Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Distillery products | $ | 4,663 | $ | 5,594 | ||||
Ingredient solutions | 358 | 1,110 | ||||||
Other (a) | — | — | ||||||
Corporate | 830 | 1,179 | ||||||
Total | $ | 5,851 | $ | 7,883 |
(a) | Significant assets from this segment were sold February 8, 2013 as previously described. |
Year Ended December 31, | |||||||
ICP’s Operating results: | 2014 | 2013 | |||||
Net sales(a) | $ | 236,486 | $ | 193,682 | |||
Cost of sales and expenses(b) | (196,551 | ) | (194,519 | ) | |||
Net income (loss) | $ | 39,935 | $ | (837 | ) |
(a) | Includes related party sales to MGPI of $34,615 and $7,736 for the years ended December 31, 2014 and 2013, respectively. |
(b) | Includes depreciation and amortization of $2,847 and $4,523 for the years ended December 31, 2014 and 2013, respectively. |
NOTE 13: | DERIVATIVE INSTRUMENTS |
Year Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Interest costs charged to expense | $ | 816 | $ | 1,118 | |||||
Plus: Interest cost capitalized | 107 | 108 | |||||||
Total | $ | 923 | $ | 1,226 |
(1) | (2) | (3) = (1) - (2) | |||||||||||
Gross Amounts of Recognized Assets (Liabilities) | Gross Amounts offset in the Balance Sheet | Net Amounts of Assets (Liabilities) presented in the Balance Sheet | |||||||||||
December 31, 2014: | |||||||||||||
Investment in bonds | $ | 7,000 | $ | 7,000 | $ | 0 | |||||||
Capital lease obligation | $ | (7,000 | ) | $ | (7,000 | ) | $ | 0 | |||||
December 31, 2013: | |||||||||||||
Investment in bonds | $ | 7,000 | $ | 7,000 | $ | 0 | |||||||
Capital lease obligation | $ | (7,000 | ) | $ | (7,000 | ) | $ | 0 |
Details about Accumulated Other Comprehensive Income Components | Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) | Affected Line Item in the Statement of Operations | ||||
Pension Plan Items: | ||||||
Recognized net actuarial loss | $ | 20 | (a) | |||
Settlement loss | 50 | (a) | ||||
70 | Total before tax | |||||
155 | Tax benefit | |||||
$ | (85 | ) | Net of tax | |||
Post Employment Benefit Items: | ||||||
Amortization of prior service cost | $ | (369 | ) | (a) | ||
Recognized net actuarial loss | 18 | (a) | ||||
Plan amendment and curtailment | 1,183 | |||||
Recognition of prior service cost due to curtailment | (52 | ) | ||||
780 | Total before tax | |||||
6 | Tax benefit | |||||
$ | 774 | Net of tax | ||||
Reclassifications for 2014 | $ | 689 | Net of tax |
(a) | These accumulated other comprehensive income components are included in the computation of net period pension cost. See Note 8: Employee Benefit Plans for additional details. |
December 31, | |||||||
2014 | 2013 | ||||||
Identifiable Assets | |||||||
Distillery products | $ | 98,791 | $ | 97,875 | |||
Ingredient solutions | 23,324 | 24,954 | |||||
Other(a) | — | — | |||||
Corporate | 38,484 | 28,500 | |||||
Total | $ | 160,599 | $ | 151,329 |
(a) | Assets from this segment were sold February 8, 2013 as previously described. |
Year Ended December 31, | |||||||
2014 | 2013 | ||||||
ICP (30% interest) | $ | 10,098 | $ | (251 | ) | ||
DMI (50% interest) | 39 | 47 | |||||
Total | $ | 10,137 | $ | (204 | ) |
NOTE 17: | PROPERTY AND BUSINESS INTERRUPTION INSURANCE CLAIMS AND RECOVERIES |
Year Ended December 31, | |||||||||||
January Fire (Indiana Facility) | October Fire (Atchison Facility) | Total | |||||||||
Total insurance recoveries | $ | 9,375 | $ | — | $ | 9,375 | |||||
Insurance recoveries - interruption of business | $ | 925 | $ | — | $ | 925 | |||||
Less: out-of-pocket expenses related to interruption of business in Cost of Sales | 447 | 170 | 617 | ||||||||
Net reduction (increase) to Cost of Sales | $ | 478 | $ | (170 | ) | $ | 308 | ||||
Insurance recoveries - property damage | $ | 8,450 | $ | — | $ | 8,450 | |||||
Less: Net book value of property loss in Insurance Recoveries | 160 | — | 160 | ||||||||
Insurance Recoveries | $ | 8,290 | $ | — | $ | 8,290 |
NOTE 12: | SUPPLEMENTAL CASH FLOW INFORMATION |
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Non-cash investing and financing activities: | ||||||||
Purchase of property and equipment in Accounts Payable | $ | 574 | $ | 1,675 | ||||
Additional cash payment information: | ||||||||
Interest paid | 903 | 1,286 | ||||||
Income tax (paid)/ refunds received | (146 | ) | (254 | ) | ||||
Decrease in revolving credit facility/increase in fixed asset sub-line facility | 7,004 | — |
NOTE 7: | COMMITMENTS AND CONTINGENCIES |
NOTE 10: | CONCENTRATIONS |
Capital Leases | ||||||||||||||||||||||||||||
Year Ending December 31, | Credit Agreement | Long-Term Debt | Minimum Lease Payments | Less Interest | Net Present Value | Total Debt | Operating Leases | |||||||||||||||||||||
2015 | $ | — | $ | 368 | $ | 1,316 | $ | 72 | $ | 1,245 | $ | 1,613 | $ | 3,641 | ||||||||||||||
2016 | — | 36 | 1,317 | 39 | 1,277 | 1,313 | 2,457 | |||||||||||||||||||||
2017 | 6,670 | — | 694 | 7 | 687 | 7,357 | 1,466 | |||||||||||||||||||||
2018 | — | — | — | — | — | — | 320 | |||||||||||||||||||||
2019 | — | — | — | — | — | — | 235 | |||||||||||||||||||||
Thereafter | — | — | — | — | — | — | 1,304 | |||||||||||||||||||||
Total | $ | 6,670 | $ | 404 | $ | 3,327 | $ | 118 | $ | 3,209 | $ | 10,283 | $ | 9,423 |
NOTE 4: | CORPORATE BORROWINGS AND CAPITAL LEASE OBLIGATIONS |
December 31, | |||||||
2014 | 2013 | ||||||
Credit Agreement - Revolver, 2.269% (variable interest rate) | $ | — | $ | 18,000 | |||
Credit Agreement - Fixed Asset Sub-Line term loan, 2.655% (variable interest rate) | 6,670 | — | |||||
Secured Promissory Note, 6.76% (variable interest rate), due monthly to July, 2016. | 404 | 746 | |||||
Water Cooling System Capital Lease Obligation, 2.61%, due monthly to May, 2017 | 3,209 | 4,422 | |||||
Total | 10,283 | 23,168 | |||||
Less current maturities of long term debt | (2,613 | ) | (1,557 | ) | |||
Long-term debt | $ | 7,670 | $ | 21,611 |
• | incur additional indebtedness; |
• | pay cash dividends or make distributions; |
• | dispose of assets; |
• | create liens on Company assets; |
• | pledge the fixed and real property assets; or |
• | merge or consolidate. |
(1) | (2) | (3) = (1) - (2) | |||||||||||
Gross Amounts of Recognized Assets (Liabilities) | Gross Amounts offset in the Balance Sheet | Net Amounts of Assets (Liabilities) presented in the Balance Sheet | |||||||||||
December 31, 2014: | |||||||||||||
Investment in bonds | $ | 7,000 | $ | 7,000 | $ | 0 | |||||||
Capital lease obligation | $ | (7,000 | ) | $ | (7,000 | ) | $ | 0 | |||||
December 31, 2013: | |||||||||||||
Investment in bonds | $ | 7,000 | $ | 7,000 | $ | 0 | |||||||
Capital lease obligation | $ | (7,000 | ) | $ | (7,000 | ) | $ | 0 |
Capital Leases | ||||||||||||||||||||||||||||
Year Ending December 31, | Credit Agreement | Long-Term Debt | Minimum Lease Payments | Less Interest | Net Present Value | Total Debt | Operating Leases | |||||||||||||||||||||
2015 | $ | — | $ | 368 | $ | 1,316 | $ | 72 | $ | 1,245 | $ | 1,613 | $ | 3,641 | ||||||||||||||
2016 | — | 36 | 1,317 | 39 | 1,277 | 1,313 | 2,457 | |||||||||||||||||||||
2017 | 6,670 | — | 694 | 7 | 687 | 7,357 | 1,466 | |||||||||||||||||||||
2018 | — | — | — | — | — | — | 320 | |||||||||||||||||||||
2019 | — | — | — | — | — | — | 235 | |||||||||||||||||||||
Thereafter | — | — | — | — | — | — | 1,304 | |||||||||||||||||||||
Total | $ | 6,670 | $ | 404 | $ | 3,327 | $ | 118 | $ | 3,209 | $ | 10,283 | $ | 9,423 |
Year Ended December 31, | |||||||||
2014 | 2013 | ||||||||
USDA grant | $ | 2,486 | $ | 3,043 | |||||
LCD reimbursement | 1,125 | 882 | |||||||
Lawrenceburg reimbursement | 488 | — | |||||||
Total | $ | 4,099 | $ | 3,925 |
NOTE 15: | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS |
NOTE 3: | EQUITY METHOD INVESTMENTS |
Year Ended December 31, | |||||||
ICP’s Operating results: | 2014 | 2013 | |||||
Net sales(a) | $ | 236,486 | $ | 193,682 | |||
Cost of sales and expenses(b) | (196,551 | ) | (194,519 | ) | |||
Net income (loss) | $ | 39,935 | $ | (837 | ) |
(a) | Includes related party sales to MGPI of $34,615 and $7,736 for the years ended December 31, 2014 and 2013, respectively. |
(b) | Includes depreciation and amortization of $2,847 and $4,523 for the years ended December 31, 2014 and 2013, respectively. |
Year Ended December 31, | |||||||
2014 | 2013 | ||||||
ICP (30% interest) | $ | 10,098 | $ | (251 | ) | ||
DMI (50% interest) | 39 | 47 | |||||
Total | $ | 10,137 | $ | (204 | ) |
December 31, | |||||||
2014 | 2013 | ||||||
ICP (30% interest) (a) | $ | 11,924 | $ | 6,653 | |||
DMI (50% interest) | 449 | 470 | |||||
Total | $ | 12,373 | $ | 7,123 |
(a) | During the year ended December 31, 2014, the Company received a $4,835 cash distribution from ICP, which reduced the Company's investment in ICP. |
December 31, | |||||||
2014 | 2013 | ||||||
ICP (30% interest) (a) | $ | 11,924 | $ | 6,653 | |||
DMI (50% interest) | 449 | 470 | |||||
Total | $ | 12,373 | $ | 7,123 |
(a) | During the year ended December 31, 2014, the Company received a $4,835 cash distribution from ICP, which reduced the Company's investment in ICP. |
NOTE 5: | INCOME TAXES |
Year Ended December 31, | |||||||
2014 | 2013 | ||||||
Current: | |||||||
Federal | $ | — | $ | (16 | ) | ||
State | 229 | 29 | |||||
229 | 13 | ||||||
Deferred: | |||||||
Federal | 5,010 | (642 | ) | ||||
State | (2,974 | ) | (85 | ) | |||
2,036 | (727 | ) | |||||
Total | $ | 2,265 | $ | (714 | ) |
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
\"Expected\" provision at federal statutory rate | $ | 9,116 | $ | (2,282 | ) | |||
State income taxes | 709 | (705 | ) | |||||
Change in valuation allowance | (7,618 | ) | 2,222 | |||||
Other | 58 | 51 | ||||||
Provision (benefit) for income taxes | $ | 2,265 | $ | (714 | ) | |||
Effective tax rate | 8.7 | % | (11.0 | )% |
December 31, | ||||||||
2014 | 2013 | |||||||
Deferred income tax assets: | ||||||||
Post-retirement liability | $ | 1,968 | $ | 1,928 | ||||
Deferred income | 1,637 | 1,568 | ||||||
Stock based compensation | 2,108 | 2,106 | ||||||
Federal operating loss carryforwards | 5,029 | 12,938 | ||||||
Capital loss carryforward | 1,311 | 926 | ||||||
State tax credits | 2,423 | 3,022 | ||||||
State operating loss carryforwards | 4,574 | 8,277 | ||||||
Other | 3,405 | 4,049 | ||||||
Less: valuation allowance | (3,829 | ) | (11,275 | ) | ||||
Gross deferred income tax assets | 18,626 | 23,539 | ||||||
Deferred income tax liabilities: | ||||||||
Fixed assets | (18,823 | ) | (17,919 | ) | ||||
Equity method investment | (1,176 | ) | (391 | ) | ||||
Other | — | (5,229 | ) | |||||
Gross deferred income tax liabilities | (19,999 | ) | (23,539 | ) | ||||
Net deferred income tax liability | $ | (1,373 | ) | $ | — |
Valuation allowance | |||
Balance at January 1, 2013 | $ | 9,053 | |
Additions: | |||
Charges to costs and expenses | 2,070 | ||
Charges to other accounts | 152 | ||
Balance at December 31, 2013 | $ | 11,275 | |
Reductions | 7,446 | ||
Balance at December 31, 2014 | $ | 3,829 |
Years Ended December 31, | ||||||||
2014 | 2013 | |||||||
Beginning of year balance | $ | 566 | $ | 445 | ||||
Additions for tax positions of prior years | 8 | 62 | ||||||
Additions for tax positions of the current year | 39 | 59 | ||||||
End of year balance | $ | 613 | $ | 566 |
• | Future realization of deferred tax assets is dependent on projected taxable income of the appropriate character from our continuing operations. |
• | Future reversals of existing temporary differences are heavily weighted sources of objectively verifiable positive evidence. |
• | The long carryback and carryforward periods permitted under the tax law are objectively verified positive evidence. |
• | Tax planning strategies can be, depending on their nature, heavily-weighted sources of objectively verifiable positive evidence when the strategies are available and can be reasonably executed. Tax-planning strategies are actions that are prudent and feasible, considering current operations and strategic plans, which the Company ordinarily might not take, but would take to prevent a tax benefit from expiring unused. Tax planning strategies, if available, may accelerate the recovery of a deferred tax asset so the tax benefit of the deferred tax asset can be carried back. |
• | Projections of future taxable income exclusive of reversing temporary differences are a source of positive evidence when the projections are combined with a history of recent profits and current financial trends and can be reasonably estimated. During 2014, the Company achieved cumulative income for a recent period of the last three years, which was regarded as a significant piece of evidence in management's decision to also rely on projections of future operating income in assessing the need for and amount of the valuation allowance for deferred tax assets. |
NOTE 1: | NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Buildings and improvements | 20 – 40 years |
Transportation equipment | 5 – 6 years |
Machinery and equipment | 10 – 12 years |
Year Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Interest costs charged to expense | $ | 816 | $ | 1,118 | |||||
Plus: Interest cost capitalized | 107 | 108 | |||||||
Total | $ | 923 | $ | 1,226 |
Year Ended December 31, | |||||||||
2014 | 2013 | ||||||||
USDA grant | $ | 2,486 | $ | 3,043 | |||||
LCD reimbursement | 1,125 | 882 | |||||||
Lawrenceburg reimbursement | 488 | — | |||||||
Total | $ | 4,099 | $ | 3,925 |
• | Future realization of deferred tax assets is dependent on projected taxable income of the appropriate character from our continuing operations. |
• | Future reversals of existing temporary differences are heavily weighted sources of objectively verifiable positive evidence. |
• | The long carryback and carryforward periods permitted under the tax law are objectively verified positive evidence. |
• | Tax planning strategies can be, depending on their nature, heavily-weighted sources of objectively verifiable positive evidence when the strategies are available and can be reasonably executed. Tax-planning strategies are actions that are prudent and feasible, considering current operations and strategic plans, which the Company ordinarily might not take, but would take to prevent a tax benefit from expiring unused. Tax planning strategies, if available, may accelerate the recovery of a deferred tax asset so the tax benefit of the deferred tax asset can be carried back. |
• | Projections of future taxable income exclusive of reversing temporary differences are a source of positive evidence when the projections are combined with a history of recent profits and current financial trends and can be reasonably estimated. During 2014, the Company achieved cumulative income for a recent period of the last three years, which was regarded as a significant piece of evidence in management's decision to also rely on projections of future operating income in assessing the need for and amount of the valuation allowance for deferred tax assets. |
NOTE 8: | EMPLOYEE BENEFIT PLANS |
Pension Benefit Plans | Post-Employment Benefit Plan | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Change in benefit obligation: | |||||||||||||||||
Beginning of year | $ | 2,190 | $ | 2,690 | $ | 4,827 | $ | 5,700 | |||||||||
Service cost | — | — | 72 | 127 | |||||||||||||
Interest cost | 87 | 83 | 149 | 165 | |||||||||||||
Actuarial loss (gain) | 35 | (241 | ) | 1,632 | (558 | ) | |||||||||||
Negative plan amendment benefit | — | — | (1,183 | ) | — | ||||||||||||
Benefits paid | (296 | ) | (342 | ) | (571 | ) | (607 | ) | |||||||||
Benefit obligation at end of year | $ | 2,016 | $ | 2,190 | $ | 4,926 | $ | 4,827 |
Pension Benefit Plans | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Fair value of plan assets at beginning of year | $ | 1,550 | $ | 1,720 | ||||
Actual return on plan assets | 46 | 172 | ||||||
Employer contributions | — | — | ||||||
Benefits paid | (296 | ) | (342 | ) | ||||
Fair value of plan assets at end of year | $ | 1,300 | $ | 1,550 |
Pension Benefit Plans | Post-Employment Benefit Plan | ||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Discount rate | 3.58 | % | 4.11 | % | 2.99 | % | 3.95 | % | |||||
Measurement date | December 31, 2014 | December 31, 2013 | December 31, 2014 | December 31, 2013 |
Pension Benefit Plans | Post-Employment Benefit Plan | |||||||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Expected return on Assets | 7.00 | % | 7.00 | % | — | — | ||||||
Discount rate | 4.11 | % | 3.19 | % | 3.95 / 3.39% | (a) | 2.98 | % | ||||
Average compensation increase | n/a | n/a | n/a | n/a |
(a) | The pension benefit plan was amended effective April 16, 2014 requiring a re-measurement valuation. The discount rate for 2014 was based on measurement dates of December 31, 2013 and April 16, 2014. |
Pension Benefit Plans | Post-Employment Benefit Plan | |||||||||||||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||
Service cost | $ | — | $ | — | $ | 72 | $ | 127 | ||||||||||
Interest cost | 87 | 83 | 149 | 165 | ||||||||||||||
Expected return on assets | (104 | ) | (114 | ) | — | — | ||||||||||||
Amortization of prior service cost | — | — | (369 | ) | (647 | ) | ||||||||||||
Recognized net actuarial loss | 21 | 66 | 18 | 28 | ||||||||||||||
Settlement losses | 50 | 52 | — | — | ||||||||||||||
Net benefit cost | $ | 54 | $ | 87 | $ | (130 | ) | $ | (327 | ) |
Pension Benefit Plans | Post-Employment Benefit Plan | ||||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net actuarial (loss) gain | $ | (92 | ) | $ | 298 | $ | (1,632 | ) | $ | 558 | |||||||
Settlement losses | 50 | 52 | — | — | |||||||||||||
Plan amendment and curtailment | — | — | 1,183 | — | |||||||||||||
Recognized net actuarial loss | 20 | 66 | 18 | 28 | |||||||||||||
Amortization of prior service cost | — | — | (369 | ) | (647 | ) | |||||||||||
Recognition of prior service cost due to curtailments | — | — | (52 | ) | — | ||||||||||||
Total other comprehensive income (loss), pre-tax | (22 | ) | 416 | (852 | ) | (61 | ) | ||||||||||
Income tax expense (benefit) | (155 | ) | 166 | (6 | ) | (22 | ) | ||||||||||
Total other comprehensive income (loss), net of tax | $ | 133 | $ | 250 | $ | (846 | ) | $ | (39 | ) |
Pension Benefit Plans | Post-Employment Benefit Plan | ||||||||||||||
As of December 31, | As of December 31, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Accrued expenses | $ | — | $ | — | $ | (506 | ) | $ | (405 | ) | |||||
Other non-current liabilities | (716 | ) | (640 | ) | — | — | |||||||||
Accrued retirement benefits | — | — | (4,420 | ) | (4,422 | ) | |||||||||
Net amount recognized | $ | (716 | ) | $ | (640 | ) | $ | (4,926 | ) | $ | (4,827 | ) |
Pension Benefit Plans | Post-Employment Benefit Plan | ||||||
Actuarial net loss | $ | (25 | ) | $ | (278 | ) | |
Net prior service credits | — | 339 | |||||
Net amount recognized | $ | (25 | ) | $ | 61 |
Post-Employment Benefit Plan | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | ||||||||||
Pre-Age 65 | Age 65 and older | Pre-Age 65 | Age 65 and older | ||||||||
Health care cost trend rate | 8.00 | % | 7.00 | % | 8.00 | % | 6.50 | % | |||
Ultimate trend rate | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | |||
Year rate reaches ultimate trend rate | 2028 | 2024 | 2027 | 2021 |
Pension Benefit Plan | Post-Employment Benefit Plan | ||||||||||
Expected Benefit Payments (a) | Expected Benefit Payments | Expected Subsidy Receipts | |||||||||
2015 | $ | 2,016 | $ | 534 | $ | 28 | |||||
2016 | — | 512 | 25 | ||||||||
2017 | — | 498 | 24 | ||||||||
2018 | — | 501 | 23 | ||||||||
2019 | — | 518 | 22 | ||||||||
2020-2024 | — | 2,194 | 88 | ||||||||
Total | $ | 2,016 | $ | 4,757 | $ | 210 |
(a) | This expected pay-out schedule anticipates the termination of the pension benefit plan during 2015. |
Pension Benefit Plan | |||||||
As of December 31, | |||||||
Asset Category | 2014 | 2013 | |||||
Cash and cash equivalents | 58 | % | 36 | % | |||
Equity Securities | 26 | % | 47 | % | |||
Debt Securities | 12 | % | 11 | % | |||
Other | 4 | % | 6 | % | |||
Total | 100 | % | 100 | % |
Fair Value Measurements at December 31, 2014 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash and cash equivalents | $ | 753 | $ | — | $ | — | $ | 753 | ||||||||
Equity Securities: | ||||||||||||||||
Domestic equity securities | 332 | — | — | 332 | ||||||||||||
Fixed income securities: | ||||||||||||||||
Investment grade domestic bonds | 162 | — | — | 162 | ||||||||||||
Other | 53 | — | — | 53 | ||||||||||||
Total | $ | 1,300 | $ | — | $ | — | $ | 1,300 |
Fair Value Measurements at December 31, 2013 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash and cash equivalents | $ | 556 | $ | — | $ | — | $ | 556 | ||||||||
Equity Securities: | ||||||||||||||||
Domestic equity securities | 566 | — | — | 566 | ||||||||||||
International equity securities | 156 | — | — | 156 | ||||||||||||
Fixed income securities: | ||||||||||||||||
Investment grade domestic bonds | 167 | — | — | 167 | ||||||||||||
Other | 105 | — | — | 105 | ||||||||||||
Total | $ | 1,550 | $ | — | $ | — | $ | 1,550 |
Year Ended December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Shares | Weighted Average Exercise Price | Shares | Weighted Average Exercise Price | |||||||||||
Outstanding at beginning of year | 10,000 | $ | 9.91 | 20,000 | $ | 9.30 | ||||||||
Granted | — | — | — | — | ||||||||||
Canceled/Forfeited | — | — | (10,000 | ) | 8.69 | |||||||||
Exercised | 6,000 | 9.54 | — | — | ||||||||||
Outstanding at end of year | 4,000 | $ | 10.45 | 10,000 | $ | 9.91 |
Year Ended December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Shares | Weighted Average Grant-Date Fair Value | Shares | Weighted Average Grant-Date Fair Value | |||||||||||
Non vested balance at beginning of year | 569,296 | $ | 5.26 | 933,887 | $ | 6.22 | ||||||||
Granted | 58,669 | 4.42 | 60,805 | 4.88 | ||||||||||
Forfeited | (206,282 | ) | 4.59 | (181,687 | ) | 5.11 | ||||||||
Vested | (142,783 | ) | 3.87 | (243,709 | ) | 8.95 | ||||||||
Non vested balance at end of year | 278,900 | $ | 6.28 | 569,296 | $ | 5.26 |
Year Ended December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Units | Weighted Average Grant-Date Fair Value | Units | Weighted Average Grant-Date Fair Value | ||||||||||
Non vested balance at beginning of year | 371,502 | $ | 4.34 | 423,264 | $ | 4.29 | |||||||
Granted | 247,463 | 5.83 | 33,822 | 5.13 | |||||||||
Forfeited | (135,104 | ) | 4.60 | (71,223 | ) | 4.31 | |||||||
Vested | (70,573 | ) | 3.22 | (14,361 | ) | 5.07 | |||||||
Non vested balance at end of year | 413,288 | $ | 5.09 | 371,502 | $ | 4.34 |
Buildings and improvements | 20 – 40 years |
Transportation equipment | 5 – 6 years |
Machinery and equipment | 10 – 12 years |
Buildings and improvements | 20 – 40 years |
Transportation equipment | 5 – 6 years |
Machinery and equipment | 10 – 12 years |
December 31, | |||||||
2014 | 2013 | ||||||
Land, buildings and improvements | $ | 43,443 | $ | 40,681 | |||
Transportation equipment | 2,717 | 2,793 | |||||
Machinery and equipment | 149,218 | 146,410 | |||||
Construction in progress | 2,798 | 4,803 | |||||
Property and equipment, at cost | 198,176 | 194,687 | |||||
Less accumulated depreciation and amortization | (134,295 | ) | (124,443 | ) | |||
Property and equipment, net | $ | 63,881 | $ | 70,244 |
NOTE 16: | QUARTERLY FINANCIAL DATA (UNAUDITED) |
Year Ended December 31, 2014(a) (b) (c) | |||||||||||||||
Fourth Quarter | Third Quarter | Second Quarter | First Quarter | ||||||||||||
Sales | $ | 83,901 | $ | 83,966 | $ | 85,903 | $ | 84,582 | |||||||
Less: excise tax | 7,576 | 6,451 | 5,336 | 5,586 | |||||||||||
Net sales | 76,325 | 77,515 | 80,567 | 78,996 | |||||||||||
Cost of sales | 70,314 | 70,204 | 72,259 | 72,195 | |||||||||||
Gross profit | 6,011 | 7,311 | 8,308 | 6,801 | |||||||||||
Selling, general and administrative | 4,897 | 4,966 | 5,166 | 5,072 | |||||||||||
Insurance recoveries (Note 17) | (7,067 | ) | (1,293 | ) | 70 | — | |||||||||
Other operating costs and loss on sale of assets, net | — | 1 | — | — | |||||||||||
Operating income | 8,181 | 3,637 | 3,072 | 1,729 | |||||||||||
Interest expense | (201 | ) | (199 | ) | (218 | ) | (198 | ) | |||||||
Equity in earnings (Note 3) | 2,850 | 1,621 | 2,331 | 3,335 | |||||||||||
Income from continuing operations before income taxes | 10,830 | 5,059 | 5,185 | 4,866 | |||||||||||
Provision (benefit) for income taxes (Note 5) | 3,267 | (1,169 | ) | 86 | 81 | ||||||||||
Net income from continuing operations | 7,563 | 6,228 | 5,099 | 4,785 | |||||||||||
Discontinued Operations, net of tax (Note 11) | — | — | — | — | |||||||||||
Net income | $ | 7,563 | $ | 6,228 | $ | 5,099 | $ | 4,785 | |||||||
Basic and diluted earnings per share data | |||||||||||||||
Income from continuing operations | $ | 0.42 | $ | 0.34 | $ | 0.28 | $ | 0.26 | |||||||
Income from discontinued operations | — | — | — | — | |||||||||||
Net income | $ | 0.42 | $ | 0.34 | $ | 0.28 | $ | 0.26 | |||||||
Dividends per Common Share | $ | — | $ | — | $ | — | $ | 0.05 |
(a) | Net income was positively/(negatively) impacted during the second, third and fourth quarters of the year ended December 31, 2014 by $(120), $1,940, and $6,778, respectively as result of insurance recoveries. Certain immaterial amounts related to the accounting for insurance recoveries recorded during the second quarter were reclassified during the third quarter. The results above for the second quarter reflect these immaterial reclassifications. See discussion on this matter at Note 17: Property and Business Interruption Insurance Claims and Recoveries. |
(b) | Net income was positively impacted during the third and fourth quarters of the year ended December 31, 2014 by $1,215, and $104, respectively, as result of a release of the valuation allowance related to deferred tax assets. See discussion on this matter at Note 5: Income Taxes. |
(c) | Total basic and diluted earnings per share for the quarters, when aggregated, do not equal the annual amounts of $1.32 and $1.32, respectively, due to rounding. |
Year Ended December 31, 2013(a) (b) (c) (d) | |||||||||||||||
Fourth Quarter | Third Quarter | Second Quarter | First Quarter | ||||||||||||
Sales | $ | 80,936 | $ | 80,709 | $ | 83,707 | $ | 88,718 | |||||||
Less: excise taxes | 3,642 | 538 | 4,312 | 2,314 | |||||||||||
Net sales | 77,294 | 80,171 | 79,395 | 86,404 | |||||||||||
Cost of sales | 69,380 | 79,356 | 74,114 | 79,175 | |||||||||||
Gross profit | 7,914 | 815 | 5,281 | 7,229 | |||||||||||
Selling, general and administrative expenses | 8,797 | 6,760 | 4,770 | 5,875 | |||||||||||
Other operating costs and (gains) losses on sale of assets | 177 | 1 | — | 58 | |||||||||||
Operating income (loss) | (1,060 | ) | (5,946 | ) | 511 | 1,296 | |||||||||
Interest income (expense), net | (289 | ) | (269 | ) | (277 | ) | (283 | ) | |||||||
Equity in earnings (loss) (Note 3) | 758 | (91 | ) | 71 | (942 | ) | |||||||||
Income (loss) from continuing operations before income taxes | (591 | ) | (6,306 | ) | 305 | 71 | |||||||||
Provision (benefit) for income taxes (Note 5) | (758 | ) | 19 | 25 | — | ||||||||||
Net income (loss) from continuing operations | 167 | (6,325 | ) | 280 | 71 | ||||||||||
Discontinued operations, net of tax (Note 11) | (528 | ) | — | — | 1,406 | ||||||||||
Net income (loss) | $ | (361 | ) | $ | (6,325 | ) | $ | 280 | $ | 1,477 | |||||
Basic and diluted earnings (loss) per share(e) | |||||||||||||||
Income (loss) from continuing operations | $ | 0.01 | $ | (0.37 | ) | $ | 0.02 | $ | — | ||||||
Income from discontinued operations | (0.03 | ) | — | — | 0.08 | ||||||||||
Net income (loss) | $ | (0.02 | ) | $ | (0.37 | ) | $ | 0.02 | $ | 0.08 | |||||
Dividends per common share | $ | — | $ | — | $ | — | $ | 0.05 |
(a) | Net loss for the fourth quarter includes $528 of income tax expense related to the gain on sale of discontinued operations. |
(b) | Net income for the first quarter includes a $1,406 gain, net of tax, on sale of discontinued operations. See discussion on this matter at Note 11: Operating Segments. |
(c) | Net income (loss) for the second, third and fourth quarters include $259, $1,802, and $3,404, respectively of expense related to the governance, proxy dispute and related matters. See discussion on this matter at Note 14: Related Party Transactions. |
(d) | Net income (loss) for the fourth quarter includes $1,525 of expense related to the severance costs. See discussion on this matter at Note 9: Restructuring and Severance Costs. |
(e) | For the third and fourth quarters, under the two class method, the losses were fully allocated common stock. |
NOTE 14: | RELATED PARTY TRANSACTIONS |
NOTE 9: | RESTRUCTURING AND SEVERANCE COSTS |
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Balance at beginning of year | $ | 1,277 | $ | 484 | ||||
Provision for additional expense(a) | 406 | 1,525 | ||||||
Payments and adjustments | (1,475 | ) | (732 | ) | ||||
Balance at end of year | $ | 208 | $ | 1,277 |
(a) | Severance costs are included in the caption Selling, General and Administrative Expenses on the Consolidated Statements of Operations. |
December 31, | |||||||
2014 | 2013 | ||||||
Employee benefit plans | $ | 973 | $ | 821 | |||
Salaries and wages | 4,633 | 4,354 | |||||
Restructuring and severance charges (Note 9) | 208 | 1,277 | |||||
Property taxes | 764 | 654 | |||||
Other accrued expenses | 1,432 | 1,176 | |||||
Total | $ | 8,010 | $ | 8,282 |
Pension Plan Items | Post-Employment Benefit Plan Items | Equity Method Investment Translation Adjustment and Post-Employment Benefit Adjustment | Total | |||||||||||||
Balance, December 31, 2012 | $ | (627 | ) | $ | 429 | $ | (35 | ) | $ | (233 | ) | |||||
Other comprehensive income before reclassifications | 179 | 333 | 18 | 530 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | 71 | (372 | ) | — | (301 | ) | ||||||||||
Net 2013 other comprehensive income (loss) | 250 | (39 | ) | 18 | 229 | |||||||||||
Balance, December 31, 2013 | $ | (377 | ) | $ | 390 | $ | (17 | ) | $ | (4 | ) | |||||
Other comprehensive income (loss) before reclassifications | 218 | (1,620 | ) | (15 | ) | (1,417 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income | (85 | ) | 774 | — | 689 | |||||||||||
Net 2014 other comprehensive income (loss) | 133 | (846 | ) | (15 | ) | (728 | ) | |||||||||
Balance, December 31, 2014 | $ | (244 | ) | $ | (456 | ) | $ | (32 | ) | $ | (732 | ) |
Pension Benefit Plan | |||||||
As of December 31, | |||||||
Asset Category | 2014 | 2013 | |||||
Cash and cash equivalents | 58 | % | 36 | % | |||
Equity Securities | 26 | % | 47 | % | |||
Debt Securities | 12 | % | 11 | % | |||
Other | 4 | % | 6 | % | |||
Total | 100 | % | 100 | % |
Pension Benefit Plans | Post-Employment Benefit Plan | ||||||||||||||
As of December 31, | As of December 31, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Accrued expenses | $ | — | $ | — | $ | (506 | ) | $ | (405 | ) | |||||
Other non-current liabilities | (716 | ) | (640 | ) | — | — | |||||||||
Accrued retirement benefits | — | — | (4,420 | ) | (4,422 | ) | |||||||||
Net amount recognized | $ | (716 | ) | $ | (640 | ) | $ | (4,926 | ) | $ | (4,827 | ) |
Pension Benefit Plans | Post-Employment Benefit Plan | ||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Discount rate | 3.58 | % | 4.11 | % | 2.99 | % | 3.95 | % | |||||
Measurement date | December 31, 2014 | December 31, 2013 | December 31, 2014 | December 31, 2013 |
Pension Benefit Plans | Post-Employment Benefit Plan | |||||||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Expected return on Assets | 7.00 | % | 7.00 | % | — | — | ||||||
Discount rate | 4.11 | % | 3.19 | % | 3.95 / 3.39% | (a) | 2.98 | % | ||||
Average compensation increase | n/a | n/a | n/a | n/a |
(a) | The pension benefit plan was amended effective April 16, 2014 requiring a re-measurement valuation. The discount rate for 2014 was based on measurement dates of December 31, 2013 and April 16, 2014. |
Year Ended December 31, | |||||||||||
January Fire (Indiana Facility) | October Fire (Atchison Facility) | Total | |||||||||
Total insurance recoveries | $ | 9,375 | $ | — | $ | 9,375 | |||||
Insurance recoveries - interruption of business | $ | 925 | $ | — | $ | 925 | |||||
Less: out-of-pocket expenses related to interruption of business in Cost of Sales | 447 | 170 | 617 | ||||||||
Net reduction (increase) to Cost of Sales | $ | 478 | $ | (170 | ) | $ | 308 | ||||
Insurance recoveries - property damage | $ | 8,450 | $ | — | $ | 8,450 | |||||
Less: Net book value of property loss in Insurance Recoveries | 160 | — | 160 | ||||||||
Insurance Recoveries | $ | 8,290 | $ | — | $ | 8,290 |
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Non-cash investing and financing activities: | ||||||||
Purchase of property and equipment in Accounts Payable | $ | 574 | $ | 1,675 | ||||
Additional cash payment information: | ||||||||
Interest paid | 903 | 1,286 | ||||||
Income tax (paid)/ refunds received | (146 | ) | (254 | ) | ||||
Decrease in revolving credit facility/increase in fixed asset sub-line facility | 7,004 | — |
Pension Benefit Plans | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Fair value of plan assets at beginning of year | $ | 1,550 | $ | 1,720 | ||||
Actual return on plan assets | 46 | 172 | ||||||
Employer contributions | — | — | ||||||
Benefits paid | (296 | ) | (342 | ) | ||||
Fair value of plan assets at end of year | $ | 1,300 | $ | 1,550 |
Year Ended December 31, | |||||||
2014 | 2013 | ||||||
Current: | |||||||
Federal | $ | — | $ | (16 | ) | ||
State | 229 | 29 | |||||
229 | 13 | ||||||
Deferred: | |||||||
Federal | 5,010 | (642 | ) | ||||
State | (2,974 | ) | (85 | ) | |||
2,036 | (727 | ) | |||||
Total | $ | 2,265 | $ | (714 | ) |
December 31, | |||||||
2014 | 2013 | ||||||
Credit Agreement - Revolver, 2.269% (variable interest rate) | $ | — | $ | 18,000 | |||
Credit Agreement - Fixed Asset Sub-Line term loan, 2.655% (variable interest rate) | 6,670 | — | |||||
Secured Promissory Note, 6.76% (variable interest rate), due monthly to July, 2016. | 404 | 746 | |||||
Water Cooling System Capital Lease Obligation, 2.61%, due monthly to May, 2017 | 3,209 | 4,422 | |||||
Total | 10,283 | 23,168 | |||||
Less current maturities of long term debt | (2,613 | ) | (1,557 | ) | |||
Long-term debt | $ | 7,670 | $ | 21,611 |
December 31, | ||||||||
2014 | 2013 | |||||||
Deferred income tax assets: | ||||||||
Post-retirement liability | $ | 1,968 | $ | 1,928 | ||||
Deferred income | 1,637 | 1,568 | ||||||
Stock based compensation | 2,108 | 2,106 | ||||||
Federal operating loss carryforwards | 5,029 | 12,938 | ||||||
Capital loss carryforward | 1,311 | 926 | ||||||
State tax credits | 2,423 | 3,022 | ||||||
State operating loss carryforwards | 4,574 | 8,277 | ||||||
Other | 3,405 | 4,049 | ||||||
Less: valuation allowance | (3,829 | ) | (11,275 | ) | ||||
Gross deferred income tax assets | 18,626 | 23,539 | ||||||
Deferred income tax liabilities: | ||||||||
Fixed assets | (18,823 | ) | (17,919 | ) | ||||
Equity method investment | (1,176 | ) | (391 | ) | ||||
Other | — | (5,229 | ) | |||||
Gross deferred income tax liabilities | (19,999 | ) | (23,539 | ) | ||||
Net deferred income tax liability | $ | (1,373 | ) | $ | — |
Pension Benefit Plans | Post-Employment Benefit Plan | ||||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net actuarial (loss) gain | $ | (92 | ) | $ | 298 | $ | (1,632 | ) | $ | 558 | |||||||
Settlement losses | 50 | 52 | — | — | |||||||||||||
Plan amendment and curtailment | — | — | 1,183 | — | |||||||||||||
Recognized net actuarial loss | 20 | 66 | 18 | 28 | |||||||||||||
Amortization of prior service cost | — | — | (369 | ) | (647 | ) | |||||||||||
Recognition of prior service cost due to curtailments | — | — | (52 | ) | — | ||||||||||||
Total other comprehensive income (loss), pre-tax | (22 | ) | 416 | (852 | ) | (61 | ) | ||||||||||
Income tax expense (benefit) | (155 | ) | 166 | (6 | ) | (22 | ) | ||||||||||
Total other comprehensive income (loss), net of tax | $ | 133 | $ | 250 | $ | (846 | ) | $ | (39 | ) |
Pension Benefit Plans | Post-Employment Benefit Plan | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Change in benefit obligation: | |||||||||||||||||
Beginning of year | $ | 2,190 | $ | 2,690 | $ | 4,827 | $ | 5,700 | |||||||||
Service cost | — | — | 72 | 127 | |||||||||||||
Interest cost | 87 | 83 | 149 | 165 | |||||||||||||
Actuarial loss (gain) | 35 | (241 | ) | 1,632 | (558 | ) | |||||||||||
Negative plan amendment benefit | — | — | (1,183 | ) | — | ||||||||||||
Benefits paid | (296 | ) | (342 | ) | (571 | ) | (607 | ) | |||||||||
Benefit obligation at end of year | $ | 2,016 | $ | 2,190 | $ | 4,926 | $ | 4,827 |
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Continuing Operations: | ||||||||
Net operating income (loss)(a) | $ | 23,675 | $ | (5,807 | ) | |||
Less: Amounts allocated to participating securities (non-vested shares and units) (b) | 832 | — | ||||||
Net operating income (loss) attributable to common shareholders | $ | 22,843 | $ | (5,807 | ) | |||
Discontinued Operations: | ||||||||
Discontinued operations attributable to all shareholders | — | 878 | ||||||
Less: Amounts allocated to participating securities (nonvested shares and units) (b) | — | — | ||||||
Discontinued operations attributable to common shareholders | $ | — | $ | 878 | ||||
Net income (loss)(c) | $ | 22,843 | $ | (4,929 | ) | |||
Share information: | ||||||||
Basic weighted average common shares(d) | 17,305,866 | 17,069,455 | ||||||
Incremental shares from potential dilutive securities (e) | — | — | ||||||
Diluted weighted average common shares | 17,305,866 | 17,069,455 | ||||||
Basic earnings (loss) per share | ||||||||
Income (loss) from continuing operations(f) | $ | 1.32 | $ | (0.34 | ) | |||
Income from discontinued operations(g) | — | 0.05 | ||||||
Net income (loss) | $ | 1.32 | $ | (0.29 | ) | |||
Diluted earnings (loss) per share | ||||||||
Income (loss) from continuing operations(f) | $ | 1.32 | $ | (0.34 | ) | |||
Income from discontinued operations(g) | — | 0.05 | ||||||
Net income (loss) | $ | 1.32 | $ | (0.29 | ) |
(a) | Net operating income (loss) attributable to all shareholders. |
(b) | Participating securities include 278,900 and 569,296 nonvested restricted stock for the years ended December 31, 2014 and 2013, as well as 413,288 and 371,502 RSUs for the years ended December 31, 2014 and 2013, respectively. Participating securities do not receive an allocation in periods when a loss is experienced. |
(c) | Net income (loss) attributable to common shareholders. |
(d) | Under the two-class method, basic weighted average common shares exclude outstanding nonvested participating securities consisting of restricted stock awards of 278,900 and 569,296 for the years ended December 31, 2014 and 2013, respectively. |
(e) | Potential dilutive securities have not been included in the earnings (loss) per share computation in a period when a loss is experienced. At December 31, 2014 and 2013, the Company had 4,000 and 10,000 stock options outstanding, respectively, and 4,000 shares were potentially dilutive at December 31, 2014 and 10,000 stock options were potentially anti-dilutive at December 31, 2013. The 4,000 potentially dilutive shares at December 31, 2014 resulted in no incremental shares for the year ended December 31, 2014. |
(f) | Income (loss) from continuing operations based on net income (loss) attributable to common shareholders. |
(g) | Income from discontinued operations based on net loss attributable to common shareholders. |
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
\"Expected\" provision at federal statutory rate | $ | 9,116 | $ | (2,282 | ) | |||
State income taxes | 709 | (705 | ) | |||||
Change in valuation allowance | (7,618 | ) | 2,222 | |||||
Other | 58 | 51 | ||||||
Provision (benefit) for income taxes | $ | 2,265 | $ | (714 | ) | |||
Effective tax rate | 8.7 | % | (11.0 | )% |
Pension Benefit Plan | Post-Employment Benefit Plan | ||||||||||
Expected Benefit Payments (a) | Expected Benefit Payments | Expected Subsidy Receipts | |||||||||
2015 | $ | 2,016 | $ | 534 | $ | 28 | |||||
2016 | — | 512 | 25 | ||||||||
2017 | — | 498 | 24 | ||||||||
2018 | — | 501 | 23 | ||||||||
2019 | — | 518 | 22 | ||||||||
2020-2024 | — | 2,194 | 88 | ||||||||
Total | $ | 2,016 | $ | 4,757 | $ | 210 |
(a) | This expected pay-out schedule anticipates the termination of the pension benefit plan during 2015. |
Fair Value Measurements at December 31, 2014 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash and cash equivalents | $ | 753 | $ | — | $ | — | $ | 753 | ||||||||
Equity Securities: | ||||||||||||||||
Domestic equity securities | 332 | — | — | 332 | ||||||||||||
Fixed income securities: | ||||||||||||||||
Investment grade domestic bonds | 162 | — | — | 162 | ||||||||||||
Other | 53 | — | — | 53 | ||||||||||||
Total | $ | 1,300 | $ | — | $ | — | $ | 1,300 |
Fair Value Measurements at December 31, 2013 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash and cash equivalents | $ | 556 | $ | — | $ | — | $ | 556 | ||||||||
Equity Securities: | ||||||||||||||||
Domestic equity securities | 566 | — | — | 566 | ||||||||||||
International equity securities | 156 | — | — | 156 | ||||||||||||
Fixed income securities: | ||||||||||||||||
Investment grade domestic bonds | 167 | — | — | 167 | ||||||||||||
Other | 105 | — | — | 105 | ||||||||||||
Total | $ | 1,550 | $ | — | $ | — | $ | 1,550 |
Post-Employment Benefit Plan | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | ||||||||||
Pre-Age 65 | Age 65 and older | Pre-Age 65 | Age 65 and older | ||||||||
Health care cost trend rate | 8.00 | % | 7.00 | % | 8.00 | % | 6.50 | % | |||
Ultimate trend rate | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | |||
Year rate reaches ultimate trend rate | 2028 | 2024 | 2027 | 2021 |
December 31, | |||||||
2014 | 2013 | ||||||
Finished goods | $ | 10,039 | $ | 11,355 | |||
Barreled distillate | 11,114 | 10,310 | |||||
Raw materials | 5,440 | 5,183 | |||||
Work in process | 2,023 | 2,737 | |||||
Maintenance materials | 4,913 | 4,766 | |||||
Other | 912 | 566 | |||||
Total | $ | 34,441 | $ | 34,917 |
Pension Benefit Plans | Post-Employment Benefit Plan | |||||||||||||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||
Service cost | $ | — | $ | — | $ | 72 | $ | 127 | ||||||||||
Interest cost | 87 | 83 | 149 | 165 | ||||||||||||||
Expected return on assets | (104 | ) | (114 | ) | — | — | ||||||||||||
Amortization of prior service cost | — | — | (369 | ) | (647 | ) | ||||||||||||
Recognized net actuarial loss | 21 | 66 | 18 | 28 | ||||||||||||||
Settlement losses | 50 | 52 | — | — | ||||||||||||||
Net benefit cost | $ | 54 | $ | 87 | $ | (130 | ) | $ | (327 | ) |
Pension Benefit Plans | Post-Employment Benefit Plan | ||||||
Actuarial net loss | $ | (25 | ) | $ | (278 | ) | |
Net prior service credits | — | 339 | |||||
Net amount recognized | $ | (25 | ) | $ | 61 |
Year Ended December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Shares | Weighted Average Grant-Date Fair Value | Shares | Weighted Average Grant-Date Fair Value | |||||||||||
Non vested balance at beginning of year | 569,296 | $ | 5.26 | 933,887 | $ | 6.22 | ||||||||
Granted | 58,669 | 4.42 | 60,805 | 4.88 | ||||||||||
Forfeited | (206,282 | ) | 4.59 | (181,687 | ) | 5.11 | ||||||||
Vested | (142,783 | ) | 3.87 | (243,709 | ) | 8.95 | ||||||||
Non vested balance at end of year | 278,900 | $ | 6.28 | 569,296 | $ | 5.26 |
Year Ended December 31, 2013(a) (b) (c) (d) | |||||||||||||||
Fourth Quarter | Third Quarter | Second Quarter | First Quarter | ||||||||||||
Sales | $ | 80,936 | $ | 80,709 | $ | 83,707 | $ | 88,718 | |||||||
Less: excise taxes | 3,642 | 538 | 4,312 | 2,314 | |||||||||||
Net sales | 77,294 | 80,171 | 79,395 | 86,404 | |||||||||||
Cost of sales | 69,380 | 79,356 | 74,114 | 79,175 | |||||||||||
Gross profit | 7,914 | 815 | 5,281 | 7,229 | |||||||||||
Selling, general and administrative expenses | 8,797 | 6,760 | 4,770 | 5,875 | |||||||||||
Other operating costs and (gains) losses on sale of assets | 177 | 1 | — | 58 | |||||||||||
Operating income (loss) | (1,060 | ) | (5,946 | ) | 511 | 1,296 | |||||||||
Interest income (expense), net | (289 | ) | (269 | ) | (277 | ) | (283 | ) | |||||||
Equity in earnings (loss) (Note 3) | 758 | (91 | ) | 71 | (942 | ) | |||||||||
Income (loss) from continuing operations before income taxes | (591 | ) | (6,306 | ) | 305 | 71 | |||||||||
Provision (benefit) for income taxes (Note 5) | (758 | ) | 19 | 25 | — | ||||||||||
Net income (loss) from continuing operations | 167 | (6,325 | ) | 280 | 71 | ||||||||||
Discontinued operations, net of tax (Note 11) | (528 | ) | — | — | 1,406 | ||||||||||
Net income (loss) | $ | (361 | ) | $ | (6,325 | ) | $ | 280 | $ | 1,477 | |||||
Basic and diluted earnings (loss) per share(e) | |||||||||||||||
Income (loss) from continuing operations | $ | 0.01 | $ | (0.37 | ) | $ | 0.02 | $ | — | ||||||
Income from discontinued operations | (0.03 | ) | — | — | 0.08 | ||||||||||
Net income (loss) | $ | (0.02 | ) | $ | (0.37 | ) | $ | 0.02 | $ | 0.08 | |||||
Dividends per common share | $ | — | $ | — | $ | — | $ | 0.05 |
(a) | Net loss for the fourth quarter includes $528 of income tax expense related to the gain on sale of discontinued operations. |
(b) | Net income for the first quarter includes a $1,406 gain, net of tax, on sale of discontinued operations. See discussion on this matter at Note 11: Operating Segments. |
(c) | Net income (loss) for the second, third and fourth quarters include $259, $1,802, and $3,404, respectively of expense related to the governance, proxy dispute and related matters. See discussion on this matter at Note 14: Related Party Transactions. |
(d) | Net income (loss) for the fourth quarter includes $1,525 of expense related to the severance costs. See discussion on this matter at Note 9: Restructuring and Severance Costs. |
(e) | For the third and fourth quarters, under the two class method, the losses were fully allocated common stock. |
Year Ended December 31, 2014(a) (b) (c) | |||||||||||||||
Fourth Quarter | Third Quarter | Second Quarter | First Quarter | ||||||||||||
Sales | $ | 83,901 | $ | 83,966 | $ | 85,903 | $ | 84,582 | |||||||
Less: excise tax | 7,576 | 6,451 | 5,336 | 5,586 | |||||||||||
Net sales | 76,325 | 77,515 | 80,567 | 78,996 | |||||||||||
Cost of sales | 70,314 | 70,204 | 72,259 | 72,195 | |||||||||||
Gross profit | 6,011 | 7,311 | 8,308 | 6,801 | |||||||||||
Selling, general and administrative | 4,897 | 4,966 | 5,166 | 5,072 | |||||||||||
Insurance recoveries (Note 17) | (7,067 | ) | (1,293 | ) | 70 | — | |||||||||
Other operating costs and loss on sale of assets, net | — | 1 | — | — | |||||||||||
Operating income | 8,181 | 3,637 | 3,072 | 1,729 | |||||||||||
Interest expense | (201 | ) | (199 | ) | (218 | ) | (198 | ) | |||||||
Equity in earnings (Note 3) | 2,850 | 1,621 | 2,331 | 3,335 | |||||||||||
Income from continuing operations before income taxes | 10,830 | 5,059 | 5,185 | 4,866 | |||||||||||
Provision (benefit) for income taxes (Note 5) | 3,267 | (1,169 | ) | 86 | 81 | ||||||||||
Net income from continuing operations | 7,563 | 6,228 | 5,099 | 4,785 | |||||||||||
Discontinued Operations, net of tax (Note 11) | — | — | — | — | |||||||||||
Net income | $ | 7,563 | $ | 6,228 | $ | 5,099 | $ | 4,785 | |||||||
Basic and diluted earnings per share data | |||||||||||||||
Income from continuing operations | $ | 0.42 | $ | 0.34 | $ | 0.28 | $ | 0.26 | |||||||
Income from discontinued operations | — | — | — | — | |||||||||||
Net income | $ | 0.42 | $ | 0.34 | $ | 0.28 | $ | 0.26 | |||||||
Dividends per Common Share | $ | — | $ | — | $ | — | $ | 0.05 |
(a) | Net income was positively/(negatively) impacted during the second, third and fourth quarters of the year ended December 31, 2014 by $(120), $1,940, and $6,778, respectively as result of insurance recoveries. Certain immaterial amounts related to the accounting for insurance recoveries recorded during the second quarter were reclassified during the third quarter. The results above for the second quarter reflect these immaterial reclassifications. See discussion on this matter at Note 17: Property and Business Interruption Insurance Claims and Recoveries. |
(b) | Net income was positively impacted during the third and fourth quarters of the year ended December 31, 2014 by $1,215, and $104, respectively, as result of a release of the valuation allowance related to deferred tax assets. See discussion on this matter at Note 5: Income Taxes. |
(c) | Total basic and diluted earnings per share for the quarters, when aggregated, do not equal the annual amounts of $1.32 and $1.32, respectively, due to rounding. |
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Balance at beginning of year | $ | 1,277 | $ | 484 | ||||
Provision for additional expense(a) | 406 | 1,525 | ||||||
Payments and adjustments | (1,475 | ) | (732 | ) | ||||
Balance at end of year | $ | 208 | $ | 1,277 |
(a) | Severance costs are included in the caption Selling, General and Administrative Expenses on the Consolidated Statements of Operations. |
Year Ended December 31, | |||||||
2014 | 2013 | ||||||
Net sales to customers: | |||||||
Distillery products | $ | 256,561 | $ | 264,098 | |||
Ingredient solutions | 56,842 | 58,967 | |||||
Other(a) | — | 199 | |||||
Total | $ | 313,403 | $ | 323,264 | |||
Gross profit: | |||||||
Distillery products | $ | 22,332 | $ | 14,309 | |||
Ingredient solutions | 6,099 | 6,986 | |||||
Other(a) | — | (56 | ) | ||||
Total | $ | 28,431 | $ | 21,239 | |||
Depreciation and amortization: | |||||||
Distillery products | $ | 8,510 | $ | 8,209 | |||
Ingredient solutions | 2,316 | 2,322 | |||||
Other(a) | — | 21 | |||||
Corporate | 1,499 | 1,457 | |||||
Total | $ | 12,325 | $ | 12,009 | |||
Income (loss) from continuing operations before income taxes: | |||||||
Distillery products | $ | 28,701 | $ | 11,987 | |||
Ingredient solutions | 3,939 | 4,503 | |||||
Other(a) | — | (90 | ) | ||||
Corporate | (6,700 | ) | (22,921 | ) | |||
Total | $ | 25,940 | $ | (6,521 | ) |
(a) | Assets from this segment were sold February 8, 2013 as previously described. |
Year Ended December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Shares | Weighted Average Exercise Price | Shares | Weighted Average Exercise Price | |||||||||||
Outstanding at beginning of year | 10,000 | $ | 9.91 | 20,000 | $ | 9.30 | ||||||||
Granted | — | — | — | — | ||||||||||
Canceled/Forfeited | — | — | (10,000 | ) | 8.69 | |||||||||
Exercised | 6,000 | 9.54 | — | — | ||||||||||
Outstanding at end of year | 4,000 | $ | 10.45 | 10,000 | $ | 9.91 |
Year Ended December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Units | Weighted Average Grant-Date Fair Value | Units | Weighted Average Grant-Date Fair Value | ||||||||||
Non vested balance at beginning of year | 371,502 | $ | 4.34 | 423,264 | $ | 4.29 | |||||||
Granted | 247,463 | 5.83 | 33,822 | 5.13 | |||||||||
Forfeited | (135,104 | ) | 4.60 | (71,223 | ) | 4.31 | |||||||
Vested | (70,573 | ) | 3.22 | (14,361 | ) | 5.07 | |||||||
Non vested balance at end of year | 413,288 | $ | 5.09 | 371,502 | $ | 4.34 |
Years Ended December 31, | ||||||||
2014 | 2013 | |||||||
Beginning of year balance | $ | 566 | $ | 445 | ||||
Additions for tax positions of prior years | 8 | 62 | ||||||
Additions for tax positions of the current year | 39 | 59 | ||||||
End of year balance | $ | 613 | $ | 566 |
NOTE 11: | OPERATING SEGMENTS |
Year Ended December 31, | |||||||
2014 | 2013 | ||||||
Net sales to customers: | |||||||
Distillery products | $ | 256,561 | $ | 264,098 | |||
Ingredient solutions | 56,842 | 58,967 | |||||
Other(a) | — | 199 | |||||
Total | $ | 313,403 | $ | 323,264 | |||
Gross profit: | |||||||
Distillery products | $ | 22,332 | $ | 14,309 | |||
Ingredient solutions | 6,099 | 6,986 | |||||
Other(a) | — | (56 | ) | ||||
Total | $ | 28,431 | $ | 21,239 | |||
Depreciation and amortization: | |||||||
Distillery products | $ | 8,510 | $ | 8,209 | |||
Ingredient solutions | 2,316 | 2,322 | |||||
Other(a) | — | 21 | |||||
Corporate | 1,499 | 1,457 | |||||
Total | $ | 12,325 | $ | 12,009 | |||
Income (loss) from continuing operations before income taxes: | |||||||
Distillery products | $ | 28,701 | $ | 11,987 | |||
Ingredient solutions | 3,939 | 4,503 | |||||
Other(a) | — | (90 | ) | ||||
Corporate | (6,700 | ) | (22,921 | ) | |||
Total | $ | 25,940 | $ | (6,521 | ) |
(a) | Assets from this segment were sold February 8, 2013 as previously described. |
December 31, | |||||||
2014 | 2013 | ||||||
Identifiable Assets | |||||||
Distillery products | $ | 98,791 | $ | 97,875 | |||
Ingredient solutions | 23,324 | 24,954 | |||||
Other(a) | — | — | |||||
Corporate | 38,484 | 28,500 | |||||
Total | $ | 160,599 | $ | 151,329 |
(a) | Assets from this segment were sold February 8, 2013 as previously described. |
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Distillery products | $ | 4,663 | $ | 5,594 | ||||
Ingredient solutions | 358 | 1,110 | ||||||
Other (a) | — | — | ||||||
Corporate | 830 | 1,179 | ||||||
Total | $ | 5,851 | $ | 7,883 |
(a) | Significant assets from this segment were sold February 8, 2013 as previously described. |
NOTE 6: | EQUITY AND EARNINGS (LOSS) PER SHARE |
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Continuing Operations: | ||||||||
Net operating income (loss)(a) | $ | 23,675 | $ | (5,807 | ) | |||
Less: Amounts allocated to participating securities (non-vested shares and units) (b) | 832 | — | ||||||
Net operating income (loss) attributable to common shareholders | $ | 22,843 | $ | (5,807 | ) | |||
Discontinued Operations: | ||||||||
Discontinued operations attributable to all shareholders | — | 878 | ||||||
Less: Amounts allocated to participating securities (nonvested shares and units) (b) | — | — | ||||||
Discontinued operations attributable to common shareholders | $ | — | $ | 878 | ||||
Net income (loss)(c) | $ | 22,843 | $ | (4,929 | ) | |||
Share information: | ||||||||
Basic weighted average common shares(d) | 17,305,866 | 17,069,455 | ||||||
Incremental shares from potential dilutive securities (e) | — | — | ||||||
Diluted weighted average common shares | 17,305,866 | 17,069,455 | ||||||
Basic earnings (loss) per share | ||||||||
Income (loss) from continuing operations(f) | $ | 1.32 | $ | (0.34 | ) | |||
Income from discontinued operations(g) | — | 0.05 | ||||||
Net income (loss) | $ | 1.32 | $ | (0.29 | ) | |||
Diluted earnings (loss) per share | ||||||||
Income (loss) from continuing operations(f) | $ | 1.32 | $ | (0.34 | ) | |||
Income from discontinued operations(g) | — | 0.05 | ||||||
Net income (loss) | $ | 1.32 | $ | (0.29 | ) |
(a) | Net operating income (loss) attributable to all shareholders. |
(b) | Participating securities include 278,900 and 569,296 nonvested restricted stock for the years ended December 31, 2014 and 2013, as well as 413,288 and 371,502 RSUs for the years ended December 31, 2014 and 2013, respectively. Participating securities do not receive an allocation in periods when a loss is experienced. |
(c) | Net income (loss) attributable to common shareholders. |
(d) | Under the two-class method, basic weighted average common shares exclude outstanding nonvested participating securities consisting of restricted stock awards of 278,900 and 569,296 for the years ended December 31, 2014 and 2013, respectively. |
(e) | Potential dilutive securities have not been included in the earnings (loss) per share computation in a period when a loss is experienced. At December 31, 2014 and 2013, the Company had 4,000 and 10,000 stock options outstanding, respectively, and 4,000 shares were potentially dilutive at December 31, 2014 and 10,000 stock options were potentially anti-dilutive at December 31, 2013. The 4,000 potentially dilutive shares at December 31, 2014 resulted in no incremental shares for the year ended December 31, 2014. |
(f) | Income (loss) from continuing operations based on net income (loss) attributable to common shareholders. |
(g) | Income from discontinued operations based on net loss attributable to common shareholders. |
Pension Plan Items | Post-Employment Benefit Plan Items | Equity Method Investment Translation Adjustment and Post-Employment Benefit Adjustment | Total | |||||||||||||
Balance, December 31, 2012 | $ | (627 | ) | $ | 429 | $ | (35 | ) | $ | (233 | ) | |||||
Other comprehensive income before reclassifications | 179 | 333 | 18 | 530 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | 71 | (372 | ) | — | (301 | ) | ||||||||||
Net 2013 other comprehensive income (loss) | 250 | (39 | ) | 18 | 229 | |||||||||||
Balance, December 31, 2013 | $ | (377 | ) | $ | 390 | $ | (17 | ) | $ | (4 | ) | |||||
Other comprehensive income (loss) before reclassifications | 218 | (1,620 | ) | (15 | ) | (1,417 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income | (85 | ) | 774 | — | 689 | |||||||||||
Net 2014 other comprehensive income (loss) | 133 | (846 | ) | (15 | ) | (728 | ) | |||||||||
Balance, December 31, 2014 | $ | (244 | ) | $ | (456 | ) | $ | (32 | ) | $ | (732 | ) |
Details about Accumulated Other Comprehensive Income Components | Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) | Affected Line Item in the Statement of Operations | ||||
Pension Plan Items: | ||||||
Recognized net actuarial loss | $ | 20 | (a) | |||
Settlement loss | 50 | (a) | ||||
70 | Total before tax | |||||
155 | Tax benefit | |||||
$ | (85 | ) | Net of tax | |||
Post Employment Benefit Items: | ||||||
Amortization of prior service cost | $ | (369 | ) | (a) | ||
Recognized net actuarial loss | 18 | (a) | ||||
Plan amendment and curtailment | 1,183 | |||||
Recognition of prior service cost due to curtailment | (52 | ) | ||||
780 | Total before tax | |||||
6 | Tax benefit | |||||
$ | 774 | Net of tax | ||||
Reclassifications for 2014 | $ | 689 | Net of tax |
(a) | These accumulated other comprehensive income components are included in the computation of net period pension cost. See Note 8: Employee Benefit Plans for additional details. |
NOTE 18: | SUBSEQUENT EVENTS |
Valuation allowance | |||
Balance at January 1, 2013 | $ | 9,053 | |
Additions: | |||
Charges to costs and expenses | 2,070 | ||
Charges to other accounts | 152 | ||
Balance at December 31, 2013 | $ | 11,275 | |
Reductions | 7,446 | ||
Balance at December 31, 2014 | $ | 3,829 |
NOTE 2: | OTHER BALANCE SHEET CAPTIONS |
December 31, | |||||||
2014 | 2013 | ||||||
Finished goods | $ | 10,039 | $ | 11,355 | |||
Barreled distillate | 11,114 | 10,310 | |||||
Raw materials | 5,440 | 5,183 | |||||
Work in process | 2,023 | 2,737 | |||||
Maintenance materials | 4,913 | 4,766 | |||||
Other | 912 | 566 | |||||
Total | $ | 34,441 | $ | 34,917 |
December 31, | |||||||
2014 | 2013 | ||||||
Land, buildings and improvements | $ | 43,443 | $ | 40,681 | |||
Transportation equipment | 2,717 | 2,793 | |||||
Machinery and equipment | 149,218 | 146,410 | |||||
Construction in progress | 2,798 | 4,803 | |||||
Property and equipment, at cost | 198,176 | 194,687 | |||||
Less accumulated depreciation and amortization | (134,295 | ) | (124,443 | ) | |||
Property and equipment, net | $ | 63,881 | $ | 70,244 |
December 31, | |||||||
2014 | 2013 | ||||||
Employee benefit plans | $ | 973 | $ | 821 | |||
Salaries and wages | 4,633 | 4,354 | |||||
Restructuring and severance charges (Note 9) | 208 | 1,277 | |||||
Property taxes | 764 | 654 | |||||
Other accrued expenses | 1,432 | 1,176 | |||||
Total | $ | 8,010 | $ | 8,282 |