Enerpac Tool Group Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Guarantor Subsidiaries

Guarantor Subsidiaries

9 Months Ended

May 31, 2011

Note 16. Guarantor Subsidiaries

On June 12, 2007, Actuant Corporation (the "Parent") issued $250.0 million of 6.875% Senior Notes. All of our material domestic wholly owned subsidiaries (the "Guarantors") fully and unconditionally guarantee the 6.875% 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. The following tables present the condensed 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.

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 in the condensed consolidating financial statements primarily includes loan activity, purchases and sales of goods or services 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, the impact of foreign currency rate changes and non-cash intercompany dividends.

CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS

(In thousands)


	Three Months Ended May 31, 2011
	Parent			Guarantors		Non- Guarantors			Eliminations			Consolidated

Net sales	$	45,301		$	142,145	$	205,331		$	—		$	392,777
Cost of products sold		11,904			97,584		129,251			—			238,739

Gross profit		33,397			44,561		76,080			—			154,038
Selling, administrative and engineering expenses		23,834			24,549		39,921			—			88,304
Restructuring charges		1,006			19		(163	)		—			862
Amortization of intangible assets		—			3,893		2,978			—			6,871

Operating profit		8,557			16,100		33,344			—			58,001
Financing costs, net		7,850			—		—			—			7,850
Intercompany expense (income), net		(984	)		4,453		(3,469	)		—			—
Other expense (income), net		(3,628	)		194		3,765			—			331

Earnings from continuing operations before income tax expense		5,319			11,453		33,048			—			49,820
Income tax expense		1,224			2,635		7,601			—			11,460

Net earnings from continuing operations before equity in earnings of subsidiaries		4,095			8,818		25,447			—			38,360
Equity in earnings of subsidiaries		33,136			22,368		1,232			(56,736	)		—

Earnings from continuing operations		37,231			31,186		26,679			(56,736	)		38,360
Loss from discontinued operations, net of income taxes		(873	)		—		(1,129	)		—			(2,002	)

Net earnings	$	36,358		$	31,186	$	25,550		$	(56,736	)	$	36,358


	Three Months Ended May 31, 2010
	Parent			Guarantors		Non- Guarantors			Eliminations			Consolidated
Net sales	$	37,788		$	121,283	$	150,997		$	—		$	310,068
Cost of products sold		12,159			86,979		94,744			—			193,882

Gross profit		25,629			34,304		56,253			—			116,186
Selling, administrative and engineering expenses		20,080			22,608		26,764			—			69,452
Restructuring charges		37			565		754			—			1,356
Amortization of intangible assets		—			3,601		1,684			—			5,285

Operating profit		5,512			7,530		27,051			—			40,093
Financing costs, net		7,681			—		98			—			7,779
Intercompany expense (income), net		(6,196	)		1,418		4,778			—			—
Other expense (income), net		143			467		(295	)		—			315

Earnings from continuing operations before income tax expense		3,884			5,645		22,470			—			31,999
Income tax expense		1,076			1,556		1,074			—			3,706

Net earnings from continuing operations before equity in earnings of subsidiaries		2,808			4,089		21,396			—			28,293
Equity in earnings of subsidiaries		19,027			10,983		712			(30,722	)		—

Earnings from continuing operations		21,835			15,072		22,108			(30,722	)		28,293
Loss from discontinued operations, net of income taxes		—			—		(6,458	)		—			(6,458	)

Net earnings	$	21,835		$	15,072	$	15,650		$	(30,722	)	$	21,835

CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS

(In thousands)


	Nine Months Ended May 31, 2011
	Parent			Guarantors		Non- Guarantors			Eliminations			Consolidated
Net sales	$	119,206		$	388,059	$	534,622		$	—		$	1,041,887
Cost of products sold		33,838			270,580		336,551			—			640,969

Gross profit		85,368			117,479		198,071			—			400,918
Selling, administrative and engineering expenses		62,915			72,637		107,306			—			242,858
Restructuring charges		1,109			128		358			—			1,595
Amortization of intangible assets		—			11,401		8,445			—			19,846

Operating profit		21,344			33,313		81,962			—			136,619
Financing costs, net		23,640			—		—			—			23,640
Intercompany expense (income), net		(8,412	)		12,479		(4,067	)		—			—
Other expense (income), net		(4,342	)		162		5,438			—			1,276

Earnings from continuing operations before income tax expense		10,440			20,672		80,591			—			111,703
Income tax expense		2,374			4,608		17,558			—			24,540

Net earnings from continuing operations before equity in earnings of subsidiaries		8,066			16,064		63,033			—			87,163
Equity in earnings of subsidiaries		76,864			51,780		3,429			(132,073	)		—

Earnings from continuing operations		84,930			67,844		66,462			(132,073	)		87,163
Loss from discontinued operations, net of income taxes		(14,753	)		—		(2,233	)		—			(16,986	)

Net earnings	$	70,177		$	67,844	$	64,229		$	(132,073	)	$	70,177


	Nine Months Ended May 31, 2010
	Parent			Guarantors		Non- Guarantors			Eliminations			Consolidated
Net sales	$	101,328		$	337,907	$	410,911		$	—		$	850,146
Cost of products sold		31,376			246,888		259,210			—			537,474

Gross profit		69,952			91,019		151,701			—			312,672
Selling, admin and engineering expenses		52,983			65,824		80,205			—			199,012
Restructuring charges		1,502			6,176		5,731			—			13,409
Amortization of intangible assets		—			10,814		5,257			—			16,071

Operating profit		15,467			8,205		60,508			—			84,180
Financing costs, net		23,973			2		140			—			24,115
Intercompany expense (income), net		(15,803	)		647		15,156			—			—
Other expense (income), net		(393	)		526		229			—			362

Earnings from continuing operations before income tax expense		7,690			7,030		44,983			—			59,703
Income tax expense		2,683			1,684		5,888			—			10,255

Net earnings from continuing operations before equity in earnings of subsidiaries		5,007			5,346		39,095			—			49,448
Equity in earnings of subsidiaries		35,839			23,007		1,352			(60,198	)		—

Earnings from continuing operations		40,846			28,353		40,447			(60,198	)		49,448
Loss from discontinued operations, net of income taxes		—			—		(8,602	)		—			(8,602	)

Net earnings	$	40,846		$	28,353	$	31,845		$	(60,198	)	$	40,846

CONDENSED CONSOLIDATING BALANCE SHEETS

(In thousands)


	May 31, 2011
	Parent		Guarantors		Non- Guarantors			Eliminations			Consolidated
ASSETS
Current Assets	$	99,784	$	159,085	$	314,470		$	—		$	573,339
Property, Plant & Equipment, net		3,177		38,555		69,037			—			110,769
Goodwill		68,619		425,768		317,708			—			812,095
Other Intangibles, net		—		235,877		183,518			—			419,395
Investment in Subsidiaries		1,639,133		378,421		60,342			(2,077,896	)		—
Intercompany Receivable		—		272,900		—			(272,900	)		—
Other Long-term Assets		11,426		53		2,138			—			13,617

Total Assets	$	1,822,139	$	1,510,659	$	947,213		$	(2,350,796	)	$	1,929,215


LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities	$	119,199	$	69,323	$	175,421		$	—		$	363,943
Long-term Debt		465,966		—		—			—			465,966
Deferred Income Taxes		83,768		—		48,113			—			131,881
Pension and Post-retirement Benefit Liabilities		24,947		—		2,776			—			27,723
Other Long-term Liabilities		23,817		621		37,401			—			61,839
Intercompany Payable		226,579		—		46,321			(272,900	)		—
Shareholders' Equity		877,863		1,440,715		637,181			(2,077,896	)		877,863

Total Liabilities and Shareholders' Equity	$	1,822,139	$	1,510,659	$	947,213		$	(2,350,796	)	$	1,929,215


	August 31, 2010
	Parent		Guarantors		Non- Guarantors			Eliminations			Consolidated
ASSETS
Current Assets	$	78,548	$	134,552	$	247,050		$	—		$	460,150
Property, Plant & Equipment, net		5,166		41,226		61,990			—			108,382
Goodwill		68,969		417,914		218,006			—			704,889
Other Intangibles, net		—		242,310		94,668			—			336,978
Investment in Subsidiaries		1,511,103		319,196		115,846			(1,946,145	)		—
Intercompany Receivable		—		227,792		212,847			(440,639	)		—
Other Long-term Assets		8,421		130		2,753			—			11,304

Total Assets	$	1,672,207	$	1,383,120	$	953,160		$	(2,386,784	)	$	1,621,703


LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities	$	102,832	$	60,983	$	182,022		$	—		$	345,837
Long-term Debt		367,380		—		—			—			367,380
Deferred Income Taxes		84,694		—		25,536			—			110,230
Pension and Post-retirement Benefit Liabilities		27,144		972		(44	)		—			28,072
Other Long-term Liabilities		20,257		766		9,440			—			30,463
Intercompany Payable		330,179		—		110,460			(440,639	)		—
Shareholders' Equity		739,721		1,320,399		625,746			(1,946,145	)		739,721

Total Liabilities and Shareholders' Equity	$	1,672,207	$	1,383,120	$	953,160		$	(2,386,784	)	$	1,621,703

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(In thousands)


	Nine Months Ended May 31, 2011
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Operating Activities
Net cash provided by (used in) operating activities	$	15,423		$	(2,123	)	$	83,331		$	(1,533	)	$	95,098

Investing Activities
Proceeds from sale of property, plant & equipment		—			191			168			—			359
Proceeds from sale of business, net of transaction costs		—			—			3,463			—			3,463
Capital expenditures		(3,354	)		(3,537	)		(7,952	)		—			(14,843	)
Business acquisitions, net of cash acquired		—			(350	)		(159,697	)		—			(160,047	)

Cash used in investing activities		(3,354	)		(3,696	)		(164,018	)		—			(171,068	)

Financing Activities

Net borrowings on revolver and other debt		—			—			14			—			14
Issuance of term loans		100,000			—			—			—			100,000
Intercompany loan activity		(95,141	)		5,819			89,322			—			—
Open market repurchases of 2% Convertible Notes		(34	)		—			—			—			(34	)
Debt issuance costs		(5,197	)		—			—			—			(5,197	)
Stock option exercises and related tax benefits		7,285			—			—			—			7,285
Cash dividend		(2,716	)		—			(1,533	)		1,533			(2,716	)

Cash provided by financing activities		4,197			5,819			87,803			1,533			99,352

Effect of exchange rate changes on cash		—			—			4,695			—			4,695

Net increase in cash and cash equivalents		16,266			—			11,811			—			28,077
Cash and cash equivalents - beginning of period		5,055			—			35,167			—			40,222

Cash and cash equivalents - end of period	$	21,321		$	—		$	46,978		$	—		$	68,299

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(In thousands)


	Nine Months Ended May 31, 2010
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Operating Activities
Net cash provided by (used in) operating activities	$	52,822		$	(12,015	)	$	33,271		$	(4,504	)	$	69,574

Investing Activities
Proceeds from sale of property, plant & equipment		1			416			656			—			1,073
Proceeds from sale of businesses, net of transaction costs		—			—			7,516			—			7,516
Capital expenditures		(809	)		(5,087	)		(7,317	)		—			(13,213	)
Business acquisitions, net of cash acquired		—			(9,374	)		(19,874	)		—			(29,248	)

Cash used in investing activities		(808	)		(14,045	)		(19,019	)		—			(33,872	)

Financing Activities

Net borrowings (repayments) on revolver and other debt		1,276			—			(1,094	)		—			182
Intercompany loan activity		(28,700	)		30,564			(1,864	)		—			—
Open market repurchases of 2% Convertible Notes		(22,894	)		—			—			—			(22,894	)
Stock option exercises, related tax benefits and other		1,692			—			—			—			1,692
Cash dividend		(2,702	)		(4,504	)		—			4,504			(2,702	)

Cash provided by (used in) financing activities		(51,328	)		26,060			(2,958	)		4,504			(23,722	)

Effect of exchange rate changes on cash		—			—			(1,084	)		—			(1,084	)

Net increase in cash and cash equivalents		686			—			10,210			—			10,896
Cash and cash equivalents - beginning of period		126			—			11,259			—			11,385

Cash and cash equivalents - end of period	$	812		$	—		$	21,469		$	—		$	22,281