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PRODUCTS CORPORATION AND SUBSIDIARIES GUARANTOR FINANCIAL INFORMATION

3 Months Ended

Mar. 31, 2020

Condensed Financial Information Disclosure [Abstract]

PRODUCTS CORPORATION AND SUBSIDIARIES GUARANTOR FINANCIAL INFORMATION

Products Corporation's 5.75% Senior Notes and 6.25% Senior Notes are fully and unconditionally guaranteed on a senior basis by certain of Products Corporation’s direct and indirect wholly-owned domestic subsidiaries (the "5.75% Senior Notes Guarantors" and the "6.25% Senior Notes Guarantors," respectively, and together the "Guarantor Subsidiaries").

The following Condensed Consolidating Financial Statements present the financial information as of March 31, 2020 and December 31, 2019, and for each of the three months March 31, 2020 and 2019 for (i) Products Corporation on a stand-alone basis; (ii) the Guarantor Subsidiaries on a stand-alone basis; (iii) the subsidiaries of Products Corporation that do not guarantee Products Corporation's 5.75% Senior Notes and 6.25% Senior Notes (the "Non-Guarantor Subsidiaries") on a stand-alone basis; and (iv) Products Corporation, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries on a consolidated basis. The Condensed Consolidating Financial Statements are presented on the equity method, under which the investments in subsidiaries are recorded at cost and adjusted to the applicable share of the subsidiary's cumulative results of operations, capital contributions, distributions and other equity changes. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.


Products Corporation and Subsidiaries Condensed Consolidating Balance Sheets
As of March 31, 2020
	Products Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated

ASSETS
Cash and cash equivalents	$	3.1	$	2.4	$	57.3	$	—	$	62.8
Trade receivables, less allowances for doubtful accounts	74.0		72.4		180.1		—		326.5
Inventories	146.5		157.0		176.3		—		479.8
Prepaid expenses and other	225.3		33.7		70.3		—		329.3
Intercompany receivables	3,021.1		3,013.0		476.8		(6,510.9)		—
Investment in subsidiaries	1,557.1		12.8		—		(1,569.9)		—
Property, plant and equipment, net	200.4		77.4		105.3		—		383.1
Deferred income taxes	179.1		(17.2)		29.8		—		191.7
Goodwill	60.1		264.0		249.6		—		573.7
Intangible assets, net	(11.9)		340.3		128.2		—		456.6
Other assets	69.2		15.3		33.5		—		118.0
Total assets	$	5,524.0	$	3,971.1	$	1,507.2	$	(8,080.8)	$	2,921.5
LIABILITIES AND STOCKHOLDER’S DEFICIENCY
Short-term borrowings	$	—	$	—	$	2.9	$	—	$	2.9
Current portion of long-term debt	856.0		—		0.1		—		856.1
Accounts payable	110.6		45.1		97.6		—		253.3
Accrued expenses and other	192.6		6.0		178.7		—		377.3
Intercompany payables	3,194.3		2,819.3		497.3		(6,510.9)		—
Long-term debt	2,322.3		—		83.2		—		2,405.5
Other long-term liabilities	176.6		113.7		38.0		—		328.3
Total liabilities	6,852.4		2,984.1		897.8		(6,510.9)		4,223.4
Stockholder’s (deficiency) equity	(1,328.4)		987.0		609.4		(1,569.9)		(1,301.9)
Total liabilities and stockholder’s deficiency	$	5,524.0	$	3,971.1	$	1,507.2	$	(8,080.8)	$	2,921.5


Products Corporation and Subsidiaries Condensed Consolidating Balance Sheets
As of December 31, 2019
	Products Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated

ASSETS
Cash and cash equivalents	$	0.8	$	6.4	$	97.1	$	—	$	104.3
Trade receivables, less allowances for doubtful accounts	95.5		92.3		235.6		—		423.4
Inventories	131.0		151.5		165.9		—		448.4
Prepaid expenses and other	219.7		26.4		46.5		—		292.6
Intercompany receivables	2,857.7		2,854.6		452.7		(6,165.0)		—
Investment in subsidiaries	1,598.3		30.7		—		(1,629.0)		—
Property, plant and equipment, net	208.7		89.5		110.4		—		408.6
Deferred income taxes	165.0		(37.8)		30.9		—		158.1
Goodwill	159.9		264.0		249.8		—		673.7
Intangible assets, net	13.0		346.9		130.8		—		490.7
Other assets	67.8		16.2		37.1		—		121.1
Total assets	$	5,517.4	$	3,840.7	$	1,556.8	$	(7,794.0)	$	3,120.9
LIABILITIES AND STOCKHOLDER’S DEFICIENCY
Short-term borrowings	$	—	$	—	$	2.2	$	—	$	2.2
Current portion of long-term debt	287.9		—		0.1		—		288.0
Accounts payable	108.4		39.9		103.5		—		251.8
Accrued expenses and other	124.1		70.0		224.1		—		418.2
Intercompany payables	3,030.3		2,668.7		466.0		(6,165.0)		—
Long-term debt	2,822.2		—		84.0		—		2,906.2
Other long-term liabilities	220.4		118.2		5.3		—		343.9
Total liabilities	6,593.3		2,896.8		885.2		(6,165.0)		4,210.3
Stockholder’s (deficiency) equity	(1,075.9)		943.9		671.6		(1,629.0)		(1,089.4)
Total liabilities and stockholder’s deficiency	$	5,517.4	$	3,840.7	$	1,556.8	$	(7,794.0)	$	3,120.9



Products Corporation and Subsidiaries Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
Three Months Ended March 31, 2020
	Products Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Net Sales	$	116.4	$	112.4	$	224.2	$	—	$	453.0
Cost of sales	58.4		54.4		85.0		—		197.8
Gross profit	58.0		58.0		139.2		—		255.2
Selling, general and administrative expenses	104.4		71.0		112.0		—		287.4
Acquisition, integration and divestiture costs	1.1		0.5		0.5		—		2.1
Restructuring charges and other, net	23.6		1.3		(0.1)		—		24.8
Impairment charges	124.3		—		—		—		124.3
Loss on divested assets	0.8		—		—		—		0.8
Operating (loss) income	(196.2)		(14.8)		26.8		—		(184.2)
Other (income) expense:
Intercompany interest, net	(2.8)		0.6		2.2		—		—
Interest expense	46.5		—		1.9		—		48.4
Amortization of debt issuance costs	4.0		—		—		—		4.0
Foreign currency losses, net	(5.5)		1.9		20.2		—		16.6
Miscellaneous, net	(23.9)		(9.2)		29.0		—		(4.1)
Other expense (income), net	18.3		(6.7)		53.3		—		64.9
Loss from continuing operations before income taxes	(214.5)		(8.1)		(26.5)		—		(249.1)
Benefit from for income taxes	(16.3)		(20.2)		(0.4)		—		(36.9)
Loss from continuing operations, net of taxes	(198.2)		12.1		(26.1)		—		(212.2)
Income from discontinued operations, net of taxes	—		—		—		—		—
Equity in (income) loss of subsidiaries	(34.1)		(20.0)		—		54.1		—
Net (loss) income	$	(232.3)	$	(7.9)	$	(26.1)	$	54.1	$	(212.2)
Other comprehensive (loss) income	(2.7)		6.5		(8.8)		2.3		(2.7)
Total comprehensive (loss) income	$	(235.0)	$	(1.4)	$	(34.9)	$	56.4	$	(214.9)


Products Corporation and Subsidiaries Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
Three Months Ended March 31, 2019
	Products Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Net Sales	$	155.5	$	129.3	$	271.2	$	(2.8)	$	553.2
Cost of sales	68.0		65.1		107.5		(2.8)		237.8
Gross profit	87.5		64.2		163.7		—		315.4
Selling, general and administrative expenses	129.7		75.1		126.0		—		330.8
Acquisition, integration and divestiture costs	0.5		0.1		—		—		0.6
Restructuring charges and other, net	1.6		2.1		1.8		—		5.5


Operating (loss) income	(44.3)		(13.1)		35.9		—		(21.5)
Other (income) expenses:
Intercompany interest, net	(1.3)		0.7		0.6		—		—
Interest expense	45.9		—		1.8		—		47.7
Amortization of debt issuance costs	3.2		—		—		—		3.2

Foreign currency losses, net	(1.5)		—		1.7		—		0.2
Miscellaneous, net	(7.9)		(13.5)		22.7		—		1.3
Other expense (income), net	38.4		(12.8)		26.8		—		52.4
(Loss) income from continuing operations before income taxes	(82.7)		(0.3)		9.1		—		(73.9)
(Benefit from) provision for income taxes	(1.8)		0.5		1.6		—		0.3
(Loss) income from continuing operations, net of taxes	(80.9)		(0.8)		7.5		—		(74.2)
Loss from discontinued operations, net of taxes	—		—		0.7		—		0.7
Equity in loss (income) of subsidiaries	7.4		5.4		—		(12.8)		—
Net (loss) income	$	(73.5)	$	4.6	$	8.2	$	(12.8)	$	(73.5)
Other comprehensive (loss) income	0.9		(0.1)		0.6		(0.5)		0.9
Total comprehensive (loss) income	$	(72.6)	$	4.5	$	8.8	$	(13.3)	$	(72.6)


Products Corporation and Subsidiaries Condensed Consolidating Statements of Cash Flows
Three Months Ended March 31, 2020
	Products Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash (used in) provided by operating activities	$	(57.7)	$	3.1	$	(23.0)	$	—	$	(77.6)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash (used in) provided by investing activities	(1.8)		(0.1)		0.1		—		(1.8)



CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in short-term borrowings and overdraft	(2.1)		(4.8)		0.5		—		(6.4)
Net borrowings under the Amended 2016 Revolving Credit Facility	69.1		—		—		—		69.1


Repayments under the 2016 Term Loan Facility	(4.5)		—		—		—		(4.5)
Payment of financing costs	(0.3)		—		—		—		(0.3)
Tax withholdings related to net share settlements of restricted stock and RSUs	(0.4)		—		—		—		(0.4)
Other financing activities	(0.1)		—		—		—		(0.1)
Net cash provided by (used in) financing activities	61.7		(4.8)		0.5		—		57.4
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—		(2.1)		(1.2)		—		(3.3)
Net increase (decrease) in cash, cash equivalents and restricted cash	2.2		(3.9)		(23.6)		—		(25.3)
Cash, cash equivalents and restricted cash at beginning of period	$	1.0	$	6.4	$	97.2	$	—	$	104.5
Cash, cash equivalents and restricted cash at end of period	$	3.2	$	2.5	$	73.6	$	—	$	79.2


Products Corporation and Subsidiaries Condensed Consolidating Statements of Cash Flows
Three Months Ended March 31, 2019
	Products Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash used in operating activities	$	(24.0)	$	2.7	$	(7.1)	$	—	$	(28.4)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash used in investing activities	(3.4)		—		(2.4)		—		(5.8)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in short-term borrowings and overdraft	(12.5)		(4.2)		(0.5)		—		(17.2)
Repayments under the 2016 Term Loan Facility	(4.5)		—		—		—		(4.5)

Net borrowings under the Amended 2016 Revolving Credit Facility	40.6		—		—		—		40.6

Payments of financing costs	(0.3)		—		(0.6)		—		(0.9)
Tax withholdings related to net share settlements of restricted stock and RSUs	(1.6)		—		—		—		(1.6)
Other financing activities	(0.2)		—		—		—		(0.2)
Net cash provided by financing activities	21.5		(4.2)		(1.1)		—		16.2
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—		0.1		0.2		—		0.3
Net decrease in cash, cash equivalents and restricted cash	(5.9)		(1.4)		(10.4)		—		(17.7)
Cash, cash equivalents and restricted cash at beginning of period	$	7.2	$	6.6	$	73.7	$	—	87.5
Cash, cash equivalents and restricted cash at end of period	$	1.3	$	5.2	$	63.3	$	—	$	69.8