Guarantor Subsidiaries

12 Months Ended

Aug. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Guarantor Subsidiaries

Note 17.    Guarantor Subsidiaries

As discussed in Note 7, “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 August 31, 2019. Certain 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 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. As a result of the refinancing of the Senior Credit Facility in March 2019, certain domestic subsidiaries that were previously Guarantors of the Senior Notes are now non-Guarantors. As such, prior period financial information has been recast to reflect the current Parent, Guarantor, and non-Guarantor structure.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(in thousands)

	Year Ended August 31, 2019
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	167,009		$	70,621		$	417,128		$	—		$	654,758
Cost of products sold	46,220			44,007			271,879			—			362,106
Gross profit	120,789			26,614			145,249			—			292,652
Selling, administrative and engineering expenses	85,399			20,095			103,737			—			209,231
Amortization of intangible assets	1,272			2,600			5,050			—			8,922
Restructuring charges	562			1,402			2,192			—			4,156
Impairment & divestiture charges	—			6,243			16,584			—			22,827
Operating profit (loss)	33,556			(3,726		)	17,686			—			47,516
Financing costs (income), net	28,716			—			(553		)	—			28,163
Intercompany (income) expense, net	(15,020		)	21,573			70,086			(76,639		)	—
Intercompany dividends	(447,637		)	(39,208		)	—			486,845			—
Other (income) expense, net	(435		)	1			1,063			—			629
Earnings (loss) before income tax (benefit) expense	467,932			13,908			(52,910		)	(410,206		)	18,724
Income tax (benefit) expense	(5,113		)	(2,395		)	18,165			—			10,657
Earnings (loss) from continuing operations	473,045			16,303			(71,075		)	(410,206		)	8,067
Loss from discontinued operations	(3,148		)	(93,730		)	(83,695		)	(76,639		)	(257,212		)
Net earnings (loss) before equity in loss of subsidiaries	469,897			(77,427		)	(154,770		)	(486,845		)	(249,145		)
Equity in loss of subsidiaries	(719,042		)	(28,354		)	11,064			736,332			—
Net loss	(249,145		)	(105,781		)	(143,706		)	249,487			(249,145		)
Comprehensive loss	$	(246,572	)	$	(105,781	)	$	(137,292	)	$	243,073		$	(246,572	)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands)

	Year Ended August 31, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	159,411		$	65,128		$	416,764		$	—		$	641,303
Cost of products sold	29,811			41,674			286,534			—			358,019
Gross profit	129,600			23,454			130,230			—			283,284
Selling, administrative and engineering expenses	81,028			22,540			106,688			—			210,256
Amortization of intangible assets	1,272			2,892			5,116			—			9,280
Restructuring charges	6,109			661			3,785						10,555
Impairment & divestiture charges (benefit)	4,217			—			(1,230		)	—			2,987
Operating profit (loss)	36,974			(2,639		)	15,871			—			50,206
Financing costs (income), net	31,752			—			(880		)	—			30,872
Intercompany (income) expense, net	(17,087		)	16,276			(46,961		)	47,772			—
Intercompany dividends	—			(28,822		)	—			28,822			—
Other (income) expense, net	(826		)	18			946			—			138
Earnings before income tax (benefit) expense	23,135			9,889			62,766			(76,594		)	19,196
Income tax (benefit) expense	(35,134		)	21,689			27,895			—			14,450
Earnings (loss) from continuing operations	58,269			(11,800		)	34,871			(76,594		)	4,746
(Loss) earnings from discontinued operations	(5,951		)	9,342			(77,557		)	47,772			(26,394		)
Net earnings (loss) before equity in (loss) earnings of subsidiaries	52,318			(2,458		)	(42,686		)	(28,822		)	(21,648		)
Equity in (loss) earnings of subsidiaries	(73,966		)	(54,385		)	613			127,738			—
Net loss	(21,648		)	(56,843		)	(42,073		)	98,916			(21,648		)
Comprehensive income (loss)	$	31,368		$	(56,843	)	$	9,555		$	47,288		$	31,368

CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS AND COMPREHENSIVE LOSS

(in thousands)

	Year Ended August 31, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	145,222		$	74,008		$	397,361		$	—		$	616,591
Cost of products sold	35,244			45,994			274,983			—			356,221
Gross profit	109,978			28,014			122,378			—			260,370
Selling, administrative and engineering expenses	76,816			24,958			106,354			—			208,128
Amortization of intangible assets	1,272			2,892			4,933			—			9,097
Director & officer transition charges	7,784			—			—			—			7,784
Restructuring charges	634			19			2,581			—			3,234
Impairment & divestiture charges	—			—			116,979			—			116,979
Operating profit (loss)	23,472			145			(108,469		)	—			(84,852		)
Financing costs (income), net	30,005			—			(784		)	—			29,221
Intercompany (income) expense, net	(23,302		)	84,562			(67,796		)	6,536			—
Intercompany dividends	—			(231,689		)	(5,623		)	237,312			—
Other expense (income), net	3,303			(26		)	539			—			3,816
Earnings (loss) before income tax (benefit) expense	13,466			147,298			(34,805		)	(243,848		)	(117,889		)
Income tax (benefit) expense	(4,623		)	(18,477		)	486			—			(22,614		)
Net earnings (loss) from continuing operations	18,089			165,775			(35,291		)	(243,848		)	(95,275		)
Net (loss) earnings from discontinued operations	(6,362		)	9,791			19,097			6,536			29,062
Net earnings (loss) before equity in (loss) earnings of subsidiaries	11,727			175,566			(16,194		)	(237,312		)	(66,213		)
Equity in (loss) earnings of subsidiaries	(77,940		)	(67,668		)	316			145,292			—
Net (loss) earnings	(66,213		)	107,898			(15,878		)	(92,020		)	(66,213		)
Comprehensive (loss) income	$	(41,651	)	$	90,011		$	43,818		$	(133,829	)	$	(41,651	)

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)

	August 31, 2019
	Parent			Guarantors			Non-Guarantors		Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	47,581		$	—		$	163,570	$	—		$	211,151
Accounts receivable, net	20,322			11,358			94,203		—			125,883
Inventories, net	26,737			6,566			43,884		—			77,187
Assets from discontinued operations	295			145,239			140,044		—			285,578
Other current assets	12,116			1,797			16,613		—			30,526
Total current assets	107,051			164,960			458,314		—			730,325
Property, plant & equipment, net	8,515			5,193			43,021		—			56,729
Goodwill	38,847			57,342			164,226		—			260,415
Other intangibles, net	5,611			8,451			38,313		—			52,375
Investment in subsidiaries	1,323,587			912,297			417,022		(2,652,906		)	—
Intercompany receivable	—			—			979,889		(979,889		)	—
Other long-term assets	27,510			(13,424		)	10,344		—			24,430
Total assets	$	1,511,121		$	1,134,819		$	2,111,129	$	(3,632,795	)	$	1,124,274
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable	$	23,678		$	3,231		$	50,005	$	—		$	76,914
Accrued compensation and benefits	11,495			1,657			13,269		—			26,421
Current maturities of debt	7,500			—			—		—			7,500
Income taxes payable	—			—			4,838		—			4,838
Liabilities from discontinued operations	1,217			29,292			113,254		—			143,763
Other current liabilities	17,556			2,388			21,021		—			40,965
Total current liabilities	61,446			36,568			202,387		—			300,401
Long-term debt	452,945			—			—		—			452,945
Deferred income taxes	(4		)	—			1,568		—			1,564
Pension and post-retirement benefit liabilities	12,005			—			8,208		—			20,213
Other long-term liabilities	44,621			114			3,237		—			47,972
Intercompany payable	638,929			340,960			—		(979,889		)	—
Shareholders’ equity	301,179			757,177			1,895,729		(2,652,906		)	301,179
Total liabilities and shareholders’ equity	$	1,511,121		$	1,134,819		$	2,111,129	$	(3,632,795	)	$	1,124,274

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)

	August 31, 2018
	Parent			Guarantors		Non-Guarantors		Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	67,945		$	—	$	182,545	$	—		$	250,490
Accounts receivable, net	19,969			15,634		87,658		—			123,261
Inventories, net	22,646			5,121		44,253		—			72,020
Assets from discontinued operations	(1,144		)	255,676		314,401		—			568,933
Other current assets	6,953			2,421		23,155		—			32,529
Total current assets	116,369			278,852		652,012		—			1,047,233
Property, plant & equipment, net	7,634			4,481		42,859		—			54,974
Goodwill	38,847			57,342		183,943		—			280,132
Other intangible assets, net	6,884			17,294		47,479		—			71,657
Investment in subsidiaries	1,836,879			918,050		301,782		(3,056,711		)	—
Intercompany receivables	—			—		937,259		(937,259		)	—
Other long-term assets	14,972			50		16,199		—			31,221
Total assets	$	2,021,585		$	1,276,069	$	2,181,533	$	(3,993,970	)	$	1,485,217
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable	$	16,091		$	2,646	$	50,847	$	—		$	69,584
Accrued compensation and benefits	19,643			1,774		14,575		—			35,992
Current maturities of debt	30,000			—		—		—			30,000
Income taxes payable	—			—		4,091		—			4,091
Liabilities from discontinued operations	17,839			20,384		122,350		—			160,573
Other current liabilities	17,380			6,017		30,371		—			53,768
Total current liabilities	100,953			30,821		222,234		—			354,008
Long-term debt	502,695			—		—		—			502,695
Deferred income taxes	2,415			—		1,532		—			3,947
Pension and post-retirement benefit liabilities	7,765			—		6,192		—			13,957
Other long-term liabilities	45,483			265		6,150		—			51,898
Intercompany payable	803,562			133,697		—		(937,259		)	—
Shareholders’ equity	558,712			1,111,286		1,945,425		(3,056,711		)	558,712
Total liabilities and shareholders’ equity	$	2,021,585		$	1,276,069	$	2,181,533	$	(3,993,970	)	$	1,485,217

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended August 31, 2019
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Operating Activities
Cash provided by (used in) operating activities - continuing operations	$	182,274		$	107,127		$	(6,856	)	$	(241,642	)	$	40,903
Cash (used in) provided by operating activities - discontinued operations	(163,135		)	147,274			136,264			(107,461		)	12,942
Cash provided by operating activities	19,139			254,401			129,408			(349,103		)	53,845
Investing Activities
Capital expenditures	(2,292		)	(2,042		)	(10,589		)	—			(14,923		)
Proceeds from sale of property, plant and equipment	2			—			1,460			—			1,462
Intercompany investment	47,104			—			(49,366		)	2,262			—
Cash provided by (used in) investing activities - continuing operations	44,814			(2,042		)	(58,495		)	2,262			(13,461		)
Cash provided by (used in) investing activities - discontinued operations	21,039			(3,288		)	30,988			(24,232		)	24,507
Cash provided by (used in) investing activities	65,853			(5,330		)	(27,507		)	(21,970		)	11,046
Financing Activities
Payment for redemption of term loan	(200,000		)	—			—			—			(200,000		)
Proceeds from issuance of term loan	200,000			—			—			—			200,000
Principal Repayments on term loan	(72,500		)	—			—			—			(72,500		)
Purchase of treasury shares	(22,481		)	—			—			—			(22,481		)
Taxes paid related to the net share settlement of equity awards	(1,872		)	—			—			—			(1,872		)
Stock option exercises, related tax benefits and other	1,900			—			—			—			1,900
Cash dividends	(2,439		)	—			—			—			(2,439		)
Payment of debt issuance costs	(2,125		)	—			—			—			(2,125		)
Intercompany dividends paid	—			(30,465		)	(85,941		)	116,406			—
Intercompany loan activity	(5,839		)	—			(21,894		)	27,733			—
Intercompany capital contribution	—			(42,539		)	(80,880		)	123,419			—
Cash used in financing activities - continuing operations	(105,356		)	(73,004		)	(188,715		)	267,558			(99,517		)
Cash (used in) provided by financing activities - discontinued operations	—			(176,067		)	72,552			103,515			—
Cash used in financing activities	(105,356		)	(249,071		)	(116,163		)	371,073			(99,517		)
Effect of exchange rate changes on cash	—			—			(4,713		)	—			(4,713		)
Net decrease in cash and cash equivalents	(20,364		)	—			(18,975		)	—			(39,339		)
Cash and cash equivalents—beginning of period	67,945			—			182,545			—			250,490
Cash and cash equivalents—end of period	$	47,581		$	—		$	163,570		$	—		$	211,151

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended August 31, 2018
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Operating Activities
Cash provided by operating activities - continuing operations	$	66,416		$	11,374		$	60,866		$	(66,740	)	$	71,916
Cash provided by operating activities - discontinued operations	(3,123		)	13,399			23,944			(43		)	34,177
Cash provided by operating activities	63,293			24,773			84,810			(66,783		)	106,093
Investing Activities
Capital expenditures	(2,822		)	(2,320		)	(5,879		)	—			(11,021		)
Proceeds from sale of property, plant and equipment	—			—			104			—			104
Intercompany investment	(11,754		)	—			—			11,754			—
Rental asset buyout for Viking divestiture	—			—			(27,718		)	—			(27,718		)
Proceeds from sale of business, net of transaction costs	198			—			8,704			—			8,902
Cash paid for business acquisitions, net of cash acquired	—			(1,732		)	(21,486		)	—			(23,218		)
Cash provided by (used in) investing activities - continuing operations	(14,378		)	(4,052		)	(46,275		)	11,754			(52,951		)
Cash provided by (used in) investing activities - discontinued operations	—			(2,664		)	(7,137		)	1			(9,800		)
Cash used in investing activities	(14,378		)	(6,716		)	(53,412		)	11,755			(62,751		)
Financing Activities
Principal repayments 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 dividends	(2,390		)	—			—			—			(2,390		)
Intercompany dividends paid	—			—			(28,822		)	28,822			—
Intercompany loan activity	2,041			(18,057		)	105,386			(89,370		)	—
Intercompany capital contribution	—			—			100			(100		)	—
Cash used in financing activities - continuing operations	(15,952		)	(18,057		)	76,664			(60,648		)	(17,993		)
Cash used in financing activities - discontinued operations	—			—			(115,676		)	115,676			—
Cash used in financing activities	(15,952		)	(18,057		)	(39,012		)	55,028			(17,993		)
Effect of exchange rate changes on cash	—			—			(4,430		)	—			(4,430		)
Net decrease in cash and cash equivalents	32,963			—			(12,044		)	—			20,919
Cash and cash equivalents—beginning of period	34,982			—			194,589			$	—		229,571
Cash and cash equivalents—end of period	$	67,945		$	—		$	182,545		$	—		$	250,490

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended August 31, 2017
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Operating Activities
Cash provided by operating activities - continuing operations	$	112,557		$	(93,067	)	$	(201,903	)	$	230,505		$	48,092
Cash provided by operating activities - discontinued operations	(23,697		)	14,820			42,748			6,536			40,407
Cash provided by operating activities	88,860			(78,247		)	(159,155		)	237,041			88,499
Investing Activities
Capital expenditures	(2,697		)	(1,824		)	(12,717		)	—			(17,238		)
Proceeds from sale of property, plant and equipment	—			—			448			—			448
Intercompany investment	2,882			78,154			(26,600		)	(54,436		)	—
Cash provided by (used in) investing activities - continuing operations	185			76,330			(38,869		)	(54,436		)	(16,790		)
Cash provided by (used in) investing activities - discontinued operations	—			(3,436		)	(7,399		)	—			(10,835		)
Cash used in investing activities	185			72,894			(46,268		)	(54,436		)	(27,625		)
Financing Activities
Principal Repayments on term loan	(18,750		)	—			—			—			(18,750		)
Redemption of 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
Cash dividends	(2,358		)	—			—			—			(2,358		)
Intercompany dividends paid	—			—			231,688			(231,688		)	—
Intercompany loan activity	(47,780		)	—			47,780			—			—
Intercompany capital contribution	—			—			(54,436		)	54,436			—
Cash used in financing activities - continuing operations	(62,188		)	—			225,032			(177,252		)	(14,408		)
Cash used in financing activities - discontinued operations	—			5,353			(742		)	(5,353		)	(742		)
Cash used in financing activities	(62,188		)	5,353			224,290			(182,605		)	(15,150		)
Effect of exchange rate changes on cash	—			—			4,243			—			4,243
Net decrease in cash and cash equivalents	26,857			—			23,110			—			49,967
Cash and cash equivalents—beginning of period	8,125			$	—		171,479			—			179,604
Cash and cash equivalents—end of period	$	34,982		$	—		$	194,589		$	—		$	229,571