Supplemental Condensed Consolidating Guarantor and Non-Guarantor Financial Information (Tables)

6 Months Ended

Jun. 30, 2013

Text Block [Abstract]

Condensed Consolidating Statements of Comprehensive Income

Condensed Consolidating Statements of Comprehensive Income (Unaudited)

For the three months ended June 30, 2013

(Amounts in thousands)

	Guarantors The Hillman Companies, Inc.			Issuer The Hillman Group, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consol- idating Adjust - ments			Consolidated
Net sales	$	—		$	139,604		$	9,128		$	43,979		$	—		$	192,711
Cost of sales (exclusive of depreciation and amortization shown below)		—			66,205			6,646			27,487			—			100,338
Selling, general and administrative expenses		4,511			41,996			1,717			11,559			—			59,783
Acquisition and integration expenses		—			657			37			1,459			—			2,153
Depreciation		—			5,785			20			468			—			6,273
Amortization		4,514			771			—			274			—			5,559
Intercompany administrative (income) expense		—			(86	)		—			86			—			—
Other (income) expense, net		69			231			(62	)		794			—			1,032
Income (loss) from operations		(9,094	)		24,045			770			1,852			—			17,573
Intercompany interest (income) expense		(3,058	)		3,058			—			—			—			—
Interest expense, net		(46	)		10,274			—			1,874			—			12,102
Interest expense on junior subordinated debentures		3,153			—			—			—			—			3,153
Investment income on trust common securities		(95	)		—			—			—			—			(95	)
Income (loss) before equity in subsidiaries’ income		(9,048	)		10,713			770			(22	)		—			2,413
Equity in subsidiaries’ income (loss)		10,347			(366	)		—			—			(9,981	)		—
Income (loss) before income taxes		1,299			10,347			770			(22	)		(9,981	)		2,413
Income tax provision		(3,364	)		—			718			396			—			(2,250	)
Net income (loss)	$	4,663		$	10,347		$	52		$	(418	)	$	(9,981	)	$	4,663
Other comprehensive income (loss):
Foreign currency translation adjustments		—			(3,512	)		21			(642	)		—			(4,133	)
Total comprehensive income (loss)	$	4,663		$	6,835		$	73		$	(1,060	)	$	(9,981	)	$	530

Condensed Consolidating Statements of Comprehensive Income (Unaudited)

For the three months ended June 30, 2012

(Amounts in thousands)

	Guarantors The Hillman Companies, Inc.			Issuer The Hillman Group, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consol- idating Adjust - ments			Consolidated
Net sales	$	—		$	136,588		$	5,115		$	5,538		$	—		$	147,241
Cost of sales (exclusive of depreciation and amortization shown separately below)		—			65,668			3,827			3,455			—			72,950
Selling, general and administrative expenses		(26	)		44,430			940			1,830			—			47,174
Acquisition and integration expenses		—			312			—			—			—			312
Depreciation		—			5,571			28			19			—			5,618
Amortization		4,514			817			—			98			—			5,429
Intercompany administrative (income) expense		—			(87	)		—			87			—			—
Other (income) expense, net		26			421			(1	)		371			—			817
Income (loss) from operations		(4,514	)		19,456			321			(322	)		—			14,941
Intercompany interest (income) expense		(3,058	)		3,058			—			—			—			—
Interest expense, net		(86	)		10,311			—			—			—			10,225
Interest expense on junior subordinated debentures		3,153			—			—			—			—			3,153
Investment income on trust common securities		(94	)		—			—			—			—			(94	)
Income (loss) before equity in subsidiaries’ income		(4,429	)		6,087			321			(322	)		—			1,657
Equity in subsidiaries’ income (loss)		5,642			(102	)		—			—			(5,540	)		—
Income (loss) before income taxes		1,213			5,985			321			(322	)		(5,540	)		1,657
Income tax provision (benefit)		157			343			160			(59	)		—			601
Net income (loss)	$	1,056		$	5,642		$	161		$	(263	)	$	(5,540	)	$	1,056
Other comprehensive income (loss):
Foreign currency translation adjustments		—			—			—			(748	)		—			(748	)
Total comprehensive income (loss)	$	1,056		$	5,642		$	161		$	(1,011	)	$	(5,540	)	$	308

Condensed Consolidating Statements of Comprehensive Income (Unaudited)

For the six months ended June 30, 2013

(Amounts in thousands)

	Guarantors The Hillman Companies, Inc.			Issuer The Hillman Group, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consol- idating Adjust - ments			Consolidated
Net sales	$	—		$	256,762		$	15,468		$	64,400		$	—		$	336,630
Cost of sales (exclusive of depreciation and amortization shown separately below)		—			122,520			11,145			40,319			—			173,984
Selling, general and administrative expenses		4,910			82,298			3,024			17,920			—			108,152
Acquisition and integration expenses		—			2,297			51			1,834			—			4,182
Depreciation		—			11,133			35			647			—			11,815
Amortization		9,029			1,543			—			433			—			11,005
Intercompany administrative (income) expense		—			(173	)		—			173			—			—
Other (income) expense, net		(69	)		1,447			(96	)		853			—			2,135
Income (loss) from operations		(13,870	)		35,697			1,309			2,221			—			25,357
Intercompany interest (income) expense		(6,116	)		6,120			—			(4	)		—			—
Interest expense, net		(92	)		21,430			—			2,717			—			24,055
Interest expense on junior subordinated debentures		6,305			—			—			—			—			6,305
Investment income on trust common securities		(189	)		—			—			—			—			(189	)
Income (loss) before equity in subsidiaries’ income		(13,778	)		8,147			1,309			(492	)		—			(4,814	)
Equity in subsidiaries’ income (loss)		7,550			(597	)		—			—			(6,953	)		—
Income (loss) before income taxes		(6,228	)		7,550			1,309			(492	)		(6,953	)		(4,814	)
Income tax provision (benefit)		(6,306	)		—			940			474			—			(4,892	)
Net income (loss)	$	78		$	7,550		$	369		$	(966	)	$	(6,953	)	$	78
Other comprehensive income (loss):
Foreign currency translation adjustments		—			(4,222	)		—			9			—			(4,213	)
Total comprehensive income (loss)	$	78		$	3,328		$	369		$	(957	)	$	(6,953	)	$	(4,135	)

Condensed Consolidating Statements of Comprehensive Income (Unaudited)

For the six months ended June 30, 2012

(Amounts in thousands)

	Guarantors The Hillman Companies, Inc.			Issuer The Hillman Group, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consol- idating Adjust - ments			Consolidated
Net sales	$	—		$	256,349		$	9,624		$	9,641		$	—		$	275,614
Cost of sales (exclusive of depreciation and amortization shown separately below)		—			123,310			7,356			5,873			—			136,539
Selling, general and administrative expenses		168			86,500			1,806			3,620			—			92,094
Acquisition and integration expenses		—			464			—			—			—			464
Depreciation		—			11,416			50			41			—			11,507
Amortization		9,029			1,673			—			198			—			10,900
Intercompany administrative (income) expense		—			(173	)		—			173			—			—
Other (income) expense, net		(168	)		473			(1	)		30			—			334
Income (loss) from operations		(9,029	)		32,686			413			(294	)		—			23,776
Intercompany interest (income) expense		(6,116	)		6,116			—			—			—			—
Interest expense, net		(192	)		20,519			—			—			—			20,327
Interest expense on junior subordinated debentures		6,305			—			—			—			—			6,305
Investment income on trust common securities		(189	)		—			—			—			—			(189	)
Income (loss) before equity in subsidiaries’ income		(8,837	)		6,051			413			(294	)		—			(2,667	)
Equity in subsidiaries’ income (loss)		5,185			(60	)		—			—			(5,125	)		—
Income (loss) before income taxes		(3,652	)		5,991			413			(294	)		(5,125	)		(2,667	)
Income tax provision (benefit)		(2,121	)		806			198			(19	)		—			(1,136	)
Net income (loss)	$	(1,531	)	$	5,185		$	215		$	(275	)	$	(5,125	)	$	(1,531	)
Other comprehensive income (loss):
Foreign currency translation adjustments		—			—			—			489			—			489
Total comprehensive income (loss)	$	(1,531	)	$	5,185		$	215		$	214		$	(5,125	)	$	(1,042	)

Condensed Consolidating Balance Sheet

Condensed Consolidating Balance Sheet (Unaudited)

As of June 30, 2013

(Amounts in thousands)

	Guarantors The Hillman Companies, Inc.			Issuer The Hillman Group, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consol- idating Adjust - ments			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	1		$	6,765		$	1,169		$	12,980		$	—		$	20,915
Restricted investments		2,889			—			—			—			—			2,889
Accounts receivable, net		—			85,200			1,178			17,923			—			104,301
Inventories		—			110,151			8,572			53,400			(327	)		171,796
Deferred income taxes		8,643			—			1,224			1,300			(668	)		10,499
Other current assets		—			7,531			197			2,575			—			10,303
Total current assets		11,533			209,647			12,340			88,178			(995	)		320,703
Intercompany notes receivable		105,446			99,886			—			(99,886	)		(105,446	)		—
Intercompany interest receivable		6,116			2,609			—			—			(8,725	)		—
Investments in subsidiaries		(646,282	)		28,123			507			266,323			351,329			—
Property and equipment, net		—			71,271			396			14,092			—			85,759
Goodwill		418,946			24,512			3,090			20,829			280			467,657
Other intangibles, net		302,803			44,503			250			26,033			—			373,589
Restricted investments		1,160			—			—			—			—			1,160
Deferred income taxes		33,648			—			(727	)		142			(33,063	)		—
Deferred financing fees		—			11,329			—			—			—			11,329
Investment in trust common securities		3,261			—			—			—			—			3,261
Other assets		—			2,537			25			515			—			3,077
Total assets	$	236,631		$	494,417		$	15,881		$	316,226		$	203,380		$	1,266,535
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	—		$	32,010		$	1,750		$	16,420		$	—		$	50,180
Current portion of senior term loans		—			3,968			—			—			—			3,968
Current portion of capitalized lease and other obligations		—			407			—			—			—			407
Interest payable on junior subordinated debentures		1,019			—			—			—			—			1,019
Intercompany interest payable		—			6,116			—			2,609			(8,725	)		—
Accrued expenses:
Salaries and wages		—			6,659			155			2,107			—			8,921
Pricing allowances		—			3,126			4			2,502			—			5,632
Income and other taxes		(529	)		2,200			311			259			—			2,241
Interest		—			2,763			—			—			—			2,763
Deferred compensation		2,889			—			—			—			—			2,889
Other accrued expenses		—			6,411			251			2,276			—			8,938
Total current liabilities		3,379			63,660			2,471			26,173			(8,725	)		86,958
Intercompany debt payable		—			105,446			—			—			(105,446	)		—
Long term senior term loans		—			380,180			—			—			—			380,180
Long term portion of capitalized leases		—			363			—			—			—			363
Long term senior notes		—			272,358			—			—			—			272,358
Junior subordinated debentures		115,040			—			—			—			—			115,040
Deferred compensation		1,160			—			—			—			—			1,160
Deferred income taxes, net		141,816			—			207			9,545			(33,731	)		117,837
Other non-current liabilities		5,555			5,700			—			—			—			11,255
Total liabilities		266,950			827,707			2,678			35,718			(147,902	)		985,151
Common stock with put options:
Common stock, $.01 par, 5,000 shares authorized, 210.5 issued and outstanding at June 30, 2013		19,983			—			—			—			—			19,983
Commitments and Contingencies
Stockholders’ Equity:
Preferred Stock:
Preferred stock, $.01 par, 5,000 shares authorized, none issued and outstanding at June 30, 2013		—			—			—			—			—			—
Common Stock:
Common stock, $.01 par, 5,000 shares authorized, 4,789.5 issued and outstanding at June 30, 2013		—			—			50			—			(50	)		—
Additional paid-in capital		113,211			(130,734	)		11,711			293,717			1,811			289,716
Accumulated deficit		(163,513	)		(198,334	)		1,442			(3,424	)		338,856			(24,973	)
Accumulated other comprehensive income		—			(4,222	)		—			(9,785	)		10,665			(3,342	)
Total stockholders’ equity		(50,302	)		(333,290	)		13,203			280,508			351,282			261,401
Total liabilities and stockholders’ equity	$	236,631		$	494,417		$	15,881		$	316,226		$	203,380		$	1,266,535

Condensed Consolidating Balance Sheet (Unaudited)

As of December 31, 2012

(Amounts in thousands)

	Guarantors The Hillman Companies, Inc.			Issuer The Hillman Group, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consol- idating Adjust - ments			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	1		$	62,917		$	429		$	2,201		$	—		$	65,548
Restricted investments		846			—			—			—			—			846
Accounts receivable, net		—			65,916			6,473			(10,045	)		—			62,344
Inventories		—			105,028			4,678			4,404			(272	)		113,838
Deferred income taxes		10,359			—			610			221			(726	)		10,464
Other current assets		—			6,526			145			1,835			—			8,506
Total current assets		11,206			240,387			12,335			(1,384	)		(998	)		261,546
Intercompany notes receivable		105,446			—			—			—			(105,446	)		—
Investments in subsidiaries		(637,376	)		27,204			—			—			610,172			—
Property and equipment, net		—			67,902			191			399			—			68,492
Goodwill		418,946			24,512			58			11,542			280			455,338
Other intangibles, net		311,832			46,047			250			8,515			—			366,644
Restricted investments		3,399			—			—			—			—			3,399
Deferred income taxes		29,492			—			(411	)		977			(30,058	)		—
Deferred financing fees		—			12,858			—			—			—			12,858
Investment in trust common securities		3,261			—			—			—			—			3,261
Other assets		—			3,521			25			709			—			4,255
Total assets	$	246,206		$	422,431		$	12,448		$	20,758		$	473,950		$	1,175,793
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	—		$	31,873		$	517		$	181		$	—		$	32,571
Current portion of senior term loans		—			3,200			—			—			—			3,200
Current portion of capitalized lease and other obligations		—			819			—			—			—			819
Additional acquisition consideration		—			—			—			—			—			—
Accrued expenses:
Salaries and wages		—			8,930			217			204			—			9,351
Pricing allowances		—			3,457			3			597			—			4,057
Income and other taxes		(625	)		2,447			25			645			—			2,492
Interest		—			2,868			—			—			—			2,868
Deferred compensation		846			—			—			—			—			846
Other accrued expenses		—			9,822			40			1,535			—			11,397
Total current liabilities		221			63,416			802			3,162			—			67,601
Intercompany debt payable		—			105,446			—			—			(105,446	)		—
Long term senior term loans		—			307,727			—			—			—			307,727
Long term portion of capitalized lease and other obligations		—			245			—			—			—			245
Long term senior notes		—			272,942			—			—			—			272,942
Junior subordinated debentures		115,132			—			—			—			—			115,132
Deferred compensation		3,399			—			—			—			—			3,399
Deferred income taxes, net		146,042			—			219			2,472			(30,784	)		117,949
Other non-current liabilities		714			5,473			—			—			—			6,187
Total liabilities		265,508			755,249			1,021			5,634			(136,230	)		891,182
Common stock with put options:
Common stock, $.01 par, 5,000 shares authorized, 198.4 issued and outstanding at December 31, 2012		14,116			—			—			—			—			14,116
Commitments and Contingencies
Stockholders’ Equity:
Preferred Stock:
Preferred stock, $.01 par, 5,000 shares authorized, none issued and outstanding at December 31, 2012		—			—			—			—			—			—
Common Stock:
Common stock, $.01 par, 5,000 shares authorized, 4,801.6 issued and outstanding at December 31, 2012		—			—			50			—			(50	)		—
Additional paid-in capital		117,261			(131,642	)		10,304			17,192			281,560			294,675
Accumulated deficit		(150,679	)		(201,176	)		1,073			(2,458	)		328,189			(25,051	)
Accumulated other comprehensive loss		—			—			—			390			481			871
Total stockholders’ equity		(33,418	)		(332,818	)		11,427			15,124			610,180			270,495
Total liabilities and stockholders’ equity	$	246,206		$	422,431		$	12,448		$	20,758		$	473,950		$	1,175,793

Condensed Consolidating Statement of Cash Flows

Condensed Consolidating Statement of Cash Flows (Unaudited)

For the six months ended June 30, 2013

(Amounts in thousands)

	Guarantors The Hillman Companies, Inc.			Issuer The Hillman Group, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consol- idating Adjust- ments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(7,472	)	$	8,147		$	369		$	(966	)	$	—		$	78
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization		9,029			12,676			35			1,080			—			22,820
Dispositions of property and equipment		—			23			13			3			—			39
Deferred income tax provision (benefit)		(6,666	)		—			(310	)		1,358			—			(5,618	)
Deferred financing and original issue discount amortization		(92	)		1,315			—			—			—			1,223
Stock-based compensation expense		4,841			—			—			—			—			4,841
Other non-cash interest expense		—			(418	)		—			—			—			(418	)
Changes in operating items:
Accounts receivable		—			(17,636	)		(3,102	)		(3,960	)		—			(24,698	)
Inventories		—			(5,068	)		(3,894	)		6,055			—			(2,907	)
Other assets		—			(1,669	)		8,345			(4,639	)		—			2,037
Accounts payable		—			137			1,233			3,435			—			4,805
Interest payable on junior subordinated debentures		1,019			—			—			—			—			1,019
Other accrued liabilities		96			168			436			6,772			(8,725	)		(1,253	)
Other items, net		(739	)		(8,434	)		(2,292	)		1,816			8,709			(940	)
Net cash provided by (used for) operating activities		16			(10,759	)		833			10,954			(16	)		1,028
Cash flows from investing activities:
Paulin acquisition		—			(103,416	)		—			—			—			(103,416	)
Capital expenditures		—			(14,336	)		(93	)		(175	)		—			(14,604	)
Other, net		(16	)		—			—			—			16			—
Net cash provided by (used for) investing activities		(16	)		(117,752	)		(93	)		(175	)		16			(118,020	)
Cash flows from financing activities:
Borrowings of senior term loans		—			76,800			—			—			—			76,800
Repayments of senior term loans		—			(1,792	)		—			—			—			(1,792	)
Discount on senior term loans		—			(2,152	)		—			—			—			(2,152	)
Principal payments under capitalized lease obligations		—			(41	)		—			—			—			(41	)
Repayment of other credit obligations		—			(456	)		—			—			—			(456	)
Net cash provided by financing activities		—			72,359			—			—			—			72,359
Net (decrease) increase in cash and cash equivalents		—			(56,152	)		740			10,779			—			(44,633	)
Cash and cash equivalents at beginning of period		1			62,917			429			2,201			—			65,548
Cash and cash equivalents at end of period	$	1		$	6,765		$	1,169		$	12,980		$	—		$	20,915

Condensed Consolidating Statement of Cash Flows (Unaudited)

For the six months ended June 30, 2012

(Amounts in thousands)

	Guarantors The Hillman Companies, Inc.			Issuer The Hillman Group, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consol- idating Adjust- ments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(6,716	)	$	5,270		$	215		$	(275	)	$	(25	)	$	(1,531	)
Adjustments to reconcile net loss to net cash (used for) provided by operating activities:
Depreciation and amortization		9,029			13,089			50			239			—			22,407
Dispositions of property and equipment		—			3			—			—			—			3
Deferred income tax provision (benefit)		(2,435	)		749			171			(47	)		—			(1,562	)
Deferred financing and original issue discount amortization		(192	)		1,234			—			—			—			1,042
Other non-cash interest and change in value of interest rate swap		—			(372	)		—			—			—			(372	)
Changes in operating items:
Accounts receivable		—			(11,126	)		(690	)		(2,222	)		—			(14,038	)
Inventories		—			(11,444	)		(347	)		(781	)		25			(12,547	)
Other assets		—			(2,876	)		(269	)		2,272			—			(873	)
Accounts payable		—			8,620			1,071			(247	)		—			9,444
Interest payable on junior subordinated debentures		1,019			—			—			—			—			1,019
Other accrued liabilities		154			7,559			103			323			(6,116	)		2,023
Other items, net		(859	)		(6,716	)		—			(21	)		6,116			(1,480	)
Net cash provided by (used for) operating activities		—			3,990			304			(759	)		—			3,535
Cash flows from investing activities:
Proceeds from sale of property and equipment		—			—			3			—			—			3
Capital expenditures		—			(10,343	)		(51	)		(102	)		—			(10,496	)
Net cash used for investing activities		—			(10,343	)		(48	)		(102	)		—			(10,493	)
Cash flows from financing activities:
Repayments of senior term loans		—			(1,600	)		—			—			—			(1,600	)
Borrowings of revolving credit loans		—			19,000			—			—			—			19,000
Payments of additional acquisition consideration		—			(12,387	)		—			—			—			(12,387	)
Principal payments under capitalized lease obligations		—			(17	)		—			—			—			(17	)
Net cash provided by financing activities		—			4,996			—			—			—			4,996
Net (decrease) increase in cash and cash equivalents		—			(1,357	)		256			(861	)		—			(1,962	)
Cash and cash equivalents at beginning of period		1			8,852			547			2,627			—			12,027
Cash and cash equivalents at end of period	$	1		$	7,495		$	803		$	1,766		$	—		$	10,065