Quarterly report pursuant to Section 13 or 15(d)

Guarantor Subsidiaries

v3.10.0.1
Guarantor Subsidiaries
3 Months Ended
Nov. 30, 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 November 30, 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 the subsidiaries that do not guarantee the 5.625% Senior Notes (the "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 the Parent, the Guarantors and the non-Guarantors and the eliminations necessary to arrive at the information for the Company on a consolidated basis.
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands)
 
Three Months Ended November 30, 2018
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net sales
$
40,290

 
$
95,822

 
$
156,419

 
$

 
$
292,531

Cost of products sold
9,881

 
70,596

 
107,046

 

 
187,523

Gross profit
30,409

 
25,226

 
49,373

 

 
105,008

Selling, administrative and engineering expenses
20,966

 
18,314

 
33,912

 

 
73,192

Amortization of intangible assets
318

 
2,692

 
1,268

 

 
4,278

Restructuring charges

 
(93
)
 
496

 

 
403

Impairment & divestiture charges

 
10,220

 
26,233

 

 
36,453

Operating profit (loss)
9,125

 
(5,907
)
 
(12,536
)
 

 
(9,318
)
Financing costs (income), net
7,551

 

 
(256
)
 

 
7,295

Intercompany (income) expense, net
(4,053
)
 
6,491

 
(2,438
)
 

 

Other (income) expense, net
(216
)
 
7

 
1,120

 

 
911

Earnings (loss) before income tax (benefit) expense
5,843

 
(12,405
)
 
(10,962
)
 

 
(17,524
)
Income tax (benefit) expense
(2,706
)
 
(102
)
 
2,736

 


 
(72
)
Net earnings (loss) before equity in (loss) earnings of subsidiaries
8,549

 
(12,303
)
 
(13,698
)
 

 
(17,452
)
Equity in (loss) earnings of subsidiaries
(26,001
)
 
(13,132
)
 
1,255

 
37,878

 

Net loss
(17,452
)
 
(25,435
)
 
(12,443
)
 
37,878

 
(17,452
)
Comprehensive loss
$
(25,396
)
 
$
(25,434
)
 
$
(20,119
)
 
$
45,553

 
$
(25,396
)


CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
(in thousands)
 
Three Months Ended November 30, 2017
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net sales
$
35,710

 
$
87,834

 
$
165,411

 
$

 
$
288,955

Cost of products sold
6,963

 
64,574

 
116,507

 

 
188,044

Gross profit
28,747

 
23,260

 
48,904

 

 
100,911

Selling, administrative and engineering expenses
19,715

 
18,448

 
36,315

 

 
74,478

Amortization of intangible assets
318

 
2,861

 
1,952

 

 
5,131

Restructuring charges
5,356

 
169

 
1,104

 

 
6,629

Operating profit
3,358

 
1,782

 
9,533

 

 
14,673

Financing costs (income), net
7,623

 
21

 
(130
)
 

 
7,514

Intercompany (income) expense, net
(4,877
)
 
5,484

 
(607
)
 

 

Other (income) expense, net
(50
)
 
45

 
334

 

 
329

Earnings (loss) before income tax (benefit) expense
662

 
(3,768
)
 
9,936

 

 
6,830

Income tax (benefit) expense
(285
)
 
437

 
1,452

 

 
1,604

Net earnings (loss) before equity in earnings (loss) of subsidiaries
947

 
(4,205
)
 
8,484

 

 
5,226

Equity in earnings (loss) of subsidiaries
4,279

 
8,793

 
(46
)
 
(13,026
)
 

Net earnings
5,226

 
4,588

 
8,438

 
(13,026
)
 
5,226

Comprehensive income
$
8,251

 
$
4,588

 
$
11,566

 
$
(16,154
)
 
$
8,251



 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
 
 
CONDENSED CONSOLIDATING BALANCE SHEETS
(in thousands)
 
November 30, 2018
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
41,371

 
$

 
$
162,072

 
$

 
$
203,443

Accounts receivable, net
18,511

 
40,803

 
131,876

 

 
191,190

Inventories, net
25,035

 
51,389

 
78,340

 

 
154,764

Assets held for sale

 
79,748

 
26,445

 

 
106,193

Other current assets
11,761

 
1,824

 
38,160

 

 
51,745

Total current assets
96,678

 
173,764

 
436,893

 

 
707,335

Property, plant & equipment, net
7,828

 
16,557

 
54,775

 

 
79,160

Goodwill
38,847

 
184,121

 
254,392

 

 
477,360

Other intangibles, net
6,566

 
97,932

 
48,221

 

 
152,719

Investment in subsidiaries
1,806,237

 
1,198,123

 
807,031

 
(3,811,391
)
 

Intercompany receivable

 
616,713

 
208,731

 
(825,444
)
 

Other long-term assets
12,745

 
339

 
20,375

 

 
33,459

Total assets
$
1,968,901

 
$
2,287,549

 
$
1,830,418

 
$
(4,636,835
)
 
$
1,450,033

LIABILITIES & SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
 
 
 
Trade accounts payable
$
13,915

 
$
20,468

 
$
89,684

 
$

 
$
124,067

Accrued compensation and benefits
10,509

 
2,938

 
22,896

 

 
36,343

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

 

 

 

 
30,000

Income taxes payable

 

 
8,215

 

 
8,215

Liabilities held for sale

 
12,951

 
57,079

 

 
70,030

Other current liabilities
18,207

 
6,481

 
39,026

 

 
63,714

Total current liabilities
72,631

 
42,838

 
216,900

 

 
332,369

Long-term debt
495,384

 

 

 

 
495,384

Deferred income taxes
15,426

 

 
1,505

 

 
16,931

Pension and post-retirement benefit liabilities
7,632

 

 
7,039

 

 
14,671

Other long-term liabilities
47,348

 
285

 
5,480

 

 
53,113

Intercompany payable
792,915

 
32,529

 

 
(825,444
)
 

Shareholders’ equity
537,565

 
2,211,897

 
1,599,494

 
(3,811,391
)
 
537,565

Total liabilities and shareholders’ equity
$
1,968,901

 
$
2,287,549

 
$
1,830,418

 
$
(4,636,835
)
 
$
1,450,033

CONDENSED CONSOLIDATING BALANCE SHEETS
(in thousands)
 
August 31, 2018
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
67,649

 
$

 
$
182,841

 
$

 
$
250,490

Accounts receivable, net
19,969

 
54,822

 
112,958

 

 
187,749

Inventories, net
22,570

 
59,391

 
74,395

 

 
156,356

Assets held for sale

 

 
23,573

 

 
23,573

Other current assets
7,358

 
4,759

 
30,615

 

 
42,732

Total current assets
117,546

 
118,972

 
424,382

 

 
660,900

Property, plant & equipment, net
7,937

 
26,408

 
55,875

 

 
90,220

Goodwill
38,847

 
203,543

 
270,022

 

 
512,412

Other intangible assets, net
6,884

 
121,793

 
52,360

 

 
181,037

Investment in subsidiaries
1,836,954

 
1,211,781

 
789,917

 
(3,838,652
)
 

Intercompany receivables

 
622,646

 
200,173

 
(822,819
)
 

Other long-term assets
12,955

 
366

 
23,448

 

 
36,769

Total assets
$
2,021,123

 
$
2,305,509

 
$
1,816,177

 
$
(4,661,471
)
 
$
1,481,338


 
 
 
 
 
 
 
 
 
LIABILITIES & SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
 
 
 
Trade accounts payable
$
15,890

 
$
29,022

 
$
85,926

 
$

 
$
130,838

Accrued compensation and benefits
22,171

 
9,804

 
22,533

 

 
54,508

Current maturities of debt
30,000

 

 

 

 
30,000

Income taxes payable

 

 
4,091

 

 
4,091

Liabilities held for sale

 

 
44,225

 

 
44,225

Other current liabilities
17,379

 
11,078

 
38,842

 

 
67,299

Total current liabilities
85,440

 
49,904

 
195,617

 

 
330,961

Long-term debt
502,695

 

 

 

 
502,695

Deferred income taxes
17,467

 

 
4,466

 

 
21,933

Pension and post-retirement benefit liabilities
7,765

 

 
7,104

 

 
14,869

Other long-term liabilities
45,483

 
359

 
6,326

 

 
52,168

Intercompany payable
803,561

 
19,258

 

 
(822,819
)
 

Shareholders’ equity
558,712

 
2,235,988

 
1,602,664

 
(3,838,652
)
 
558,712

Total liabilities and shareholders’ equity
$
2,021,123

 
$
2,305,509

 
$
1,816,177

 
$
(4,661,471
)
 
$
1,481,338

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(in thousands)
 
Three Months Ended November 30, 2018
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Operating Activities
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by operating activities
$
(16,275
)
 
$
4,337

 
$
(17,172
)
 
$

 
$
(29,110
)
Investing Activities
 
 
 
 
 
 
 
 
 
Capital expenditures
(423
)
 
(4,340
)
 
(2,903
)
 

 
(7,666
)
Proceeds from sale of property, plant and equipment
8

 
3

 

 

 
11

Cash used in investing activities
(415
)
 
(4,337
)
 
(2,903
)
 

 
(7,655
)
Financing Activities
 
 
 
 
 
 
 
 
 
Principal repayments on term loan
(7,500
)
 

 

 

 
(7,500
)
Stock option exercises, related tax benefits and other
552

 

 

 

 
552

Taxes paid related to the net share settlement of equity awards
(201
)
 

 

 

 
(201
)
Cash Dividends
(2,439
)
 

 

 

 
(2,439
)
Cash used in financing activities
(9,588
)
 

 

 

 
(9,588
)
Effect of exchange rate changes on cash

 

 
(694
)
 

 
(694
)
Net decrease in cash and cash equivalents
(26,278
)
 

 
(20,769
)
 

 
(47,047
)
Cash and cash equivalents—beginning of period
67,649

 

 
182,841

 

 
250,490

Cash and cash equivalents—end of period
$
41,371

 
$

 
$
162,072

 
$

 
$
203,443

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(in thousands)
 
Three Months Ended November 30, 2017
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Operating Activities
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by operating activities
$
(9,838
)
 
$
3,580

 
$
(14,200
)
 
$

 
$
(20,458
)
Investing Activities
 
 
 
 
 
 
 
 
 
Capital expenditures
(1,478
)
 
(3,589
)
 
(2,837
)
 

 
(7,904
)
Proceeds from sale of property, plant and equipment

 
9

 
23

 

 
32

Rental asset lease buyout for Viking divestiture

 

 
(27,718
)
 

 
(27,718
)
Cash used in investing activities
(1,478
)
 
(3,580
)
 
(30,532
)
 

 
(35,590
)
Financing Activities
 
 
 
 
 
 
 
 
 
Repayments on term loan
(7,500
)
 

 

 

 
(7,500
)
Stock option exercises and other
2,231

 

 

 

 
2,231

Taxes paid related to the net share settlement of equity awards
(282
)
 

 

 

 
(282
)
Cash dividend
(2,390
)
 

 

 

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

 
5,954

 

 

Cash (used in) provided by financing activities
(13,895
)
 

 
5,954

 

 
(7,941
)
Effect of exchange rate changes on cash

 

 
(532
)
 

 
(532
)
Net decrease in cash and cash equivalents
(25,211
)
 

 
(39,310
)
 

 
(64,521
)
Cash and cash equivalents—beginning of period
34,715

 

 
194,856

 

 
229,571

Cash and cash equivalents—end of period
$
9,504

 
$

 
$
155,546

 
$

 
$
165,050