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

9 Months Ended

Sep. 30, 2013

Text Block [Abstract]

Condensed Consolidating Statements of Comprehensive Income

Condensed Consolidating Statements of Comprehensive Income (Unaudited)

For the three months ended September 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	$	—		$	144,589		$	9,218		$	38,575		$	—		$	192,382
Cost of sales (exclusive of depreciation and amortization shown below)		—			68,492			6,574			22,739			—			97,805
Selling, general and administrative expenses		1,672			43,576			1,792			11,579			—			58,619
Acquisition and integration expenses		—			639			11			712			—			1,362
Depreciation		—			5,276			21			462			—			5,759
Amortization		4,515			772			—			267			—			5,554
Intercompany administrative (income) expense		—			(88	)		—			88			—			—
Management fees to related party		—			63			—			—			—			63
Other (income) expense, net		(148	)		987			53			(101	)		—			791
Income (loss) from operations		(6,039	)		24,872			767			2,829			—			22,429
Intercompany interest (income) expense		(3,058	)		3,058			—			—			—			—
Interest expense, net		(49	)		10,208			—			1,816			—			11,975
Interest expense on junior subordinated debentures		3,152			—			—			—			—			3,152
Investment income on trust common securities		(95	)		—			—			—			—			(95	)
Income (loss) before equity in subsidiaries’ income		(5,989	)		11,606			767			1,013			—			7,397
Equity in subsidiaries’ income (loss)		14,679			3,073			—			—			(17,752	)		—
Income (loss) before income taxes		8,690			14,679			767			1,013			(17,752	)		7,397
Income tax provision (benefit)		6,942			—			(2,240	)		947			—			5,649
Net income (loss)	$	1,748		$	14,679		$	3,007		$	66		$	(17,752	)	$	1,748
Other comprehensive income (loss):
Foreign currency translation adjustments		—			2,122			—			(163	)		—			1,959
Total comprehensive income (loss)	$	1,748		$	16,801		$	3,007		$	(97	)	$	(17,752	)	$	3,707

Condensed Consolidating Statements of Comprehensive Income (Unaudited)

For the three months ended September 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	$	—		$	137,215		$	5,992		$	4,962		$	—		$	148,169
Cost of sales (exclusive of depreciation and amortization shown separately below)		—			64,803			4,590			3,898			—			73,291
Selling, general and administrative expenses		137			47,872			949			1,854			—			50,812
Acquisition and integration expenses		—			343			—			—			—			343
Depreciation		—			4,905			20			20			—			4,945
Amortization		4,515			853			—			98			—			5,466
Intercompany administrative (income) expense		—			(87	)		—			87			—			—
Management and transaction fees to related party		—			122			—			—			—			122
Other (income) expense, net		(166	)		284			(10	)		(499	)		—			(391	)
Income (loss) from operations		(4,486	)		18,120			443			(496	)		—			13,581
Intercompany interest (income) expense		(3,058	)		3,058			—			—			—			—
Interest expense, net		(43	)		10,305			—			4			—			10,266
Interest expense on junior subordinated debentures		3,152			—			—			—			—			3,152
Investment income on trust common securities		(95	)		—			—			—			—			(95	)
Income (loss) before equity in subsidiaries’ income		(4,442	)		4,757			443			(500	)		—			258
Equity in subsidiaries’ income (loss)		4,196			(172	)		—			—			(4,024	)		—
Income (loss) before income taxes		(246	)		4,585			443			(500	)		(4,024	)		258
Income tax provision (benefit)		(1,353	)		389			195			(80	)		—			(849	)
Net income (loss)	$	1,107		$	4,196		$	248		$	(420	)	$	(4,024	)	$	1,107
Other comprehensive income:
Foreign currency translation adjustments		—			—			—			697			—			697
Total comprehensive income (loss)	$	1,107		$	4,196		$	248		$	277		$	(4,024	)	$	1,804

Condensed Consolidating Statements of Comprehensive Income (Unaudited)

For the nine months ended September 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	$	—		$	401,351		$	24,686		$	102,975		$	—		$	529,012
Cost of sales (exclusive of depreciation and amortization shown separately below)		—			191,012			17,719			63,058			—			271,789
Selling, general and administrative expenses		6,582			125,874			4,816			29,499			—			166,771
Acquisition and integration expenses		—			2,936			62			2,546			—			5,544
Depreciation		—			16,409			56			1,109			—			17,574
Amortization		13,544			2,315			—			700			—			16,559
Intercompany administrative (income) expense		—			(261	)		—			261			—			—
Management and transaction fees to related party		—			63			—			—			—			63
Other (income) expense, net		(217	)		2,434			(43	)		752			—			2,926
Income (loss) from operations		(19,909	)		60,569			2,076			5,050			—			47,786
Intercompany interest (income) expense		(9,174	)		9,178			—			(4	)		—			—
Interest expense, net		(141	)		31,638			—			4,533			—			36,030
Interest expense on junior subordinated debentures		9,457			—			—			—			—			9,457
Investment income on trust common securities		(284	)		—			—			—			—			(284	)
Income (loss) before equity in subsidiaries’ income		(19,767	)		19,753			2,076			521			—			2,583
Equity in subsidiaries’ income (loss)		22,229			2,476			—			—			(24,705	)		—
Income (loss) before income taxes		2,462			22,229			2,076			521			(24,705	)		2,583
Income tax provision (benefit)		636			—			(1,300	)		1,421			—			757
Net income (loss)	$	1,826		$	22,229		$	3,376		$	(900	)	$	(24,705	)	$	1,826
Other comprehensive income (loss):
Foreign currency translation adjustments		—			(2,100	)		—			(154	)		—			(2,254	)
Total comprehensive income (loss)	$	1,826		$	20,129		$	3,376		$	(1,054	)	$	(24,705	)	$	(428	)

Condensed Consolidating Statements of Comprehensive Income (Unaudited)

For the nine months ended September 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	$	—		$	393,564		$	15,616		$	14,603		$	—		$	423,783
Cost of sales (exclusive of depreciation and amortization shown separately below)		—			188,113			11,946			9,771			—			209,830
Selling, general and administrative expenses		305			134,372			2,755			5,474			—			142,906
Acquisition and integration expenses		—			807			—			—			—			807
Depreciation		—			16,321			70			61			—			16,452
Amortization		13,544			2,526			—			296			—			16,366
Intercompany administrative (income) expense		—			(260	)		—			260			—			—
Management and transaction fees to related party		—			122			—			—			—			122
Other (income) expense, net		(334	)		757			(11	)		(469	)		—			(57	)
Income (loss) from operations		(13,515	)		50,806			856			(790	)		—			37,357
Intercompany interest (income) expense		(9,174	)		9,174			—			—			—			—
Interest expense, net		(235	)		30,824			—			4			—			30,593
Interest expense on junior subordinated debentures		9,457			—			—			—			—			9,457
Investment income on trust common securities		(284	)		—			—			—			—			(284	)
Income (loss) before equity in subsidiaries’ income		(13,279	)		10,808			856			(794	)		—			(2,409	)
Equity in subsidiaries’ income (loss)		9,381			(232	)		—			—			(9,149	)		—
Income (loss) before income taxes		(3,898	)		10,576			856			(794	)		(9,149	)		(2,409	)
Income tax provision (benefit)		(3,474	)		1,195			393			(99	)		—			(1,985	)
Net income (loss)	$	(424	)	$	9,381		$	463		$	(695	)	$	(9,149	)	$	(424	)
Other comprehensive income:
Foreign currency translation adjustments		—			—			—			1,186			—			1,186
Total comprehensive income (loss)	$	(424	)	$	9,381		$	463		$	491		$	(9,149	)	$	762

Condensed Consolidating Balance Sheet

Condensed Consolidating Balance Sheet (Unaudited)

As of September 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		$	16,399		$	1,418		$	8,553		$	—		$	26,371
Restricted investments		2,889			—			—			—			—			2,889
Accounts receivable, net		—			87,925			932			17,149			—			106,006
Inventories		—			107,379			9,100			63,522			(354	)		179,647
Deferred income taxes		9,309			—			1,196			1,325			(847	)		10,983
Other current assets		—			7,817			188			2,447			—			10,452
Total current assets		12,199			219,520			12,834			92,996			(1,201	)		336,348
Intercompany notes receivable		105,446			101,942			—			(101,942	)		(105,446	)		—
Intercompany interest receivable		9,174			4,526			—			—			(13,700	)		—
Investments in subsidiaries		(652,522	)		28,123			507			271,803			352,089			—
Property and equipment, net		—			78,325			382			14,132			—			92,839
Goodwill		418,947			24,512			3,090			21,100			280			467,929
Other intangibles, net		298,288			43,731			250			26,108			—			368,377
Restricted investments		1,235			—			—			—			—			1,235
Deferred income taxes		24,325			—			668			(383	)		(24,610	)		—
Deferred financing fees		—			10,563			—			—			—			10,563
Investment in trust common securities		3,261			—			—			—			—			3,261
Other assets		—			2,281			25			398			—			2,704
Total assets	$	220,353		$	513,523		$	17,756		$	324,212		$	207,412		$	1,283,256
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	—		$	31,117		$	1,544		$	15,756		$	—		$	48,417
Current portion of senior term loans		—			3,968			—			—			—			3,968
Current portion of capitalized lease and other obligations		—			183			—			—			—			183
Interest payable on junior subordinated debentures		1,019			—			—			—			—			1,019
Intercompany interest payable		—			9,174			—			4,526			(13,700	)		—
Accrued expenses:
Salaries and wages		—			6,215			163			1,863			—			8,241
Pricing allowances		—			3,471			3			2,705			—			6,179
Income and other taxes		(476	)		2,782			(569	)		1,617			—			3,354
Interest		—			9,805			—			—			—			9,805
Deferred compensation		2,889			—			—			—			—			2,889
Other accrued expenses		—			6,588			198			2,255			—			9,041
Total current liabilities		3,432			73,303			1,339			28,722			(13,700	)		93,096
Intercompany debt payable		—			105,446			—			—			(105,446	)		—
Long term senior term loans		—			379,404			—			—			—			379,404
Long term portion of capitalized leases		—			339			—			—			—			339
Long term senior notes		—			272,056			—			—			—			272,056
Junior subordinated debentures		114,991			—			—			—			—			114,991
Deferred compensation		1,235			—			—			—			—			1,235
Deferred income taxes, net		139,986			—			207			9,597			(25,457	)		124,333
Other non-current liabilities		7,079			5,632			—			—			—			12,711
Total liabilities		266,723			836,180			1,546			38,319			(144,603	)		998,165
Common stock with put options:
Common stock, $.01 par, 5,000 shares authorized, 210.5 issued and outstanding at September 30, 2013		20,686			—			—			—			—			20,686
Commitments and Contingencies
Stockholders’ Equity:
Preferred Stock:
Preferred stock, $.01 par, 5,000 shares authorized, none issued and outstanding at September 30, 2013		—			—			—			—			—			—
Common Stock:
Common stock, $.01 par, 5,000 shares authorized, 4,789.5 issued and outstanding at September 30, 2013		—			—			50			—			(50	)		—
Additional paid-in capital		112,508			(130,734	)		11,711			293,717			1,811			289,013
Accumulated deficit		(179,564	)		(189,823	)		4,449			(3,358	)		345,071			(23,225	)
Accumulated other comprehensive (loss) income		—			(2,100	)		—			(4,466	)		5,183			(1,383	)
Total stockholders’ equity		(67,056	)		(322,657	)		16,210			285,893			352,015			264,405
Total liabilities and stockholders’ equity	$	220,353		$	513,523		$	17,756		$	324,212		$	207,412		$	1,283,256

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, 198.3 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, 4,801.7 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 income		—			—			—			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 nine months ended September 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)	$	(20,403	)	$	19,753		$	3,376		$	(900	)	$	—		$	1,826
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization		13,544			18,724			56			1,809			—			34,133
Dispositions of property and equipment		—			76			13			12			—			101
Deferred income tax provision (benefit)		161			—			(1,677	)		1,910			—			394
Deferred financing and original issue discount amortization		(141	)		1,995			—			—			—			1,854
Stock-based compensation expense		6,365			—			—			—			—			6,365
Other non-cash interest expense		—			(391	)		—			—			—			(391	)
Changes in operating items:
Accounts receivable		—			(18,307	)		(3,067	)		(5,029	)		—			(26,403	)
Inventories		—			(2,269	)		(4,422	)		(4,067	)		—			(10,758	)
Other assets		—			(3,753	)		8,565			(2,551	)		—			2,261
Accounts payable		—			(756	)		1,027			2,771			—			3,042
Interest payable on junior subordinated debentures		1,019			—			—			—			—			1,019
Other accrued liabilities		149			10,928			(490	)		9,985			(13,700	)		6,872
Other items, net		(678	)		(13,384	)		(2,286	)		2,570			13,684			(94	)
Net cash provided by (used for) operating activities		16			12,616			1,095			6,510			(16	)		20,221
Cash flows from investing activities:
Paulin acquisition		—			(103,416	)		—			—			—			(103,416	)
Capital expenditures		—			(26,826	)		(106	)		(158	)		—			(27,090	)
Other, net		(16	)		—			—			—			16			—
Net cash provided by (used for) investing activities		(16	)		(130,242	)		(106	)		(158	)		16			(130,506	)
Cash flows from financing activities:
Borrowings of senior term loans		—			76,800			—			—			—			76,800
Repayments of senior term loans		—			(2,784	)		—			—			—			(2,784	)
Discount on senior term loans		—			(2,152	)		—			—			—			(2,152	)
Principal payments under capitalized lease obligations		—			(73	)		—			—			—			(73	)
Repayment of other credit obligations		—			(683	)		—			—			—			(683	)
Net cash provided by financing activities		—			71,108			—			—			—			71,108
Net (decrease) increase in cash and cash equivalents		—			(46,518	)		989			6,352			—			(39,177	)
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		$	16,399		$	1,418		$	8,553		$	—		$	26,371

Condensed Consolidating Statement of Cash Flows (Unaudited)

For the nine months ended September 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)	$	(9,805	)	$	9,615		$	463		$	(695	)	$	(2	)	$	(424	)
Adjustments to reconcile net income (loss) to net cash (used for) provided by operating activities:
Depreciation and amortization		13,544			18,847			70			357			—			32,818
Dispositions of property and equipment		—			270			4			—			—			274
Deferred income tax provision (benefit)		(2,790	)		(72	)		346			(89	)		—			(2,605	)
Deferred financing and original issue discount amortization		(235	)		1,851			—			—			—			1,616
Other non-cash interest and change in value of interest rate swap		—			(578	)		—			—			—			(578	)
Changes in operating items:
Accounts receivable		—			(11,712	)		(905	)		(783	)		—			(13,400	)
Inventories		—			(14,531	)		523			(1,321	)		2			(15,327	)
Other assets		—			(4,791	)		46			2,490			—			(2,255	)
Accounts payable		—			2,596			(104	)		(323	)		—			2,169
Interest payable on junior subordinated debentures		1,019			—			—			—			—			1,019
Other accrued liabilities		194			20,099			102			295			(9,175	)		11,515
Other items, net		(1,927	)		(8,673	)		18			(153	)		9,175			(1,560	)
Net cash provided by (used for) operating activities		—			12,921			563			(222	)		—			13,262
Cash flows from investing activities:
Proceeds from sale of property and equipment		—			—			3			—			—			3
Capital expenditures		—			(17,063	)		(124	)		(138	)		—			(17,325	)
Net cash used for investing activities		—			(17,063	)		(121	)		(138	)		—			(17,322	)
Cash flows from financing activities:
Repayments of senior term loans		—			(2,400	)		—			—			—			(2,400	)
Borrowings of revolving credit loans		—			19,000			—			—			—			19,000
Repayments of revolving credit loans		—			(7,000	)		—			—			—			(7,000	)
Payments of additional acquisition consideration		—			(12,387	)		—			—			—			(12,387	)
Principal payments under capitalized lease obligations		—			(30	)		—			—			—			(30	)
Net cash used for financing activities		—			(2,817	)		—			—			—			(2,817	)
Net (decrease) increase in cash and cash equivalents		—			(6,959	)		442			(360	)		—			(6,877	)
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		$	1,893		$	989		$	2,267		$	—		$	5,150