Guarantor Subsidiaries

12 Months Ended

Aug. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Guarantor Subsidiaries

Note 17.    Guarantor Subsidiaries

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 August 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 consolidating financial statements. These items are of a corporate or consolidated nature and include, but are not limited to, tax provisions and related assets and liabilities, certain employee benefit obligations, prepaid and accrued insurance and corporate indebtedness. Intercompany activity in the consolidating financial statements primarily includes loan activity, purchases and sales of goods or services, 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)

	Year Ended August 31, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	159,411		$	371,890		$	651,310		$	—		$	1,182,611
Cost of products sold	29,619			275,280			462,452			—			767,351
Gross profit	129,792			96,610			188,858			—			415,260
Selling, administrative and engineering expenses	81,194			72,688			137,562			—			291,444
Amortization of intangible assets	1,272			11,394			7,899			—			20,565
Restructuring charges	6,433			1,398			4,164			—			11,995
Impairment & divestiture charges	4,217			23,740			45,101			—			73,058
Operating profit (loss)	36,676			(12,610		)	(5,868		)	—			18,198
Financing costs (income), net	31,752			81			(342		)	—			31,491
Intercompany (income) expense, net	(17,042		)	26,596			(9,554		)	—			—
Intercompany dividends	—			(28,822		)	—			28,822			—
Other (income) expense, net	(1,200		)	57			522			—			(621		)
Earnings (loss) before income tax (benefit) expense	23,166			(10,522		)	3,506			(28,822		)	(12,672		)
Income tax (benefit) expense	(25,380		)	17,921			16,435			—			8,976
Net earnings (loss) before equity in (loss) earnings of subsidiaries	48,546			(28,443		)	(12,929		)	(28,822		)	(21,648		)
Equity in (loss) earnings of subsidiaries	(70,194		)	(15,652		)	2,103			83,743			—
Net loss	(21,648		)	(44,095		)	(10,826		)	54,921			(21,648		)
Comprehensive income (loss)	$	31,368		$	(44,095	)	$	40,800		$	3,295		$	31,368

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands)

	Year Ended August 31, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	145,223		$	355,989		$	594,572		$	—		$	1,095,784
Cost of products sold	34,300			260,700			421,067			—			716,067
Gross profit	110,923			95,289			173,505			—			379,717
Selling, administrative and engineering expenses	74,996			69,826			132,666			—			277,488
Amortization of intangible assets	1,272			11,715			7,487			—			20,474
Director & officer transition charges	7,784			—			—			—			7,784
Restructuring charges	826			1,359			5,043			—			7,228
Impairment & divestiture charges	—			—			116,979			—			116,979
Operating profit (loss)	26,045			12,389			(88,670		)	—			(50,236		)
Financing costs, net	30,005			35			(337		)	—			29,703
Intercompany (income) expense, net	(22,941		)	22,066			875			—			—
Intercompany dividends	5,353			(59,401		)	(5,353		)	59,401			—
Other expense (income), net	2,690			87			(25		)	—			2,752
Earnings (loss) before income tax benefit	10,938			49,602			(83,830		)	(59,401		)	(82,691		)
Income tax benefit	(782		)	(14,574		)	(1,122		)	—			(16,478		)
Net earnings (loss) before equity in (loss) earnings of subsidiaries	11,720			64,176			(82,708		)	(59,401		)	(66,213		)
Equity in (loss) earnings of subsidiaries	(77,933		)	(81,389		)	3,335			155,987			—
Net loss	(66,213		)	(17,213		)	(79,373		)	96,586			(66,213		)
Comprehensive loss	$	(41,651	)	$	(35,121	)	$	(39,942	)	$	75,063		$	(41,651	)

CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS AND COMPREHENSIVE LOSS

(in thousands)

	Year Ended August 31, 2016
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	135,679		$	361,209		$	652,522		$	—		$	1,149,410
Cost of products sold	34,576			263,197			448,240			—			746,013
Gross profit	101,103			98,012			204,282			—			403,397
Selling, administrative and engineering expenses	69,677			69,382			135,438			—			274,497
Amortization of intangible assets	1,272			13,287			8,384			—			22,943
Loss on product line divestiture	—			5,092			—			—			5,092
Restructuring charges	2,426			3,455			8,690			—			14,571
Impairment charges	—			49,012			137,499			—			186,511
Operating profit (loss)	27,728			(42,216		)	(85,729		)	—			(100,217		)
Financing costs, net	30,123			—			(1,355		)	—			28,768
Intercompany (income) expense, net	(20,445		)	(9,999		)	30,444			—			—
Intercompany dividends	—			—			(5,338		)	5,338			—
Other expense, net	914			54			391			—			1,359
Earnings (loss) before income taxes	17,136			(32,271		)	(109,871		)	(5,338		)	(130,344		)
Income tax (benefit) expense	(8,729		)	519			(17,046		)	86			(25,170		)
Net earnings (loss) before equity in (loss) earnings of subsidiaries	25,865			(32,790		)	(92,825		)	(5,424		)	(105,174		)
Equity in (loss) earnings of subsidiaries	(131,037		)	(83,747		)	3,024			211,760			—
Net loss	(105,174		)	(116,537		)	(89,801		)	206,336			(105,174		)
Comprehensive loss	$	(143,357	)	$	(157,344	)	$	(83,802	)	$	241,146		$	(143,357	)

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)

	August 31, 2018
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	67,649	$	—	$	182,841	$	—		$	250,490
Accounts receivable, net	19,969		54,822		112,958		—			187,749
Inventories, net	22,570		59,391		74,395		—			156,356
Assets held for sale	—		—		23,573		—			23,573
Other current assets	7,358		4,759		30,615		—			42,732
Total current assets	117,546		118,972		424,382		—			660,900
Property, plant & equipment, net	7,937		26,408		55,875		—			90,220
Goodwill	38,847		203,543		270,022		—			512,412
Other intangible assets, net	6,884		121,793		52,360		—			181,037
Investment in subsidiaries	1,836,954		1,211,781		789,917		(3,838,652		)	—
Intercompany receivables	—		622,646		200,173		(822,819		)	—
Other long-term assets	12,955		366		23,448		—			36,769
Total assets	$	2,021,123	$	2,305,509	$	1,816,177	$	(4,661,471	)	$	1,481,338
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable	$	15,890	$	29,022	$	85,926	$	—		$	130,838
Accrued compensation and benefits	22,171		9,804		22,533		—			54,508
Current maturities of debt	30,000		—		—		—			30,000
Income taxes payable	—		—		4,091		—			4,091
Liabilities held for sale	—		—		44,225		—			44,225
Other current liabilities	17,379		11,078		38,842		—			67,299
Total current liabilities	85,440		49,904		195,617		—			330,961
Long-term debt	502,695		—		—		—			502,695
Deferred income taxes	17,467		—		4,466		—			21,933
Pension and post-retirement benefit liabilities	7,765		—		7,104		—			14,869
Other long-term liabilities	45,483		359		6,326		—			52,168
Intercompany payable	803,561		19,258		—		(822,819		)	—
Shareholders’ equity	558,712		2,235,988		1,602,664		(3,838,652		)	558,712
Total liabilities and shareholders’ equity	$	2,021,123	$	2,305,509	$	1,816,177	$	(4,661,471	)	$	1,481,338

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 intangible assets, 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)

	Year Ended August 31, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Operating Activities
Net cash provided by operating activities	$	63,264		$	27,673		$	15,156		$	—		$	106,093
Investing Activities
Capital expenditures	(2,822		)	(8,015		)	(10,033		)	—			(20,870		)
Proceeds from sale of property, plant and equipment	—			99			54			—			153
Rental asset buyout for Viking divestiture	—			—			(27,718		)	—			(27,718		)
Proceeds from sale of businesses, net of transaction costs	198			—			8,704			—			8,902
Cash paid for business acquisitions, net of cash acquired	—			(1,732		)	(21,486		)	—			(23,218		)
Intercompany investment	(11,754		)	(1		)	—			11,755			—
Cash used in investing activities	(14,378		)	(9,649		)	(50,479		)	11,755			(62,751		)
Financing Activities
Principal repayment on term loan	(30,000		)	—			—			—			(30,000		)
Taxes paid related to the net share settlement of equity awards	(1,284		)	—			—			—			(1,284		)
Stock option exercises, related tax benefits and other	15,681			—			—			—			15,681
Cash dividend	(2,390		)	—			—			—			(2,390		)
Changes in receivables and payable to subsidiaries	2,041			(18,024		)	15,983			—			—
Intercompany capital contribution	—			—			11,755			(11,755		)	—
Cash (used in) provided by financing activities	(15,952		)	(18,024		)	27,738			(11,755		)	(17,993		)
Effect of exchange rate changes on cash	—			—			(4,430		)	—			(4,430		)
Net increase (decrease) in cash and cash equivalents	32,934			—			(12,015		)	—			20,919
Cash and cash equivalents—beginning of period	34,715			—			194,856			—			229,571
Cash and cash equivalents—end of period	$	67,649		$	—		$	182,841		$	—		$	250,490

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended August 31, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Operating Activities
Net cash provided by operating activities	$	99,241		$	14,340		$	39,672		$	(64,754	)	$	88,499
Investing Activities
Capital expenditures	(3,391		)	(9,265		)	(15,539		)	—			(28,195		)
Proceeds from sale of property, plant and equipment	—			207			363			—			570
Intercompany investment	(6,900		)	—			—			6,900			—
Cash used in investing activities	(10,291		)	(9,058		)	(15,176		)	6,900			(27,625		)
Financing Activities
Principal repayment on term loan	(18,750		)	—			—			—			(18,750		)
Redemption on 5.625% Senior Notes	(500		)	—			—			—			(500		)
Taxes paid related to the net share settlement of equity awards	(1,065		)	—			—			—			(1,065		)
Stock option exercises, related tax benefits and other	8,265			—			—			—			8,265
Payment of deferred acquisition consideration	—			—			(742		)	—			(742		)
Cash dividend	(2,358		)	(5,353		)	(59,401		)	64,754			(2,358		)
Intercompany loan activity	(47,780		)	—			47,780			—			—
Intercompany capital contributions	—			—			6,900			(6,900		)	—
Cash used in financing activities	(62,188		)	(5,353		)	(5,463		)	57,854			(15,150		)
Effect of exchange rate changes on cash	—			—			4,243			—			4,243
Net increase (decrease) in cash and cash equivalents	26,762			(71		)	23,276			—			49,967
Cash and cash equivalents—beginning of period	7,953			71			171,580			—			179,604
Cash and cash equivalents—end of period	$	34,715		$	—		$	194,856		$	—		$	229,571

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended August 31, 2016
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Operating Activities
Net cash provided by (used in) operating activities	$	58,926		$	(1,953	)	$	66,062		$	(5,338	)	$	117,697
Investing Activities
Capital expenditures	(2,135		)	(6,781		)	(11,293		)	—			(20,209		)
Proceeds from sale of property, plant and equipment	13			7,000			2,283			—			9,296
Intercompany investment	(339		)	(3,458		)	—			3,797			—
Business acquisitions, net of cash acquired	—			—			(81,916		)	—			(81,916		)
Proceeds from sale of businesses, net of transaction costs	—			9,695			—			—			9,695
Cash (used in) provided by investing activities	(2,461		)	6,456			(90,926		)	3,797			(83,134		)
Financing Activities
Net repayments on revolving credit facility	—			—			(210		)	—			(210		)
Principal repayments on term loan	(3,750		)	—			—			—			(3,750		)
Purchase of treasury shares	(17,101		)	—			—			—			(17,101		)
Taxes paid related to the net share settlement of equity awards	(1,409		)	—			—			—			(1,409		)
Stock option exercises, related tax benefits and other	6,416			—			—			—			6,416
Cash dividend	(2,376		)	(5,338		)	—			5,338			(2,376		)
Intercompany loan activity	(48,980		)	—			48,980			—			—
Intercompany capital contributions	—			339			3,458			(3,797		)	—
Cash (used in) provided by financing activities	(67,200		)	(4,999		)	52,228			1,541			(18,430		)
Effect of exchange rate changes on cash	—			—			(5,375		)	—			(5,375		)
Net increase (decrease) in cash and cash equivalents	(10,735		)	(496		)	21,989			—			10,758
Cash and cash equivalents—beginning of period	18,688			567			149,591			—			168,846
Cash and cash equivalents—end of period	$	7,953		$	71		$	171,580		$	—		$	179,604