Guarantor Subsidiaries

6 Months Ended

Feb. 29, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

As discussed in Note 5, “Debt” on April 16, 2012, Actuant Corporation (the “Parent”) issued $300.0 million of 5.625% Senior Notes, of which $288.1 million remains outstanding as of February 29, 2016. 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. The following tables present the results of operations, financial position and cash flows of Actuant Corporation and its subsidiaries, the Guarantor and non-Guarantor entities, and the eliminations necessary to arrive at the information for the Company on a consolidated basis.

Certain assets, liabilities and expenses have not been allocated to the Guarantors and non-Guarantors and therefore are included in the Parent column in the accompanying 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.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands)



	Three Months Ended February 29, 2016
	Parent			Guarantors			Non-Guarantors			Eliminations		Consolidated
Net sales	$	32,399		$	55,783		$	175,107		$	—	$	263,289
Cost of products sold	12,077			39,688			120,494			—		172,259
Gross profit	20,322			16,095			54,613			—		91,030
Selling, administrative and engineering expenses	17,117			13,121			36,934			—		67,172
Amortization of intangible assets	318			2,644			2,918			—		5,880
Restructuring charges	79			2,374			1,129			—		3,582
Impairment charges	—			49,012			137,499			—		186,511
Operating profit (loss)	2,808			(51,056		)	(123,867		)	—		(172,115		)
Financing costs, net	7,308			—			(442		)	—		6,866
Intercompany (income) expense, net	(5,465		)	1,025			4,440			—		—
Other expense (income), net	200			(31		)	66			—		235
Earnings (loss) before income taxes	765			(52,050		)	(127,931		)	—		(179,216		)
Income tax benefit	(1,648		)	(744		)	(17,634		)	—		(20,026		)
Net earnings (loss) before equity in earnings (loss) of subsidiaries	2,413			(51,306		)	(110,297		)	—		(159,190		)
Equity in earnings (loss) of subsidiaries	(161,603		)	(95,088		)	111			256,580		—
Net loss	$	(159,190	)	$	(146,394	)	$	(110,186	)	$	256,580	$	(159,190	)
Comprehensive loss	$	(173,341	)	$	(163,017	)	$	(108,215	)	$	271,232	$	(173,341	)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands)



	Three Months Ended February 28, 2015
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	39,335		$	70,675		$	190,995		$	—		$	301,005
Cost of products sold	12,076			52,182			126,986			—			191,244
Gross profit	27,259			18,493			64,009			—			109,761
Selling, administrative and engineering expenses	16,430			16,367			42,971			—			75,768
Amortization of intangible assets	318			2,785			2,984			—			6,087
Impairment charges	—			20,249			64,104			—			84,353
Operating profit (loss)	10,511			(20,908		)	(46,050		)	—			(56,447		)
Financing costs, net	7,267			—			(237		)	—			7,030
Intercompany (income) expense, net	(5,098		)	849			4,249			—			—
Intercompany dividend income	(212		)	(243		)	(31		)	486			—
Other income, net	(246		)	(64		)	(309		)	—			(619		)
Earnings (loss) before income taxes	8,800			(21,450		)	(49,722		)	(486		)	(62,858		)
Income tax expense (benefit)	1,514			(207		)	757			(84		)	1,980
Net earnings (loss) before equity in earnings (loss) of subsidiaries	7,286			(21,243		)	(50,479		)	(402		)	(64,838		)
Equity in earnings (loss) of subsidiaries	(72,124		)	(28,577		)	323			100,378			—
Net loss	$	(64,838	)	$	(49,820	)	$	(50,156	)	$	99,976		$	(64,838	)
Comprehensive loss	$	(121,586	)	$	(65,247	)	$	(65,507	)	$	130,754		$	(121,586	)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands)



	Six Months Ended February 29, 2016
	Parent			Guarantors			Non-Guarantors			Eliminations		Consolidated
Net sales	$	67,089		$	125,799		$	375,412		$	—	$	568,300
Cost of products sold	19,248			89,330			260,131			—		368,709
Gross profit	47,841			36,469			115,281			—		199,591
Selling, administrative and engineering expenses	36,877			27,507			75,699			—		140,083
Amortization of intangible assets	636			5,260			5,883			—		11,779
Restructuring charges	957			2,495			4,510			—		7,962
Impairment charges	—			49,012			137,499			—		186,511
Operating profit (loss)	9,371			(47,805		)	(108,310		)	—		(146,744		)
Financing costs, net	14,763			—			(781		)	—		13,982
Intercompany (income) expense, net	(11,294		)	(2,732		)	14,026			—		—
Other expense, net	603			31			221			—		855
Earnings (loss) before income taxes	5,299			(45,104		)	(121,776		)	—		(161,581		)
Income tax expense (benefit)	(1,057		)	305			(17,087		)	—		(17,839		)
Net earnings (loss) before equity in loss of subsidiaries	6,356			(45,409		)	(104,689		)	—		(143,742		)
Equity in loss of subsidiaries	(150,098		)	(89,755		)	(3		)	239,856		—
Net loss	$	(143,742	)	$	(135,164	)	$	(104,692	)	$	239,856	$	(143,742	)
Comprehensive loss	$	(178,827	)	$	(164,011	)	$	(111,313	)	$	275,324	$	(178,827	)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands)



	Six Months Ended February 28, 2015
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	79,601		$	148,266		$	400,903		$	—		$	628,770
Cost of products sold	22,043			105,440			264,550			—			392,033
Gross profit	57,558			42,826			136,353			—			236,737
Selling, administrative and engineering expenses	35,502			33,834			88,904			—			158,240
Amortization of intangible assets	636			5,570			6,167			—			12,373
Impairment charges	—			20,249			64,104			—			84,353
Operating profit (loss)	21,420			(16,827		)	(22,822		)	—			(18,229		)
Financing costs, net	13,814			—			(593		)	—			13,221
Intercompany expense (income), net	(10,830		)	2,083			8,747			—			—
Intercompany dividend income	(212		)	(243		)	(31		)	486			—
Other expense (income), net	219			(160		)	(1,117		)	—			(1,058		)
Earnings before income taxes	18,429			(18,507		)	(29,828		)	(486		)	(30,392		)
Income tax expense	3,824			499			5,533			(84		)	9,772
Net earnings (loss) before equity in earnings (loss) of subsidiaries	14,605			(19,006		)	(35,361		)	(402		)	(40,164		)
Equity in earnings (loss) of subsidiaries	(54,769		)	(14,430		)	517			68,682			—
Net loss	$	(40,164	)	$	(33,436	)	$	(34,844	)	$	68,280		$	(40,164	)
Comprehensive loss	$	(159,875	)	$	(71,847	)	$	(88,657	)	$	160,504		$	(159,875	)

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)



	February 29, 2016
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	6,553	$	—	$	148,118	$	—		$	154,671
Accounts receivable, net	13,081		32,039		136,215		—			181,335
Inventories, net	24,689		31,557		91,125		—			147,371
Other current assets	14,389		2,683		37,834		—			54,906
Total current assets	58,712		66,279		413,292		—			538,283
Property, plant and equipment, net	5,363		19,647		85,857		—			110,867
Goodwill	38,847		143,690		303,816		—			486,353
Other intangibles, net	10,065		101,041		139,429		—			250,535
Investment in subsidiaries	1,886,769		900,034		24,363		(2,811,166		)	—
Intercompany receivable	—		604,822		571,847		(1,176,669		)	—
Other long-term assets	9,968		—		14,998		—			24,966
Total assets	$	2,009,724	$	1,835,513	$	1,553,602	$	(3,987,835	)	$	1,411,004
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable	$	13,585	$	15,371	$	82,594	$	—		$	111,550
Accrued compensation and benefits	13,513		3,665		23,729		—			40,907
Current maturities of debt and short-term borrowings	11,250		—		—		—			11,250
Income taxes payable	—		—		5,136		—			5,136
Other current liabilities	18,955		5,213		28,599		—			52,767
Total current liabilities	57,303		24,249		140,058		—			221,610
Long-term debt, less current maturities	576,809		—		—		—			576,809
Deferred income taxes	35,157		—		17,457		—			52,614
Pension and postretirement benefit liabilities	11,016		—		5,300		—			16,316
Other long-term liabilities	47,004		1,028		8,091		—			56,123
Intercompany payable	794,903		—		381,766		(1,176,669		)	—
Shareholders’ equity	487,532		1,810,236		1,000,930		(2,811,166		)	487,532
Total liabilities and shareholders’ equity	$	2,009,724	$	1,835,513	$	1,553,602	$	(3,987,835	)	$	1,411,004

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)



	August 31, 2015
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	18,688	$	523	$	149,635	$	—		$	168,846
Accounts receivable, net	16,135		33,748		143,198		—			193,081
Inventories, net	23,074		33,480		86,198		—			142,752
Deferred income taxes	9,256		—		3,666		—			12,922
Other current assets	18,020		2,967		21,801		—			42,788
Total current assets	85,173		70,718		404,498		—			560,389
Property, plant and equipment, net	6,363		23,691		112,404		—			142,458
Goodwill	38,847		189,337		380,072		—			608,256
Other intangibles, net	10,702		109,665		188,395		—			308,762
Investment in subsidiaries	2,067,438		1,017,418		27,552		(3,112,408		)	—
Intercompany receivable	—		619,198		565,968		(1,185,166		)	—
Other long-term assets	10,694		—		6,358		—			17,052
Total assets	$	2,219,217	$	2,030,027	$	1,685,247	$	(4,297,574	)	$	1,636,917
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable	$	14,700	$	19,213	$	84,202	$	—		$	118,115
Accrued compensation and benefits	16,479		2,952		24,276		—			43,707
Current maturities of debt and short-term borrowings	3,750		—		219		—			3,969
Income taxes payable	10,947		—		3,858		—			14,805
Other current liabilities	19,817		4,783		29,860		—			54,460
Total current liabilities	65,693		26,948		142,415		—			235,056
Long-term debt, less current maturities	584,309		—		—		—			584,309
Deferred income taxes	43,210		—		29,731		—			72,941
Pension and postretirement benefit liabilities	11,712		—		6,116		—			17,828
Other long-term liabilities	46,407		400		6,975		—			53,782
Intercompany payable	794,885		—		390,281		(1,185,166		)	—
Shareholders’ equity	673,001		2,002,679		1,109,729		(3,112,408		)	673,001
Total liabilities and shareholders’ equity	$	2,219,217	$	2,030,027	$	1,685,247	$	(4,297,574	)	$	1,636,917

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)



	Six Months Ended February 29, 2016
	Parent			Guarantors			Non-Guarantors			Eliminations		Consolidated
Operating Activities
Cash provided by (used in) operating activities	$	(1,458	)	$	(1,222	)	$	31,543		$	—	$	28,863
Investing Activities
Proceeds from sale of property, plant and equipment	13			2,568			2,055			—		4,636
Capital expenditures	(339		)	(1,869		)	(8,796		)	—		(11,004		)
Business acquisitions, net of cash acquired	—			—			(15,026		)	—		(15,026		)
Cash (used in) provided by investing activities	(326		)	699			(21,767		)	—		(21,394		)
Financing Activities
Net repayments on revolver and other debt	—			—			(210		)	—		(210		)
Purchase of treasury shares	(9,352		)	—			—			—		(9,352		)
Taxes paid related to the net share settlement of equity awards	(1,332		)	—			—			—		(1,332		)
Stock option exercises, related tax benefits and other	2,245			—			—			—		2,245
Cash dividend	(2,376		)	—			—			—		(2,376		)
Intercompany loan activity	464			—			(464		)	—		—
Cash used in financing activities	(10,351		)	—			(674		)	—		(11,025		)
Effect of exchange rate changes on cash	—			—			(10,619		)	—		(10,619		)
Net decrease in cash and cash equivalents	(12,135		)	(523		)	(1,517		)	—		(14,175		)
Cash and cash equivalents—beginning of period	18,688			523			149,635			—		168,846
Cash and cash equivalents—end of period	$	6,553		$	—		$	148,118		$	—	$	154,671

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)



	Six Months Ended February 28, 2015
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Operating Activities
Net cash provided by (used in) operating activities	$	20,360		$	(41,149	)	$	23,940		$	—		$	3,151
Investing Activities
Capital expenditures	(519		)	(2,447		)	(9,911		)	—			(12,877		)
Proceeds from sale of property, plant and equipment	—			198			509			—			707
Intercompany investment	(1,117		)	—			—			1,117			—
Cash used in investing activities	(1,636		)	(2,249		)	(9,402		)	1,117			(12,170		)
Financing Activities
Net borrowing on revolver and other debt	199,000			—			—			—			199,000
Principal repayments on term loan	(2,250		)	—			—			—			(2,250		)
Purchase of treasury shares	(180,512		)	—			—			—			(180,512		)
Taxes paid related to the net share settlement of equity awards	(2,325		)	—			—			—			(2,325		)
Stock option exercises, related tax benefits and other	4,753			—			—			—			4,753
Cash dividend	(2,598		)	—			—			—			(2,598		)
Intercompany loan activity	(57,169		)	42,010			15,159			—			—
Intercompany capital contribution	—			—			1,117			(1,117		)	—
Cash (used in) provided by financing activities	(41,101		)	42,010			16,276			(1,117		)	16,068
Effect of exchange rate changes on cash	—			—			(28,564		)	—			(28,564		)
Net (decrease) increase in cash and cash equivalents	(22,377		)	(1,388		)	2,250			—			(21,515		)
Cash and cash equivalents—beginning of period	27,931			3,325			77,756			—			109,012
Cash and cash equivalents—end of period	$	5,554		$	1,937		$	80,006		$	—		$	87,497