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EX-10.15 - EX-10.15 - Covia Holdings Corpd586536dex1015.htm
EX-99.3 - EX-99.3 - Covia Holdings Corpd586536dex993.htm
EX-99.1 - EX-99.1 - Covia Holdings Corpd586536dex991.htm
EX-23.1 - EX-23.1 - Covia Holdings Corpd586536dex231.htm
EX-10.23 - EX-10.23 - Covia Holdings Corpd586536dex1023.htm
EX-10.22 - EX-10.22 - Covia Holdings Corpd586536dex1022.htm
EX-10.21 - EX-10.21 - Covia Holdings Corpd586536dex1021.htm
EX-10.20 - EX-10.20 - Covia Holdings Corpd586536dex1020.htm
EX-10.19 - EX-10.19 - Covia Holdings Corpd586536dex1019.htm
EX-10.18 - EX-10.18 - Covia Holdings Corpd586536dex1018.htm
EX-10.17 - EX-10.17 - Covia Holdings Corpd586536dex1017.htm
EX-10.16 - EX-10.16 - Covia Holdings Corpd586536dex1016.htm
EX-10.14 - EX-10.14 - Covia Holdings Corpd586536dex1014.htm
EX-10.13 - EX-10.13 - Covia Holdings Corpd586536dex1013.htm
EX-10.12 - EX-10.12 - Covia Holdings Corpd586536dex1012.htm
EX-10.11 - EX-10.11 - Covia Holdings Corpd586536dex1011.htm
EX-10.10 - EX-10.10 - Covia Holdings Corpd586536dex1010.htm
EX-10.9 - EX-10.9 - Covia Holdings Corpd586536dex109.htm
EX-10.8 - EX-10.8 - Covia Holdings Corpd586536dex108.htm
EX-10.7 - EX-10.7 - Covia Holdings Corpd586536dex107.htm
EX-10.6 - EX-10.6 - Covia Holdings Corpd586536dex106.htm
EX-10.5 - EX-10.5 - Covia Holdings Corpd586536dex105.htm
EX-10.4 - EX-10.4 - Covia Holdings Corpd586536dex104.htm
EX-10.3 - EX-10.3 - Covia Holdings Corpd586536dex103.htm
EX-10.2 - EX-10.2 - Covia Holdings Corpd586536dex102.htm
EX-10.1 - EX-10.1 - Covia Holdings Corpd586536dex101.htm
EX-4.2 - EX-4.2 - Covia Holdings Corpd586536dex42.htm
EX-4.1 - EX-4.1 - Covia Holdings Corpd586536dex41.htm
EX-3.2 - EX-3.2 - Covia Holdings Corpd586536dex32.htm
EX-3.1 - EX-3.1 - Covia Holdings Corpd586536dex31.htm
EX-2.2 - EX-2.2 - Covia Holdings Corpd586536dex22.htm
8-K - FORM 8-K - Covia Holdings Corpd586536d8k.htm

Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS

The following unaudited pro forma condensed statement of operations for the three months ended March 31, 2018 and for the years ended December 31, 2017, 2016, 2015 and the unaudited pro forma condensed balance sheet as of March 31, 2018, give effect to the disposition by Unimin Corporation (now known as Covia Holdings Corporation) (“Unimin” or the “Company”) of its global high purity quartz business (the “HPQ business”) to a wholly owned subsidiary of its parent company SCR-Sibelco NV (“Sibelco”). The summary unaudited pro forma condensed statements of operations is prepared as if such disposition occurred on January 1, 2015, and the summary unaudited pro forma condensed balance sheet is prepared as if such disposition occurred on March 31, 2018. The following unaudited pro forma condensed financial statements are based on the historical financial statements of Unimin and are intended to illustrate how the transaction might have affected the historical financial statements of Unimin if each had been consummated as of the dates indicated above and do not represent future market conditions. The unaudited pro forma condensed financial statements reflect preliminary estimates and assumptions based on information available at the time of preparation.

The unaudited pro forma condensed financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results or financial position that would have actually resulted had the transaction occurred as of the dates indicated, nor should they be taken as necessarily indicative of the future financial position or results of operations of the Company. Future results may vary significantly from the results reflected because of various factors, including those discussed in the section entitled “Risk Factors” in the Company’s Registration Statement on Form S-4 (File No. 333-224228). In addition, the unaudited pro forma condensed financial statements include adjustments that are preliminary and may be revised. There can be no assurance that such revisions will not result in material changes to the information presented.

The unaudited pro forma condensed financial statements have been prepared solely to illustrate the effects of the disposition of the HPQ business in accordance with SEC rules regarding dispositions of assets. These pro forma condensed financial statements do not reflect the business combination transaction between Unimin and Fairmount Santrol Holdings Inc. and related refinancing transactions, which have been reflected in the pro forma financial statements contained in the Company’s Registration Statement on Form S-4 and which will be included in a subsequent Form 8-K/A to be filed by Unimin.

The following unaudited pro forma condensed financial statements should be read in conjunction with the consolidated financial statements, the accompanying notes and the related management discussion and analysis of financial condition and results of operations for the year ended December 31, 2017 contained in the Company’s Registration Statement on Form S-4.


Covia Holdings Corporation

Unaudited Pro Forma Condensed Balance Sheet

As of March 31, 2018

(in thousands, except per share data)

 

     Historical
Unimin
    HPQ
Carveout
(Note 1)
    Unimin Pro
Forma
Total
 

ASSETS

      

Current assets:

      

Cash and cash equivalents

   $ 284,274     $ (31,000   $ 253,274  

Accounts receivable, net of allowance for doubtful accounts

     274,542       (32,739     241,803  

Inventories, net

     110,212       (26,199     84,013  

Other receivables

     28,217       —         28,217  

Prepaid expenses and other current assets

     19,112       (934     18,178  
  

 

 

   

 

 

   

 

 

 

Total current assets

     716,357       (90,872     625,485  

Noncurrent assets:

      

Property, plant and equipment, net

     1,256,192       (93,829     1,162,363  

Intangible assets, net

     26,483       (1,588     24,895  

Goodwill

     53,512       —         53,512  

Deferred tax assets, net

     9,019       —         9,019  

Other assets

     2,730       —         2,730  
  

 

 

   

 

 

   

 

 

 

Total noncurrent assets

     1,347,936       (95,417     1,252,519  
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 2,064,293     $ (186,289   $ 1,878,004  
  

 

 

   

 

 

   

 

 

 

LIABILITIES AND EQUITY

      

Current liabilities:

      

Accounts payable

   $ 87,954     $ (5,163   $ 82,791  

Current portion of long-term debt

     49,742       —         49,742  

Accrued expenses and other current liabilities

     77,129       (6,998     70,131  
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     214,825       (12,161     202,664  

Noncurrent liabilities:

      

Long-term debt

     366,942       —         366,942  

Employee benefit obligations

     99,079       —         99,079  

Deferred tax liabilities, net

     72,219       (7,648     64,571  

Other noncurrent liabilities

     30,437       (436     30,001  
  

 

 

   

 

 

   

 

 

 

Total noncurrent liabilities

     568,677       (8,084     560,593  

EQUITY

      

Equity:

      

Unimin common stock, $1.00 par value, 2,000,000 shares authorized; 1,776,666 shares issued and 1,343,714 shares outstanding at March 31, 2018

     1,777       —         1,777  

Additional paid-in capital

     43,941       258,000       301,941  

Accumulated other comprehensive loss, net

     (118,294     —         (118,294

Retained earnings

     1,963,999       —         1,963,999  

Treasury stock, 432,952 shares at March 31, 2018

     (610,632     (424,044     (1,034,676
  

 

 

   

 

 

   

 

 

 

Total equity

     1,280,791       (166,044     1,114,747  
  

 

 

   

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 2,064,293     $ (186,289   $ 1,878,004  
  

 

 

   

 

 

   

 

 

 

See accompanying notes to the Unaudited Pro Forma Condensed Financial Information


Covia Holdings Corporation

Unaudited Pro Forma Condensed Statement of Operations

For the Three Months Ended March 31, 2018

(in thousands, except per share data)

 

     Historical
Unimin
    HPQ
Carveout
(Note 1)
    Unimin
Pro Forma
Total
 

Revenue

   $ 414,607     $ (44,786   $ 369,821  

Cost of goods sold (excludes depreciation, depletion and amortization)

     288,565       (28,246     260,319  

Operating Expenses

      

Selling, general and administrative expenses

     29,224       (4,000     25,224  

Depreciation, depletion and amortization expense

     29,409       (2,278     27,131  

Other operating expense (income), net

     (40     40       —    
  

 

 

   

 

 

   

 

 

 

Income from operations

     67,449       (10,302     57,147  
  

 

 

   

 

 

   

 

 

 

Interest expense, net

     5,191       —         5,191  

Other expense, net

     5,300       —         5,300  
  

 

 

   

 

 

   

 

 

 

Total other expenses, net

     10,491       —         10,491  
  

 

 

   

 

 

   

 

 

 

Income before provision for income taxes

     56,958       (10,302     46,656  

Income tax provision

     11,416       (1,545     9,871  
  

 

 

   

 

 

   

 

 

 

Net income

   $ 45,542     $ (8,757   $ 36,785  
  

 

 

   

 

 

   

 

 

 

Earnings per share:

      

Basic and diluted

   $ 33.89       $ 31.33  

Weighted average shares outstanding:

      

Basic and diluted

     1,344       (170     1,174  

See accompanying notes to the Unaudited Pro Forma Condensed Financial Information


Covia Holdings Corporation

Unaudited Pro Forma Condensed Statement of Operations

For the Year Ended December 31, 2017

(in thousands, except per share data)

 

     Historical
Unimin
    HPQ
Carveout
(Note 1)
    Unimin Pro
Forma
Total
 

Revenue

   $ 1,444,487     $ (149,375   $ 1,295,112  

Cost of goods sold (excludes depreciation, depletion and amortization)

     1,032,957       (100,775     932,182  

Operating Expenses

      

Selling, general and administrative expenses

     115,971       (14,519     101,452  

Depreciation, depletion and amortization expense

     112,705       (11,145     101,560  

Other operating expense, net

     2,948       155       3,103
  

 

 

   

 

 

   

 

 

 

Income from operations

     179,906       (23,091     156,815  
  

 

 

   

 

 

   

 

 

 

Interest expense, net

     14,653       —         14,653  

Other expense, net

     19,300       —         19,300  
  

 

 

   

 

 

   

 

 

 

Total other expenses, net

     33,953       —         33,953  
  

 

 

   

 

 

   

 

 

 

Income before benefit for income taxes

     145,953       (23,091     122,862  

Income tax benefit

     (8,218     (621     (8,839
  

 

 

   

 

 

   

 

 

 

Net income

   $ 154,171     $ (22,470   $ 131,701  
  

 

 

   

 

 

   

 

 

 

Earnings per share:

      

Basic and diluted

   $ 114.71       $ 112.18  

Weighted average shares outstanding:

      

Basic and diluted

     1,344       (170     1,174  

See accompanying notes to the Unaudited Pro Forma Condensed Financial Information


Covia Holdings Corporation

Unaudited Pro Forma Condensed Statement of Operations

For the Year Ended December 31, 2016

(in thousands, except per share data)

 

     Historical
Unimin
    HPQ
Carveout
(Note 1)
    Unimin
Pro
Forma
Total
 

Revenue

   $ 1,093,476     $ (110,780   $ 982,696  

Cost of goods sold (excludes depreciation, depletion and amortization)

     826,945       (72,480     754,465  

Operating Expenses

      

Selling, general and administrative expenses

     112,715       (11,794     100,921  

Depreciation, depletion and amortization expense

     116,259       (11,210     105,049  

Goodwill and other asset impairments

     9,634       —         9,634  

Other operating expense (income), net

     8,471       (642     7,829  
  

 

 

   

 

 

   

 

 

 

Income from operations

     19,452       (14,654     4,798  
  

 

 

   

 

 

   

 

 

 

Interest expense, net

     23,999       —         23,999  

Equity in (earnings) of affiliated companies

     (1,022     —         (1,022

Other expense, net

     12,923       —         12,923  
  

 

 

   

 

 

   

 

 

 

Total other expenses, net

     35,900       —         35,900  
  

 

 

   

 

 

   

 

 

 

Loss before benefit for income taxes

     (16,448     (14,654     (31,102

Income tax benefit

     (20,113     (2,780     (22,893
  

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 3,665     $ (11,874   $ (8,209
  

 

 

   

 

 

   

 

 

 

Earnings per share:

      

Basic and diluted

   $ 2.73       $ (6.99

Weighted average shares outstanding:

      

Basic and diluted

     1,344       (170     1,174  

See accompanying notes to the Unaudited Pro Forma Condensed Financial Information


Covia Holdings Corporation

Unaudited Pro Forma Condensed Statement of Operations

For the Year Ended December 31, 2015

(in thousands, except per share data)

 

     Historical
Unimin
    HPQ
Carveout
(Note 1)
    Unimin Pro
Forma
Total
 

Revenue

   $ 1,472,903     $ (101,225   $ 1,371,678  

Cost of goods sold (excludes depreciation, depletion and amortization)

     1,127,794       (61,900     1,065,894  

Operating Expenses

      

Selling, general and administrative expenses

     118,514       (9,990     108,524  

Depreciation, depletion and amortization expense

     126,294       (15,369     110,925  

Goodwill and other asset impairments

     150,038       —         150,038  

Other operating expense (income), net

     27,131       (544     26,587
  

 

 

   

 

 

   

 

 

 

Loss from operations

     (76,868     (13,422     (90,290
  

 

 

   

 

 

   

 

 

 

Interest expense, net

     36,187       —         36,187  

Equity in (earnings) of affiliated companies

     (4,970     —         (4,970
  

 

 

   

 

 

   

 

 

 

Total other expenses, net

     31,217       —         31,217  
  

 

 

   

 

 

   

 

 

 

Loss before benefit for income taxes

     (108,085     (13,422     (121,507

Income tax benefit

     (35,727     (2,429     (38,156
  

 

 

   

 

 

   

 

 

 

Net loss

   $ (72,358   $ (10,993   $ (83,351
  

 

 

   

 

 

   

 

 

 

Earnings per share:

      

Basic and diluted

   $ (53.84     $ (71.00

Weighted average shares outstanding:

      

Basic and diluted

     1,344       (170     1,174  

See accompanying notes to the Unaudited Pro Forma Condensed Financial Information


Covia Holdings Corporation and Subsidiaries

Notes to Unaudited Pro Forma Condensed Financial Information

(in thousands, except per share data)

Note 1. Description of the Disposition and Pro Forma Adjustments

HPQ Carveout

As contemplated by the Merger Agreement, dated as of December 11, 2017 (the “Merger Agreement”), among Unimin, Sibelco, Fairmount Santrol Holdings Inc., Bison Merger Sub, Inc. and Bison Merger Sub I, LLC, on May 31, 2018, Unimin contributed certain assets, including its global high purity quartz business, which consists of Unimin’s Electronics segment, to Sibelco North America, Inc. (“Sibelco North America”), in exchange for all of the stock of Sibelco North America and the assumption by Sibelco North America of certain liabilities related to the business being transferred. Prior to the consummation of the Merger, Unimin redeemed 169,550 shares of its common stock from Sibelco in exchange for 100% of the stock of Sibelco North America transferred by Unimin to Sibelco. Accordingly, the pro forma adjustments are being made to exclude the assets, liabilities, stockholder’s equity, revenue and net income of the HPQ business, which are not part of the Company following consummation of the transactions contemplated by the Merger Agreement.

The adjustment to eliminate the net assets sold to, and liabilities assumed by, Sibelco and to recognize the preliminary estimated gain was determined as follows:

 

Value of Unimin stock received

   $ 424.0  

Net Assets transferred

     (166.0
  

 

 

 

Estimated after-tax gain

   $ 258.0  

The transfer of the HPQ business to Sibelco is a tax-free spin-off and therefore, there will not be any tax expense on the gain for this transaction. Since the transaction is between entities under common control, the gain is reflected as an adjustment to additional paid in capital.

Note 2. Basis of Pro Forma Presentation

The accompanying unaudited pro forma condensed financial statements were prepared in accordance with Article 11 of Regulation S-X and are based on the audited historical financial information of Unimin. The audited historical consolidated financial information has been adjusted in the accompanying unaudited pro forma condensed financial statements to give effect to pro forma events that are (1) directly attributable to the transactions, (2) factually supportable and (3) with respect to the unaudited pro forma condensed statement of operations, expected to have a continuing impact on Unimin’s results.

The unaudited pro forma condensed financial information gives effect to the disposition to be accounted for in accordance with ASC 205, Presentation of Financial Statements, with the disposition treated as a discontinued operation, as if the disposition had been completed on January 1, 2015, for statement of operations purposes, and on March 31, 2018, for balance sheet purposes.