Guarantor Subsidiaries

3 Months Ended

Nov. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

As discussed in Note 8, “Debt” on April 16, 2012, Actuant Corporation (the “Parent”) issued $300.0 million of 5.625% Senior Notes, of which $287.6 million remains outstanding as of November 30, 2017. 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 EARNINGS AND COMPREHENSIVE INCOME

(in thousands)



	Three Months Ended November 30, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	35,710		$	87,834		$	165,411		$	—		$	288,955
Cost of products sold	6,963			64,574			116,507			—			188,044
Gross profit	28,747			23,260			48,904			—			100,911
Selling, administrative and engineering expenses	19,715			18,448			36,315			—			74,478
Amortization of intangible assets	318			2,861			1,952			—			5,131
Restructuring charges	5,356			169			1,104			—			6,629
Operating profit	3,358			1,782			9,533			—			14,673
Financing costs, net	7,623			21			(130		)	—			7,514
Intercompany (income) expense, net	(4,877		)	5,484			(607		)	—			—
Other (income) expense, net	(50		)	45			334			—			329
Earnings (loss) before income tax (benefit) expense	662			(3,768		)	9,936			—			6,830
Income tax (benefit) expense	(285		)	437			1,452			—			1,604
Net earnings (loss) before equity in earnings (loss) of subsidiaries	947			(4,205		)	8,484			—			5,226
Equity in earnings (loss) of subsidiaries	4,279			8,793			(46		)	(13,026		)	—
Net earnings	5,226			4,588			8,438			(13,026		)	5,226
Comprehensive income	$	8,251		$	4,588		$	11,566		$	(16,154	)	$	8,251

CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (LOSS)

(in thousands)



	Three Months Ended November 30, 2016
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	31,729		$	84,276		$	149,788		$	—		$	265,793
Cost of products sold	7,094			61,416			104,216			—			172,726
Gross profit	24,635			22,860			45,572			—			93,067
Selling, administrative and engineering expenses	17,967			16,636			33,999			—			68,602
Amortization of intangible assets	318			3,076			1,868			—			5,262
Restructuring charges	355			723			1,870			—			2,948
Director & officer transition charges	7,784			—			—			—			7,784
Operating (loss) profit	(1,789		)	2,425			7,835			—			8,471
Financing costs (income), net	7,326			—			(194		)	—			7,132
Intercompany (income) expense, net	(5,068		)	(1,086		)	6,154			—			—
Intercompany dividends	—			(55,143		)	—			55,143			—
Other expense (income), net	2,085			(70		)	(2,643		)	—			(628		)
(Loss) earnings before income tax benefit	(6,132		)	58,724			4,518			(55,143		)	1,967
Income tax benefit	(2,714		)	(30		)	(254		)	—			(2,998		)
Net (loss) earnings before equity in earnings of subsidiaries	(3,418		)	58,754			4,772			(55,143		)	4,965
Equity in earnings of subsidiaries	8,383			5,625			3,130			(17,138		)	—
Net earnings	4,965			64,379			7,902			(72,281		)	4,965
Comprehensive (loss) income	$	(21,157	)	$	46,292		$	631		$	(46,923	)	$	(21,157	)

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)



	November 30, 2017
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	9,504	$	—	$	155,546	$	—		$	165,050
Accounts receivable, net	16,577		52,010		132,730		—			201,317
Inventories, net	24,490		54,521		75,235		—			154,246
Assets held for sale	—		—		21,393		—			21,393
Other current assets	29,359		2,997		43,974		—			76,330
Total current assets	79,930		109,528		428,878		—			618,336
Property, plant and equipment, net	8,051		30,461		60,476		—			98,988
Goodwill	38,847		200,499		292,108		—			531,454
Other intangibles, net	7,839		135,181		73,012		—			216,032
Investment in subsidiaries	1,839,467		1,196,261		804,946		(3,840,674		)	—
Intercompany receivable	—		577,424		206,969		(784,393		)	—
Other long-term assets	8,147		1,869		15,415		—			25,431
Total assets	$	1,982,281	$	2,251,223	$	1,881,804	$	(4,625,067	)	$	1,490,241
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable	$	15,804	$	28,772	$	97,169	$	—		$	141,745
Accrued compensation and benefits	7,634		6,325		23,811		—			37,770
Current maturities of debt and short-term borrowings	30,000		—		—		—			30,000
Income taxes payable	307		—		6,335		—			6,642
Liabilities held for sale	—		—		70,787		—			70,787
Other current liabilities	20,521		8,140		28,314		—			56,975
Total current liabilities	74,266		43,237		226,416		—			343,919
Long-term debt, net	524,629		—		—		—			524,629
Deferred income taxes	23,789		—		5,778		—			29,567
Pension and postretirement benefit liabilities	12,209		—		7,330		—			19,539
Other long-term liabilities	49,646		305		6,318		—			56,269
Intercompany payable	781,424		—		2,969		(784,393		)	—
Shareholders’ equity	516,318		2,207,681		1,632,993		(3,840,674		)	516,318
Total liabilities and shareholders’ equity	$	1,982,281	$	2,251,223	$	1,881,804	$	(4,625,067	)	$	1,490,241

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)



	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

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)



	Three Months Ended November 30, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations		Consolidated
Operating Activities
Net cash (used in) provided by operating activities	$	(9,838	)	$	3,580		$	(14,200	)	$	—	$	(20,458	)
Investing Activities
Capital expenditures	(1,478		)	(3,589		)	(2,837		)	—		(7,904		)
Proceeds from sale of property, plant and equipment	—			9			23			—		32
Rental asset lease buyout for Viking divestiture	—			—			(27,718		)	—		(27,718		)
Cash used in investing activities	(1,478		)	(3,580		)	(30,532		)	—		(35,590		)
Financing Activities
Repayments on term loan	(7,500		)	—			—			—		(7,500		)
Stock option exercises and other	2,231			—			—			—		2,231
Taxes paid related to the net share settlement of equity awards	(282		)	—			—			—		(282		)
Cash dividend	(2,390		)	—			—			—		(2,390		)
Intercompany loan activity	(5,954		)	—			5,954			—		—
Cash (used in) provided by financing activities	(13,895		)	—			5,954			—		(7,941		)
Effect of exchange rate changes on cash	—			—			(532		)	—		(532		)
Net decrease in cash and cash equivalents	(25,211		)	—			(39,310		)	—		(64,521		)
Cash and cash equivalents—beginning of period	34,715			—			194,856			—		229,571
Cash and cash equivalents—end of period	$	9,504		$	—		$	155,546		$	—	$	165,050

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)



	Three Months Ended November 30, 2016
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Operating Activities
Net provided by operating activities	$	61,380		$	2,491		$	3,736		$	(55,143	)	$	12,463
Investing Activities
Capital expenditures	(861		)	(2,607		)	(1,671		)	—			(5,139		)
Proceeds from sale of property, plant and equipment	—			46			84			—			130
Cash used in investing activities	(861		)	(2,561		)	(1,587		)	—			(5,009		)
Financing Activities
Principal repayments on term loan	(3,750		)	—			—			—			(3,750		)
Taxes paid related to the net share settlement of equity awards	(223		)	—			—			—			(223		)
Stock option exercises and other	964			—			—			—			964
Cash dividend	(2,358		)	—			(55,143		)	55,143			(2,358		)
Intercompany loan activity	(53,734		)	—			53,734			—			—
Cash used in financing activities	(59,101		)	—			(1,409		)	55,143			(5,367		)
Effect of exchange rate changes on cash	—			—			(4,820		)	—			(4,820		)
Net increase (decrease) in cash and cash equivalents	1,418			(71		)	(4,080		)	—			(2,733		)
Cash and cash equivalents—beginning of period	7,953			71			171,580			—			179,604
Cash and cash equivalents—end of period	$	9,371		$	—		$	167,500		$	—		$	176,871