Quarterly report pursuant to Section 13 or 15(d)

Guarantor Subsidiaries

v3.8.0.1
Guarantor Subsidiaries
6 Months Ended
Feb. 28, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Guarantor Subsidiaries
Guarantor Subsidiaries
As discussed in Note 8, “Debt” on April 16, 2012, Actuant Corporation (the “Parent”) issued $300.0 million of 5.625% Senior Notes, of which $287.6 million remains outstanding as of February 28, 2018. All of our material, domestic wholly owned subsidiaries (the “Guarantors”) fully and unconditionally guarantee the 5.625% Senior Notes on a joint and several basis. There are no significant restrictions on the ability of the Guarantors to make distributions to the Parent.
Certain assets, liabilities and expenses have not been allocated to the Guarantors and non-Guarantors and therefore are included in the Parent column in the accompanying condensed consolidating financial statements. These items are of a corporate or consolidated nature and include, but are not limited to, tax provisions and related assets and liabilities, certain employee benefit obligations, prepaid and accrued insurance and corporate indebtedness. Intercompany activity primarily includes loan activity, purchases and sales of goods or services, investments and dividends. Intercompany balances also reflect certain non-cash transactions including transfers of assets and liabilities between the Parent, Guarantor and non-Guarantor, allocation of non-cash expenses from the Parent to the Guarantors and non-Guarantors, non-cash intercompany dividends and the impact of foreign currency rate changes. 
The following tables present the results of operations, financial position and cash flows of Actuant Corporation and its subsidiaries, the Guarantor and non-Guarantor entities, and the eliminations necessary to arrive at the information for the Company on a consolidated basis.
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands)
 
Three Months Ended February 28, 2018
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net sales
$
36,219

 
$
83,072

 
$
155,874

 
$

 
$
275,165

Cost of products sold
5,848

 
63,979

 
115,642

 

 
185,469

Gross profit
30,371

 
19,093

 
40,232

 

 
89,696

Selling, administrative and engineering expenses
18,190

 
17,232

 
33,080

 

 
68,502

Amortization of intangible assets
318

 
2,861

 
1,989

 

 
5,168

Restructuring charges
194

 
909

 
2,347

 

 
3,450

Impairment & divestiture charges
4,217

 

 
(1,230
)
 

 
2,987

Operating profit (loss)
7,452

 
(1,909
)
 
4,046

 

 
9,589

Financing costs (income), net
7,777

 
22

 
(195
)
 

 
7,604

Intercompany (income) expense, net
(5,042
)
 
5,419

 
(377
)
 

 

Other expense, net
90

 
49

 
228

 

 
367

Earnings (loss) before income taxes
4,627

 
(7,399
)
 
4,390

 

 
1,618

Income tax expense (benefit)
10,612

 
(2,234
)
 
11,461

 

 
19,839

Net loss before equity in loss of subsidiaries
(5,985
)
 
(5,165
)
 
(7,071
)
 

 
(18,221
)
Equity in loss of subsidiaries
(12,236
)
 
(9,454
)
 
(1,459
)
 
23,149

 

Net loss
$
(18,221
)
 
$
(14,619
)
 
$
(8,530
)
 
$
23,149

 
$
(18,221
)
Comprehensive income (loss)
$
62,788

 
$
(14,619
)
 
$
74,820

 
$
(60,201
)
 
$
62,788

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands)
 
Three Months Ended February 28, 2017
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net sales
$
34,953

 
$
80,973

 
$
142,943

 
$

 
$
258,869

Cost of products sold
10,049

 
61,821

 
99,673

 

 
171,543

Gross profit
24,904

 
19,152

 
43,270

 

 
87,326

Selling, administrative and engineering expenses
18,553

 
16,549

 
31,855

 

 
66,957

Amortization of intangible assets
318

 
2,918

 
1,833

 

 
5,069

Restructuring charges
372

 
441

 
1,288

 

 
2,101

Operating profit (loss)
5,661

 
(756
)
 
8,294

 

 
13,199

Financing costs (income), net
7,430

 

 
(96
)
 

 
7,334

Intercompany (income) expense, net
(7,882
)
 
11,242

 
(3,360
)
 

 

Intercompany dividends

 
(4,258
)
 

 
4,258

 

Other (income) expense, net
(48
)
 
(4
)
 
643

 

 
591

Earnings (loss) before income taxes
6,161

 
(7,736
)
 
11,107

 
(4,258
)
 
5,274

Income tax expense (benefit)
151

 
(667
)
 
716

 

 
200

Net earnings (loss) before equity in (loss) earnings of subsidiaries
6,010

 
(7,069
)
 
10,391

 
(4,258
)
 
5,074

Equity in earnings (loss) of subsidiaries
(936
)
 
8,057

 
(268
)
 
(6,853
)
 

Net earnings
$
5,074

 
$
988

 
$
10,123

 
$
(11,111
)
 
$
5,074

Comprehensive income
$
8,185

 
$
1,324

 
$
12,828

 
$
(14,152
)
 
$
8,185

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands)

 
Six Months Ended February 28, 2018
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net sales
$
71,929

 
$
170,906

 
$
321,285

 
$

 
$
564,120

Cost of products sold
12,811

 
128,553

 
232,149

 

 
373,513

Gross profit
59,118

 
42,353

 
89,136

 

 
190,607

Selling, administrative and engineering expenses
37,905

 
35,680

 
69,395

 

 
142,980

Amortization of intangible assets
636

 
5,722

 
3,941

 

 
10,299

Restructuring charges
5,550

 
1,078

 
3,451

 

 
10,079

Impairment & divestiture charges
4,217

 

 
(1,230
)
 

 
2,987

Operating profit (loss)
10,810

 
(127
)
 
13,579

 

 
24,262

Financing costs (income), net
15,400

 
43

 
(325
)
 

 
15,118

Intercompany (income) expense, net
(9,919
)
 
10,903

 
(984
)
 

 

Other expense, net
40

 
94

 
562

 

 
696

Earnings (loss) before income taxes
5,289

 
(11,167
)
 
14,326

 

 
8,448

Income tax expense (benefit)
10,327

 
(1,797
)
 
12,913

 

 
21,443

Net (loss) earnings before equity in loss of subsidiaries
(5,038
)
 
(9,370
)
 
1,413

 

 
(12,995
)
Loss in earnings of subsidiaries
(7,957
)
 
(661
)
 
(1,505
)
 
10,123

 

Net loss
$
(12,995
)
 
$
(10,031
)
 
$
(92
)
 
$
10,123

 
$
(12,995
)
Comprehensive income (loss)
$
71,039

 
$
(10,031
)
 
$
86,386

 
$
(76,355
)
 
$
71,039

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands)

 
Six Months Ended February 28, 2017
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net sales
$
66,682

 
$
165,249

 
$
292,731

 
$

 
$
524,662

Cost of products sold
17,143

 
123,237

 
203,889

 

 
344,269

Gross profit
49,539

 
42,012

 
88,842

 

 
180,393

Selling, administrative and engineering expenses
36,520

 
33,185

 
65,856

 

 
135,561

Amortization of intangible assets
636

 
5,994

 
3,700

 

 
10,330

Restructuring charges
727

 
1,164

 
3,157

 

 
5,048

Director & officer transition charges
7,784

 

 

 

 
7,784

Operating profit
3,872

 
1,669

 
16,129

 

 
21,670

Financing costs (income), net
14,756

 

 
(289
)
 

 
14,467

Intercompany (income) expense, net
(12,950
)
 
10,156

 
2,794

 

 

Intercompany dividends

 
(59,401
)
 

 
59,401

 

Other expense (income), net
2,037

 
(74
)
 
(2,001
)
 

 
(38
)
Earnings before income taxes
29

 
50,988

 
15,625

 
(59,401
)
 
7,241

Income tax (benefit) expense
(2,563
)
 
(697
)
 
462

 

 
(2,798
)
Net earnings before equity in earnings of subsidiaries
2,592

 
51,685

 
15,163

 
(59,401
)
 
10,039

Equity in earnings of subsidiaries
7,447

 
13,682

 
2,862

 
(23,991
)
 

Net earnings
$
10,039

 
$
65,367

 
$
18,025

 
$
(83,392
)
 
$
10,039

Comprehensive (loss) income
$
(12,972
)
 
$
47,616

 
$
13,459

 
$
(61,075
)
 
$
(12,972
)
CONDENSED CONSOLIDATING BALANCE SHEETS
(in thousands)
 
February 28, 2018
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
4,276

 
$

 
$
149,319

 
$

 
$
153,595

Accounts receivable, net
19,641

 
52,171

 
138,838

 

 
210,650

Inventories, net
26,915

 
61,363

 
77,949

 

 
166,227

Other current assets
14,186

 
3,263

 
43,120

 

 
60,569

Total current assets
65,018

 
116,797

 
409,226

 

 
591,041

Property, plant and equipment, net
8,076

 
31,661

 
62,674

 

 
102,411

Goodwill
38,846

 
201,578

 
305,711

 

 
546,135

Other intangibles, net
7,521

 
132,320

 
76,529

 

 
216,370

Investment in subsidiaries
1,902,303

 
1,274,274

 
806,292

 
(3,982,869
)
 

Intercompany receivable

 
564,517

 
208,983

 
(773,500
)
 

Other long-term assets
7,407

 
1,864

 
15,077

 

 
24,348

Total assets
$
2,029,171

 
$
2,323,011

 
$
1,884,492

 
$
(4,756,369
)
 
$
1,480,305

LIABILITIES & SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
 
 
 
Trade accounts payable
$
15,469

 
$
31,079

 
$
90,393

 
$

 
$
136,941

Accrued compensation and benefits
13,376

 
5,239

 
22,903

 

 
41,518

Current maturities of debt and short-term borrowings
30,000

 

 

 

 
30,000

Income taxes payable
152

 

 
7,535

 

 
7,687

Other current liabilities
13,683

 
7,951

 
36,734

 

 
58,368

Total current liabilities
72,680

 
44,269

 
157,565

 

 
274,514

Long-term debt, net
517,318

 

 

 

 
517,318

Deferred income taxes
17,631

 

 
5,631

 

 
23,262

Pension and postretirement benefit liabilities
11,942

 

 
7,396

 

 
19,338

Other long-term liabilities
48,651

 
383

 
7,558

 

 
56,592

Intercompany payable
771,668

 

 
1,832

 
(773,500
)
 

Shareholders’ equity
589,281

 
2,278,359

 
1,704,510

 
(3,982,869
)
 
589,281

Total liabilities and shareholders’ equity
$
2,029,171

 
$
2,323,011

 
$
1,884,492

 
$
(4,756,369
)
 
$
1,480,305

CONDENSED CONSOLIDATING BALANCE SHEETS
(in thousands)
 
August 31, 2017
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
34,715

 
$

 
$
194,856

 
$

 
$
229,571

Accounts receivable, net
17,498

 
50,749

 
121,959

 

 
190,206

Inventories, net
23,308

 
48,492

 
71,851

 

 
143,651

Assets held for sale

 

 
21,835

 

 
21,835

Other current assets
23,576

 
3,619

 
34,468

 

 
61,663

Total current assets
99,097

 
102,860

 
444,969

 

 
646,926

Property, plant & equipment, net
7,049

 
26,130

 
61,342

 

 
94,521

Goodwill
38,847

 
200,499

 
290,735

 

 
530,081

Other intangibles, net
8,156

 
138,042

 
74,291

 

 
220,489

Investment in subsidiaries
1,832,472

 
1,186,715

 
805,016

 
(3,824,203
)
 

Intercompany receivable

 
589,193

 
205,183

 
(794,376
)
 

Other long-term assets
8,377

 
812

 
15,749

 

 
24,938

Total assets
$
1,993,998

 
$
2,244,251

 
$
1,897,285

 
$
(4,618,579
)
 
$
1,516,955

LIABILITIES & SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
 
 
 
Trade accounts payable
$
15,412

 
$
27,168

 
$
90,807

 
$

 
$
133,387

Accrued compensation and benefits
19,082

 
7,672

 
24,185

 

 
50,939

Current maturities of debt and short-term borrowings
30,000

 

 

 

 
30,000

Income taxes payable
153

 

 
5,927

 

 
6,080

Liabilities held for sale

 

 
101,083

 

 
101,083

Other current liabilities
18,512

 
7,169

 
31,764

 

 
57,445

Total current liabilities
83,159

 
42,009

 
253,766

 

 
378,934

Long-term debt
531,940

 

 

 

 
531,940

Deferred income taxes
24,164

 

 
5,695

 

 
29,859

Pension and post-retirement benefit liabilities
12,540

 

 
7,322

 

 
19,862

Other long-term liabilities
48,692

 
352

 
6,777

 

 
55,821

Intercompany payable
792,964

 

 
1,412

 
(794,376
)
 

Shareholders’ equity
500,539

 
2,201,890

 
1,622,313

 
(3,824,203
)
 
500,539

Total liabilities and shareholders’ equity
$
1,993,998

 
$
2,244,251

 
$
1,897,285

 
$
(4,618,579
)
 
$
1,516,955

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(in thousands)
 
Six Months Ended February 28, 2018
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Operating Activities
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by operating activities
$
(14,509
)
 
$
6,923

 
$
(14,520
)
 
$

 
$
(22,106
)
Investing Activities
 
 
 
 
 
 
 
 
 
Capital expenditures
(1,982
)
 
(5,274
)
 
(5,291
)
 

 
(12,547
)
Proceeds from sale of property, plant and equipment

 
83

 
30

 

 
113

Rental asset buyout for Viking divestiture

 

 
(27,718
)
 

 
(27,718
)
Proceeds from sale of business, net of transactions costs
198

 

 
8,582

 

 
8,780

Cash paid for business acquisitions, net of cash acquired

 
(1,732
)
 
(14,785
)
 

 
(16,517
)
Cash used in investing activities
(1,784
)
 
(6,923
)
 
(39,182
)
 

 
(47,889
)
Financing Activities
 
 
 
 
 
 
 
 
 
Principal repayments on term loan
(15,000
)
 

 

 

 
(15,000
)
Stock option exercises and other
10,305

 

 

 

 
10,305

Taxes paid related to the net share settlement of equity awards
(1,107
)
 

 

 

 
(1,107
)
Cash dividend
(2,390
)
 

 

 

 
(2,390
)
Intercompany loan activity
(5,954
)
 

 
5,954

 

 

Cash (used in) provided by financing activities
(14,146
)
 

 
5,954

 

 
(8,192
)
Effect of exchange rate changes on cash

 

 
2,211

 

 
2,211

Net decrease in cash and cash equivalents
(30,439
)
 

 
(45,537
)
 

 
(75,976
)
Cash and cash equivalents—beginning of period
34,715

 

 
194,856

 

 
229,571

Cash and cash equivalents—end of period
$
4,276

 
$

 
$
149,319

 
$

 
$
153,595

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(in thousands)
 
Six Months Ended February 28, 2017
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Operating Activities
 
 
 
 
 
 
 
 
 
Net provided by operating activities
$
59,275

 
$
5,902

 
$
8,906

 
$
(59,401
)
 
$
14,682

Investing Activities
 
 
 
 
 
 
 
 
 
Capital expenditures
(2,156
)
 
(6,108
)
 
(6,431
)
 

 
(14,695
)
Proceeds from sale of property, plant and equipment

 
135

 
109

 

 
244

Cash used in investing activities
(2,156
)
 
(5,973
)
 
(6,322
)
 

 
(14,451
)
Financing Activities
 
 
 
 
 
 
 
 
 
Principal repayments on term loan
(7,500
)
 

 

 

 
(7,500
)
Taxes paid related to the net share settlement of equity awards
(920
)
 

 

 

 
(920
)
Stock option exercises and other
5,949

 

 

 

 
5,949

Cash dividend
(2,358
)
 

 
(59,401
)
 
59,401

 
(2,358
)
Intercompany loan activity
(53,734
)
 

 
53,734

 

 

Cash used in financing activities
(58,563
)
 

 
(5,667
)
 
59,401

 
(4,829
)
Effect of exchange rate changes on cash

 

 
(3,116
)
 

 
(3,116
)
Net decrease in cash and cash equivalents
(1,444
)
 
(71
)
 
(6,199
)
 

 
(7,714
)
Cash and cash equivalents—beginning of period
7,953

 
71

 
171,580

 

 
179,604

Cash and cash equivalents—end of period
$
6,509

 
$

 
$
165,381

 
$

 
$
171,890