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Guarantor Subsidiaries | 3 Months Ended
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Nov. 30, 2017
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 November 30, 2017. 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 (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, 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 STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (LOSS) (in thousands)
| Three Months Ended November 30, 2016
| Parent |  | Guarantors |  | Non-Guarantors |  | Eliminations |  | Consolidated
Net sales | $ | 31,729 |  |  | $ | 84,276 |  |  | $ | 149,788 |  |  | $ | — |  |  | $ | 265,793 |
Cost of products sold | 7,094 |  |  | 61,416 |  |  | 104,216 |  |  | — |  |  | 172,726 |
Gross profit | 24,635 |  |  | 22,860 |  |  | 45,572 |  |  | — |  |  | 93,067 |
Selling, administrative and engineering expenses | 17,967 |  |  | 16,636 |  |  | 33,999 |  |  | — |  |  | 68,602 |
Amortization of intangible assets | 318 |  |  | 3,076 |  |  | 1,868 |  |  | — |  |  | 5,262 |
Restructuring charges | 355 |  |  | 723 |  |  | 1,870 |  |  | — |  |  | 2,948 |
Director & officer transition charges | 7,784 |  |  | — |  |  | — |  |  | — |  |  | 7,784 |
Operating (loss) profit | (1,789 | ) |  | 2,425 |  |  | 7,835 |  |  | — |  |  | 8,471 |
Financing costs (income), net | 7,326 |  |  | — |  |  | (194 | ) |  | — |  |  | 7,132 |
Intercompany (income) expense, net | (5,068 | ) |  | (1,086 | ) |  | 6,154 |  |  | — |  |  | — |
Intercompany dividends | — |  |  | (55,143 | ) |  | — |  |  | 55,143 |  |  | — |
Other expense (income), net | 2,085 |  |  | (70 | ) |  | (2,643 | ) |  | — |  |  | (628 | )
(Loss) earnings before income tax benefit | (6,132 | ) |  | 58,724 |  |  | 4,518 |  |  | (55,143 | ) |  | 1,967 |
Income tax benefit | (2,714 | ) |  | (30 | ) |  | (254 | ) |  | — |  |  | (2,998 | )
Net (loss) earnings before equity in earnings of subsidiaries | (3,418 | ) |  | 58,754 |  |  | 4,772 |  |  | (55,143 | ) |  | 4,965 |
Equity in earnings of subsidiaries | 8,383 |  |  | 5,625 |  |  | 3,130 |  |  | (17,138 | ) |  | — |
Net earnings | 4,965 |  |  | 64,379 |  |  | 7,902 |  |  | (72,281 | ) |  | 4,965 |
Comprehensive (loss) income | $ | (21,157 | ) |  | $ | 46,292 |  |  | $ | 631 |  |  | $ | (46,923 | ) |  | $ | (21,157 | )
CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands)
| November 30, 2017
| Parent |  | Guarantors |  | Non-Guarantors |  | Eliminations |  | Consolidated
ASSETS |  |  |  |  |  |  |  |  |
Current assets |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 9,504 |  |  | $ | — |  |  | $ | 155,546 |  |  | $ | — |  |  | $ | 165,050 |
Accounts receivable, net | 16,577 |  |  | 52,010 |  |  | 132,730 |  |  | — |  |  | 201,317 |
Inventories, net | 24,490 |  |  | 54,521 |  |  | 75,235 |  |  | — |  |  | 154,246 |
Assets held for sale | — |  |  | — |  |  | 21,393 |  |  | — |  |  | 21,393 |
Other current assets | 29,359 |  |  | 2,997 |  |  | 43,974 |  |  | — |  |  | 76,330 |
Total current assets | 79,930 |  |  | 109,528 |  |  | 428,878 |  |  | — |  |  | 618,336 |
Property, plant and equipment, net | 8,051 |  |  | 30,461 |  |  | 60,476 |  |  | — |  |  | 98,988 |
Goodwill | 38,847 |  |  | 200,499 |  |  | 292,108 |  |  | — |  |  | 531,454 |
Other intangibles, net | 7,839 |  |  | 135,181 |  |  | 73,012 |  |  | — |  |  | 216,032 |
Investment in subsidiaries | 1,839,467 |  |  | 1,196,261 |  |  | 804,946 |  |  | (3,840,674 | ) |  | — |
Intercompany receivable | — |  |  | 577,424 |  |  | 206,969 |  |  | (784,393 | ) |  | — |
Other long-term assets | 8,147 |  |  | 1,869 |  |  | 15,415 |  |  | — |  |  | 25,431 |
Total assets | $ | 1,982,281 |  |  | $ | 2,251,223 |  |  | $ | 1,881,804 |  |  | $ | (4,625,067 | ) |  | $ | 1,490,241 |
LIABILITIES & SHAREHOLDERS' EQUITY |  |  |  |  |  |  |  |
Current liabilities |  |  |  |  |  |  |  |  |
Trade accounts payable | $ | 15,804 |  |  | $ | 28,772 |  |  | $ | 97,169 |  |  | $ | — |  |  | $ | 141,745 |
Accrued compensation and benefits | 7,634 |  |  | 6,325 |  |  | 23,811 |  |  | — |  |  | 37,770 |
Current maturities of debt and short-term borrowings | 30,000 |  |  | — |  |  | — |  |  | — |  |  | 30,000 |
Income taxes payable | 307 |  |  | — |  |  | 6,335 |  |  | — |  |  | 6,642 |
Liabilities held for sale | — |  |  | — |  |  | 70,787 |  |  | — |  |  | 70,787 |
Other current liabilities | 20,521 |  |  | 8,140 |  |  | 28,314 |  |  | — |  |  | 56,975 |
Total current liabilities | 74,266 |  |  | 43,237 |  |  | 226,416 |  |  | — |  |  | 343,919 |
Long-term debt, net | 524,629 |  |  | — |  |  | — |  |  | — |  |  | 524,629 |
Deferred income taxes | 23,789 |  |  | — |  |  | 5,778 |  |  | — |  |  | 29,567 |
Pension and postretirement benefit liabilities | 12,209 |  |  | — |  |  | 7,330 |  |  | — |  |  | 19,539 |
Other long-term liabilities | 49,646 |  |  | 305 |  |  | 6,318 |  |  | — |  |  | 56,269 |
Intercompany payable | 781,424 |  |  | — |  |  | 2,969 |  |  | (784,393 | ) |  | — |
Shareholders’ equity | 516,318 |  |  | 2,207,681 |  |  | 1,632,993 |  |  | (3,840,674 | ) |  | 516,318 |
Total liabilities and shareholders’ equity | $ | 1,982,281 |  |  | $ | 2,251,223 |  |  | $ | 1,881,804 |  |  | $ | (4,625,067 | ) |  | $ | 1,490,241 |
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 and short-term borrowings | 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)
| 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 |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands)
| Three Months Ended November 30, 2016
| Parent |  | Guarantors |  | Non-Guarantors |  | Eliminations |  | Consolidated
Operating Activities |  |  |  |  |  |  |  |  |
Net provided by operating activities | $ | 61,380 |  |  | $ | 2,491 |  |  | $ | 3,736 |  |  | $ | (55,143 | ) |  | $ | 12,463 |
Investing Activities |  |  |  |  |  |  |  |  |
Capital expenditures | (861 | ) |  | (2,607 | ) |  | (1,671 | ) |  | — |  |  | (5,139 | )
Proceeds from sale of property, plant and equipment | — |  |  | 46 |  |  | 84 |  |  | — |  |  | 130 |
Cash used in investing activities | (861 | ) |  | (2,561 | ) |  | (1,587 | ) |  | — |  |  | (5,009 | )
Financing Activities |  |  |  |  |  |  |  |  |
Principal repayments on term loan | (3,750 | ) |  | — |  |  | — |  |  | — |  |  | (3,750 | )
Taxes paid related to the net share settlement of equity awards | (223 | ) |  | — |  |  | — |  |  | — |  |  | (223 | )
Stock option exercises and other | 964 |  |  | — |  |  | — |  |  | — |  |  | 964 |
Cash dividend | (2,358 | ) |  | — |  |  | (55,143 | ) |  | 55,143 |  |  | (2,358 | )
Intercompany loan activity | (53,734 | ) |  | — |  |  | 53,734 |  |  | — |  |  | — |
Cash used in financing activities | (59,101 | ) |  | — |  |  | (1,409 | ) |  | 55,143 |  |  | (5,367 | )
Effect of exchange rate changes on cash | — |  |  | — |  |  | (4,820 | ) |  | — |  |  | (4,820 | )
Net increase (decrease) in cash and cash equivalents | 1,418 |  |  | (71 | ) |  | (4,080 | ) |  | — |  |  | (2,733 | )
Cash and cash equivalents—beginning of period | 7,953 |  |  | 71 |  |  | 171,580 |  |  | — |  |  | 179,604 |
Cash and cash equivalents—end of period | $ | 9,371 |  |  | $ | — |  |  | $ | 167,500 |  |  | $ | — |  |  | $ | 176,871 |

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