Guarantor Subsidiaries

3 Months Ended

Nov. 30, 2018

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, 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 the subsidiaries that do not guarantee the 5.625% Senior Notes (the "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 the Parent, the Guarantors and the non-Guarantors and the eliminations necessary to arrive at the information for the Company on a consolidated basis.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands)



	Three Months Ended November 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations		Consolidated
Net sales	$	40,290		$	95,822		$	156,419		$	—	$	292,531
Cost of products sold	9,881			70,596			107,046			—		187,523
Gross profit	30,409			25,226			49,373			—		105,008
Selling, administrative and engineering expenses	20,966			18,314			33,912			—		73,192
Amortization of intangible assets	318			2,692			1,268			—		4,278
Restructuring charges	—			(93		)	496			—		403
Impairment & divestiture charges	—			10,220			26,233			—		36,453
Operating profit (loss)	9,125			(5,907		)	(12,536		)	—		(9,318		)
Financing costs (income), net	7,551			—			(256		)	—		7,295
Intercompany (income) expense, net	(4,053		)	6,491			(2,438		)	—		—
Other (income) expense, net	(216		)	7			1,120			—		911
Earnings (loss) before income tax (benefit) expense	5,843			(12,405		)	(10,962		)	—		(17,524		)
Income tax (benefit) expense	(2,706		)	(102		)	2,736					(72		)
Net earnings (loss) before equity in (loss) earnings of subsidiaries	8,549			(12,303		)	(13,698		)	—		(17,452		)
Equity in (loss) earnings of subsidiaries	(26,001		)	(13,132		)	1,255			37,878		—
Net loss	(17,452		)	(25,435		)	(12,443		)	37,878		(17,452		)
Comprehensive loss	$	(25,396	)	$	(25,434	)	$	(20,119	)	$	45,553	$	(25,396	)

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 (income), 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 BALANCE SHEETS

(in thousands)



	November 30, 2018
	Parent		Guarantors		Non-Guarantors		Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	41,371	$	—	$	162,072	$	—		$	203,443
Accounts receivable, net	18,511		40,803		131,876		—			191,190
Inventories, net	25,035		51,389		78,340		—			154,764
Assets held for sale	—		79,748		26,445		—			106,193
Other current assets	11,761		1,824		38,160		—			51,745
Total current assets	96,678		173,764		436,893		—			707,335
Property, plant & equipment, net	7,828		16,557		54,775		—			79,160
Goodwill	38,847		184,121		254,392		—			477,360
Other intangibles, net	6,566		97,932		48,221		—			152,719
Investment in subsidiaries	1,806,237		1,198,123		807,031		(3,811,391		)	—
Intercompany receivable	—		616,713		208,731		(825,444		)	—
Other long-term assets	12,745		339		20,375		—			33,459
Total assets	$	1,968,901	$	2,287,549	$	1,830,418	$	(4,636,835	)	$	1,450,033
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable	$	13,915	$	20,468	$	89,684	$	—		$	124,067
Accrued compensation and benefits	10,509		2,938		22,896		—			36,343
Current maturities of debt and short-term borrowings	30,000		—		—		—			30,000
Income taxes payable	—		—		8,215		—			8,215
Liabilities held for sale	—		12,951		57,079		—			70,030
Other current liabilities	18,207		6,481		39,026		—			63,714
Total current liabilities	72,631		42,838		216,900		—			332,369
Long-term debt	495,384		—		—		—			495,384
Deferred income taxes	15,426		—		1,505		—			16,931
Pension and post-retirement benefit liabilities	7,632		—		7,039		—			14,671
Other long-term liabilities	47,348		285		5,480		—			53,113
Intercompany payable	792,915		32,529		—		(825,444		)	—
Shareholders’ equity	537,565		2,211,897		1,599,494		(3,811,391		)	537,565
Total liabilities and shareholders’ equity	$	1,968,901	$	2,287,549	$	1,830,418	$	(4,636,835	)	$	1,450,033

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 STATEMENTS OF CASH FLOWS

(in thousands)



	Three Months Ended November 30, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations		Consolidated
Operating Activities
Net cash (used in) provided by operating activities	$	(16,275	)	$	4,337		$	(17,172	)	$	—	$	(29,110	)
Investing Activities
Capital expenditures	(423		)	(4,340		)	(2,903		)	—		(7,666		)
Proceeds from sale of property, plant and equipment	8			3			—			—		11
Cash used in investing activities	(415		)	(4,337		)	(2,903		)	—		(7,655		)
Financing Activities
Principal repayments on term loan	(7,500		)	—			—			—		(7,500		)
Stock option exercises, related tax benefits and other	552			—			—			—		552
Taxes paid related to the net share settlement of equity awards	(201		)	—			—			—		(201		)
Cash Dividends	(2,439		)	—			—			—		(2,439		)
Cash used in financing activities	(9,588		)	—			—			—		(9,588		)
Effect of exchange rate changes on cash	—			—			(694		)	—		(694		)
Net decrease in cash and cash equivalents	(26,278		)	—			(20,769		)	—		(47,047		)
Cash and cash equivalents—beginning of period	67,649			—			182,841			—		250,490
Cash and cash equivalents—end of period	$	41,371		$	—		$	162,072		$	—	$	203,443

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