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SEC Filings

10-Q
FORTERRA, INC. filed this Form 10-Q on 11/09/2017
Entire Document
 
FORTERRA, INC.
Notes to Unaudited Condensed Consolidated Financial Statements



A summary of the status of stock options granted under the 2016 Incentive Plan during the nine months ended September 30, 2017, and changes during the nine months then ended, is presented in the table below:

 
Shares
Weighted Average Exercise Price
Outstanding, beginning of period
357,840

$18.00
Granted
1,225,188

$10.80
Exercised

n/a
Forfeited
(178,509
)
$18.70
Outstanding, end of period
1,404,519

$11.63
Options exercisable at end of period
27,500

$18.00
 

Restricted Stock Awards

Restricted stock awards are share awards that entitle the holder to receive shares of the Company's common stock which become freely transferable upon vesting. During the three and nine months ended September 30, 2017, pursuant to the 2016 Incentive Plan, the Company issued 160,348 and 450,698 restricted stock awards, respectively. These restricted stock awards granted to employees generally vest on a three-year vesting schedule. The estimated compensation cost of the restricted stock awards, which is equal to the fair value of the awards on the date of grant, is recognized on a straight-line basis over the vesting period.

The following table summarizes information about restricted stock award activity during the nine months ended September 30, 2017:

 
Shares
Weighted Average Grant Date Fair Value
Unvested balance, beginning of period
134,650

$18.00
Grants
450,698

$13.16
Vested shares
(13,500
)
$18.00
Forfeitures
(78,798
)
$18.75
Unvested balance, end of period
493,050

$13.45

17.    Income Taxes

The Company's quarterly provision for income taxes is calculated using the annual effective tax rate method, which applies an estimated annual effective tax rate to pre-tax income or loss. The Company recorded income tax benefit from continuing operations of $8.5 million and $25.4 million for the three and nine months ended September 30, 2017, respectively, and an income tax expense of $8.2 million and an income tax benefit of $28.6 million for the three and nine months ended September 30, 2016, respectively.
 
The income tax benefit for the nine months ended September 30, 2017 recorded includes an effective tax rate of 36.0%, which differs from the federal statutory rate primarily due to the effect of state income taxes, valuation allowance in certain states and foreign rate differentials which decrease the benefit rate. There was no income tax benefit associated with the goodwill impairment recognized in the nine months ended September 30, 2017 since the goodwill is nondeductible for income tax purposes. The income tax benefit for the nine months ended September 30, 2016 is primarily attributable to the reduction of the Company's valuation allowance and corresponding recognition of a deferred tax benefit after giving consideration to deferred income tax liabilities of $34.9 million recorded in the acquisition of Sherman-Dixie Concrete Industries, Inc. and USP Holdings, Inc.


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