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Guarantor Subsidiaries
6 Months Ended
Feb. 28, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Guarantor Subsidiaries
Guarantor Subsidiaries
As discussed in Note 6, “Debt” on April 16, 2012, Actuant Corporation (the “Parent”) issued $300 million of 5.625% Senior Notes. All material domestic wholly owned subsidiaries (the “Guarantors”) fully and unconditionally guarantee (except for certain customary limitations) such debt on a joint and several basis. There are no significant restrictions on the ability of the Guarantors to make distributions to the Parent. 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.
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 and the impact of foreign currency rate changes.
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands)
 
 
Three Months Ended February 28, 2015
 
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net sales
 
$
39,335

 
$
70,675

 
$
190,995

 
$

 
$
301,005

Cost of products sold
 
12,076

 
52,182

 
126,986

 

 
191,244

Gross profit
 
27,259

 
18,493

 
64,009

 

 
109,761

Selling, administrative and engineering expenses
 
16,430

 
16,367

 
42,971

 

 
75,768

Amortization of intangible assets
 
318

 
2,785

 
2,984

 

 
6,087

Impairment charge
 

 
20,249

 
64,104

 

 
84,353

Operating profit (loss)
 
10,511

 
(20,908
)
 
(46,050
)
 

 
(56,447
)
Financing costs, net
 
7,267

 

 
(237
)
 

 
7,030

Intercompany expense (income), net
 
(5,098
)
 
849

 
4,249

 

 

Intercompany dividend income
 
(212
)
 
(243
)
 
(31
)
 
486

 

Other income, net
 
(246
)
 
(64
)
 
(309
)
 

 
(619
)
Earnings (loss) before income tax expense (benefit)
 
8,800

 
(21,450
)
 
(49,722
)
 
(486
)
 
(62,858
)
Income tax expense (benefit)
 
1,514

 
(207
)
 
757

 
(84
)
 
1,980

Net earnings (loss) before equity in earnings (loss) of subsidiaries
 
7,286

 
(21,243
)
 
(50,479
)
 
(402
)
 
(64,838
)
Equity in earnings (loss) of subsidiaries
 
(72,124
)
 
(28,577
)
 
323

 
100,378

 

Net loss
 
$
(64,838
)
 
$
(49,820
)
 
$
(50,156
)
 
$
99,976

 
$
(64,838
)
Comprehensive loss
 
$
(121,586
)
 
$
(65,247
)
 
$
(65,507
)
 
$
130,754

 
$
(121,586
)
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands)
 
 
Three Months Ended February 28, 2014
 
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net sales
 
$
43,595

 
$
75,203

 
$
208,972

 
$

 
$
327,770

Cost of products sold
 
11,992

 
52,009

 
139,322

 

 
203,323

Gross profit
 
31,603

 
23,194

 
69,650

 

 
124,447

Selling, administrative and engineering expenses
 
19,399

 
13,753

 
46,088

 

 
79,240

Amortization of intangible assets
 
318

 
2,576

 
3,332

 

 
6,226

Operating profit
 
11,886

 
6,865

 
20,230

 

 
38,981

Financing costs, net
 
6,499

 

 
(237
)
 

 
6,262

Intercompany expense (income), net
 
(12,153
)
 
5,334

 
6,819

 

 

Other expense (income), net
 
669

 
(125
)
 
782

 

 
1,326

Earnings from continuing operations before income tax expense
 
16,871

 
1,656

 
12,866

 

 
31,393

Income tax expense
 
4,885

 
479

 
3,725

 

 
9,089

Net earnings before equity in earnings of subsidiaries
 
11,986

 
1,177

 
9,141

 

 
22,304

Equity in earnings (loss) of subsidiaries
 
50,097

 
(23,996
)
 
867

 
(26,968
)
 

Earnings (loss) from continuing operations
 
62,083

 
(22,819
)
 
10,008

 
(26,968
)
 
22,304

Earnings (loss) from discontinued operations, net of income taxes
 
(20,691
)
 
53,156

 
(13,377
)
 

 
19,088

Net earnings (loss)
 
$
41,392

 
$
30,337

 
$
(3,369
)
 
$
(26,968
)
 
$
41,392

Comprehensive income (loss)
 
$
45,789

 
$
34,943

 
$
(5,804
)
 
$
(29,139
)
 
$
45,789


CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands)
 
 
Six Months Ended February 28, 2015
 
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net sales
 
$
79,601

 
$
148,266

 
$
400,903

 
$

 
$
628,770

Cost of products sold
 
22,043

 
105,440

 
264,550

 

 
392,033

Gross profit
 
57,558

 
42,826

 
136,353

 

 
236,737

Selling, administrative and engineering expenses
 
35,502

 
33,834

 
88,904

 

 
158,240

Amortization of intangible assets
 
636

 
5,570

 
6,167

 

 
12,373

Impairment charge
 

 
20,249

 
64,104

 

 
84,353

Operating profit (loss)
 
21,420

 
(16,827
)
 
(22,822
)
 

 
(18,229
)
Financing costs, net
 
13,814

 

 
(593
)
 

 
13,221

Intercompany expense (income), net
 
(10,830
)
 
2,083

 
8,747

 

 

Intercompany dividend income
 
(212
)
 
(243
)
 
(31
)
 
486

 

Other expense (income), net
 
219

 
(160
)
 
(1,117
)
 

 
(1,058
)
Earnings (loss) before income tax expense
 
18,429

 
(18,507
)
 
(29,828
)
 
(486
)
 
(30,392
)
Income tax expense
 
3,824

 
499

 
5,533

 
(84
)
 
9,772

Net earnings (loss) before equity in earnings (loss) of subsidiaries
 
14,605

 
(19,006
)
 
(35,361
)
 
(402
)
 
(40,164
)
Equity in earnings (loss) of subsidiaries
 
(54,769
)
 
(14,430
)
 
517

 
68,682

 

Net loss
 
$
(40,164
)
 
$
(33,436
)
 
$
(34,844
)
 
$
68,280

 
$
(40,164
)
Comprehensive loss
 
$
(159,875
)
 
$
(71,847
)
 
$
(88,657
)
 
$
160,504

 
$
(159,875
)



CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(in thousands)
 
 
Six Months Ended February 28, 2014
 
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net sales
 
$
88,686

 
$
154,839

 
$
423,801

 
$

 
$
667,326

Cost of products sold
 
24,064

 
107,264

 
279,771

 

 
411,099

Gross profit
 
64,622

 
47,575

 
144,030

 

 
256,227

Selling, administrative and engineering expenses
 
36,257

 
29,705

 
95,196

 

 
161,158

Amortization of intangible assets
 
636

 
5,151

 
6,654

 

 
12,441

Operating profit
 
27,729

 
12,719

 
42,180

 

 
82,628

Financing costs, net
 
13,278

 
3

 
(269
)
 

 
13,012

Intercompany expense (income), net
 
(17,150
)
 
4,995

 
12,155

 

 

Other expense (income), net
 
11,086

 
(418
)
 
(8,201
)
 

 
2,467

Earnings from continuing operations before income tax expense
 
20,515

 
8,139

 
38,495

 

 
67,149

Income tax expense
 
5,893

 
2,274

 
3,673

 

 
11,840

Net earnings before equity in earnings (loss) of subsidiaries
 
14,622

 
5,865

 
34,822

 

 
55,309

Equity in earnings (loss) of subsidiaries
 
84,319

 
(10,663
)
 
4,067

 
(77,723
)
 

Earnings (loss) from continuing operations
 
98,941

 
(4,798
)
 
38,889

 
(77,723
)
 
55,309

Earnings (loss) from discontinued operations, net of income taxes
 
(21,512
)
 
56,494

 
(12,862
)
 

 
22,120

Net earnings
 
$
77,429

 
$
51,696

 
$
26,027

 
$
(77,723
)
 
$
77,429

Comprehensive income
 
$
98,829

 
$
73,740

 
$
21,867

 
$
(95,607
)
 
$
98,829

CONDENSED CONSOLIDATING BALANCE SHEETS
(in thousands)
 
 
February 28, 2015
 
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
5,553

 
$
1,937

 
$
80,007

 
$

 
$
87,497

Accounts receivable, net
 
17,648

 
42,966

 
143,448

 

 
204,062

Inventories, net
 
24,640

 
42,056

 
96,088

 

 
162,784

Deferred income taxes
 
7,579

 

 
3,034

 

 
10,613

Other current assets
 
16,563

 
2,502

 
29,210

 

 
48,275

Total current assets
 
71,983

 
89,461

 
351,787

 

 
513,231

Property, plant and equipment, net
 
7,161

 
25,998

 
120,019

 

 
153,178

Goodwill
 
38,847

 
263,141

 
313,965

 

 
615,953

Other intangibles, net
 
11,338

 
134,829

 
178,700

 

 
324,867

Investment in subsidiaries
 
2,051,045

 
1,014,867

 
13,273

 
(3,079,185
)
 

Intercompany receivable
 

 
639,140

 
544,177

 
(1,183,317
)
 

Other long-term assets
 
18,100

 

 
11,490

 

 
29,590

Total assets
 
$
2,198,474

 
$
2,167,436

 
$
1,533,411

 
$
(4,262,502
)
 
$
1,636,819

LIABILITIES & SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
 
 
 
 
Trade accounts payable
 
$
15,948

 
$
23,535

 
$
87,401

 
$

 
$
126,884

Accrued compensation and benefits
 
13,278

 
2,997

 
25,514

 

 
41,789

Current maturities of debt
 
6,750

 

 

 

 
6,750

Income taxes payable
 
(6,309
)
 
(548
)
 
7,459

 

 
602

Other current liabilities
 
18,600

 
4,952

 
33,128

 

 
56,680

Total current liabilities
 
48,267

 
30,936

 
153,502

 

 
232,705

Long-term debt, less current maturities
 
580,000

 

 

 

 
580,000

Deferred income taxes
 
49,247

 

 
38,724

 

 
87,971

Pension and postretirement benefit liabilities
 
7,440

 

 
6,176

 

 
13,616

Other long-term liabilities
 
43,378

 
4,223

 
8,201

 

 
55,802

Intercompany payable
 
803,417

 

 
379,900

 
(1,183,317
)
 

Shareholders’ equity
 
666,725

 
2,132,277

 
946,908

 
(3,079,185
)
 
666,725

Total liabilities and shareholders’ equity
 
$
2,198,474

 
$
2,167,436

 
$
1,533,411

 
$
(4,262,502
)
 
$
1,636,819

CONDENSED CONSOLIDATING BALANCE SHEETS
(in thousands)
 
 
August 31, 2014
 
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
27,931

 
$
3,325

 
$
77,756

 
$

 
$
109,012

Accounts receivable, net
 
22,811

 
38,511

 
165,686

 

 
227,008

Inventories, net
 
31,024

 
38,860

 
92,736

 

 
162,620

Deferred income taxes
 
7,503

 

 
3,547

 

 
11,050

Other current assets
 
3,871

 
1,057

 
28,372

 

 
33,300

Total current assets
 
93,140

 
81,753

 
368,097

 

 
542,990

Property, plant and equipment, net
 
9,096

 
22,879

 
137,126

 

 
169,101

Goodwill
 
44,700

 
280,693

 
417,377

 

 
742,770

Other intangibles, net
 
11,974

 
140,400

 
212,803

 

 
365,177

Investment in subsidiaries
 
2,286,068

 
806,414

 
237,207

 
(3,329,689
)
 

Intercompany receivable
 

 
678,073

 
622,818

 
(1,300,891
)
 

Other long-term assets
 
23,432

 

 
13,409

 

 
36,841

Total assets
 
$
2,468,410

 
$
2,010,212

 
$
2,008,837

 
$
(4,630,580
)
 
$
1,856,879

LIABILITIES & SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
 
 
 
 
Trade accounts payable
 
$
20,014

 
$
25,673

 
$
100,111

 
$

 
$
145,798

Accrued compensation and benefits
 
15,135

 
3,293

 
34,536

 

 
52,964

Income taxes payable
 
31,582

 

 
6,765

 

 
38,347

Current maturities of debt
 
4,500

 

 

 

 
4,500

Other current liabilities
 
19,081

 
3,989

 
34,442

 

 
57,512

Total current liabilities
 
90,312

 
32,955

 
175,854

 

 
299,121

Long-term debt
 
385,500

 

 

 

 
385,500

Deferred income taxes
 
47,543

 

 
49,427

 

 
96,970

Pension and postretirement benefit liabilities
 
8,668

 

 
7,031

 

 
15,699

Other long-term liabilities
 
42,647

 
4,138

 
11,093

 

 
57,878

Intercompany payable
 
892,029

 

 
408,861

 
(1,300,890
)
 

Shareholders’ equity
 
1,001,711

 
1,973,119

 
1,356,571

 
(3,329,690
)
 
1,001,711

Total liabilities and shareholders’ equity
 
$
2,468,410

 
$
2,010,212

 
$
2,008,837

 
$
(4,630,580
)
 
$
1,856,879

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(in thousands)
 
 
Six Months Ended February 28, 2015
 
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Operating Activities
 
 
 
 
 
 
 
 
 
 
Cash provided by (used in) operating activities
 
$
18,035

 
$
(41,149
)
 
$
13,495

 
$

 
$
(9,619
)
Investing Activities
 

 

 

 

 

Capital expenditures
 
(519
)
 
(2,447
)
 
(9,911
)
 

 
(12,877
)
Proceeds from sale of property, plant and equipment
 

 
198

 
509

 

 
707

Intercompany investment
 
(1,117
)
 

 

 
1,117

 

Cash used in investing activities
 
(1,636
)
 
(2,249
)
 
(9,402
)
 
1,117

 
(12,170
)
Financing Activities
 

 

 

 

 

Net borrowings on revolver
 
199,000

 

 

 

 
199,000

Repayment on term loan
 
(2,250
)
 

 

 

 
(2,250
)
Purchase of treasury shares
 
(180,512
)
 

 

 

 
(180,512
)
Intercompany loan activity
 
(57,170
)
 
42,010

 
15,160

 

 

Intercompany capital contribution
 

 

 
1,117

 
(1,117
)
 

Stock option exercises, related tax benefits and other
 
4,753

 

 

 

 
4,753

Cash dividend
 
(2,598
)
 

 

 

 
(2,598
)
Cash provided by (used in) financing activities
 
(38,777
)
 
42,010

 
16,277

 
(1,117
)
 
18,393

Effect of exchange rate changes on cash
 

 

 
(18,119
)
 

 
(18,119
)
Net (decrease) increase in cash and cash equivalents
 
(22,378
)
 
(1,388
)
 
2,251

 

 
(21,515
)
Cash and cash equivalents—beginning of period
 
27,931

 
3,325

 
77,756

 

 
109,012

Cash and cash equivalents—end of period
 
$
5,553

 
$
1,937

 
$
80,007

 
$

 
$
87,497

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(in thousands)
 
 
Six Months Ended February 28, 2014
 
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Operating Activities
 
 
 
 
 
 
 
 
 
 
Cash provided by (used in) operating activities
 
$
(223
)
 
$
8,331

 
$
43,491

 
$
(14,716
)
 
$
36,883

Investing Activities
 

 

 

 

 

Capital expenditures
 
(2,424
)
 
(2,379
)
 
(17,423
)
 

 
(22,226
)
Proceeds from sale of property, plant and equipment
 
1

 
74

 
1,933

 

 
2,008

Proceeds from sale of businesses, net
 
(4,134
)
 
214,268

 
33,252

 

 
243,386

Intercompany investment
 

 
(99,963
)
 

 
99,963

 

Cash provided by (used in) investing activities
 
(6,557
)
 
112,000

 
17,762

 
99,963

 
223,168

Financing Activities
 
 
 
 
 
 
 
 
 
 
Net repayments on revolver
 
(125,000
)
 

 

 

 
(125,000
)
Purchase of treasury shares
 
(109,095
)
 

 

 

 
(109,095
)
Intercompany loan activity
 
213,449

 
(120,305
)
 
(93,144
)
 

 

Intercompany capital contribution
 

 

 
99,963

 
(99,963
)
 

Stock option exercises and related tax benefits
 
25,803

 

 

 

 
25,803

Payment of contingent acquisition consideration
 

 

 
(753
)
 

 
(753
)
Cash dividend
 
(2,919
)
 

 
(14,716
)
 
14,716

 
(2,919
)
Cash provided by (used in) financing activities
 
2,238

 
(120,305
)
 
(8,650
)
 
(85,247
)
 
(211,964
)
Effect of exchange rate changes on cash
 

 

 
2,944

 

 
2,944

Net increase (decrease) in cash and cash equivalents
 
(4,542
)
 
26

 
55,547

 

 
51,031

Cash and cash equivalents—beginning of period
 
16,122

 

 
87,864

 

 
103,986

Cash and cash equivalents—end of period
 
$
11,580

 
$
26

 
$
143,411

 
$

 
$
155,017