x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Wisconsin | 39-0168610 | |
(State of incorporation) | (I.R.S. Employer Id. No.) |
Large accelerated filer | x | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ | |||
Emerging growth company | ¨ |
Page No. | |
• | economic uncertainty or a prolonged economic downturn; |
• | end market conditions in the industrial, oil & gas, energy, power generation, infrastructure, commercial construction, truck, automotive, specialty vehicle, mining and agriculture industries; |
• | competition in the markets we serve and market acceptance of existing and new products; |
• | a material disruption at a significant manufacturing facility; |
• | our ability to successfully identify and integrate acquisitions and realize anticipated benefits/results from acquired companies; |
• | divestitures and/or discontinued operations including retained liabilities from businesses that we sell; |
• | operating margin risk due to competitive pricing, operating inefficiencies, production levels and material, labor and overhead cost increases; |
• | our international operations present special risks, primarily from currency exchange rate fluctuations, exposure to local economic and political conditions, export and import restrictions and controls on repatriation of cash; |
• | regulatory and legal developments including changes to United States taxation rules, conflict mineral supply chain compliance, environmental laws and governmental climate change initiatives; |
• | the potential for a non-cash asset impairment charge, if operating performance or the outlook for one or more of our businesses were to fall significantly below current levels; |
• | our ability to execute restructuring actions and the realization of anticipated cost savings from those restructuring actions and cost reduction efforts; |
• | a significant failure in information technology (IT) infrastructure and systems, unauthorized access to financial and other sensitive data or cybersecurity threats; |
• | due to the assembly nature of our operations we purchase a significant amount of components from suppliers and our reliance on suppliers involves certain risks; |
• | litigation, including product liability and warranty claims; |
• | inadequate intellectual property protection or if our products are deemed to infringe on the intellectual property of others; |
• | our level of indebtedness, ability to comply with the financial and other covenants in our debt agreements and fluctuations in interest rates; and |
• | numerous other matters including those of a political, economic, business, competitive and regulatory nature contained from time to time in U.S. Securities and Exchange Commission ("SEC") filings, including, but not limited to, those factors listed in the "Risk Factors" section within Item 1A of Part I of the Form 10-K filed with the SEC on October 26, 2017. |
Three Months Ended February 28, | Six Months Ended February 28, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net sales | $ | 275,165 | $ | 258,869 | $ | 564,120 | $ | 524,662 | |||||||
Cost of products sold | 185,469 | 171,543 | 373,513 | 344,269 | |||||||||||
Gross profit | 89,696 | 87,326 | 190,607 | 180,393 | |||||||||||
Selling, administrative and engineering expenses | 68,502 | 66,957 | 142,980 | 135,561 | |||||||||||
Amortization of intangible assets | 5,168 | 5,069 | 10,299 | 10,330 | |||||||||||
Director & officer transition charges | — | — | — | 7,784 | |||||||||||
Restructuring charges | 3,450 | 2,101 | 10,079 | 5,048 | |||||||||||
Impairment & divestiture charges | 2,987 | — | 2,987 | — | |||||||||||
Operating profit | 9,589 | 13,199 | 24,262 | 21,670 | |||||||||||
Financing costs, net | 7,604 | 7,334 | 15,118 | 14,467 | |||||||||||
Other expense (income), net | 367 | 591 | 696 | (38 | ) | ||||||||||
Earnings before income tax expense (benefit) | 1,618 | 5,274 | 8,448 | 7,241 | |||||||||||
Income tax expense (benefit) | 19,839 | 200 | 21,443 | (2,798 | ) | ||||||||||
Net (loss) earnings | $ | (18,221 | ) | $ | 5,074 | $ | (12,995 | ) | $ | 10,039 | |||||
(Loss) earnings per share | |||||||||||||||
Basic | $ | (0.30 | ) | $ | 0.09 | $ | (0.22 | ) | $ | 0.17 | |||||
Diluted | $ | (0.30 | ) | $ | 0.08 | $ | (0.22 | ) | $ | 0.17 | |||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 60,318 | 59,368 | 60,095 | 59,170 | |||||||||||
Diluted | 60,318 | 60,146 | 60,095 | 59,881 | |||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net (loss) earnings | $ | (18,221 | ) | $ | 5,074 | $ | (12,995 | ) | $ | 10,039 | |||||
Other comprehensive income (loss), net of tax | |||||||||||||||
Foreign currency translation adjustments | 13,237 | 2,909 | 16,135 | (23,749 | ) | ||||||||||
Foreign currency translation due to divested business | 67,645 | — | 67,645 | — | |||||||||||
Pension and other postretirement benefit plans | 127 | 202 | 254 | 738 | |||||||||||
Total other comprehensive income (loss), net of tax | 81,009 | 3,111 | 84,034 | (23,011 | ) | ||||||||||
Comprehensive income (loss) | $ | 62,788 | $ | 8,185 | $ | 71,039 | $ | (12,972 | ) |
February 28, 2018 | August 31, 2017 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 153,595 | $ | 229,571 | ||||
Accounts receivable, net | 210,650 | 190,206 | ||||||
Inventories, net | 166,227 | 143,651 | ||||||
Assets held for sale | — | 21,835 | ||||||
Other current assets | 60,569 | 61,663 | ||||||
Total current assets | 591,041 | 646,926 | ||||||
Property, plant and equipment | ||||||||
Land, buildings and improvements | 48,457 | 43,737 | ||||||
Machinery and equipment | 241,393 | 227,535 | ||||||
Gross property, plant and equipment | 289,850 | 271,272 | ||||||
Less: Accumulated depreciation | (187,439 | ) | (176,751 | ) | ||||
Property, plant and equipment, net | 102,411 | 94,521 | ||||||
Goodwill | 546,135 | 530,081 | ||||||
Other intangibles, net | 216,370 | 220,489 | ||||||
Other long-term assets | 24,348 | 24,938 | ||||||
Total assets | $ | 1,480,305 | $ | 1,516,955 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Trade accounts payable | $ | 136,941 | $ | 133,387 | ||||
Accrued compensation and benefits | 41,518 | 50,939 | ||||||
Current maturities of debt and short-term borrowings | 30,000 | 30,000 | ||||||
Income taxes payable | 7,687 | 6,080 | ||||||
Liabilities held for sale | — | 101,083 | ||||||
Other current liabilities | 58,368 | 57,445 | ||||||
Total current liabilities | 274,514 | 378,934 | ||||||
Long-term debt, net | 517,318 | 531,940 | ||||||
Deferred income taxes | 23,262 | 29,859 | ||||||
Pension and postretirement benefit liabilities | 19,338 | 19,862 | ||||||
Other long-term liabilities | 56,592 | 55,821 | ||||||
Total liabilities | 891,024 | 1,016,416 | ||||||
Commitments and contingencies (Note 14) | ||||||||
Shareholders’ equity | ||||||||
Class A common stock, $0.20 par value per share, authorized 168,000,000 shares, issued 81,087,904 and 80,200,110 shares, respectively | 16,218 | 16,040 | ||||||
Additional paid-in capital | 155,974 | 138,449 | ||||||
Treasury stock, at cost, 20,439,434 shares | (617,731 | ) | (617,731 | ) | ||||
Retained earnings | 1,178,047 | 1,191,042 | ||||||
Accumulated other comprehensive loss | (143,227 | ) | (227,261 | ) | ||||
Stock held in trust | (2,848 | ) | (2,696 | ) | ||||
Deferred compensation liability | 2,848 | 2,696 | ||||||
Total shareholders’ equity | 589,281 | 500,539 | ||||||
Total liabilities and shareholders’ equity | $ | 1,480,305 | $ | 1,516,955 |
Six Months Ended February 28, | |||||||
2018 | 2017 | ||||||
Operating Activities | |||||||
Net (loss) earnings | $ | (12,995 | ) | $ | 10,039 | ||
Adjustments to reconcile net (loss) earnings to net cash (used in) provided by operating activities: | |||||||
Impairment & divestiture charges, including tax expense | 12,385 | — | |||||
Depreciation and amortization | 20,385 | 21,625 | |||||
Stock based compensation expense | 8,292 | 12,177 | |||||
(Benefit) expense for deferred income taxes | (7,124 | ) | 551 | ||||
Amortization of debt issuance costs | 826 | 826 | |||||
Other non-cash adjustments | 200 | 715 | |||||
Changes in components of working capital and other, excluding acquisitions and divestitures: | |||||||
Accounts receivable | (16,872 | ) | (20,897 | ) | |||
Inventories | (18,433 | ) | (394 | ) | |||
Trade accounts payable | (1,753 | ) | 12,276 | ||||
Prepaid expenses and other assets | (9,168 | ) | (10,819 | ) | |||
Income taxes payable/receivable | 17,505 | (6,918 | ) | ||||
Accrued compensation and benefits | (9,959 | ) | (3,704 | ) | |||
Other accrued liabilities | (5,395 | ) | (795 | ) | |||
Cash (used in) provided by operating activities | (22,106 | ) | 14,682 | ||||
Investing Activities | |||||||
Capital expenditures | (12,547 | ) | (14,695 | ) | |||
Proceeds from sale of property, plant and equipment | 113 | 244 | |||||
Rental asset buyout for Viking divestiture | (27,718 | ) | — | ||||
Proceeds from sale of business, net of transaction costs | 8,780 | — | |||||
Cash paid for business acquisitions, net of cash acquired | (16,517 | ) | — | ||||
Cash used in investing activities | (47,889 | ) | (14,451 | ) | |||
Financing Activities | |||||||
Principal repayments on term loan | (15,000 | ) | (7,500 | ) | |||
Stock option exercises and other | 10,305 | 5,949 | |||||
Taxes paid related to the net share settlement of equity awards | (1,107 | ) | (920 | ) | |||
Cash dividend | (2,390 | ) | (2,358 | ) | |||
Cash used in financing activities | (8,192 | ) | (4,829 | ) | |||
Effect of exchange rate changes on cash | 2,211 | (3,116 | ) | ||||
Net decrease in cash and cash equivalents | (75,976 | ) | (7,714 | ) | |||
Cash and cash equivalents - beginning of period | 229,571 | 179,604 | |||||
Cash and cash equivalents - end of period | $ | 153,595 | $ | 171,890 |
• | for the three and six months ended February 28, 2018, we recorded $1.3 million and $1.5 million, respectively, in excess tax deficiency as an increase to our income tax expense. This requirement was applied prospectively; |
• | excess tax benefits are now presented as operating activities in the statement of cash flows, rather than as financing activities. The Company chose to apply this requirement retrospectively, and as a result, reclassified approximately $0.6 million of excess tax benefits recognized during the six months ended February 28, 2017 from financing activities to operating activities in the condensed consolidated statement of cash flows; |
• | our computation of diluted earnings per share now excludes the excess tax benefits or deficiencies from the assumed proceeds available to repurchase shares. This requirement was applied prospectively. |
February 28, 2018 | August 31, 2017 | ||||||
Foreign currency translation adjustments | $ | 124,024 | $ | 207,804 | |||
Pension and other postretirement benefit plans, net of tax | 19,203 | 19,457 | |||||
Accumulated other comprehensive loss | $ | 143,227 | $ | 227,261 |
Six Months Ended February 28, 2018 | |||||||||||||||||||||
Industrial | Energy | Engineered Solutions | Corporate | Total | |||||||||||||||||
Balance as of August 31, 2017 | $ | 202 | $ | 3,613 | $ | 1,792 | $ | 30 | $ | 5,637 | |||||||||||
Restructuring charges | 2,951 | 3,205 | 486 | 4,271 | 10,913 | ||||||||||||||||
Cash payments | (868 | ) | (2,666 | ) | (1,517 | ) | (1,648 | ) | (6,699 | ) | |||||||||||
Other non-cash uses of reserve | (490 | ) | (1 | ) | (473 | ) | (192 | ) | (2,007 | ) | (1) | (3,162 | ) | ||||||||
Impact of changes in foreign currency rates | (10 | ) | (83 | ) | 21 | — | (72 | ) | |||||||||||||
Balance as of February 28, 2018 | $ | 1,785 | $ | 3,596 | $ | 590 | $ | 646 | $ | 6,617 |
Six Months Ended February 28, 2017 | ||||||||||||||||||||
Industrial | Energy | Engineered Solutions | Corporate | Total | ||||||||||||||||
Balance as of August 31, 2016 | $ | 1,343 | $ | 3,021 | $ | 1,863 | $ | 46 | $ | 6,273 | ||||||||||
Restructuring charges | 1,372 | 48 | 3,546 | 82 | 5,048 | |||||||||||||||
Cash payments | (1,394 | ) | (973 | ) | (2,312 | ) | (83 | ) | (4,762 | ) | ||||||||||
Other non-cash uses of reserve | (438 | ) | (14 | ) | (16 | ) | (36 | ) | (504 | ) | ||||||||||
Impact of changes in foreign currency rates | (21 | ) | 44 | (8 | ) | — | 15 | |||||||||||||
Balance as of February 28, 2017 | $ | 862 | $ | 2,126 | $ | 3,073 | $ | 9 | $ | 6,070 |
Total | |||
Accounts receivable, net | $ | 1,090 | |
Inventories, net | 3,004 | ||
Other current assets | 90 | ||
Property, plant & equipment | 2,014 | ||
Goodwill | 8,856 | ||
Other intangible assets, net | 4,126 | ||
Trade accounts payable | (1,299 | ) | |
Accrued compensation and benefits | (97 | ) | |
Income taxes payable | (586 | ) | |
Deferred income taxes | (681 | ) | |
Cash paid, net of cash acquired | $ | 16,517 |
Industrial | Energy | Engineered Solutions | Total | ||||||||||||
Balance as of August 31, 2017 | $ | 103,875 | $ | 188,830 | $ | 237,376 | $ | 530,081 | |||||||
Business acquisitions | — | 8,856 | — | 8,856 | |||||||||||
Impact of changes in foreign currency rates | 968 | 4,180 | 2,050 | 7,198 | |||||||||||
Balance as of February 28, 2018 | $ | 104,843 | $ | 201,866 | $ | 239,426 | $ | 546,135 |
February 28, 2018 | August 31, 2017 | ||||||||||||||||||||||||
Weighted Average Amortization Period (Years) | Gross Carrying Value | Accumulated Amortization | Net Book Value | Gross Carrying Value | Accumulated Amortization | Net Book Value | |||||||||||||||||||
Amortizable intangible assets: | |||||||||||||||||||||||||
Customer relationships | 15 | $ | 268,105 | $ | 163,676 | $ | 104,429 | $ | 263,498 | $ | 153,003 | $ | 110,495 | ||||||||||||
Patents | 10 | 30,538 | 24,918 | 5,620 | 30,401 | 24,027 | 6,374 | ||||||||||||||||||
Trademarks and tradenames | 18 | 21,396 | 10,015 | 11,381 | 21,498 | 9,396 | 12,102 | ||||||||||||||||||
Other intangibles | 3 | 6,777 | 6,458 | 319 | 6,672 | 6,234 | 438 | ||||||||||||||||||
Indefinite lived intangible assets: | |||||||||||||||||||||||||
Tradenames | N/A | 94,621 | — | 94,621 | 91,080 | — | 91,080 | ||||||||||||||||||
$ | 421,437 | $ | 205,067 | $ | 216,370 | $ | 413,149 | $ | 192,660 | $ | 220,489 |
Six Months Ended February 28, | |||||||
2018 | 2017 | ||||||
Beginning balance | $ | 6,616 | $ | 5,592 | |||
Provision for warranties | 3,403 | 1,482 | |||||
Warranty payments and costs incurred | (3,582 | ) | (3,096 | ) | |||
Impact of changes in foreign currency rates | 213 | (101 | ) | ||||
Ending balance | $ | 6,650 | $ | 3,877 |
February 28, 2018 | August 31, 2017 | ||||||
Senior Credit Facility | |||||||
Revolver | $ | — | $ | — | |||
Term Loan | 262,500 | 277,500 | |||||
Total Senior Credit Facility | 262,500 | 277,500 | |||||
5.625% Senior Notes | 287,559 | 287,559 | |||||
Total Senior Indebtedness | 550,059 | 565,059 | |||||
Less: Current maturities of long-term debt | (30,000 | ) | (30,000 | ) | |||
Debt issuance costs | (2,741 | ) | (3,119 | ) | |||
Total long-term debt, net | $ | 517,318 | $ | 531,940 |
Three Months Ended February 28, | Six Months Ended February 28, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Foreign currency (loss) gain, net | $ | (74 | ) | $ | (474 | ) | $ | 140 | $ | (1,966 | ) |
Three Months Ended February 28, | Six Months Ended February 28, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Numerator: | |||||||||||||||
Net (loss) earnings | $ | (18,221 | ) | $ | 5,074 | $ | (12,995 | ) | $ | 10,039 | |||||
Denominator: | |||||||||||||||
Weighted average common shares outstanding - basic | 60,318 | 59,368 | 60,095 | 59,170 | |||||||||||
Net effect of dilutive securities - stock based compensation plans (1) | — | 778 | — | 711 | |||||||||||
Weighted average common shares outstanding - diluted | 60,318 | 60,146 | $ | 60,095 | $ | 59,881 | |||||||||
Basic (loss) earnings per share | $ | (0.30 | ) | $ | 0.09 | $ | (0.22 | ) | $ | 0.17 | |||||
Diluted (loss) earnings per share | (0.30 | ) | 0.08 | (0.22 | ) | 0.17 | |||||||||
Anti-dilutive securities from stock based compensation plans (excluded from earnings per share calculation) | 3,397 | 2,011 | 2,613 | 1,987 |
Three Months Ended February 28, | Six Months Ended February 28, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Earnings (loss) before income taxes | $ | 1,618 | $ | 5,274 | $ | 8,448 | $ | 7,241 | |||||||
Income tax expense (benefit) | 19,839 | 200 | 21,443 | (2,798 | ) | ||||||||||
Effective income tax rate | 1,226.1 | % | 3.8 | % | 253.8 | % | (38.6 | )% |
• | The amount recorded for the transition tax liability is a provisional amount based on current estimates of total post-1986 foreign E&P and the income tax pools for all foreign subsidiaries which will continue to be refined over the coming periods. Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when the Company finalizes the calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and finalizes the amounts held in cash or other specified assets as of August 31, 2018. Further interpretations from U.S. federal and state governments and regulatory organizations may change the provisional tax liability or the accounting treatment of the provisional tax liability. It is anticipated that the amounts resulting from the transition tax will be fully offset by available foreign tax credits and will not result in future cash tax payments. In addition, there is a foreign tax credit carryforward on the balance sheet after the calculation of the transition tax liability. The Company is continuing to analyze the new provisions in order to determine future utilization of the credits and is anticipating further interpretive guidance in connection with the utilization of foreign tax credits going forward. As such, we are not yet able to reasonably estimate the future utilization of the foreign tax credits and have recorded the aforementioned valuation allowance. |
• | The Company is still analyzing certain aspects of the Act and refining the estimate of the expected revaluation of its deferred tax balances. This can potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. In addition, the Act provides for accelerated first year expensing of certain capital expenditures for which an estimate has been included in the estimated deferred balances for the year but will continue to be refined as the year progresses. The Act also provides changes related to the limits of deduction for employee compensation. The Company is treating any future non-deductible compensation as impacting deductible compensation expenses in the period incurred until further guidance is provided. |
• | The Act also includes a provision designed to tax global intangible low taxed income (GILTI) which will be effective in fiscal 2019. Under the provision, a U.S. shareholder is required to include in gross income the amount of its GILTI, which |
• | Prior to the Act, our practice and intention was to reinvest the earnings in our non-U.S. subsidiaries outside of the U.S., and no U.S. deferred income taxes or foreign withholding taxes were recorded. The transition tax noted above will result in the previously untaxed foreign earnings being included in the federal and state fiscal 2018 taxable income. We are currently analyzing our global working capital requirements and the potential tax liabilities that would be incurred if the non-U.S. subsidiaries distribute cash to the U.S. parent, which may include withholding taxes, local country taxes and potential U.S. state taxation. Furthermore, the transition tax will reduce the outside basis differences in our foreign corporations and any remaining temporary difference will potentially have some interaction with the GILTI tax noted above. For these reasons, we are not yet able to reasonably estimate the effect of this provision of the Act and have not recorded any withholding or state tax liabilities, any deferred taxes attributable to GILTI (as noted above) or any deferred taxes attributable to our investment in our foreign subsidiaries. |
• | We are also currently analyzing certain additional provisions of the Act that come into effect in fiscal 2019 and will determine if and how these items would impact the effective tax rate in the year the income or expense occurs. These provisions include the Base Erosion Anti-Abuse Tax (BEAT), eliminating U.S. federal income taxes on dividends from foreign subsidiaries, the new provision that could limit the amount of deductible interest expense, and the limitations on the deductibility of certain executive compensation. |
Three Months Ended February 28, | Six Months Ended February 28, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net Sales by Reportable Product Line & Segment: | |||||||||||||||
Industrial Segment: | |||||||||||||||
Industrial Tools | $ | 87,438 | $ | 78,679 | $ | 171,949 | $ | 157,718 | |||||||
Heavy Lifting Technology | 11,643 | 12,969 | 24,048 | 21,220 | |||||||||||
99,081 | 91,648 | 195,997 | 178,938 | ||||||||||||
Energy Segment: | |||||||||||||||
Energy Maintenance & Integrity | 48,889 | 51,590 | 105,598 | 116,411 | |||||||||||
Other Energy Solutions | 17,103 | 21,294 | 36,235 | 41,119 | |||||||||||
65,992 | 72,884 | 141,833 | 157,530 | ||||||||||||
Engineered Solutions Segment: | |||||||||||||||
On-Highway | 59,297 | 50,611 | 124,179 | 102,242 | |||||||||||
Agriculture, Off-Highway and Other | 50,795 | 43,726 | 102,111 | 85,952 | |||||||||||
110,092 | 94,337 | 226,290 | 188,194 | ||||||||||||
$ | 275,165 | $ | 258,869 | $ | 564,120 | $ | 524,662 | ||||||||
Operating Profit (Loss): | |||||||||||||||
Industrial | $ | 16,781 | $ | 18,380 | $ | 35,024 | $ | 37,155 | |||||||
Energy (1) | (4,513 | ) | (579 | ) | (4,220 | ) | 2,632 | ||||||||
Engineered Solutions | 2,209 | 1,816 | 8,543 | 2,571 | |||||||||||
General Corporate | (4,888 | ) | (6,418 | ) | (15,085 | ) | (20,688 | ) | |||||||
$ | 9,589 | $ | 13,199 | $ | 24,262 | $ | 21,670 |
February 28, 2018 | August 31, 2017 | ||||||
Assets by Segment: | |||||||
Industrial | $ | 324,477 | $ | 329,134 | |||
Energy | 464,018 | 482,963 | |||||
Engineered Solutions | 548,547 | 531,068 | |||||
General Corporate | 143,263 | 173,790 | |||||
$ | 1,480,305 | $ | 1,516,955 |
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 |
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 |
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 |
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 | ) |
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 |
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 |
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 |
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 |
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||||||
Net sales | $ | 275 | 100 | % | $ | 259 | 100 | % | $ | 564 | 100 | % | $ | 525 | 100 | % | ||||||||||||
Cost of products sold | 185 | 67 | % | 172 | 66 | % | 374 | 66 | % | 344 | 66 | % | ||||||||||||||||
Gross profit | 90 | 33 | % | 87 | 34 | % | 190 | 34 | % | 181 | 34 | % | ||||||||||||||||
Selling, administrative and engineering expenses | 69 | 25 | % | 67 | 26 | % | 143 | 25 | % | 136 | 26 | % | ||||||||||||||||
Amortization of intangible assets | 5 | 2 | % | 5 | 2 | % | 10 | 2 | % | 10 | 2 | % | ||||||||||||||||
Director & officer transition charges | — | — | % | — | — | % | — | — | % | 8 | 2 | % | ||||||||||||||||
Restructuring charges | 3 | 1 | % | 2 | 1 | % | 10 | 2 | % | 5 | 1 | % | ||||||||||||||||
Impairment & divestiture charges | 3 | 2 | % | — | — | % | 3 | 1 | % | — | — | % | ||||||||||||||||
Operating profit | 10 | 0.03636363636 | 4 | % | 13 | 5 | % | 24 | 4 | % | 22 | 4 | % | |||||||||||||||
Financing costs, net | 8 | 3 | % | 7 | 3 | % | 15 | 3 | % | 14 | 3 | % | ||||||||||||||||
Other expense, net | — | 0.02909090909 | — | % | 1 | — | % | 1 | — | % | — | — | % | |||||||||||||||
Earnings before income tax expense (benefit) | 2 | — | 1 | % | 5 | 2 | % | 8 | 1 | % | 7 | 1 | % | |||||||||||||||
Income tax expense (benefit) | 20 | 0.007272727273 | 7 | % | — | — | % | 21 | 4 | % | (3 | ) | (1 | )% | ||||||||||||||
Net (loss) earnings | $ | (18 | ) | 0.03636363636 | (7 | )% | $ | 5 | 2 | % | $ | (13 | ) | (2 | )% | $ | 11 | 2 | % | |||||||||
Diluted (loss) earnings per share | $ | (0.30 | ) | $ | 0.08 | $ | (0.22 | ) | $ | 0.17 |
Three Months Ended February 28, | Six Months Ended February 28, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net sales | $ | 99 | $ | 92 | $ | 196 | $ | 179 | |||||||
Operating profit | 17 | 18 | 35 | 37 | |||||||||||
Operating profit % | 17.0 | % | 20.1 | % | 17.9 | % | 20.8 | % |
Three Months Ended February 28, | Six Months Ended February 28, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net sales | $ | 66 | $ | 73 | $ | 142 | $ | 158 | |||||||
Operating (loss) profit (1) | (5 | ) | (1 | ) | (4 | ) | 3 | ||||||||
Operating (loss) profit % | (6.8 | )% | (0.8 | )% | (3.0 | )% | 1.7 | % |
Three Months Ended February 28, | Six Months Ended February 28, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net sales | $ | 110 | $ | 94 | $ | 226 | $ | 188 | |||||||
Operating profit | 2 | 2 | 9 | 3 | |||||||||||
Operating profit % | 2.0 | % | 1.9 | % | 3.8 | % | 1.4 | % |
Three Months Ended February 28, | Six Months Ended February 28, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Earnings before income taxes | $ | 2 | $ | 5 | $ | 8 | $ | 7 | |||||||
Income tax expense (benefit) | 20 | — | 21 | (3 | ) | ||||||||||
Effective income tax rate | 1,226.1 | % | 3.8 | % | 253.8 | % | (38.6 | )% |
Six Months Ended February 28, | |||||||
2018 | 2017 | ||||||
Net cash (used in) provided by operating activities | $ | (22 | ) | $ | 15 | ||
Net cash used in investing activities | (48 | ) | (15 | ) | |||
Net cash used in financing activities | (8 | ) | (5 | ) | |||
Effect of exchange rates on cash | 2 | (3 | ) | ||||
Net decrease in cash and cash equivalents | $ | (76 | ) | $ | (8 | ) |
February 28, 2018 | PWC% | August 31, 2017 | PWC% | ||||||||||
Accounts receivable, net | $ | 211 | 19 | % | $ | 190 | 17 | % | |||||
Inventory, net | 166 | 15 | % | 144 | 13 | % | |||||||
Accounts payable | (137 | ) | (12 | )% | (133 | ) | (12 | )% | |||||
Net primary working capital | $ | 240 | 22 | % | $ | 201 | 18 | % |
ACTUANT CORPORATION | |||
(Registrant) | |||
Date: April 9, 2018 | By: | /S/ RICK T. DILLON | |
Rick T. Dillon | |||
Executive Vice President and Chief Financial Officer | |||
(Principal Financial Officer) |
Exhibit | Description | Incorporated Herein By Reference To | Filed Herewith | Furnished Herewith | ||||
First Amendment to the Actuant Corporation 2017 Omnibus Incentive Plan | Exhibit A to the Definitive Proxy Statement related to the Company's 2018 Annual Meeting of Shareholders, which was filed with the SEC on December 4, 2017 | |||||||
Agreement by and between Actuant Corporation and Southeastern Capital Management dated March 20, 2018 | Exhibit 10.1 of Registrant's Form 8-K filed on March 21, 2018 | |||||||
Offer letter by and between Actuant Corporation and John Jeffery Schmaling dated January 18, 2018. | X | |||||||
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | |||||||
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | |||||||
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | |||||||
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | |||||||
The following materials from the Actuant Corporation Form 10-Q for the quarter ended February 28, 2018 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows and (v) the Notes to Condensed Consolidated Financial Statements. | X |
By: | /s/ Andre L. Williams | |
Its: | EVP - Human Resources |
Jeff Schmaling | ||
Signed: | /s/ John J. Schmaling | |
Date: | January 23, 2018 |
1. | I have reviewed this quarterly report on Form 10-Q of Actuant Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting |
/s/ Randal W. Baker | |
Randal W. Baker Chief Executive Officer and President |
1. | I have reviewed this quarterly report on Form 10-Q of Actuant Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting |
/s/ Rick T. Dillon | |
Rick T. Dillon | |
Executive Vice President and Chief Financial Officer |
/s/ Randal W. Baker | |
Randal W. Baker |
/s/ Rick T. Dillon | |
Rick T. Dillon |
Document and Entity Information - $ / shares |
6 Months Ended | ||
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Feb. 28, 2018 |
Mar. 31, 2018 |
Aug. 31, 2017 |
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Document Information [Line Items] | |||
Document Type | 10-Q | ||
Amendment Flag | false | ||
Document Period End Date | Feb. 28, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | Q2 | ||
Trading Symbol | ATU | ||
Entity Registrant Name | ACTUANT CORP | ||
Entity Central Index Key | 0000006955 | ||
Current Fiscal Year End Date | --08-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 60,686,435 | ||
Common Class A | |||
Document Information [Line Items] | |||
Common Stock, Par or Stated Value Per Share | $ 0.2 | $ 0.2 | |
Common Stock, Shares Authorized | 168,000,000 | 168,000,000 | |
Common Stock, Shares, Issued | 81,087,904 | 80,200,110 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Feb. 28, 2018 |
Feb. 28, 2017 |
Feb. 28, 2018 |
Feb. 28, 2017 |
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Condensed Statement of Income Captions [Line Items] | ||||
Net (loss) earnings | $ (18,221) | $ 5,074 | $ (12,995) | $ 10,039 |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation adjustments | 13,237 | 2,909 | 16,135 | (23,749) |
Other Comprehensive Income Loss Foreign Currency Transaction And Translation Adjustment Related to Divested Business, Net Of Tax | 67,645 | 0 | 67,645 | 0 |
Pension and other postretirement benefit plans | 127 | 202 | 254 | 738 |
Total other comprehensive income (loss), net of tax | 81,009 | 3,111 | 84,034 | (23,011) |
Comprehensive income (loss) | $ 62,788 | $ 8,185 | $ 71,039 | $ (12,972) |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Feb. 28, 2018 |
Aug. 31, 2017 |
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Treasury Stock, Shares | 20,439,434 | 20,439,434 |
Common Class A | ||
Common Stock, Par or Stated Value Per Share | $ 0.2 | $ 0.2 |
Common Stock, Shares Authorized | 168,000,000 | 168,000,000 |
Common Stock, Shares, Issued | 81,087,904 | 80,200,110 |
Basis of Presentation |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Note 1. Basis of Presentation General The accompanying unaudited condensed consolidated financial statements of Actuant Corporation (“Actuant,” or the “Company”) have been prepared in accordance with generally accepted accounting principles for interim financial reporting and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The condensed consolidated balance sheet data as of August 31, 2017 was derived from the Company’s audited financial statements, but does not include all disclosures required by United States generally accepted accounting principles. For additional information, including the Company’s significant accounting policies, refer to the consolidated financial statements and related footnotes in the Company’s fiscal 2017 Annual Report on Form 10-K. In the opinion of management, all adjustments considered necessary for a fair statement of financial results have been made. Such adjustments consist of only those of a normal recurring nature. Operating results for the three and six months ended February 28, 2018 are not necessarily indicative of the results that may be expected for the entire fiscal year ending August 31, 2018. New Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Stock Compensation: Improvements to Employee Share-Based Payment Accounting, to simplify several aspects of accounting for share-based payment transactions. Under the new guidance it is required, among other items, that all excess tax deficiencies or benefits be recorded as income tax expense or benefit in the statement of operations and not in additional paid-in capital (shareholder's equity). This guidance was adopted on September 1, 2017 and the impact of adopting this guidance had the following effects:
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. Under ASU 2014-09 and subsequent updates included in ASU 2016-10, ASU 2016-12, ASU 2017-13 and ASU 2017-14, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. It also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. This guidance is effective for fiscal years beginning on or after December 15, 2017 (fiscal 2019 for the Company). The Company has begun assessing its various revenue streams to identify performance obligations under these ASUs and the key aspects of the standard that will impact the Company's revenue recognition process. Based upon our preliminary assessments, these standards may impact our allocation of contract revenue between various products and services and the timing of when those revenues are recognized, but do not expect a material or significant impact to amounts recognized. Given the diversity of its commercial arrangements, the Company is continuing to assess the impact these standards may have on its consolidated results of operations, financial position, cash flows and related financial statement disclosures upon adoption. In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the income statement. The new guidance requires the service cost component of net periodic benefit cost to be presented in the same income statement line items as other employee compensation costs arising from services rendered during the period. Other components of the net periodic benefit cost are to be stated separately from service cost and outside of operating income. This guidance is effective for fiscal years beginning after December 15, 2017 (fiscal 2019 for the Company) and interim periods within those annual periods. The amendment is to be applied retrospectively. Due to a majority of the Company's defined benefit pension or other postretirement benefit plans being frozen and the net periodic benefit pension cost not being significant, the Company does not believe that adoption of this guidance will have a significant impact on the financial statements of the Company. In August 2016, the FASB issued ASU 2016‑15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, to address how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This guidance is effective for fiscal years beginning after December 15, 2017 (fiscal 2019 for the Company), including interim periods within those fiscal years. This update will require adoption on a retrospective basis unless it is impracticable to apply. The Company does not believe that this guidance will have a significant impact on its presentation of the statement of cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (and subsequent ASU 2018-01), to increase transparency and comparability among organizations by recognizing all lease transactions (with terms in excess of 12 months) on the balance sheet as a lease liability and a right-of-use asset. This guidance is effective for fiscal years beginning after December 15, 2018 (fiscal 2020 for the Company), including interim periods within those fiscal years. Upon adoption, the lessee will apply the new standard retrospectively to all periods presented under a modified retrospective approach using a cumulative effect adjustment in the year of adoption. The Company is currently gathering, documenting and analyzing lease agreements subject to this ASU and anticipates material additions to the balance sheet (upon adoption) of right-of-use assets, offset by the associated liabilities, due to our routine use of operating leases over time. In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows companies to reclassify stranded income tax effects resulting from the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings in their consolidated financial statements. This guidance is effective for fiscal years beginning after December 15, 2018 (fiscal 2020 for Company), including interim periods within those fiscal years. We are currently evaluating the impact of this new standard on our consolidated financial statements. Accumulated Other Comprehensive Loss The following is a summary of the Company's accumulated other comprehensive loss (in thousands):
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Director & Officer Transition Charges (Notes) |
6 Months Ended |
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Feb. 28, 2018 | |
Compensation Related Costs [Abstract] | |
Compensation Related Costs, General [Text Block] | Note 2. Director & Officer Transition Charges During the six months ended February 28, 2017, the Company recorded separation and transition charges of $7.8 million in connection with the retirement of one director of the Company's Board of Directors and the transition of the Executive Vice President/Chief Financial Officer. The charges were mainly comprised of compensation expense for accelerated equity vesting, severance, outplacement, legal, signing bonus and relocation costs. |
Restructuring Charges (Notes) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities Disclosure [Text Block] | Note 3. Restructuring Charges The Company has committed to various restructuring initiatives including workforce reductions, leadership changes, plant consolidations to reduce manufacturing overhead, satellite office closures, the continued movement of production and product sourcing to low cost alternatives and the centralization and standardization of certain administrative functions. Total restructuring charges for these activities were $4.3 million and $2.1 million in the three months ended February 28, 2018 and 2017, respectively. Year-to-date restructuring charges totaled $10.9 million and $5.0 million for fiscal 2018 and 2017. Approximately $0.8 million of the restructuring charges recognized in the three and six months ended February 28, 2018 were reported in the Consolidated Statements of Operations in “Cost of products sold,” with the balance of the charges reported in “Restructuring charges.” Liabilities for severance will generally be paid during the next twelve months, while future lease payments related to facilities vacated as a result of restructuring will be paid over the underlying remaining lease terms. The following rollforwards summarize restructuring reserve activity by segment (in thousands):
(1) Majority of non-cash uses of reserve represents accelerated equity vesting in connection with employee severance agreements.
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Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination Disclosure [Text Block] | Note 4. Acquisitions The Company acquired the stock and certain assets of Mirage Machines, Ltd. ("Mirage") on December 1, 2017 for a purchase price of $16.5 million, net of cash acquired and subject to closing working capital adjustments plus potential future performance-based consideration. This Energy segment tuck-in acquisition is a provider of industrial and energy maintenance tools. This acquisition resulted in the recognition of goodwill in the Company’s consolidated financial statements because the purchase price reflected the future earnings and cash flow potential of Mirage, as well as the complementary strategic fit and resulting synergies. The Company incurred acquisition transaction costs of $0.3 million in the six months ended February 28, 2018 (included in selling, administrative and engineering expenses in the condensed consolidated statement of operations) related to this acquisition. The Company makes an initial allocation of the purchase price, at the date of acquisition, based upon the fair value of the acquired assets and assumed liabilities. The Company obtains this information during due diligence and through other sources. If additional information is obtained about these assets and liabilities within the measurement period (not to exceed one year from the date of acquisition), the Company will refine its estimates of fair value and adjust the purchase price allocation accordingly. The preliminary purchase price allocation resulted in $8.9 million of goodwill (which is not deductible for tax purposes) and $4.1 million of intangible assets, including $2.3 million of indefinite lived tradenames and $1.8 million of amortizable customer relationships. Net sales of $1.9 million are included in our consolidated financial results for both the three and six months ended February 28, 2018 related to Mirage. Because the net sales and earnings impact of the Mirage acquisition are not material to the three and six month periods ended February 28, 2018 and 2017, respectively, the Company has not included the pro forma operating result disclosures otherwise required for acquisitions. The following table summarizes the preliminary estimated fair value of the assets acquired and the liabilities assumed, at the date of acquisition, for Mirage (in thousands):
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Divestiture Activities Divestiture Activities (Notes) |
6 Months Ended |
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Feb. 28, 2018 | |
Divestiture Activities [Abstract] | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Note 5. Divestiture Activities On December 1, 2017, the Company completed the sale of the Viking business for net cash proceeds of $8.8 million, net of transaction costs of $1.6 million, subject to closing working capital adjustments. In the second quarter of fiscal 2018, we recognized an after-tax impairment and divestiture charge of $12.4 million comprised of real estate lease exit charges related to retained facilities that became vacant as a result of the Viking divestiture ($3.0 million) and approximately $9.4 million of associated discrete income tax expense. The divestiture results in the Company's exit from the offshore mooring market and will significantly limit our exposure to the upstream, offshore oil & gas market. The results of the Viking business are not material to the consolidated financial results of the Company and are included in continuing operations. The Viking business had net sales of $6.0 million and $11.5 million in the three and six months ended February 28, 2017, respectively. In addition, net sales were $2.7 million for the six months ended February 28, 2018. |
Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Note 6. Goodwill, Intangible Assets and Long-Lived Assets Changes in the gross carrying value of intangible assets and goodwill can result from changes in foreign currency exchange rates, business acquisitions, divestitures or impairment charges. The changes in the carrying amount of goodwill for the six months ended February 28, 2018 are as follows (in thousands):
The gross carrying value and accumulated amortization of the Company’s other intangible assets are as follows (in thousands):
The Company estimates that amortization expense will be $10.4 million for the remaining six months of fiscal 2018. Amortization expense for future years is estimated to be: $20.2 million in fiscal 2019, $19.5 million in 2020, $18.6 million in fiscal 2021, $16.6 million in fiscal 2022, $13.6 million in fiscal 2023 and $22.9 million thereafter. The future amortization expense amounts represent estimates and may be impacted by future acquisitions, divestitures or changes in foreign currency exchange rates. |
Product Warranty Costs |
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Guarantees [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranty Costs | Note 7. Product Warranty Costs The Company generally offers its customers a warranty on products sold, although warranty periods vary by product type and application. The reserve for future warranty claims is based on historical claim rates and current warranty cost experience. The following is a rollforward of the product warranty reserves for the six months ended February 28, 2018 and 2017 (in thousands):
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Note 8. Debt The following is a summary of the Company’s long-term indebtedness (in thousands):
The Company’s Senior Credit Facility matures on May 8, 2020 and provides a $600 million revolver, an amortizing term loan and a $450 million expansion option, subject to certain conditions. Borrowings are subject to a pricing grid, which can result in increases or decreases to the borrowing spread, depending on the Company’s leverage ratio, ranging from 1.00% to 2.25% in the case of loans bearing interest at LIBOR and from 0.00% to 1.25% in the case of loans bearing interest at the base rate. As of February 28, 2018, the borrowing spread on LIBOR based borrowings was 2.00% (aggregating to a 3.69% variable rate borrowing cost on the outstanding term loan balance). In addition, a non-use fee is payable quarterly on the average unused credit line under the revolver ranging from 0.15% to 0.35% per annum. As of February 28, 2018, the unused credit line under the revolver was $597.1 million, of which $83.7 million was available for borrowing. Quarterly term loan principal payments of $3.8 million began on June 30, 2016, increased to $7.5 million starting on June 30, 2017 and extend through March 31, 2020, with the remaining principal due at maturity. The Senior Credit Facility, which is secured by substantially all of the Company’s domestic personal property assets, also contains customary limits and restrictions concerning investments, sales of assets, liens on assets, dividends and other payments. The two financial covenants included in the Senior Credit Facility agreement are a maximum leverage ratio of 3.75:1 and a minimum interest coverage ratio of 3.5:1. The Company was in compliance with all financial covenants at February 28, 2018. On April 16, 2012, the Company issued $300 million of 5.625% Senior Notes due 2022 (the “Senior Notes”), of which $287.6 million remains outstanding. The Senior Notes require no principal installments prior to their June 15, 2022 maturity, require semiannual interest payments in December and June of each year and contain certain financial and non-financial covenants. The Senior Notes include a call feature that allows the Company to repurchase them anytime on or after June 15, 2017 at stated redemption prices (ranging from 100.0% to 102.8%), plus accrued and unpaid interest. |
Fair Value Measurement |
6 Months Ended |
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Feb. 28, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Note 9. Fair Value Measurement The Company assesses the inputs used to measure the fair value of financial assets and liabilities using a three-tier hierarchy. Level 1 inputs include quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates, commodity rates and yield curves. Level 3 inputs are not observable in the market and include management’s own judgments about the assumptions market participation would use in pricing an asset or liability. The fair value of the Company’s cash and cash equivalents, accounts receivable, accounts payable and variable rate long-term debt approximated book value at both February 28, 2018 and August 31, 2017 due to their short-term nature and the fact that the interest rates approximated market rates. Foreign currency exchange contracts are recorded at fair value. The fair value of the Company's foreign currency exchange contracts was a net liability of $0.1 million and $0.2 million at February 28, 2018 and August 31, 2017, respectively. The fair value of the foreign currency exchange contracts was based on quoted inactive market prices and is therefore classified as Level 2 within the valuation hierarchy. The fair value of the Company’s outstanding Senior Notes was $293.3 million and $295.8 million at February 28, 2018 and August 31, 2017, respectively. The fair value of the Senior Notes was based on quoted inactive market prices and is therefore classified as Level 2 within the valuation hierarchy. |
Derivatives |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives | Note 10. Derivatives All derivatives are recognized in the balance sheet at their estimated fair value. On the date the Company enters into a derivative contract, it designates the derivative as a hedge of a recognized asset or liability (fair value hedge) or a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge). The Company does not enter into derivatives for speculative purposes. Changes in the value of fair value hedges and non-designated hedges are recorded in earnings along with the gain or loss on the hedged asset or liability, while changes in the value of cash flow hedges are recorded in accumulated other comprehensive loss, until earnings are affected by the variability of cash flows. The Company is exposed to market risk for changes in foreign currency exchange rates due to the global nature of its operations. In order to manage this risk the Company has historically hedged portions of its forecasted inventory purchases and other cash flows that are denominated in non-functional currencies (cash flow hedges). However, there were no cash flow hedges outstanding at February 28, 2018 and August 31, 2017. The Company also utilizes foreign currency exchange contracts to reduce the exchange rate risk associated with recognized non-functional currency balances. The effects of changes in exchange rates are reflected concurrently in earnings for both the fair value of the foreign currency exchange contracts and the related non-functional currency asset or liability. These derivative gains and losses offset foreign currency gains and losses from the related revaluation of non-functional currency assets and liabilities (amounts included in other expense in the condensed consolidated statement of operations). The U.S. dollar equivalent notional value of these short duration foreign currency exchange contracts (fair value hedges or non-designated hedges) was $26.5 million and $22.0 million at February 28, 2018 and August 31, 2017, respectively. The fair value of outstanding foreign currency exchange contracts was a net liability of $0.1 million and $0.2 million at February 28, 2018 and August 31, 2017, respectively. Net foreign currency gain (loss) related to these derivative instruments were as follows (in thousands):
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Capital Stock and Share Repurchase |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Stock and Share Repurchase | Note 11. Capital Stock and Share Repurchases The Company's Board of Directors authorized the repurchase of shares of the Company's common stock under publicly announced share repurchase programs. Since the inception of the initial share repurchase program in fiscal 2012, the Company has repurchased 20,439,434 shares of common stock for $617.7 million. As of February 28, 2018, the maximum number of shares that may yet be purchased under the programs is 7,560,566 shares. There were no share repurchases in the three and six months ended February 28, 2018. The reconciliation between basic and diluted (loss) earnings per share is as follows (in thousands, except per share amounts):
(1) As a result of the net loss for the three and six months ended February 28, 2018, shares from stock based compensation plans are excluded from the calculation of diluted (loss) earnings per share, as the result would be anti-dilutive. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Note 12. Income Taxes The Company's income tax expense or benefit is impacted by a number of factors, including the amount of taxable earnings generated in foreign jurisdictions with tax rates that are lower than the U.S. federal statutory rate, permanent items, state tax rates, changes in tax laws, acquisitions and divestitures and the ability to utilize various tax credits and net operating loss carryforwards. The Company's global operations, acquisition activity and specific tax attributes provide opportunities for continuous global tax planning initiatives to maximize tax credits and deductions. Both fiscal 2018 and 2017 include the benefits of tax planning initiatives. Comparative earnings (loss) before income taxes, income tax expense or benefit and effective income tax rates are as follows (amounts in thousands):
The Company’s income tax expense and effective tax rates during the three and six months ended February 28, 2018 were impacted by the Tax Cuts and Jobs Act (the “Act”), which was enacted into law on December 22, 2017. The Act includes significant changes to the U.S. corporate income tax system which reduce the U.S. federal corporate income tax rate from 35.0% to 21.0% as of January 1, 2018; shifts to a modified territorial tax regime which requires companies to pay a transition tax on earnings of certain foreign subsidiaries that were previously deferred from U.S. income tax; and creates new taxes on certain foreign-sourced earnings. The decrease in the U.S. federal corporate income tax rate from 35.0% to 21.0% results in a blended statutory tax rate of 25.7% for the fiscal year ending August 31, 2018. The new taxes for certain foreign-sourced earnings under the Act are effective for the Company in fiscal 2019. Income tax effects resulting from changes in tax laws are accounted for by the Company in the period in which the law is enacted and the effects are recorded as a component of income tax expense or benefit. As a result, the Company recorded provisional income tax expense resulting from the Act totaling $8.4 million during the three and six months ended February 28, 2018, which includes (i) a transition tax of $16.2 million on the Company’s total post-1986 earnings and profits (“E&P”) which, prior to the Act, were previously deferred from U.S. income tax, (ii) a $16.7 million decrease in income tax expense as a result of the re-measurement of the Company’s deferred tax assets and liabilities to the new corporate tax rate of 21% and (iii) $8.9 million in valuation allowances recorded against foreign tax credits as future utilization is now uncertain. The amounts recorded are provisional and represent the Company’s best estimate of the tax effects of the Act as of February 28, 2018. Amounts recorded are based in part on a reasonable estimate of the effects on its transition tax and existing deferred tax balances which are subject to change and modification. Provisional amounts recorded may change as a result of the following:
The effective tax rate for the six months ended February 28, 2018 was 253.8% compared to (38.6)% for the comparable prior year period. The effective tax rate for the current year results in significantly greater tax expense than the comparable prior year period due to recording the effects of the Act as described above. Additionally, the six months ended February 28, 2018 also include discrete income tax expense of $9.4 million related to the Viking divestiture and $1.5 million related to the shortfall of tax benefits on deductible equity compensation and expiration of unexercised stock options. Both the current and prior year income tax rates were impacted by the proportion of earnings in foreign jurisdictions (with income tax rates lower than the U.S. federal income tax rate) and tax benefits derived from tax planning initiatives which were comparable between years. In addition, the Company may release a material valuation allowance in a foreign jurisdiction in late fiscal 2018 or in fiscal 2019, if the Company determines that it is more likely than not the deferred tax assets will be realized. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Note 13. Segment Information The Company is a global manufacturer of a broad range of industrial products and systems and is organized into three reportable segments: Industrial, Energy and Engineered Solutions. The Industrial segment is primarily involved in the design, manufacture and distribution of branded hydraulic and mechanical tools to the maintenance, industrial, infrastructure and production automation markets. The Energy segment provides joint integrity products and services, as well as rope and cable solutions to the global oil & gas, power generation and other markets. Divestiture of the Viking business during the quarter resulted in the elimination of the sale and rental of customized off-shore vessel mooring solutions. The Engineered Solutions segment provides highly engineered position and motion control systems to original equipment manufacturers ("OEM") in various on and off-highway vehicle markets, as well as a variety of other products to the industrial and agricultural markets. The following tables summarize financial information by reportable segment and product line (in thousands):
(1) Energy segment operating (loss) profit includes impairment and divestiture charges of $3.0 million for both the three and six months ended February 28, 2018.
In addition to the impact of foreign currency exchange rate changes, the comparability of segment and product line information is impacted by acquisition/divestiture activities, impairment charges, director & officer transition charges, restructuring costs and related benefits. Corporate assets, which are not allocated, principally represent cash and cash equivalents, capitalized debt issuance costs and deferred income taxes. |
Contingencies and Litigation |
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Feb. 28, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Litigation | Commitments and Contingencies The Company had outstanding letters of credit of $23.4 million and $22.1 million at February 28, 2018 and August 31, 2017, respectively, the majority of which relate to commercial contracts and self-insured workers compensation programs. The Company is a party to various legal proceedings that have arisen in the normal course of business. These legal proceedings typically include product liability, environmental, labor, patent claims and other disputes. The Company has recorded reserves for loss contingencies based on the specific circumstances of each case. Such reserves are recorded when it is probable that a loss has been incurred and can be reasonably estimated. In the opinion of management, resolution of these contingencies are not expected to have a material adverse effect on the Company’s financial condition, results of operations or cash flows. The Company remains contingently liable for lease payments under leases of businesses that it previously divested or spun-off, in the event that such businesses are unable to fulfill their future lease payment obligations. The discounted present value of future minimum lease payments for these leases was $12.1 million using a weighted average discount rate of 3.15% at February 28, 2018. The Company has facilities in numerous geographic locations that are subject to a range of environmental laws and regulations. Environmental expenditures over the past two years have not been material. Management believes that such costs will not have a material adverse effect on the Company’s financial position, results of operations or cash flows. |
Guarantor Subsidiaries |
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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)
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in thousands)
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in thousands)
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in thousands)
CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands)
CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands)
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Basis of Presentation Basis of Presentation (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Stock Compensation: Improvements to Employee Share-Based Payment Accounting, to simplify several aspects of accounting for share-based payment transactions. Under the new guidance it is required, among other items, that all excess tax deficiencies or benefits be recorded as income tax expense or benefit in the statement of operations and not in additional paid-in capital (shareholder's equity). This guidance was adopted on September 1, 2017 and the impact of adopting this guidance had the following effects:
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. Under ASU 2014-09 and subsequent updates included in ASU 2016-10, ASU 2016-12, ASU 2017-13 and ASU 2017-14, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. It also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. This guidance is effective for fiscal years beginning on or after December 15, 2017 (fiscal 2019 for the Company). The Company has begun assessing its various revenue streams to identify performance obligations under these ASUs and the key aspects of the standard that will impact the Company's revenue recognition process. Based upon our preliminary assessments, these standards may impact our allocation of contract revenue between various products and services and the timing of when those revenues are recognized, but do not expect a material or significant impact to amounts recognized. Given the diversity of its commercial arrangements, the Company is continuing to assess the impact these standards may have on its consolidated results of operations, financial position, cash flows and related financial statement disclosures upon adoption. In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the income statement. The new guidance requires the service cost component of net periodic benefit cost to be presented in the same income statement line items as other employee compensation costs arising from services rendered during the period. Other components of the net periodic benefit cost are to be stated separately from service cost and outside of operating income. This guidance is effective for fiscal years beginning after December 15, 2017 (fiscal 2019 for the Company) and interim periods within those annual periods. The amendment is to be applied retrospectively. Due to a majority of the Company's defined benefit pension or other postretirement benefit plans being frozen and the net periodic benefit pension cost not being significant, the Company does not believe that adoption of this guidance will have a significant impact on the financial statements of the Company. In August 2016, the FASB issued ASU 2016‑15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, to address how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This guidance is effective for fiscal years beginning after December 15, 2017 (fiscal 2019 for the Company), including interim periods within those fiscal years. This update will require adoption on a retrospective basis unless it is impracticable to apply. The Company does not believe that this guidance will have a significant impact on its presentation of the statement of cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (and subsequent ASU 2018-01), to increase transparency and comparability among organizations by recognizing all lease transactions (with terms in excess of 12 months) on the balance sheet as a lease liability and a right-of-use asset. This guidance is effective for fiscal years beginning after December 15, 2018 (fiscal 2020 for the Company), including interim periods within those fiscal years. Upon adoption, the lessee will apply the new standard retrospectively to all periods presented under a modified retrospective approach using a cumulative effect adjustment in the year of adoption. The Company is currently gathering, documenting and analyzing lease agreements subject to this ASU and anticipates material additions to the balance sheet (upon adoption) of right-of-use assets, offset by the associated liabilities, due to our routine use of operating leases over time. In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows companies to reclassify stranded income tax effects resulting from the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings in their consolidated financial statements. This guidance is effective for fiscal years beginning after December 15, 2018 (fiscal 2020 for Company), including interim periods within those fiscal years. We are currently evaluating the impact of this new standard on our consolidated financial statements. |
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Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | Accumulated Other Comprehensive Loss The following is a summary of the Company's accumulated other comprehensive loss (in thousands):
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Basis of Presentation Schedule of Accumulated Other Comprehensive Income (Loss) (Tables) |
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Schedule of Accumulated Other Comprehensive Income (Loss) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | Accumulated Other Comprehensive Loss The following is a summary of the Company's accumulated other comprehensive loss (in thousands):
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Restructuring Charges (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs [Table Text Block] | The following rollforwards summarize restructuring reserve activity by segment (in thousands):
(1) Majority of non-cash uses of reserve represents accelerated equity vesting in connection with employee severance agreements.
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Goodwill and Other Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | Changes in the gross carrying value of intangible assets and goodwill can result from changes in foreign currency exchange rates, business acquisitions, divestitures or impairment charges. The changes in the carrying amount of goodwill for the six months ended February 28, 2018 are as follows (in thousands):
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Schedule Of Finite Lived And Indefinite Lived Intangible Assets Table | The gross carrying value and accumulated amortization of the Company’s other intangible assets are as follows (in thousands):
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Product Warranty Costs (Tables) |
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Guarantees [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability | The following is a rollforward of the product warranty reserves for the six months ended February 28, 2018 and 2017 (in thousands):
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Indebtedness | The following is a summary of the Company’s long-term indebtedness (in thousands):
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Derivatives Derivatives (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments, Gain (Loss) [Table Text Block] | Net foreign currency gain (loss) related to these derivative instruments were as follows (in thousands):
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Capital Stock and Share Repurchase (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The reconciliation between basic and diluted (loss) earnings per share is as follows (in thousands, except per share amounts):
(1) As a result of the net loss for the three and six months ended February 28, 2018, shares from stock based compensation plans are excluded from the calculation of diluted (loss) earnings per share, as the result would be anti-dilutive. |
Income Taxes Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Effective Tax Rate [Table Text Block] |
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Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Financial Information by Reportable Segment and Product Line | The following tables summarize financial information by reportable segment and product line (in thousands):
(1) Energy segment operating (loss) profit includes impairment and divestiture charges of $3.0 million for both the three and six months ended February 28, 2018.
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Guarantor Subsidiaries (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Condensed Consolidating Statement Of Earnings And Comprehensive Income [Table Text Block] | CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in thousands)
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in thousands)
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in thousands)
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in thousands)
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Condensed Consolidating Balance Sheets | CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands)
CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands)
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Condensed Consolidating Statements of Cash Flows | CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands)
|
Basis of Presentation Basis of Presentation (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Feb. 28, 2018 |
Feb. 28, 2018 |
Aug. 31, 2017 |
|
Accounting Policies [Abstract] | |||
Adjustments to Additional Paid in Capital, Income Tax Deficiency from Share-based Compensation | $ 1,300 | $ 1,500 | |
Excess Tax Benefit from Share-based Compensation, Operating Activities | 600 | ||
Condensed Statement of Income Captions [Line Items] | |||
AOCI - Foreign Currency Translation Adjustment, net of tax | 124,024 | 124,024 | $ 207,804 |
AOCI - Pension and other postretirement benefit plans, net of tax | 19,203 | 19,203 | 19,457 |
Total shareholders’ equity | (589,281) | (589,281) | (500,539) |
AOCI Attributable to Parent [Member] | |||
Condensed Statement of Income Captions [Line Items] | |||
Total shareholders’ equity | $ 143,227 | $ 143,227 | $ 227,261 |
Director & Officer Transition Charges (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2018 |
Feb. 28, 2017 |
Feb. 28, 2018 |
Feb. 28, 2017 |
|
Compensation Related Costs [Abstract] | ||||
Director & officer transition charges | $ 0 | $ 0 | $ 0 | $ 7,784 |
Divestiture Activities (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2018 |
Feb. 28, 2017 |
Feb. 28, 2018 |
Feb. 28, 2017 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sale of business, net of transaction costs | $ 8,780 | $ 0 | ||
Viking [Domain] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sale of business, net of transaction costs | 8,780 | |||
Transaction Costs in connection with Disposal of Business | 1,600 | |||
Divestiture Charges | $ 12,400 | |||
Business Exit Costs | 3,000 | |||
Discrete Income Tax Expense | $ 9,400 | |||
Viking [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Disposal Group, Not Discontinued Operation, annual revenue | $ 6,000 | $ 2,700 | $ 11,500 |
Changes in Carrying Value of Goodwill (Details) $ in Thousands |
6 Months Ended |
---|---|
Feb. 28, 2018
USD ($)
| |
Goodwill [Roll Forward] | |
Balance as of August 31, 2016 | $ 530,081 |
Goodwill, Acquired During Period | 8,856 |
Impact of changes in foreign currency rates | 7,198 |
Balance as of February 28, 2018 | 546,135 |
Industrial | |
Goodwill [Roll Forward] | |
Balance as of August 31, 2016 | 103,875 |
Goodwill, Acquired During Period | 0 |
Impact of changes in foreign currency rates | 968 |
Balance as of February 28, 2018 | 104,843 |
Energy | |
Goodwill [Roll Forward] | |
Balance as of August 31, 2016 | 188,830 |
Goodwill, Acquired During Period | 8,856 |
Impact of changes in foreign currency rates | 4,180 |
Balance as of February 28, 2018 | 201,866 |
Engineered Solutions | |
Goodwill [Roll Forward] | |
Balance as of August 31, 2016 | 237,376 |
Goodwill, Acquired During Period | 0 |
Impact of changes in foreign currency rates | 2,050 |
Balance as of February 28, 2018 | $ 239,426 |
Gross Carrying Amount and Accumulated Amortization of Other Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Feb. 28, 2018 |
Aug. 31, 2017 |
|
Indefinite And Finite Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ 205,067 | $ 192,660 |
Gross Carrying Value | 421,437 | 413,149 |
Net Book Value | 216,370 | 220,489 |
Tradenames | ||
Indefinite And Finite Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | 0 | 0 |
Net Book Value | 94,621 | 91,080 |
Gross Carrying Value | $ 94,621 | 91,080 |
Customer relationships | ||
Indefinite And Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 15 years | |
Gross Carrying Value | $ 268,105 | 263,498 |
Accumulated Amortization | 163,676 | 153,003 |
Net Book Value | $ 104,429 | 110,495 |
Patents | ||
Indefinite And Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 10 years | |
Gross Carrying Value | $ 30,538 | 30,401 |
Accumulated Amortization | 24,918 | 24,027 |
Net Book Value | $ 5,620 | 6,374 |
Trademarks and tradenames | ||
Indefinite And Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 18 years | |
Gross Carrying Value | $ 21,396 | 21,498 |
Accumulated Amortization | 10,015 | 9,396 |
Net Book Value | $ 11,381 | 12,102 |
Other intangibles | ||
Indefinite And Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 3 years | |
Gross Carrying Value | $ 6,777 | 6,672 |
Accumulated Amortization | 6,458 | 6,234 |
Net Book Value | $ 319 | $ 438 |
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands |
Feb. 28, 2018 |
Aug. 31, 2017 |
---|---|---|
Impaired Assets [Line Items] | ||
Goodwill | $ 546,135 | $ 530,081 |
Future Amortization Expense, Remainder of 2018 | 10,400 | |
Future Amortization Expense, 2019 | 20,200 | |
Future Amortization Expense, 2020 | 19,500 | |
Future Amortization Expense, 2021 | 18,600 | |
Future Amortization Expense, 2022 | 16,600 | |
Future Amortization Expense, 2023 | 13,600 | |
Future Amortization Expense, Thereafter | $ 22,900 |
Rollforward of Accrued Product Warranty Reserve (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Feb. 28, 2018 |
Feb. 28, 2017 |
|
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance | $ 6,616 | $ 5,592 |
Provision for warranties | 3,403 | 1,482 |
Warranty reserve for acquired businesses | (3,582) | (3,096) |
Impact of changes in foreign currency rates | 213 | (101) |
Ending balance | $ 6,650 | $ 3,877 |
Long-Term Indebtedness (Details) - USD ($) $ in Thousands |
Feb. 28, 2018 |
Aug. 31, 2017 |
---|---|---|
Debt Instrument [Line Items] | ||
Total Senior Indebtedness | $ 550,059 | $ 565,059 |
Less: Current maturities of long-term debt | (30,000) | (30,000) |
Deferred Finance Costs, Own-share Lending Arrangement, Issuance Costs, Net | (2,741) | (3,119) |
Long-term debt | 517,318 | 531,940 |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Total Senior Indebtedness | 262,500 | 277,500 |
Line of Credit | Senior Credit Facility - Revolver | ||
Debt Instrument [Line Items] | ||
Total Senior Indebtedness | 0 | 0 |
Line of Credit | Senior Credit Facility - Term Loan | ||
Debt Instrument [Line Items] | ||
Total Senior Indebtedness | 262,500 | 277,500 |
Senior Notes | 5.625% Senior Notes | ||
Debt Instrument [Line Items] | ||
Senior Notes, Noncurrent | $ 287,600 | $ 287,600 |
Debt - Additional Information (Details) |
3 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2016
USD ($)
|
Apr. 16, 2012
USD ($)
|
Feb. 28, 2018
USD ($)
|
|
Debt Instrument [Line Items] | ||||
Senior credit facility expansion option, available | $ 450,000,000 | |||
Debt Instrument, actual interest rate | 3.69% | |||
Libor Rate | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate over variable rate | 2.00% | |||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Maturity Date | May 08, 2020 | |||
Maximum borrowing capacity | $ 600,000,000 | |||
Line of Credit | Senior Credit Facility - Revolver | ||||
Debt Instrument [Line Items] | ||||
Unused credit line | 597,100,000 | |||
Unused credit line Available for Borrowing, Amount | $ 83,700,000 | |||
Senior Notes | 5.625% Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Maturity Date | Jun. 15, 2022 | |||
Debt Instrument, Face Amount | $ 300,000,000 | |||
Debt instrument, interest rate | 5.625% | |||
Minimum | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.15% | |||
Interest coverage ratio | 3.5 | |||
Minimum | Libor Rate | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate over variable rate | 1.00% | |||
Minimum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate over variable rate | 0.00% | |||
Minimum | Senior Notes | 5.625% Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Redemption Price, Percentage | 100.00% | |||
Maximum | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.35% | |||
Leverage ratio | 3.75 | |||
Maximum | Libor Rate | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate over variable rate | 2.25% | |||
Maximum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate over variable rate | 1.25% | |||
Maximum | Senior Notes | 5.625% Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Redemption Price, Percentage | 102.80% | |||
Starting on June 30, 2016 | Senior Credit Facility - Term Loan | ||||
Debt Instrument [Line Items] | ||||
Quarterly installments, payable on term loan | $ 3,800,000 | |||
Starting on June 30, 2017 | Senior Credit Facility - Term Loan | ||||
Debt Instrument [Line Items] | ||||
Quarterly installments, payable on term loan | $ 7,500,000 |
Fair Value Measurement - Additional Information (Details) - USD ($) $ in Millions |
Feb. 28, 2018 |
Aug. 31, 2017 |
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Foreign Currency Contracts, Liability, Fair Value Disclosure | $ (0.1) | $ (0.2) |
Senior Notes | 5.625% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of long-term debt | $ 293.3 | $ 295.8 |
Derivatives Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Feb. 28, 2018 |
Feb. 28, 2017 |
Feb. 28, 2018 |
Feb. 28, 2017 |
Aug. 31, 2017 |
|
Derivative [Line Items] | |||||
Foreign Currency Contracts, Liability, Fair Value Disclosure | $ (100) | $ (100) | $ (200) | ||
Gain (Loss) on Foreign Currency Fair Value Hedge Derivatives and Not Designated as Hedging Instruments at Fair Value | (74) | $ (474) | 140 | $ (1,966) | |
Fair Value Hedging [Member] | |||||
Derivative [Line Items] | |||||
Derivative, Notional Amount | $ 26,500 | $ 26,500 | $ 22,000 |
Capital Stock and Share Repurchase Share Repurchase (Details) - USD ($) $ in Millions |
Feb. 28, 2018 |
Aug. 31, 2017 |
---|---|---|
Equity [Abstract] | ||
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased | 7,560,566 | |
Treasury Stock, Shares | 20,439,434 | 20,439,434 |
Stock Repurchase Program, Authorized Amount | $ 617.7 |
Capital Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2018 |
Feb. 28, 2017 |
Feb. 28, 2018 |
Feb. 28, 2017 |
|
Earnings Per Share [Abstract] | ||||
Net (loss) earnings | $ (18,221) | $ 5,074 | $ (12,995) | $ 10,039 |
Weighted average common shares outstanding - basic | 60,318 | 59,368 | 60,095 | 59,170 |
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities | 0 | 778 | 0 | 711 |
Diluted | 60,318 | 60,146 | 60,095 | 59,881 |
Basic | $ (0.30) | $ 0.09 | $ (0.22) | $ 0.17 |
Diluted | $ (0.30) | $ 0.08 | $ (0.22) | $ 0.17 |
Anti-dilutive securities from stock based compensation plans (excluded from earnings per share calculation) | 3,397 | 2,011 | 2,613 | 1,987 |
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands |
2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | ||
---|---|---|---|---|---|---|
Feb. 28, 2018 |
Feb. 28, 2018 |
Feb. 28, 2017 |
Dec. 31, 2017 |
Feb. 28, 2018 |
Feb. 28, 2017 |
|
Income Tax Disclosure Additional Details [Table] [Line Items] | ||||||
Earnings (loss) before income taxes | $ 1,618 | $ 5,274 | $ 8,448 | $ 7,241 | ||
Income tax expense (benefit) | $ 19,839 | $ 200 | $ 21,443 | $ (2,798) | ||
Effective Income Tax Rate Reconciliation, Percent | 1226.10% | 3.80% | 253.80% | (38.60%) | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | ||||
Effective Income Tax Rate Reconciliation, at Blended Federal Statutory Income Tax Rate | 25.70% | |||||
Transition Tax | $ 16,200 | $ 16,200 | ||||
Change in Income Tax Expense | (16,700) | (16,700) | ||||
Valuation Allowances Recorded Against Foreign Tax Credits | 8,900 | 8,900 | ||||
Provisional Tax Expense Related to Tax Cuts and Jobs Act | 8,400 | $ 8,400 | ||||
Discrete Income Tax Expense - related to shortfall | $ 1,500 |
Summary of Financial Information by Reportable Segment and Product Line (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Feb. 28, 2018 |
Feb. 28, 2017 |
Feb. 28, 2018 |
Feb. 28, 2017 |
Aug. 31, 2017 |
|
Segment Reporting Information [Line Items] | |||||
Net sales | $ 275,165 | $ 258,869 | $ 564,120 | $ 524,662 | |
Operating profit (Loss) | 9,589 | 13,199 | 24,262 | 21,670 | |
Assets | 1,480,305 | 1,480,305 | $ 1,516,955 | ||
Impairment & divestiture charges | 2,987 | 0 | 2,987 | 0 | |
Industrial | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 99,081 | 91,648 | 195,997 | 178,938 | |
Operating profit (Loss) | 16,781 | 18,380 | 35,024 | 37,155 | |
Assets | 324,477 | 324,477 | 329,134 | ||
Industrial Tools [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 87,438 | 78,679 | 171,949 | 157,718 | |
Heavy Lifting Technology [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 11,643 | 12,969 | 24,048 | 21,220 | |
Energy | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 65,992 | 72,884 | 141,833 | 157,530 | |
Operating profit (Loss) | (4,513) | (579) | (4,220) | 2,632 | |
Assets | 464,018 | 464,018 | 482,963 | ||
Energy Maintenance & Integrity | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 48,889 | 51,590 | 105,598 | 116,411 | |
Other Energy Solutions [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 17,103 | 21,294 | 36,235 | 41,119 | |
Engineered Solutions | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 110,092 | 94,337 | 226,290 | 188,194 | |
Operating profit (Loss) | 2,209 | 1,816 | 8,543 | 2,571 | |
Assets | 548,547 | 548,547 | 531,068 | ||
On-Highway | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 59,297 | 50,611 | 124,179 | 102,242 | |
Agriculture, Off-Highway and Other | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 50,795 | 43,726 | 102,111 | 85,952 | |
General Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Operating profit (Loss) | (4,888) | $ (6,418) | (15,085) | $ (20,688) | |
Assets | 143,263 | 143,263 | $ 173,790 | ||
Viking [Domain] | |||||
Segment Reporting Information [Line Items] | |||||
Impairment & divestiture charges | $ 2,987 | $ 2,987 |
Contingencies and Litigation - Additional Information (Details) - USD ($) $ in Millions |
Feb. 28, 2018 |
Aug. 31, 2017 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Outstanding letters of credit | $ 23.4 | $ 22.1 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Discounted present value of future minimum lease payments | $ 12.1 | |
Weighted Average Discount Rate on Future Minimum Lease Payments | 3.15% |
Guarantor Subsidiaries - Additional Information (Details) - 5.625% Senior Notes - Senior Notes - USD ($) |
Feb. 28, 2018 |
Aug. 31, 2017 |
Apr. 16, 2012 |
---|---|---|---|
Guarantor Obligations [Line Items] | |||
Debt Instrument, Face Amount | $ 300,000,000 | ||
Senior Notes, Noncurrent | $ 287,600,000 | $ 287,600,000 | |
Debt instrument, interest rate | 5.625% |
Condensed Consolidating Statements of Earnings and Comprehensive Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2018 |
Feb. 28, 2017 |
Feb. 28, 2018 |
Feb. 28, 2017 |
|
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | $ 275,165 | $ 258,869 | $ 564,120 | $ 524,662 |
Cost of products sold | 185,469 | 171,543 | 373,513 | 344,269 |
Gross profit | 89,696 | 87,326 | 190,607 | 180,393 |
Selling, administrative and engineering expenses | 68,502 | 66,957 | 142,980 | 135,561 |
Amortization of intangible assets | 5,168 | 5,069 | 10,299 | 10,330 |
Restructuring Charges | 3,450 | 2,101 | 10,079 | 5,048 |
Impairment & divestiture charges | 2,987 | 0 | 2,987 | 0 |
Director & officer transition charges | 0 | 0 | 0 | 7,784 |
Operating profit | 9,589 | 13,199 | 24,262 | 21,670 |
Financing costs, net | 7,604 | 7,334 | 15,118 | 14,467 |
Intercompany Expense (Income) Net | 0 | 0 | 0 | 0 |
Other Nonoperating (Income) Expense | 367 | 591 | 696 | (38) |
Intercompany Dividends | 0 | 0 | ||
Earnings before income tax expense (benefit) | 1,618 | 5,274 | 8,448 | 7,241 |
Income tax expense (benefit) | 19,839 | 200 | 21,443 | (2,798) |
Income tax expense (benefit) | (18,221) | 5,074 | (12,995) | 10,039 |
Equity In Earnings Of Subsidiaries | 0 | 0 | 0 | 0 |
Net (loss) earnings | (18,221) | 5,074 | (12,995) | 10,039 |
Comprehensive income (loss) | 62,788 | 8,185 | 71,039 | (12,972) |
Reportable Legal Entities | Parent | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | 36,219 | 34,953 | 71,929 | 66,682 |
Cost of products sold | 5,848 | 10,049 | 12,811 | 17,143 |
Gross profit | 30,371 | 24,904 | 59,118 | 49,539 |
Selling, administrative and engineering expenses | 18,190 | 18,553 | 37,905 | 36,520 |
Amortization of intangible assets | 318 | 318 | 636 | 636 |
Restructuring Charges | 194 | 372 | 5,550 | 727 |
Impairment & divestiture charges | 4,217 | 4,217 | ||
Director & officer transition charges | 7,784 | |||
Operating profit | 7,452 | 5,661 | 10,810 | 3,872 |
Financing costs, net | 7,777 | 7,430 | 15,400 | 14,756 |
Intercompany Expense (Income) Net | (5,042) | (7,882) | (9,919) | (12,950) |
Other Nonoperating (Income) Expense | 90 | (48) | 40 | 2,037 |
Intercompany Dividends | 0 | 0 | ||
Earnings before income tax expense (benefit) | 4,627 | 6,161 | 5,289 | 29 |
Income tax expense (benefit) | 10,612 | 151 | 10,327 | (2,563) |
Income tax expense (benefit) | (5,985) | 6,010 | (5,038) | 2,592 |
Equity In Earnings Of Subsidiaries | (12,236) | (936) | (7,957) | 7,447 |
Net (loss) earnings | (18,221) | 5,074 | (12,995) | 10,039 |
Comprehensive income (loss) | 62,788 | 8,185 | 71,039 | (12,972) |
Reportable Legal Entities | Guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | 83,072 | 80,973 | 170,906 | 165,249 |
Cost of products sold | 63,979 | 61,821 | 128,553 | 123,237 |
Gross profit | 19,093 | 19,152 | 42,353 | 42,012 |
Selling, administrative and engineering expenses | 17,232 | 16,549 | 35,680 | 33,185 |
Amortization of intangible assets | 2,861 | 2,918 | 5,722 | 5,994 |
Restructuring Charges | 909 | 441 | 1,078 | 1,164 |
Impairment & divestiture charges | 0 | 0 | ||
Director & officer transition charges | 0 | |||
Operating profit | (1,909) | (756) | (127) | 1,669 |
Financing costs, net | 22 | 0 | 43 | 0 |
Intercompany Expense (Income) Net | 5,419 | 11,242 | 10,903 | 10,156 |
Other Nonoperating (Income) Expense | 49 | (4) | 94 | (74) |
Intercompany Dividends | (4,258) | (59,401) | ||
Earnings before income tax expense (benefit) | (7,399) | (7,736) | (11,167) | 50,988 |
Income tax expense (benefit) | (2,234) | (667) | (1,797) | (697) |
Income tax expense (benefit) | (5,165) | (7,069) | (9,370) | 51,685 |
Equity In Earnings Of Subsidiaries | (9,454) | 8,057 | (661) | 13,682 |
Net (loss) earnings | (14,619) | 988 | (10,031) | 65,367 |
Comprehensive income (loss) | (14,619) | 1,324 | (10,031) | 47,616 |
Reportable Legal Entities | Non-Guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | 155,874 | 142,943 | 321,285 | 292,731 |
Cost of products sold | 115,642 | 99,673 | 232,149 | 203,889 |
Gross profit | 40,232 | 43,270 | 89,136 | 88,842 |
Selling, administrative and engineering expenses | 33,080 | 31,855 | 69,395 | 65,856 |
Amortization of intangible assets | 1,989 | 1,833 | 3,941 | 3,700 |
Restructuring Charges | 2,347 | 1,288 | 3,451 | 3,157 |
Impairment & divestiture charges | (1,230) | (1,230) | ||
Director & officer transition charges | 0 | |||
Operating profit | 4,046 | 8,294 | 13,579 | 16,129 |
Financing costs, net | (195) | (96) | (325) | (289) |
Intercompany Expense (Income) Net | (377) | (3,360) | (984) | 2,794 |
Other Nonoperating (Income) Expense | 228 | 643 | 562 | (2,001) |
Intercompany Dividends | 0 | 0 | ||
Earnings before income tax expense (benefit) | 4,390 | 11,107 | 14,326 | 15,625 |
Income tax expense (benefit) | 11,461 | 716 | 12,913 | 462 |
Income tax expense (benefit) | (7,071) | 10,391 | 1,413 | 15,163 |
Equity In Earnings Of Subsidiaries | (1,459) | (268) | (1,505) | 2,862 |
Net (loss) earnings | (8,530) | 10,123 | (92) | 18,025 |
Comprehensive income (loss) | 74,820 | 12,828 | 86,386 | 13,459 |
Eliminations | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Cost of products sold | 0 | 0 | 0 | 0 |
Gross profit | 0 | 0 | 0 | 0 |
Selling, administrative and engineering expenses | 0 | 0 | 0 | 0 |
Amortization of intangible assets | 0 | 0 | 0 | 0 |
Restructuring Charges | 0 | 0 | 0 | 0 |
Impairment & divestiture charges | 0 | 0 | ||
Director & officer transition charges | 0 | |||
Operating profit | 0 | 0 | 0 | 0 |
Financing costs, net | 0 | 0 | 0 | 0 |
Intercompany Expense (Income) Net | 0 | 0 | 0 | 0 |
Other Nonoperating (Income) Expense | 0 | 0 | 0 | 0 |
Intercompany Dividends | 4,258 | 59,401 | ||
Earnings before income tax expense (benefit) | 0 | (4,258) | 0 | (59,401) |
Income tax expense (benefit) | 0 | 0 | 0 | 0 |
Income tax expense (benefit) | 0 | (4,258) | 0 | (59,401) |
Equity In Earnings Of Subsidiaries | 23,149 | (6,853) | 10,123 | (23,991) |
Net (loss) earnings | 23,149 | (11,111) | 10,123 | (83,392) |
Comprehensive income (loss) | $ (60,201) | $ (14,152) | $ (76,355) | $ (61,075) |
Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Thousands |
Feb. 28, 2018 |
Aug. 31, 2017 |
Feb. 28, 2017 |
Aug. 31, 2016 |
---|---|---|---|---|
Current assets | ||||
Cash and cash equivalents | $ 153,595 | $ 229,571 | $ 171,890 | $ 179,604 |
Accounts receivable, net | 210,650 | 190,206 | ||
Inventories, net | 166,227 | 143,651 | ||
Assets held for sale | 0 | 21,835 | ||
Other current assets | 60,569 | 61,663 | ||
Total current assets | 591,041 | 646,926 | ||
Property, plant and equipment, net | 102,411 | 94,521 | ||
Goodwill | 546,135 | 530,081 | ||
Other intangibles, net | 216,370 | 220,489 | ||
Investment in subsidiaries | 0 | 0 | ||
Intercompany receivable | 0 | 0 | ||
Other long-term assets | 24,348 | 24,938 | ||
Total assets | 1,480,305 | 1,516,955 | ||
Current liabilities | ||||
Trade accounts payable | 136,941 | 133,387 | ||
Accrued compensation and benefits | 41,518 | 50,939 | ||
Current maturities of debt and short-term borrowings | 30,000 | 30,000 | ||
Income taxes payable | 7,687 | 6,080 | ||
Liabilities held for sale | 0 | 101,083 | ||
Other current liabilities | 58,368 | 57,445 | ||
Total current liabilities | 274,514 | 378,934 | ||
Long-term debt | 517,318 | 531,940 | ||
Deferred income taxes | 23,262 | 29,859 | ||
Pension and postretirement benefit liabilities | 19,338 | 19,862 | ||
Other long-term liabilities | 56,592 | 55,821 | ||
Intercompany payable | 0 | 0 | ||
Shareholders’ equity | 589,281 | 500,539 | ||
Total liabilities and shareholders’ equity | 1,480,305 | 1,516,955 | ||
Reportable Legal Entities | Parent | ||||
Current assets | ||||
Cash and cash equivalents | 4,276 | 34,715 | 6,509 | 7,953 |
Accounts receivable, net | 19,641 | 17,498 | ||
Inventories, net | 26,915 | 23,308 | ||
Assets held for sale | 0 | |||
Other current assets | 14,186 | 23,576 | ||
Total current assets | 65,018 | 99,097 | ||
Property, plant and equipment, net | 8,076 | 7,049 | ||
Goodwill | 38,846 | 38,847 | ||
Other intangibles, net | 7,521 | 8,156 | ||
Investment in subsidiaries | 1,902,303 | 1,832,472 | ||
Intercompany receivable | 0 | 0 | ||
Other long-term assets | 7,407 | 8,377 | ||
Total assets | 2,029,171 | 1,993,998 | ||
Current liabilities | ||||
Trade accounts payable | 15,469 | 15,412 | ||
Accrued compensation and benefits | 13,376 | 19,082 | ||
Current maturities of debt and short-term borrowings | 30,000 | 30,000 | ||
Income taxes payable | 152 | 153 | ||
Liabilities held for sale | 0 | |||
Other current liabilities | 13,683 | 18,512 | ||
Total current liabilities | 72,680 | 83,159 | ||
Long-term debt | 517,318 | 531,940 | ||
Deferred income taxes | 17,631 | 24,164 | ||
Pension and postretirement benefit liabilities | 11,942 | 12,540 | ||
Other long-term liabilities | 48,651 | 48,692 | ||
Intercompany payable | 771,668 | 792,964 | ||
Shareholders’ equity | 589,281 | 500,539 | ||
Total liabilities and shareholders’ equity | 2,029,171 | 1,993,998 | ||
Reportable Legal Entities | Guarantors | ||||
Current assets | ||||
Cash and cash equivalents | 0 | 0 | 0 | 71 |
Accounts receivable, net | 52,171 | 50,749 | ||
Inventories, net | 61,363 | 48,492 | ||
Assets held for sale | 0 | |||
Other current assets | 3,263 | 3,619 | ||
Total current assets | 116,797 | 102,860 | ||
Property, plant and equipment, net | 31,661 | 26,130 | ||
Goodwill | 201,578 | 200,499 | ||
Other intangibles, net | 132,320 | 138,042 | ||
Investment in subsidiaries | 1,274,274 | 1,186,715 | ||
Intercompany receivable | 564,517 | 589,193 | ||
Other long-term assets | 1,864 | 812 | ||
Total assets | 2,323,011 | 2,244,251 | ||
Current liabilities | ||||
Trade accounts payable | 31,079 | 27,168 | ||
Accrued compensation and benefits | 5,239 | 7,672 | ||
Current maturities of debt and short-term borrowings | 0 | 0 | ||
Income taxes payable | 0 | 0 | ||
Liabilities held for sale | 0 | |||
Other current liabilities | 7,951 | 7,169 | ||
Total current liabilities | 44,269 | 42,009 | ||
Long-term debt | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Pension and postretirement benefit liabilities | 0 | 0 | ||
Other long-term liabilities | 383 | 352 | ||
Intercompany payable | 0 | 0 | ||
Shareholders’ equity | 2,278,359 | 2,201,890 | ||
Total liabilities and shareholders’ equity | 2,323,011 | 2,244,251 | ||
Reportable Legal Entities | Non-Guarantors | ||||
Current assets | ||||
Cash and cash equivalents | 149,319 | 194,856 | 165,381 | 171,580 |
Accounts receivable, net | 138,838 | 121,959 | ||
Inventories, net | 77,949 | 71,851 | ||
Assets held for sale | 21,835 | |||
Other current assets | 43,120 | 34,468 | ||
Total current assets | 409,226 | 444,969 | ||
Property, plant and equipment, net | 62,674 | 61,342 | ||
Goodwill | 305,711 | 290,735 | ||
Other intangibles, net | 76,529 | 74,291 | ||
Investment in subsidiaries | 806,292 | 805,016 | ||
Intercompany receivable | 208,983 | 205,183 | ||
Other long-term assets | 15,077 | 15,749 | ||
Total assets | 1,884,492 | 1,897,285 | ||
Current liabilities | ||||
Trade accounts payable | 90,393 | 90,807 | ||
Accrued compensation and benefits | 22,903 | 24,185 | ||
Current maturities of debt and short-term borrowings | 0 | 0 | ||
Income taxes payable | 7,535 | 5,927 | ||
Liabilities held for sale | 101,083 | |||
Other current liabilities | 36,734 | 31,764 | ||
Total current liabilities | 157,565 | 253,766 | ||
Long-term debt | 0 | 0 | ||
Deferred income taxes | 5,631 | 5,695 | ||
Pension and postretirement benefit liabilities | 7,396 | 7,322 | ||
Other long-term liabilities | 7,558 | 6,777 | ||
Intercompany payable | 1,832 | 1,412 | ||
Shareholders’ equity | 1,704,510 | 1,622,313 | ||
Total liabilities and shareholders’ equity | 1,884,492 | 1,897,285 | ||
Eliminations | ||||
Current assets | ||||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 |
Accounts receivable, net | 0 | 0 | ||
Inventories, net | 0 | 0 | ||
Assets held for sale | 0 | |||
Other current assets | 0 | 0 | ||
Total current assets | 0 | 0 | ||
Property, plant and equipment, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangibles, net | 0 | 0 | ||
Investment in subsidiaries | (3,982,869) | (3,824,203) | ||
Intercompany receivable | (773,500) | (794,376) | ||
Other long-term assets | 0 | 0 | ||
Total assets | (4,756,369) | (4,618,579) | ||
Current liabilities | ||||
Trade accounts payable | 0 | 0 | ||
Accrued compensation and benefits | 0 | 0 | ||
Current maturities of debt and short-term borrowings | 0 | 0 | ||
Income taxes payable | 0 | 0 | ||
Liabilities held for sale | 0 | |||
Other current liabilities | 0 | 0 | ||
Total current liabilities | 0 | 0 | ||
Long-term debt | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Pension and postretirement benefit liabilities | 0 | 0 | ||
Other long-term liabilities | 0 | 0 | ||
Intercompany payable | (773,500) | (794,376) | ||
Shareholders’ equity | (3,982,869) | (3,824,203) | ||
Total liabilities and shareholders’ equity | $ (4,756,369) | $ (4,618,579) |
Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Feb. 28, 2018 |
Feb. 28, 2017 |
|
Operating Activities | ||
Net cash (used in) provided by operating activities | $ (22,106) | $ 14,682 |
Investing Activities | ||
Capital expenditures | (12,547) | (14,695) |
Proceeds from sale of property, plant and equipment | 113 | 244 |
Rental asset lease buyout for Viking divestiture | (27,718) | 0 |
Proceeds from sale of business, net of transaction costs | 8,780 | 0 |
Cash paid for business acquisitions, Net of Cash Acquired | (16,517) | 0 |
Cash used in investing activities | (47,889) | (14,451) |
Financing Activities | ||
Principal repayments on term loan | (15,000) | (7,500) |
Taxes paid related to the net share settlement of equity awards | (1,107) | (920) |
Stock option exercises and other | 10,305 | 5,949 |
Cash dividend | (2,390) | (2,358) |
Intercompany Loan Activity | 0 | 0 |
Cash used in financing activities | (8,192) | (4,829) |
Effect of exchange rate changes on cash | 2,211 | (3,116) |
Net decrease in cash and cash equivalents | (75,976) | (7,714) |
Cash and cash equivalents - beginning of period | 229,571 | 179,604 |
Cash and cash equivalents - end of period | 153,595 | 171,890 |
Line of Credit | Senior Credit Facility - Term Loan | ||
Financing Activities | ||
Principal repayments on term loan | (15,000) | (7,500) |
Reportable Legal Entities | Parent | ||
Operating Activities | ||
Net cash (used in) provided by operating activities | (14,509) | 59,275 |
Investing Activities | ||
Capital expenditures | (1,982) | (2,156) |
Proceeds from sale of property, plant and equipment | 0 | 0 |
Rental asset lease buyout for Viking divestiture | 0 | |
Proceeds from sale of business, net of transaction costs | 198 | |
Cash paid for business acquisitions, Net of Cash Acquired | 0 | |
Cash used in investing activities | (1,784) | (2,156) |
Financing Activities | ||
Principal repayments on term loan | (15,000) | (7,500) |
Taxes paid related to the net share settlement of equity awards | (1,107) | (920) |
Stock option exercises and other | 10,305 | 5,949 |
Cash dividend | (2,390) | (2,358) |
Intercompany Loan Activity | (5,954) | (53,734) |
Cash used in financing activities | (14,146) | (58,563) |
Effect of exchange rate changes on cash | 0 | 0 |
Net decrease in cash and cash equivalents | (30,439) | (1,444) |
Cash and cash equivalents - beginning of period | 34,715 | 7,953 |
Cash and cash equivalents - end of period | 4,276 | 6,509 |
Reportable Legal Entities | Guarantors | ||
Operating Activities | ||
Net cash (used in) provided by operating activities | 6,923 | 5,902 |
Investing Activities | ||
Capital expenditures | (5,274) | (6,108) |
Proceeds from sale of property, plant and equipment | 83 | 135 |
Rental asset lease buyout for Viking divestiture | 0 | |
Proceeds from sale of business, net of transaction costs | 0 | |
Cash paid for business acquisitions, Net of Cash Acquired | (1,732) | |
Cash used in investing activities | (6,923) | (5,973) |
Financing Activities | ||
Principal repayments on term loan | 0 | 0 |
Taxes paid related to the net share settlement of equity awards | 0 | 0 |
Stock option exercises and other | 0 | 0 |
Cash dividend | 0 | 0 |
Intercompany Loan Activity | 0 | 0 |
Cash used in financing activities | 0 | 0 |
Effect of exchange rate changes on cash | 0 | 0 |
Net decrease in cash and cash equivalents | 0 | (71) |
Cash and cash equivalents - beginning of period | 0 | 71 |
Cash and cash equivalents - end of period | 0 | 0 |
Reportable Legal Entities | Non-Guarantors | ||
Operating Activities | ||
Net cash (used in) provided by operating activities | (14,520) | 8,906 |
Investing Activities | ||
Capital expenditures | (5,291) | (6,431) |
Proceeds from sale of property, plant and equipment | 30 | 109 |
Rental asset lease buyout for Viking divestiture | (27,718) | |
Proceeds from sale of business, net of transaction costs | 8,582 | |
Cash paid for business acquisitions, Net of Cash Acquired | (14,785) | |
Cash used in investing activities | (39,182) | (6,322) |
Financing Activities | ||
Principal repayments on term loan | 0 | 0 |
Taxes paid related to the net share settlement of equity awards | 0 | 0 |
Stock option exercises and other | 0 | 0 |
Cash dividend | 0 | (59,401) |
Intercompany Loan Activity | 5,954 | 53,734 |
Cash used in financing activities | 5,954 | (5,667) |
Effect of exchange rate changes on cash | 2,211 | (3,116) |
Net decrease in cash and cash equivalents | (45,537) | (6,199) |
Cash and cash equivalents - beginning of period | 194,856 | 171,580 |
Cash and cash equivalents - end of period | 149,319 | 165,381 |
Eliminations | ||
Operating Activities | ||
Net cash (used in) provided by operating activities | 0 | (59,401) |
Investing Activities | ||
Capital expenditures | 0 | 0 |
Proceeds from sale of property, plant and equipment | 0 | 0 |
Rental asset lease buyout for Viking divestiture | 0 | |
Proceeds from sale of business, net of transaction costs | 0 | |
Cash paid for business acquisitions, Net of Cash Acquired | 0 | |
Cash used in investing activities | 0 | 0 |
Financing Activities | ||
Principal repayments on term loan | 0 | 0 |
Taxes paid related to the net share settlement of equity awards | 0 | 0 |
Stock option exercises and other | 0 | 0 |
Cash dividend | 0 | 59,401 |
Intercompany Loan Activity | 0 | 0 |
Cash used in financing activities | 0 | 59,401 |
Effect of exchange rate changes on cash | 0 | 0 |
Net decrease in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents - beginning of period | 0 | 0 |
Cash and cash equivalents - end of period | $ 0 | $ 0 |
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