Guarantor Subsidiaries

9 Months Ended

May 31, 2018

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 May 31, 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 EARNINGS AND COMPREHENSIVE INCOME (LOSS)

(in thousands)

	Three Months Ended May 31, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	41,851		$	101,780		$	173,465		$	—		$	317,096
Cost of products sold	6,394			73,266			120,927			—			200,587
Gross profit	35,457			28,514			52,538			—			116,509
Selling, administrative and engineering expenses	22,480			18,439			36,651			—			77,570
Amortization of intangible assets	318			2,861			2,005			—			5,184
Restructuring charges	661			253			256			—			1,170
Operating profit	11,998			6,961			13,626			—			32,585
Financing costs (income), net	7,847			22			(113		)	—			7,756
Intercompany (income) expense, net	(2,023		)	7,120			(5,097		)	—			—
Other (income) expense, net	(251		)	(8		)	71			—			(188		)
Earnings (loss) before income tax (benefit) expense	6,425			(173		)	18,765			—			25,017
Income tax (benefit) expense	(11,354		)	(86		)	7,445			—			(3,995		)
Net earnings (loss) before equity in earnings of subsidiaries	17,779			(87		)	11,320			—			29,012
Equity in earnings of subsidiaries	11,233			13,406			1,157			(25,796		)	—
Net earnings	$	29,012		$	13,319		$	12,477		$	(25,796	)	$	29,012
Comprehensive income (loss)	$	8,059		$	13,319		$	(9,092	)	$	(4,227	)	$	8,059

CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME

(in thousands)

	Three Months Ended May 31, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	39,753		$	98,391		$	157,283		$	—		$	295,427
Cost of products sold	9,944			71,565			111,114			—			192,623
Gross profit	29,809			26,826			46,169			—			102,804
Selling, administrative and engineering expenses	18,113			18,060			33,878			—			70,051
Amortization of intangible assets	318			2,865			1,854			—			5,037
Restructuring charges	99			153			132			—			384
Operating profit	11,279			5,748			10,305			—			27,332
Financing costs (income), net	7,558			—			(5		)	—			7,553
Intercompany (income) expense, net	(3,941		)	3,958			(17		)	—			—
Intercompany dividends	5,353			—			(5,353		)	—			—
Other (income) expense, net	(159		)	98			1,358			—			1,297
Earnings before income tax benefit	2,468			1,692			14,322			—			18,482
Income tax benefit	(3,521		)	(168		)	(340		)	—			(4,029		)
Net earnings before equity in earnings of subsidiaries	5,989			1,860			14,662			—			22,511
Equity in earnings of subsidiaries	16,523			15,475			1,754			(33,752		)	—
Net earnings	$	22,511		$	17,335		$	16,416		$	(33,752	)	$	22,511
Comprehensive income	$	42,835		$	24,376		$	28,358		$	(52,734	)	$	42,835

CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME

(in thousands)

	Nine Months Ended May 31, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	113,780		$	272,686		$	494,750		$	—		$	881,216
Cost of products sold	19,205			201,819			353,076			—			574,100
Gross profit	94,575			70,867			141,674			—			307,116
Selling, administrative and engineering expenses	60,385			54,119			106,046			—			220,550
Amortization of intangible assets	954			8,583			5,946			—			15,483
Restructuring charges	6,211			1,331			3,707			—			11,249
Impairment & divestiture charges (income)	4,217			—			(1,230		)	—			2,987
Operating profit	22,808			6,834			27,205			—			56,847
Financing costs (income), net	23,247			65			(438		)	—			22,874
Intercompany (income) expense, net	(11,942		)	18,023			(6,081		)	—			—
Other (income) expense, net	(211		)	86			633			—			508
Earnings (loss) before income tax (benefit) expense	11,714			(11,340		)	33,091			—			33,465
Income tax (benefit) expense	(1,027		)	(1,883		)	20,358			—			17,448
Net earnings (loss) before equity in earnings (loss) of subsidiaries	12,741			(9,457		)	12,733			—			16,017
Equity in earnings (loss) of subsidiaries	3,276			12,745			(348		)	(15,673		)	—
Net earnings	$	16,017		$	3,288		$	12,385		$	(15,673	)	$	16,017
Comprehensive income	$	79,098		$	3,288		$	77,294		$	(80,582	)	$	79,098

CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME

(in thousands)

	Nine Months Ended May 31, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	106,435		$	263,640		$	450,014		$	—		$	820,089
Cost of products sold	27,087			194,802			315,003			—			536,892
Gross profit	79,348			68,838			135,011			—			283,197
Selling, administrative and engineering expenses	54,633			51,245			99,731			—			205,609
Amortization of intangible assets	954			8,859			5,555			—			15,368
Restructuring charges	826			1,317			3,290			—			5,433
Director & officer transition charges	7,784			—			—			—			7,784
Operating profit	15,151			7,417			26,435			—			49,003
Financing costs (income), net	22,314			—			(295		)	—			22,019
Intercompany (income) expense, net	(16,891		)	14,114			2,777			—			—
Intercompany dividends	5,353			(59,401		)	(5,353		)	59,401			—
Other expense (income), net	1,878			24			(642		)	—			1,260
Earnings before income tax (benefit) expense	2,497			52,680			29,948			(59,401		)	25,724
Income tax (benefit) expense	(6,084		)	(865		)	122			—			(6,827		)
Net earnings before equity in earnings of subsidiaries	8,581			53,545			29,826			(59,401		)	32,551
Equity in earnings of subsidiaries	23,970			29,157			4,616			(57,743		)	—
Net earnings	$	32,551		$	82,702		$	34,442		$	(117,144	)	$	32,551
Comprehensive income	$	29,864		$	71,992		$	41,817		$	(113,809	)	$	29,864

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)

	May 31, 2018
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	36,411	$	—	$	153,079	$	—		$	189,490
Accounts receivable, net	18,176		55,856		138,252		—			212,284
Inventories, net	26,590		62,274		78,453		—			167,317
Other current assets	9,763		4,045		44,924		—			58,732
Total current assets	90,940		122,175		414,708		—			627,823
Property, plant & equipment, net	8,073		31,872		60,820		—			100,765
Goodwill	38,847		201,578		298,367		—			538,792
Other intangibles, net	7,202		129,460		73,498		—			210,160
Investment in subsidiaries	1,890,023		1,264,257		802,395		(3,956,675		)	—
Intercompany receivable	—		564,943		214,895		(779,838		)	—
Other long-term assets	10,391		31		16,823		—			27,245
Total assets	$	2,045,476	$	2,314,316	$	1,881,506	$	(4,736,513	)	$	1,504,785
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable	$	14,511	$	30,284	$	97,404	$	—		$	142,199
Accrued compensation and benefits	14,112		8,962		25,019		—			48,093
Current maturities of debt	30,000		—		—		—			30,000
Income taxes payable	6,069		—		11,536		—			17,605
Other current liabilities	18,931		6,521		37,985		—			63,437
Total current liabilities	83,623		45,767		171,944		—			301,334
Long-term debt	510,007		—		—		—			510,007
Deferred income taxes	13,659		—		5,832		—			19,491
Pension and post-retirement benefit liabilities	11,587		—		7,105		—			18,692
Other long-term liabilities	46,651		374		7,208		—			54,233
Intercompany payable	778,921		—		917		(779,838		)	—
Shareholders’ equity	601,028		2,268,175		1,688,500		(3,956,675		)	601,028
Total liabilities and shareholders’ equity	$	2,045,476	$	2,314,316	$	1,881,506	$	(4,736,513	)	$	1,504,785

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	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)

	Nine Months Ended May 31, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Operating Activities
Net cash provided by operating activities	$	25,741		$	9,439		$	409		$	—		$	35,589
Investing Activities
Capital expenditures	(2,455		)	(7,806		)	(8,455		)	—			(18,716		)
Proceeds from sale of property, plant and equipment	—			99			49			—			148
Rental asset buyout for Viking divestiture	—			—			(27,718		)	—			(27,718		)
Proceeds from sale of business, net of transition costs	198			—			8,582			—			8,780
Cash paid for business acquisitions, net of cash acquired	—			(1,732		)	(20,594		)	—			(22,326		)
Intercompany investment	(100		)	—			—			100			—
Cash used in investing activities	(2,357		)	(9,439		)	(48,136		)	100			(59,832		)
Financing Activities
Principal repayments on term loan	(22,500		)	—			—			—			(22,500		)
Stock option exercises and other	10,435			—			—			—			10,435
Taxes paid related to the net share settlement of equity awards	(1,279		)	—			—			—			(1,279		)
Cash dividend	(2,390		)	—			—			—			(2,390		)
Intercompany loan activity	(5,954		)	—			5,954			—			—
Intercompany capital contribution	—			—			100			(100		)	—
Cash (used in) provided by financing activities	(21,688		)	—			6,054			(100		)	(15,734		)
Effect of exchange rate changes on cash	—			—			(104		)	—			(104		)
Net increase (decrease) in cash and cash equivalents	1,696			—			(41,777		)	—			(40,081		)
Cash and cash equivalents—beginning of period	34,715			—			194,856			—			229,571
Cash and cash equivalents—end of period	$	36,411		$	—		$	153,079		$	—		$	189,490

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Nine Months Ended May 31, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Operating Activities
Net provided by operating activities	$	82,834		$	13,184		$	20,798		$	(64,754	)	$	52,062
Investing Activities
Capital expenditures	(2,706		)	(8,037		)	(12,176		)	—			(22,919		)
Proceeds from sale of property, plant and equipment	—			135			109			—			244
Cash used in investing activities	(2,706		)	(7,902		)	(12,067		)	—			(22,675		)
Financing Activities
Principal repayments on term loan	(11,250		)	—			—			—			(11,250		)
Redemption of 5.625% Senior Notes	(500		)	—			—			—			(500		)
Stock option exercises and other	7,314			—			—			—			7,314
Taxes paid related to the net share settlement of equity awards	(999		)	—			—			—			(999		)
Payment of deferred acquisition consideration	—			—			(742		)	—			(742		)
Cash dividend	(2,358		)	(5,353		)	(59,401		)	64,754			(2,358		)
Intercompany loan activity	(53,734		)	—			53,734			—			—
Cash used in financing activities	(61,527		)	(5,353		)	(6,409		)	64,754			(8,535		)
Effect of exchange rate changes on cash	—			—			(1,502		)	—			(1,502		)
Net increase (decrease) in cash and cash equivalents	18,601			(71		)	820			—			19,350
Cash and cash equivalents—beginning of period	7,953			71			171,580			—			179,604
Cash and cash equivalents—end of period	$	26,554		$	—		$	172,400		$	—		$	198,954