287.7
|
|
|
|
Level 2
|
|
Level 3
|
||||||||||||
(in millions)
|
|
March 31, 2018
|
|
December 31, 2017
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||
Financial current assets:
|
|
|
|
|
|
|
|
|
||||||||
Forward currency contracts
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swap contracts
|
|
10.8
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
||||
Financial non-current assets:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap contracts
|
|
13.2
|
|
|
10.6
|
|
|
—
|
|
|
—
|
|
||||
Financial current liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Forward currency contracts
|
|
0.3
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
||||
Contingent consideration
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
||||
Financial non-current liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.4
|
|
(in millions)
|
|
Contingent
Consideration
|
||
Fair value as of December 31, 2017
|
|
$
|
0.4
|
|
Fair value adjustments
|
|
0.2
|
|
|
Fair value as of March 31, 2018
|
|
$
|
0.6
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
(in millions)
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value |
||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt including current portion (Level 2)
|
|
$
|
2,704.0
|
|
|
$
|
2,760.6
|
|
|
$
|
2,882.0
|
|
|
$
|
2,939.7
|
|
|
|
Three months ended March 31,
|
||||||
(in millions)
|
|
2018
|
|
2017
|
||||
Environmental liabilities at beginning of period
|
|
$
|
89.2
|
|
|
$
|
95.8
|
|
Revised obligation estimates
|
|
2.2
|
|
|
3.1
|
|
||
Environmental payments
|
|
(4.8
|
)
|
|
(5.3
|
)
|
||
Foreign exchange
|
|
0.1
|
|
|
0.1
|
|
||
Environmental liabilities at end of period
|
|
$
|
86.7
|
|
|
$
|
93.7
|
|
(in millions)
|
|
USA
|
|
Canada
|
|
EMEA
|
|
Rest of
World |
|
Other/
Eliminations (1) |
|
Consolidated
|
||||||||||||
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External customers
|
|
$
|
1,204.4
|
|
|
$
|
313.4
|
|
|
$
|
538.6
|
|
|
$
|
101.6
|
|
|
$
|
—
|
|
|
$
|
2,158.0
|
|
Inter-segment
|
|
35.1
|
|
|
2.0
|
|
|
1.4
|
|
|
0.1
|
|
|
(38.6
|
)
|
|
—
|
|
||||||
Total net sales
|
|
$
|
1,239.5
|
|
|
$
|
315.4
|
|
|
$
|
540.0
|
|
|
$
|
101.7
|
|
|
$
|
(38.6
|
)
|
|
$
|
2,158.0
|
|
Cost of goods sold
|
|
960.6
|
|
|
253.0
|
|
|
416.0
|
|
|
80.4
|
|
|
(38.6
|
)
|
|
1,671.4
|
|
||||||
Gross profit
|
|
$
|
278.9
|
|
|
$
|
62.4
|
|
|
$
|
124.0
|
|
|
$
|
21.3
|
|
|
$
|
—
|
|
|
$
|
486.6
|
|
Outbound freight and handling
|
|
49.9
|
|
|
10.4
|
|
|
17.0
|
|
|
2.0
|
|
|
—
|
|
|
79.3
|
|
||||||
Warehousing, selling and administrative
|
|
137.8
|
|
|
22.5
|
|
|
62.3
|
|
|
11.5
|
|
|
6.9
|
|
|
241.0
|
|
||||||
Adjusted EBITDA
|
|
$
|
91.2
|
|
|
$
|
29.5
|
|
|
$
|
44.7
|
|
|
$
|
7.8
|
|
|
$
|
(6.9
|
)
|
|
$
|
166.3
|
|
Other operating expenses, net
|
|
|
|
|
|
|
|
|
|
|
|
13.6
|
|
|||||||||||
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
31.4
|
|
|||||||||||
Amortization
|
|
|
|
|
|
|
|
|
|
|
|
13.4
|
|
|||||||||||
Interest expense, net
|
|
|
|
|
|
|
|
|
|
|
|
34.9
|
|
|||||||||||
Other income, net
|
|
|
|
|
|
|
|
|
|
|
|
(2.6
|
)
|
|||||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
10.2
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
$
|
65.4
|
|
||||||||||
Total assets
|
|
$
|
3,356.1
|
|
|
$
|
1,821.5
|
|
|
$
|
1,034.0
|
|
|
$
|
247.4
|
|
|
$
|
(764.7
|
)
|
|
$
|
5,694.3
|
|
(in millions)
|
|
USA
|
|
Canada
|
|
EMEA
|
|
Rest of
World |
|
Other/
Eliminations (1) |
|
Consolidated
|
||||||||||||
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External customers
|
|
$
|
1,150.9
|
|
|
$
|
307.3
|
|
|
$
|
439.7
|
|
|
$
|
100.9
|
|
|
$
|
—
|
|
|
$
|
1,998.8
|
|
Inter-segment
|
|
31.2
|
|
|
1.8
|
|
|
1.3
|
|
|
0.1
|
|
|
(34.4
|
)
|
|
—
|
|
||||||
Total net sales
|
|
$
|
1,182.1
|
|
|
$
|
309.1
|
|
|
$
|
441.0
|
|
|
$
|
101.0
|
|
|
$
|
(34.4
|
)
|
|
$
|
1,998.8
|
|
Cost of goods sold
|
|
919.2
|
|
|
253.3
|
|
|
339.2
|
|
|
82.1
|
|
|
(34.4
|
)
|
|
1,559.4
|
|
||||||
Gross profit
|
|
$
|
262.9
|
|
|
$
|
55.8
|
|
|
$
|
101.8
|
|
|
$
|
18.9
|
|
|
$
|
—
|
|
|
$
|
439.4
|
|
Outbound freight and handling
|
|
46.8
|
|
|
9.2
|
|
|
13.4
|
|
|
1.6
|
|
|
—
|
|
|
71.0
|
|
||||||
Warehousing, selling and administrative
|
|
134.8
|
|
|
22.0
|
|
|
54.7
|
|
|
10.6
|
|
|
6.4
|
|
|
228.5
|
|
||||||
Adjusted EBITDA
|
|
$
|
81.3
|
|
|
$
|
24.6
|
|
|
$
|
33.7
|
|
|
$
|
6.7
|
|
|
$
|
(6.4
|
)
|
|
$
|
139.9
|
|
Other operating expenses, net
|
|
|
|
|
|
|
|
|
|
|
|
19.8
|
|
|||||||||||
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
35.9
|
|
|||||||||||
Amortization
|
|
|
|
|
|
|
|
|
|
|
|
16.7
|
|
|||||||||||
Interest expense, net
|
|
|
|
|
|
|
|
|
|
|
|
35.8
|
|
|||||||||||
Loss on extinguishment of debt
|
|
|
|
|
|
|
|
|
|
|
|
0.8
|
|
|||||||||||
Other expense, net
|
|
|
|
|
|
|
|
|
|
|
|
6.7
|
|
|||||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
1.6
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
$
|
22.6
|
|
||||||||||
Total assets
|
|
$
|
3,640.2
|
|
|
$
|
1,975.5
|
|
|
$
|
908.2
|
|
|
$
|
227.9
|
|
|
$
|
(1,155.8
|
)
|
|
$
|
5,596.0
|
|
|
(1)
|
Other/Eliminations represents the elimination of intersegment transactions as well as unallocated corporate costs consisting of costs specifically related to parent company operations that do not directly benefit segments, either individually or collectively.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
we report Adjusted EBITDA to our lenders as required under the covenants of our credit agreements;
|
•
|
we consider gains (losses) on the acquisition, disposal and impairment of assets as resulting from investing decisions rather than ongoing operations;
|
•
|
Adjusted EBITDA excludes the effects of income taxes, as well as the effects of financing and investing activities by eliminating the effects of interest, depreciation and amortization expenses and therefore more closely measures our operational performance;
|
•
|
we use Adjusted EBITDA in setting performance incentive targets in order to align performance measurement with operational performance; and
|
•
|
other significant items, while periodically affecting our results, may vary significantly from period to period and have a disproportionate effect in a given period, which affects comparability of our results.
|
|
|
Three Months Ended
|
|
Favorable
(unfavorable)
|
|
% Change
|
|
Impact of
currency
(1)
|
||||||||||||||||
(in millions)
|
|
March 31, 2018
|
|
March 31, 2017
|
|
|||||||||||||||||||
Net sales
|
|
$
|
2,158.0
|
|
|
100.0
|
%
|
|
$
|
1,998.8
|
|
|
100.0
|
%
|
|
$
|
159.2
|
|
|
8.0
|
%
|
|
4.2
|
%
|
Cost of goods sold
|
|
1,671.4
|
|
|
77.5
|
%
|
|
1,559.4
|
|
|
78.0
|
%
|
|
(112.0
|
)
|
|
7.2
|
%
|
|
(4.2
|
)%
|
|||
Gross profit
|
|
$
|
486.6
|
|
|
22.5
|
%
|
|
$
|
439.4
|
|
|
22.0
|
%
|
|
$
|
47.2
|
|
|
10.7
|
%
|
|
4.2
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Outbound freight and handling
|
|
79.3
|
|
|
3.7
|
%
|
|
71.0
|
|
|
3.6
|
%
|
|
(8.3
|
)
|
|
11.7
|
%
|
|
(3.8
|
)%
|
|||
Warehousing, selling and administrative
|
|
241.0
|
|
|
11.2
|
%
|
|
228.5
|
|
|
11.4
|
%
|
|
(12.5
|
)
|
|
5.5
|
%
|
|
(4.0
|
)%
|
|||
Other operating expenses, net
|
|
13.6
|
|
|
0.6
|
%
|
|
19.8
|
|
|
1.0
|
%
|
|
6.2
|
|
|
(31.3
|
)%
|
|
(1.0
|
)%
|
|||
Depreciation
|
|
31.4
|
|
|
1.5
|
%
|
|
35.9
|
|
|
1.8
|
%
|
|
4.5
|
|
|
(12.5
|
)%
|
|
(2.2
|
)%
|
|||
Amortization
|
|
13.4
|
|
|
0.6
|
%
|
|
16.7
|
|
|
0.8
|
%
|
|
3.3
|
|
|
(19.8
|
)%
|
|
(1.2
|
)%
|
|||
Total operating expenses
|
|
$
|
378.7
|
|
|
17.5
|
%
|
|
$
|
371.9
|
|
|
18.6
|
%
|
|
$
|
(6.8
|
)
|
|
1.8
|
%
|
|
(3.5
|
)%
|
Operating income (loss)
|
|
$
|
107.9
|
|
|
5.0
|
%
|
|
$
|
67.5
|
|
|
3.4
|
%
|
|
$
|
40.4
|
|
|
59.9
|
%
|
|
8.6
|
%
|
Other (expense) income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
|
1.2
|
|
|
0.1
|
%
|
|
0.9
|
|
|
—
|
%
|
|
0.3
|
|
|
33.3
|
%
|
|
—
|
%
|
|||
Interest expense
|
|
(36.1
|
)
|
|
(1.7
|
)%
|
|
(36.7
|
)
|
|
(1.8
|
)%
|
|
0.6
|
|
|
(1.6
|
)%
|
|
(0.5
|
)%
|
|||
Loss on extinguishment of debt
|
|
—
|
|
|
—
|
%
|
|
(0.8
|
)
|
|
—
|
%
|
|
0.8
|
|
|
(100.0
|
)%
|
|
—
|
%
|
|||
Other income (expense), net
|
|
2.6
|
|
|
0.1
|
%
|
|
(6.7
|
)
|
|
(0.3
|
)%
|
|
9.3
|
|
|
N/M
|
|
|
3.0
|
%
|
|||
Total other expense
|
|
$
|
(32.3
|
)
|
|
(1.5
|
)%
|
|
$
|
(43.3
|
)
|
|
(2.2
|
)%
|
|
$
|
11.0
|
|
|
(25.4
|
)%
|
|
—
|
%
|
Income before income taxes
|
|
75.6
|
|
|
3.5
|
%
|
|
24.2
|
|
|
1.2
|
%
|
|
51.4
|
|
|
212.4
|
%
|
|
24.0
|
%
|
|||
Income tax expense
|
|
10.2
|
|
|
0.5
|
%
|
|
1.6
|
|
|
0.1
|
%
|
|
(8.6
|
)
|
|
537.5
|
%
|
|
31.3
|
%
|
|||
Net income
|
|
$
|
65.4
|
|
|
3.0
|
%
|
|
$
|
22.6
|
|
|
1.1
|
%
|
|
$
|
42.8
|
|
|
189.4
|
%
|
|
27.9
|
%
|
|
(1)
|
Foreign currency translation is included in the percentage change. Unfavorable impacts from foreign currency translation are designated with parentheses.
|
Net sales percentage change due to:
|
||
Acquisitions
|
0.4
|
%
|
Reported sales volumes
|
(3.5
|
)%
|
Sales pricing and product mix
|
6.9
|
%
|
Foreign currency translation
|
4.2
|
%
|
Total
|
8.0
|
%
|
Gross profit percentage change due to:
|
||
Acquisitions
|
0.6
|
%
|
Reported sales volumes
|
(3.5
|
)%
|
Sales pricing, product costs and other adjustments
|
9.4
|
%
|
Foreign currency translation
|
4.2
|
%
|
Total
|
10.7
|
%
|
(in millions)
|
|
USA
|
|
Canada
|
|
EMEA
|
|
Rest of
World
|
|
Other/
Eliminations
(1)
|
|
Consolidated
|
||||||||||||
|
|
Three months ended March 31, 2018
|
||||||||||||||||||||||
Net sales:
|
|
|
|
|
|
|
|
|
||||||||||||||||
External customers
|
|
$
|
1,204.4
|
|
|
$
|
313.4
|
|
|
$
|
538.6
|
|
|
$
|
101.6
|
|
|
$
|
—
|
|
|
$
|
2,158.0
|
|
Inter-segment
|
|
35.1
|
|
|
2.0
|
|
|
1.4
|
|
|
0.1
|
|
|
(38.6
|
)
|
|
—
|
|
||||||
Total net sales
|
|
$
|
1,239.5
|
|
|
$
|
315.4
|
|
|
$
|
540.0
|
|
|
$
|
101.7
|
|
|
$
|
(38.6
|
)
|
|
$
|
2,158.0
|
|
Cost of goods sold
|
|
960.6
|
|
|
253.0
|
|
|
416.0
|
|
|
80.4
|
|
|
(38.6
|
)
|
|
1,671.4
|
|
||||||
Gross profit
|
|
$
|
278.9
|
|
|
$
|
62.4
|
|
|
$
|
124.0
|
|
|
$
|
21.3
|
|
|
$
|
—
|
|
|
$
|
486.6
|
|
Outbound freight and handling
|
|
49.9
|
|
|
10.4
|
|
|
17.0
|
|
|
2.0
|
|
|
—
|
|
|
79.3
|
|
||||||
Warehousing, selling and administrative
|
|
137.8
|
|
|
22.5
|
|
|
62.3
|
|
|
11.5
|
|
|
6.9
|
|
|
241.0
|
|
||||||
Adjusted EBITDA
|
|
$
|
91.2
|
|
|
$
|
29.5
|
|
|
$
|
44.7
|
|
|
$
|
7.8
|
|
|
$
|
(6.9
|
)
|
|
$
|
166.3
|
|
Other operating expenses, net
|
|
|
|
|
|
|
|
13.6
|
|
|||||||||||||||
Depreciation
|
|
|
|
|
|
|
|
31.4
|
|
|||||||||||||||
Amortization
|
|
|
|
|
|
|
|
13.4
|
|
|||||||||||||||
Interest expense, net
|
|
|
|
|
|
|
|
34.9
|
|
|||||||||||||||
Other income, net
|
|
|
|
|
|
|
|
(2.6
|
)
|
|||||||||||||||
Income tax expense
|
|
|
|
|
|
|
|
10.2
|
|
|||||||||||||||
Net income
|
|
|
|
|
|
|
|
$
|
65.4
|
|
(in millions)
|
|
USA
|
|
Canada
|
|
EMEA
|
|
Rest of
World |
|
Other/
Eliminations
(1)
|
|
Consolidated
|
||||||||||||
|
|
Three months ended March 31, 2017
|
||||||||||||||||||||||
Net sales:
|
|
|
|
|
|
|
|
|
||||||||||||||||
External customers
|
|
$
|
1,150.9
|
|
|
$
|
307.3
|
|
|
$
|
439.7
|
|
|
$
|
100.9
|
|
|
$
|
—
|
|
|
$
|
1,998.8
|
|
Inter-segment
|
|
31.2
|
|
|
1.8
|
|
|
1.3
|
|
|
0.1
|
|
|
(34.4
|
)
|
|
—
|
|
||||||
Total net sales
|
|
$
|
1,182.1
|
|
|
$
|
309.1
|
|
|
$
|
441.0
|
|
|
$
|
101.0
|
|
|
$
|
(34.4
|
)
|
|
$
|
1,998.8
|
|
Cost of goods sold
|
|
919.2
|
|
|
253.3
|
|
|
339.2
|
|
|
82.1
|
|
|
(34.4
|
)
|
|
1,559.4
|
|
||||||
Gross profit
|
|
$
|
262.9
|
|
|
$
|
55.8
|
|
|
$
|
101.8
|
|
|
$
|
18.9
|
|
|
$
|
—
|
|
|
$
|
439.4
|
|
Outbound freight and handling
|
|
46.8
|
|
|
9.2
|
|
|
13.4
|
|
|
1.6
|
|
|
—
|
|
|
71.0
|
|
||||||
Warehousing, selling and administrative
|
|
134.8
|
|
|
22.0
|
|
|
54.7
|
|
|
10.6
|
|
|
6.4
|
|
|
228.5
|
|
||||||
Adjusted EBITDA
|
|
$
|
81.3
|
|
|
$
|
24.6
|
|
|
$
|
33.7
|
|
|
$
|
6.7
|
|
|
$
|
(6.4
|
)
|
|
$
|
139.9
|
|
Other operating expenses, net
|
|
|
|
|
|
|
|
19.8
|
|
|||||||||||||||
Depreciation
|
|
|
|
|
|
|
|
35.9
|
|
|||||||||||||||
Amortization
|
|
|
|
|
|
|
|
16.7
|
|
|||||||||||||||
Interest expense, net
|
|
|
|
|
|
|
|
35.8
|
|
|||||||||||||||
Loss on extinguishment of debt
|
|
|
|
|
|
|
|
0.8
|
|
|||||||||||||||
Other expense, net
|
|
|
|
|
|
|
|
6.7
|
|
|||||||||||||||
Income tax expense
|
|
|
|
|
|
|
|
1.6
|
|
|||||||||||||||
Net income
|
|
|
|
|
|
|
|
$
|
22.6
|
|
|
(1)
|
Other/Eliminations represents the elimination of intersegment transactions as well as unallocated corporate costs consisting of costs specifically related to parent company operations that do not directly benefit segments, either individually or collectively.
|
Net sales percentage change due to:
|
|
Gross profit percentage change due to:
|
||||||
Reported sales volumes
|
|
(0.9
|
)%
|
|
Reported sales volumes
|
|
(0.9
|
)%
|
Sales pricing and product mix
|
|
5.5
|
%
|
|
Sales pricing, product costs and other adjustments
|
|
7.0
|
%
|
Total
|
|
4.6
|
%
|
|
Total
|
|
6.1
|
%
|
Net sales percentage change due to:
|
|
Gross profit percentage change due to:
|
||||||
Reported sales volumes
|
|
(3.1
|
)%
|
|
Reported sales volumes
|
|
(3.1
|
)%
|
Sales pricing and product mix
|
|
0.5
|
%
|
|
Sales pricing, product costs and other adjustments
|
|
9.9
|
%
|
Foreign currency translation
|
|
4.6
|
%
|
|
Foreign currency translation
|
|
5.0
|
%
|
Total
|
|
2.0
|
%
|
|
Total
|
|
11.8
|
%
|
Net sales percentage change due to:
|
|
Gross profit percentage change due to:
|
||||||
Acquisitions
|
|
1.5
|
%
|
|
Acquisitions
|
|
1.8
|
%
|
Reported sales volumes
|
|
(6.5
|
)%
|
|
Reported sales volumes
|
|
(6.5
|
)%
|
Sales pricing and product mix
|
|
12.6
|
%
|
|
Sales pricing, product costs and other adjustments
|
|
11.3
|
%
|
Foreign currency translation
|
|
14.9
|
%
|
|
Foreign currency translation
|
|
15.2
|
%
|
Total
|
|
22.5
|
%
|
|
Total
|
|
21.8
|
%
|
Net sales percentage change due to:
|
|
Gross profit percentage change due to:
|
||||||
Acquisitions
|
|
2.1
|
%
|
|
Acquisitions
|
|
4.2
|
%
|
Reported sales volumes
|
|
(28.3
|
)%
|
|
Reported sales volumes
|
|
(28.3
|
)%
|
Sales pricing and product mix
|
|
22.9
|
%
|
|
Sales pricing, product costs and other adjustments
|
|
33.6
|
%
|
Foreign currency translation
|
|
4.0
|
%
|
|
Foreign currency translation
|
|
3.2
|
%
|
Total
|
|
0.7
|
%
|
|
Total
|
|
12.7
|
%
|
|
|
Three months ended
|
||||||
(in millions)
|
|
March 31, 2018
|
|
March 31, 2017
|
||||
Net cash used by operating activities
|
|
$
|
(139.0
|
)
|
|
$
|
(77.1
|
)
|
Net cash used by investing activities
|
|
(22.9
|
)
|
|
(21.7
|
)
|
||
Net cash (used) provided by financing activities
|
|
(186.8
|
)
|
|
57.5
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
(2.4
|
)
|
|
5.5
|
|
||
Net decrease in cash and cash equivalents
|
|
$
|
(351.1
|
)
|
|
$
|
(35.8
|
)
|
•
|
general economic conditions, particularly fluctuations in industrial production and the demands of our customers;
|
•
|
disruptions in the supply of chemicals we distribute or our customers’ or producers' operations;
|
•
|
termination or change of contracts or relationships with customers or producers on short notice;
|
•
|
the price and availability of chemicals, or a decline in the demand for chemicals;
|
•
|
our ability to pass through cost increases to our customers;
|
•
|
our ability to meet customer demand for a product;
|
•
|
trends in oil and gas prices;
|
•
|
competitive pressures in the chemical distribution industry;
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•
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consolidation of our competitors;
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•
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our ability to execute strategic investments, including pursuing acquisitions and/or dispositions, and successfully integrating and operating acquired companies;
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•
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liabilities associated with acquisitions, dispositions and ventures;
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•
|
potential impairment of goodwill;
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•
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inability to generate sufficient working capital;
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•
|
our ability to sustain profitability;
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•
|
our ability to implement and efficiently operate the systems needed to manage our operations;
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•
|
the risks associated with security threats, including cybersecurity threats;
|
•
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increases in transportation costs and changes in our relationship with third party carriers;
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•
|
the risks associated with hazardous materials and related activities;
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•
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accidents, safety failures, environmental damage, product quality issues, major or systemic delivery failures involving our distribution network or the products we carry or adverse health effects or other harm related to the materials we blend, manage, handle, store, sell or transport;
|
•
|
challenges associated with international operations, including securing producers and personnel, import/export requirements, compliance with foreign laws and international business laws and changes in economic or political conditions;
|
•
|
our ability to effectively implement our strategies or achieve our business goals;
|
•
|
exposure to interest rate and currency fluctuations;
|
•
|
evolving laws and regulations relating to hydraulic fracturing and risks associated with chemicals used in hydraulic fracturing;
|
•
|
losses due to potential product liability claims and recalls and asbestos claims;
|
•
|
compliance with extensive environmental, health and safety laws, including laws relating to our environmental services businesses and the investigation and remediation of contamination, that could require material expenditures or changes in our operations;
|
•
|
general regulatory and tax requirements;
|
•
|
operational risks for which we may not be adequately insured;
|
•
|
ongoing litigation and other legal and regulatory actions and risks, including asbestos claims;
|
•
|
loss of key personnel;
|
•
|
labor disruptions and other costs associated with the unionized portion of our workforce;
|
•
|
negative developments affecting our pension plans and multi-employer pensions;
|
•
|
changes in legislation, regulation and government policy; and
|
•
|
our substantial indebtedness and the restrictions imposed by our debt instruments and indenture.
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Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Exhibit Number
|
Exhibit Description
|
|
|
|
|
|
Offer Letter, dated February 1, 2018, by and between Univar Inc. and David Jukes.
|
|
|
|
|
|
Form of Employee Stock Option Agreement for awards granted on or after February 7, 2018, 2017 Omnibus Equity Incentive Plan.
|
|
|
|
|
|
Stock Option Agreement, dated as of February 7, 2018, by and between Univar Inc. and Stephen D. Newlin, 2017 Omnibus Equity Incentive Plan.
|
|
|
|
|
|
Form of Employee Restricted Stock Unit Agreement for awards granted on or after February 7, 2018, 2017 Omnibus Equity Incentive Plan.
|
|
|
|
|
|
Restricted Stock Unit Agreement, dated as of February 7, 2018, by and between Univar Inc. and Stephen D. Newlin, 2017 Omnibus Equity Incentive Plan.
|
|
|
|
|
|
Form of Employee Performance-Based Restricted Stock Unit Agreement for awards granted on or after February 7, 2018, 2017 Omnibus Equity Incentive Plan.
|
|
|
|
|
|
Performance-Based Restricted Stock Unit Agreement dated as of February 7, 2018, by and between Univar Inc. and Stephen D. Newlin, 2017 Omnibus Equity Incentive Plan.
|
|
|
|
|
|
Form of Director Deferred Share Unit Agreement for awards granted on or after February 7, 2018, 2017 Omnibus Equity Incentive Plan.
|
|
|
|
|
|
Form of Director Restricted Stock Agreement for awards granted on or after February 7, 2018, 2017 Omnibus Equity Incentive Plan.
|
|
|
|
|
|
Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
101.1*
|
|
Interactive Data File
|
†
|
Identifies each management compensation plan or arrangement.
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
Univar Inc.
(Registrant)
|
||
|
|
|
By:
|
|
/s/ David C. Jukes
|
|
|
David C. Jukes
President and Chief Executive Officer
|
By:
|
|
/s/ Carl J. Lukach
|
|
|
Carl J. Lukach
Executive Vice President, Chief Financial Officer
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|
No information found
Customers
Customer name | Ticker |
---|---|
Sonoco Products Company | SON |
No Suppliers Found
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|