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, 2012

Note 14. Guarantor Subsidiaries

On April 16, 2012, Actuant Corporation (the “Parent”) issued $300.0 million of 5.625% Senior Notes due 2022. All of the Company’s material domestic wholly owned subsidiaries (the “Guarantors”) fully and unconditionally guarantee (except for certain customary limitations) the 5.625% Senior Notes on a joint and several basis. The Company plans to file a registration statement on Form S-4 with the Securities and Exchange Commission (the “SEC”) with respect to its offer to exchange new 5.625% Senior Secured Notes due 2022 that have been registered under the Securities Act of 1933 for any and all of its outstanding 5.625% Senior Secured Notes due 2022 that have not been so registered. There are no significant restrictions on the ability of the Guarantors to make distributions to the Parent. 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.

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 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 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, 2012
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
Net sales	$	53,206		$	153,967		$	222,042		$	—		$	429,215
Cost of products sold		17,112			105,368			140,615			—			263,095

Gross profit		36,094			48,599			81,427			—			166,120
Selling, administrative and engineering expenses		21,609			26,264			43,190			—			91,063
Amortization of intangible assets		335			3,412			3,646			—			7,393

Operating profit		14,150			18,923			34,591			—			67,664
Financing costs, net		7,255			(22	)		3			—			7,236
Intercompany expense (income), net		(8,412	)		1,432			6,980			—			—
Debt refinancing charges		16,830			—			—			—			16,830
Other expense (income), net		(111	)		907			1,808			—			2,604

Earnings (loss) before income tax expense (benefit)		(1,412	)		16,606			25,800			—			40,994
Income tax expense (benefit)		(2,898	)		3,716			5,775			—			6,593

Net earnings before equity in earnings of subsidiaries		1,486			12,890			20,025			—			34,401
Equity in earnings (loss) of subsidiaries		32,915			16,521			(450	)		(48,986	)		—

Net earnings	$	34,401		$	29,411		$	19,575		$	(48,986	)	$	34,401


	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		24,840			24,568			39,758			—			89,166
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

CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS

(In thousands)


	Nine Months Ended May 31, 2012
	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
Net sales	$	151,240		$	427,839		$	620,959		$	—		$	1,200,038
Cost of products sold		49,505			297,651			392,862			—			740,018

Gross profit		101,735			130,188			228,097			—			460,020
Selling, administrative and engineering expenses		61,935			79,138			122,862			—			263,935
Amortization of intangible assets		1,005			10,243			10,436			—			21,684

Operating profit		38,795			40,807			94,799			—			174,401
Financing costs, net		23,527			(14	)		(234	)		—			23,279
Intercompany expense (income), net		(24,585	)		3,731			20,854			—			—
Debt refinancing charges		16,830			—			—			—			16,830
Other expense (income), net		904			2,581			(395	)		—			3,090

Earnings before income tax expense		22,119			34,509			74,574			—			131,202
Income tax expense		2,542			7,858			17,052			—			27,452

Net earnings before equity in earnings of subsidiaries		19,577			26,651			57,522			—			103,750
Equity in earnings of subsidiaries		84,173			51,134			988			(136,295	)		—

Net earnings	$	103,750		$	77,785		$	58,510		$	(136,295	)	$	103,750


	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		64,024			72,765			107,664			—			244,453
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		(4,324	)		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

CONDENSED CONSOLIDATING BALANCE SHEETS

(In thousands)


	May 31, 2012
	Parent		Guarantors		Non- Guarantors		Eliminations			Consolidated
ASSETS
Current assets	$	83,779	$	159,031	$	332,481	$	—		$	575,291
Property, plant & equipment, net		6,684		33,251		76,030		—			115,965
Goodwill		62,543		433,193		377,946		—			873,682
Other intangibles, net		14,857		206,925		232,578		—			454,360
Intercompany receivable		—		399,007		281,587		(680,594	)		—
Investment in subsidiaries		1,884,934		440,620		120,266		(2,445,820	)		—
Other long-term assets		12,490		22		2,299		—			14,811

Total assets	$	2,065,287	$	1,672,049	$	1,423,187	$	(3,126,414	)	$	2,034,109

LIABILITIES & SHAREHOLDERS’ EQUITY
Current liabilities	$	90,009	$	63,592	$	172,161	$	—		$	325,762
Long-term debt		392,500		—		—		—			392,500
Deferred income taxes		92,126		—		41,493		—			133,619
Pension and post-retirement benefit liabilities		16,119		—		2,052		—			18,171
Other long-term liabilities		59,234		660		26,878		—			86,772
Intercompany payable		338,014		—		342,580		(680,594	)		—
Shareholders’ equity		1,077,285		1,607,797		838,023		(2,445,820	)		1,077,285

Total liabilities and shareholders’ equity	$	2,065,287	$	1,672,049	$	1,423,187	$	(3,126,414	)	$	2,034,109

CONDENSED CONSOLIDATING BALANCE SHEETS

(In thousands)


	August 31, 2011
	Parent		Guarantors		Non- Guarantors		Eliminations			Consolidated
ASSETS
Current assets	$	87,982	$	155,067	$	303,435	$	—		$	546,484
Property, plant & equipment, net		4,327		37,133		87,189		—			128,649
Goodwill		62,543		432,184		393,739		—			888,466
Other intangibles, net		15,861		216,277		247,268		—			479,406
Intercompany receivable		—		277,157		288,701		(565,858	)		—
Investment in subsidiaries		1,859,779		379,170		67,794		(2,306,743	)		—
Other long-term assets		10,862		51		2,763		—			13,676

Total assets	$	2,041,354	$	1,497,039	$	1,390,889	$	(2,872,601	)	$	2,056,681

LIABILITIES & SHAREHOLDERS’ EQUITY
Current liabilities	$	76,300	$	70,126	$	183,877	$	—		$	330,303
Long-term debt		522,727		—		—		—			522,727
Deferred income taxes		124,469		—		41,476		—			165,945
Pension and post-retirement benefit liabilities		16,452		—		2,412		—			18,864
Other long-term liabilities		59,466		779		39,584		—			99,829
Intercompany payable		322,927		—		242,931		(565,858	)		—
Shareholders’ equity		919,013		1,426,134		880,609		(2,306,743	)		919,013

Total liabilities and shareholders’ equity	$	2,041,354	$	1,497,039	$	1,390,889	$	(2,872,601	)	$	2,056,681

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(In thousands)


	Nine Months Ended May 31, 2012
	Parent			Guarantors			Non- Guarantors			Eliminations		Consolidated
Operating Activities
Net cash provided by operating activities	$	56,851		$	13,659		$	58,804		$	—	$	129,314
Investing Activities
Proceeds from sale of property, plant and equipment		2,100			137			6,249			—		8,486
Capital expenditures		(4,367	)		(2,797	)		(10,327	)		—		(17,491	)
Business acquisitions, net of cash acquired		(290	)		—			(29,444	)		—		(29,734	)

Cash used in investing activities		(2,557	)		(2,660	)		(33,522	)		—		(38,739	)
Financing Activities
Net repayments on revolving credit facilities		(57,990	)		—			(177	)		—		(58,167	)
Intercompany loan activity		(2,947	)		(10,999	)		13,946			—		—
Principal repayments on term loan		(1,250	)		—			—			—		(1,250	)
Repurchases of 2% Convertible Notes		(102	)		—			—			—		(102	)
Proceeds on 5.625% Senior Note issuance		300,000			—			—			—		300,000
Redemption of 6.875% Senior Notes		(250,000	)		—			—			—		(250,000	)
Debt issuance costs		(5,340	)		—			—			—		(5,340	)
Purchase of treasury shares		(39,282	)		—			—			—		(39,282	)
Stock option exercises and related tax benefits		6,392			—			—			—		6,392
Cash dividends		(2,748	)		—			—			—		(2,748	)

Cash (used in) provided by financing activities		(53,267	)		(10,999	)		13,769			—		(50,497	)
Effect of exchange rate changes on cash		—			—			(4,150	)		—		(4,150	)

Net increase in cash and cash equivalents		1,027			—			34,901			—		35,928
Cash and cash equivalents—beginning of period		872			—			43,349			—		44,221

Cash and cash equivalents—end of period	$	1,899		$	—		$	78,250		$	—	$	80,149

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 and equipment		—			191			168			—			359
Proceeds from sale of businesses, 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 revolving credit facilities		—			—			14			—			14
Issuance of term loans		100,000			—			—			—			100,000
Intercompany loan activity		(95,141	)		5,819			89,322			—			—
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 dividends		(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