NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
General
The accompanying unaudited condensed consolidated financial statements of Actuant Corporation (“Actuant,” or the “Company”) have been prepared in accordance with generally accepted accounting principles for interim financial reporting and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The condensed consolidated balance sheet data as of
August 31, 2017
was derived from the Company’s audited financial statements, but does not include all disclosures required by United States generally accepted accounting principles. For additional information, including the Company’s significant accounting policies, refer to the consolidated financial statements and related footnotes in the Company’s
fiscal 2017
Annual Report on Form 10-K.
In the opinion of management, all adjustments considered necessary for a fair statement of financial results have been made. Such adjustments consist of only those of a normal recurring nature. Operating results for the
three months ended November 30, 2017
are not necessarily indicative of the results that may be expected for the entire fiscal year ending
August 31, 2018
.
New Accounting Pronouncements
In March 2016, the FASB issued ASU 2016-09,
Stock Compensation: Improvements to Employee Share-Based Payment Accounting,
to simplify several aspects of accounting for share-based payment transactions. Under the new guidance it is required, among other items, that all excess tax deficiencies or benefits be recorded as income tax expense or benefit in the statement of earnings and not in additional paid-in capital (shareholder's equity). This guidance was adopted on September 1, 2017 and the impact of adopting this guidance had the following effects:
|
|
•
|
for the quarter ended November 30, 2017, we recorded $0.2 million in excess tax deficiency as an increase to our income tax expense for the quarter. This requirement was applied prospectively;
|
|
|
•
|
excess tax benefits are now presented as operating activities in the statement of cash flows, rather than financing activities. The Company chose to apply this requirement retrospectively, and as a result, reclassified approximately $0.4 million of excess tax benefits recognized during the three months ended November 30, 2016 from financing activities to operating activities in the condensed consolidated statement of cash flows;
|
|
|
•
|
our computation of diluted earnings per share now excludes the excess tax benefits or deficiencies from the assumed proceeds available to repurchase shares. This requirement was applied prospectively.
|
In May 2014, the FASB issued ASU 2014-09,
Revenue from Contracts with Customers.
Under ASU 2014-09 and subsequent updates included in ASU 2016-10, ASU 2016-12, ASU 2017-13 and ASU 2017-14, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. It also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. This guidance is effective for fiscal years beginning on or after December 15, 2017 (fiscal 2019 for the Company). The Company has begun assessing its various revenue streams to identify performance obligations under these ASUs and the key aspects of the standard that will impact the Company's revenue recognition process. Based upon our preliminary assessments, these standards may impact our allocation of contract revenue between various products and services and the timing of when those revenues are recognized, but do not expect a material or significant impact to amounts recognized. Given the diversity of its commercial arrangements, the Company is continuing to assess the impact these standards may have on its consolidated results of operations, financial position, cash flows and related financial statement disclosures.
In March 2017, the FASB issued ASU 2017-07,
Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,
which changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the income statement. The new guidance requires the service cost component of net periodic benefit cost to be presented in the same income statement line items as other employee compensation costs arising from services rendered during the period. Other components of the net periodic benefit cost are to be stated separately from service cost and outside of operating income. This guidance is effective for fiscal years beginning after December 15, 2017 (fiscal 2019 for the Company) and interim periods within those annual periods. The amendment is to be applied retrospectively. Due to a majority of the Company's defined benefit pension or other postretirement benefit plans being frozen and the net periodic benefit pension cost not being significant, the Company does not believe that adoption of this guidance will have a significant impact on the financial statements of the Company.
In August 2016, the FASB issued ASU 2016‑15,
Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments
, to address how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This guidance is effective for fiscal years beginning after December 15, 2017 (fiscal 2019 for the Company), including interim
periods within those fiscal years. This update will require adoption on a retrospective basis unless it is impracticable to apply. The Company does not believe that this guidance will have a significant impact on its presentation of the statement of cash flows.
In February 2016, the FASB issued ASU 2016-02,
Leases,
to increase transparency and comparability among organizations by recognizing all lease transactions (with terms in excess of 12 months) on the balance sheet as a lease liability and a right-of-use asset. This guidance is effective for fiscal years beginning after December 15, 2018 (fiscal 2020 for the Company), including interim periods within those fiscal years. Upon adoption, the lessee will apply the new standard retrospectively to all periods presented under a modified retrospective approach using a cumulative effect adjustment in the year of adoption. The Company is currently gathering, documenting and analyzing lease agreements subject to this ASU and anticipates material additions to the balance sheet (upon adoption) of right-of-use assets, offset by the associated liabilities, due to our routine use of operating leases over time.
Accumulated Other Comprehensive Loss
The following is a summary of the Company's accumulated other comprehensive loss (in thousands):
|
|
|
|
|
|
|
|
|
|
|
November 30, 2017
|
August 31, 2017
|
Foreign currency translation adjustments
|
|
$
|
204,906
|
|
$
|
207,804
|
|
Pension and other postretirement benefit plans, net of tax
|
|
19,330
|
|
19,457
|
|
Accumulated other comprehensive loss
|
|
$
|
224,236
|
|
$
|
227,261
|
|
Note 2. Director & Officer Transition Charges
During the
three months ended November 30, 2016
, the Company recorded separation and transition charges of
$7.8 million
in connection with the retirement of one director of the Company's Board of Directors and the transition of the Executive Vice President/Chief Financial Officer. The charges were mainly comprised of compensation expense for accelerated equity vesting, severance, outplacement, legal, signing bonus and relocation costs.
Note 3. Restructuring Charges
The Company has committed to various restructuring initiatives including workforce reductions, leadership changes, plant consolidations to reduce manufacturing overhead, satellite office closures, the continued movement of production and product sourcing to low cost alternatives and the centralization and standardization of certain administrative functions. Total restructuring charges for these activities were
$6.6 million
and
$2.9 million
in the
three months ended November 30, 2017
and
2016
, respectively. Liabilities for severance will generally be paid during the next twelve months, while future lease payments related to facilities vacated as a result of restructuring will be paid over the underlying remaining lease terms.
The following rollforwards summarize restructuring reserve activity by segment (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended November 30, 2017
|
|
|
Industrial
|
|
Energy
|
|
Engineered Solutions
|
|
Corporate
|
|
Total
|
Balance as of August 31, 2017
|
|
$
|
202
|
|
|
$
|
3,613
|
|
|
$
|
1,792
|
|
|
$
|
30
|
|
|
$
|
5,637
|
|
Restructuring charges
|
|
1,239
|
|
|
931
|
|
|
285
|
|
|
4,174
|
|
|
6,629
|
|
Cash payments
|
|
(259
|
)
|
|
(1,398
|
)
|
|
(762
|
)
|
|
(345
|
)
|
|
(2,764
|
)
|
Other non-cash uses of reserve
|
|
(492
|
)
|
|
207
|
|
|
(193
|
)
|
|
(2,019
|
)
|
(1)
|
(2,497
|
)
|
Impact of changes in foreign currency rates
|
|
—
|
|
|
(161
|
)
|
|
(2
|
)
|
|
—
|
|
|
(163
|
)
|
Balance as of November 30, 2017
|
|
$
|
690
|
|
|
$
|
3,192
|
|
|
$
|
1,120
|
|
|
$
|
1,840
|
|
|
$
|
6,842
|
|
(1)
Majority of non-cash uses of reserve represents accelerated equity vesting in connection with employee severance agreements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended November 30, 2016
|
|
|
Industrial
|
|
Energy
|
|
Engineered Solutions
|
|
Corporate
|
|
Total
|
Balance as of August 31, 2016
|
|
$
|
1,343
|
|
|
$
|
3,021
|
|
|
$
|
1,863
|
|
|
$
|
46
|
|
|
$
|
6,273
|
|
Restructuring charges
|
|
715
|
|
|
117
|
|
|
2,080
|
|
|
36
|
|
|
2,948
|
|
Cash payments
|
|
(333
|
)
|
|
(558
|
)
|
|
(1,802
|
)
|
|
(36
|
)
|
|
(2,729
|
)
|
Other non-cash uses of reserve
|
|
(166
|
)
|
|
(6
|
)
|
|
(3
|
)
|
|
(13
|
)
|
|
(188
|
)
|
Impact of changes in foreign currency rates
|
|
(25
|
)
|
|
10
|
|
|
(8
|
)
|
|
—
|
|
|
(22
|
)
|
Balance as of November 30, 2016
|
|
$
|
1,534
|
|
|
$
|
2,584
|
|
|
$
|
2,130
|
|
|
$
|
33
|
|
|
$
|
6,282
|
|
Note 4. Acquisitions
During the fourth quarter of fiscal 2017, the Company signed a definitive agreement to purchase Mirage Machines, Ltd. ("Mirage"), a provider of industrial and energy maintenance tools. Subsequent to November 30, 2017, we completed the acquisition of Mirage for a purchase price of
$17.3 million
net of cash acquired, plus potential future performance-based consideration. The Company incurred acquisition transaction costs of
$0.2 million
in the
three months ended November 30, 2017
(included in selling, administration and engineering expenses in the condensed consolidated statement of earnings), related to this acquisition.
Note 5. Divestiture Activities
During the fourth quarter of fiscal 2017, the Company signed a definitive agreement to sell the Viking business (Energy segment). Subsequent to quarter-end, on December 1, 2017, the Company completed the sale of the Viking business for
$12.0 million
, which was paid in cash at the closing of the transaction, subject to closing working capital adjustments, cash and indebtedness and other adjustments. We anticipate recognizing an additional
$15.0 million
to
$20.0 million
in after tax divestiture charges in the second quarter of fiscal 2018.
Due to the divestiture of the Viking business not closing until subsequent to quarter-end, the associated assets and liabilities are classified as held for sale in the condensed consolidated balance sheet. The divestiture will result in the Company's exit from the offshore mooring market and will significantly limit our exposure to the upstream, offshore oil & gas market.
The following is a summary of the assets and liabilities held for sale of the Viking business (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
November 30, 2017
|
|
August 31, 2017
|
Accounts receivable, net
|
|
$
|
2,116
|
|
|
$
|
2,426
|
|
Inventories, net
|
|
185
|
|
|
190
|
|
Property, plant & equipment, net
|
|
7,434
|
|
|
7,534
|
|
Prepaid expenses and other current assets
|
|
1,996
|
|
|
1,927
|
|
Other long-term assets
|
|
9,662
|
|
|
9,758
|
|
Assets held for sale
|
|
$
|
21,393
|
|
|
$
|
21,835
|
|
|
|
|
|
|
Trade accounts payable
|
|
$
|
1,804
|
|
|
$
|
1,883
|
|
Other current liabilities (including divestiture accruals)
|
|
1,338
|
|
|
1,637
|
|
Rental asset lease buyout liability
|
|
—
|
|
|
28,644
|
|
Reserve for cumulative translation adjustment
|
|
67,645
|
|
|
68,919
|
|
Liabilities held for sale
|
|
$
|
70,787
|
|
|
$
|
101,083
|
|
The results of the Viking business are not material to the consolidated financial results of the Company and are included in continuing operations. The Viking business had net sales of
$2.7 million
and
$5.5 million
in the three months ended November 30, 2017 and 2016, respectively.
Note 6. Goodwill, Intangible Assets and Long-Lived Assets
Changes in the gross carrying value of intangible assets and goodwill can result from changes in foreign currency exchange rates, business acquisitions, divestitures or impairment charges. The changes in the carrying amount of goodwill for the
three months ended November 30, 2017
are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial
|
|
Energy
|
|
Engineered Solutions
|
|
Total
|
Balance as of August 31, 2017
|
$
|
103,875
|
|
|
$
|
188,830
|
|
|
$
|
237,376
|
|
|
$
|
530,081
|
|
Impact of changes in foreign currency rates
|
65
|
|
|
1,925
|
|
|
(617
|
)
|
|
1,373
|
|
Balance as of November 30, 2017
|
$
|
103,940
|
|
|
$
|
190,755
|
|
|
$
|
236,759
|
|
|
$
|
531,454
|
|
The gross carrying value and accumulated amortization of the Company’s other intangible assets are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November 30, 2017
|
|
August 31, 2017
|
|
Weighted Average
Amortization
Period (Years)
|
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Net
Book
Value
|
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Net
Book
Value
|
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer relationships
|
15
|
|
$
|
264,409
|
|
|
$
|
158,245
|
|
|
$
|
106,164
|
|
|
$
|
263,498
|
|
|
$
|
153,003
|
|
|
$
|
110,495
|
|
Patents
|
10
|
|
30,448
|
|
|
24,476
|
|
|
5,972
|
|
|
30,401
|
|
|
24,027
|
|
|
6,374
|
|
Trademarks and tradenames
|
18
|
|
21,324
|
|
|
9,637
|
|
|
11,687
|
|
|
21,498
|
|
|
9,396
|
|
|
12,102
|
|
Other intangibles
|
3
|
|
6,712
|
|
|
6,328
|
|
|
384
|
|
|
6,672
|
|
|
6,234
|
|
|
438
|
|
Indefinite lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tradenames
|
N/A
|
|
91,825
|
|
|
—
|
|
|
91,825
|
|
|
91,080
|
|
|
—
|
|
|
91,080
|
|
|
|
|
$
|
414,718
|
|
|
$
|
198,686
|
|
|
$
|
216,032
|
|
|
$
|
413,149
|
|
|
$
|
192,660
|
|
|
$
|
220,489
|
|
The Company estimates that amortization expense will be
$15.3 million
for the remaining
nine
months of fiscal
2018
. Amortization expense for future years is estimated to be:
$19.9 million
in fiscal
2019
,
$19.2 million
in
2020
,
$18.3 million
in fiscal
2021
,
$16.3 million
in fiscal
2022
,
$13.3 million
in fiscal
2023
and
$21.9 million
thereafter. The future amortization expense amounts represent estimates and may be impacted by future acquisitions, divestitures or changes in foreign currency exchange rates.
Note 7. Product Warranty Costs
The Company generally offers its customers a warranty on products sold, although warranty periods vary by product type and application. The reserve for future warranty claims is based on historical claim rates and current warranty cost experience. The following is a rollforward of the product warranty reserves for the
three months ended November 30,
2017
and
2016
(in thousands):
|
|
|
|
|
|
|
|
|
|
Three Months Ended November 30,
|
|
2017
|
|
2016
|
Beginning balance
|
$
|
6,616
|
|
|
$
|
5,592
|
|
Provision for warranties
|
1,531
|
|
|
777
|
|
Warranty payments and costs incurred
|
(1,145
|
)
|
|
(2,309
|
)
|
Impact of changes in foreign currency rates
|
(8
|
)
|
|
(105
|
)
|
Ending balance
|
$
|
6,994
|
|
|
$
|
3,955
|
|
Note 8. Debt
The following is a summary of the Company’s long-term indebtedness (in thousands):
|
|
|
|
|
|
|
|
|
|
November 30, 2017
|
|
August 31, 2017
|
Senior Credit Facility
|
|
|
|
Revolver
|
$
|
—
|
|
|
$
|
—
|
|
Term Loan
|
270,000
|
|
|
277,500
|
|
Total Senior Credit Facility
|
270,000
|
|
|
277,500
|
|
5.625% Senior Notes
|
287,559
|
|
|
287,559
|
|
Total Senior Indebtedness
|
557,559
|
|
|
565,059
|
|
Less: Current maturities of long-term debt
|
(30,000
|
)
|
|
(30,000
|
)
|
Debt issuance costs
|
(2,930
|
)
|
|
(3,119
|
)
|
Total long-term debt, net
|
$
|
524,629
|
|
|
$
|
531,940
|
|
The Company’s Senior Credit Facility matures on
May 8, 2020
and provides a
$600 million
revolver, an amortizing term loan and a
$450 million
expansion option, subject to certain conditions. Borrowings are subject to a pricing grid, which can result in increases or decreases to the borrowing spread, depending on the Company’s leverage ratio, ranging from
1.00%
to
2.25%
in the case of loans bearing interest at LIBOR and from
0.00%
to
1.25%
in the case of loans bearing interest at the base rate. As of
November 30, 2017
, the borrowing spread on LIBOR based borrowings was
2.00%
(aggregating to a
3.38%
variable rate borrowing cost on the outstanding term loan balance). In addition, a non-use fee is payable quarterly on the average unused credit line under the revolver ranging from
0.15%
to
0.35%
per annum. As of
November 30, 2017
, the unused credit line under the revolver was
$597.1 million
, of which
$93.1 million
was available for borrowing. Quarterly term loan principal payments of
$3.8 million
began on
June 30, 2016
, increased to
$7.5 million
starting on
June 30, 2017
and extend through
March 31, 2020
, with the remaining principal due at maturity. The Senior Credit Facility, which is secured by substantially all of the Company’s domestic personal property assets, also contains customary limits and restrictions concerning investments, sales of assets, liens on assets, dividends and other payments. The two financial covenants included in the Senior Credit Facility agreement are a maximum leverage ratio of
3.75
:1 and a minimum interest coverage ratio of
3.5
:1. The Company was in compliance with all financial covenants at
November 30, 2017
.
On
April 16, 2012
, the Company issued
$300 million
of
5.625%
Senior Notes due 2022 (the “Senior Notes”), of which
$287.6 million
remains outstanding. The Senior Notes require no principal installments prior to their
June 15, 2022
maturity, require semiannual interest payments in December and June of each year and contain certain financial and non-financial covenants. The Senior Notes include a call feature that allows the Company to repurchase them anytime on or after
June 15, 2017
at stated redemption prices (ranging from
100.0%
to
102.8%
), plus accrued and unpaid interest.
Note 9. Fair Value Measurement
The Company assesses the inputs used to measure the fair value of financial assets and liabilities using a three-tier hierarchy. Level 1 inputs include quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates, commodity rates and yield curves. Level 3 inputs are not observable in the market and include management’s own judgments about the assumptions market participation would use in pricing an asset or liability.
The fair value of the Company’s cash and cash equivalents, accounts receivable, accounts payable and variable rate long-term debt approximated book value at both
November 30, 2017
and
August 31, 2017
due to their short-term nature and the fact that the interest rates approximated market rates. Foreign currency exchange contracts are recorded at fair value. The fair value of the Company's foreign currency exchange contracts was a net asset of
$0.1 million
at
November 30, 2017
and a net liability of
$0.2 million
at
August 31, 2017
. The fair value of the foreign currency exchange contracts was based on quoted inactive market prices and is therefore classified as Level 2 within the valuation hierarchy. The fair value of the Company’s outstanding Senior Notes was
$295.1 million
and
$295.8 million
at
November 30, 2017
and
August 31, 2017
, respectively. The fair value of the Senior Notes was based on quoted inactive market prices and is therefore classified as Level 2 within the valuation hierarchy.
Note 10. Derivatives
All derivatives are recognized in the balance sheet at their estimated fair value. On the date the Company enters into a derivative contract, it designates the derivative as a hedge of a recognized asset or liability (fair value hedge) or a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge). The Company does not enter into derivatives for speculative purposes. Changes in the value of fair value hedges and non-designated hedges are recorded in earnings along with the gain or loss on the hedged asset or liability, while changes in the value
of cash flow hedges are recorded in accumulated other comprehensive loss, until earnings are affected by the variability of cash flows. However, there were no cash flow hedges outstanding at
November 30, 2017
and
August 31, 2017
.
The Company is exposed to market risk for changes in foreign currency exchange rates due to the global nature of its operations. In order to manage this risk the Company has historically hedged portions of its forecasted inventory purchases and other cash flows that are denominated in non-functional currencies (cash flow hedges).
The Company also utilizes foreign currency exchange contracts to reduce the exchange rate risk associated with recognized non-functional currency balances. The effects of changes in exchange rates are reflected concurrently in earnings for both the fair value of the foreign currency exchange contracts and the related non-functional currency asset or liability. These derivative gains and losses offset foreign currency gains and losses from the related revaluation of non-functional currency assets and liabilities (amounts included in other expense in the condensed consolidated statement of earnings). The U.S. dollar equivalent notional value of these short duration foreign currency exchange contracts (fair value hedges or non-designated hedges) was
$22.5 million
and
$22.0 million
at
November 30, 2017
and
August 31, 2017
, respectively. The fair value of outstanding foreign currency exchange contracts was a net asset of
$0.1 million
at
November 30, 2017
and a net liability of
$0.2 million
at
August 31, 2017
. Net foreign currency gain (loss) related to these derivative instruments were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended November 30,
|
|
|
2017
|
|
2016
|
|
Foreign currency gain (loss), net
|
$
|
214
|
|
|
$
|
(1,491
|
)
|
|
Note 11. Capital Stock and Share Repurchases
The Company's Board of Directors authorized the repurchase of shares of the Company's common stock under publicy announced share repurchase programs. Since the inception of the initial share repurchase program in fiscal 2012, the Company has repurchased
20,439,434
shares of common stock for
$617.7 million
. As of
November 30, 2017
, the maximum number of shares that may yet be purchased under the programs is
7,560,566
shares. There were no share repurchases in the
three months ended November 30, 2017
.
The reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended November 30,
|
|
|
2017
|
|
2016
|
|
Numerator:
|
|
|
|
|
Net earnings
|
$
|
5,226
|
|
|
$
|
4,965
|
|
|
Denominator:
|
|
|
|
|
Weighted average common shares outstanding - basic
|
59,871
|
|
|
58,972
|
|
|
Net effect of dilutive securities - stock based compensation plans
|
738
|
|
|
644
|
|
|
Weighted average common shares outstanding - diluted
|
60,609
|
|
|
59,616
|
|
|
|
|
|
|
|
Basic earnings per share
|
$
|
0.09
|
|
|
$
|
0.08
|
|
|
Diluted earnings per share
|
0.09
|
|
|
0.08
|
|
|
|
|
|
|
|
Anti-dilutive securities from stock based compensation plans (excluded from earnings per share calculation)
|
1,829
|
|
|
1,963
|
|
|
Note 12. Income Taxes
The Company's income tax expense or benefit is impacted by a number of factors, including the amount of taxable earnings generated in foreign jurisdictions with tax rates that are lower than the U.S. federal statutory rate, permanent items, state tax rates and the ability to utilize various tax credits and net operating loss carryforwards. The Company's global operations, acquisition activity and specific tax attributes provide opportunities for continuous global tax planning initiatives to maximize tax credits and deductions. Both fiscal 2018 and 2017 include the benefits of tax planning initiatives. Comparative earnings before income taxes, income tax expense (benefit) and effective income tax rates are as follows (amounts in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended November 30,
|
|
|
2017
|
|
2016
|
|
Earnings before income taxes
|
$
|
6,830
|
|
|
$
|
1,967
|
|
|
Income tax expense (benefit)
|
1,604
|
|
|
(2,998
|
)
|
|
Effective income tax rate
|
23.5
|
%
|
|
(152.4
|
)%
|
|
Both the current and prior year effective income tax rates were impacted by the proportion of earnings in foreign jurisdictions with income tax rates lower than the U.S. federal income tax rate and the amount of income tax benefits from tax planning initiatives. The Company's earnings before income taxes included approximately
80%
of earnings from foreign jurisdictions for both the estimated full-year fiscal 2018 and fiscal 2017. This foreign income tax rate differential had the effect of reducing the
35%
U.S. statutory tax rate by
12.2%
and
22.4%
, for the three months ended November 30, 2017 and 2016, respectively. In addition to tax planning initiatives (which yield an effective income tax rate lower than the federal income tax rate) in each year, the income tax benefit for the three months ended November 30, 2016 included a
$2.9 million
benefit related to the discrete director and officer transition costs. These factors, combined with year-to-date activity, yielded an income tax expense (benefit) of
23.5%
and
(152.4)%
for the three months ended November 30, 2017 and 2016, respectively. The tax benefits related to tax planning initiatives are not expected to repeat in future periods due to certain tax attributes that are no longer available and subsequent changes in relevant tax laws. The Company may release a material valuation allowance in a foreign jurisdiction in late fiscal 2018 or in fiscal 2019, if the jurisdiction demonstrates sustained profitability and the Company determines that it is more likely than not the deferred tax assets will be realized.
On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“the Act”) was signed. The Act significantly changes the income tax environment for US multinational corporations. The Company is actively evaluating the corporate income tax provisions of the Act including the reduction in the US corporate income tax rate, limitation on deductibility of interest, repatriation of foreign earnings, the move to a territorial tax system, and other provisions. Due to the complexity of the Act, the Company will continue to assess the provisions as well as any prospectively released regulations and disclose the anticipated impact to income tax expense resulting from the Act in future filings.
Note 13. Segment Information
The Company is a global manufacturer of a broad range of industrial products and systems and is organized into
three
reportable segments: Industrial, Energy and Engineered Solutions. The Industrial segment is primarily involved in the design, manufacture and distribution of branded hydraulic and mechanical tools to the maintenance, industrial, infrastructure and production automation markets. The Energy segment provides joint integrity products and services, customized offshore vessel mooring solutions, as well as rope and cable solutions to the global oil & gas, power generation and other markets. The Engineered Solutions segment provides highly engineered position and motion control systems to original equipment manufacturers ("OEM") in various on and off-highway vehicle markets, as well as a variety of other products to the industrial and agricultural markets.
The following tables summarize financial information by reportable segment and product line (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended November 30,
|
|
|
2017
|
|
2016
|
|
Net Sales by Reportable Product Line & Segment:
|
|
|
|
|
Industrial Segment:
|
|
|
|
|
Industrial Tools
|
$
|
84,510
|
|
|
$
|
79,039
|
|
|
Heavy Lifting Technology
|
12,406
|
|
|
8,251
|
|
|
|
96,916
|
|
|
87,290
|
|
|
Energy Segment:
|
|
|
|
|
Energy Maintenance & Integrity
|
56,710
|
|
|
64,821
|
|
|
Other Energy Solutions
|
19,131
|
|
|
19,825
|
|
|
|
75,841
|
|
|
84,646
|
|
|
Engineered Solutions Segment:
|
|
|
|
|
On-Highway
|
64,882
|
|
|
51,630
|
|
|
Agriculture, Off-Highway and Other
|
51,316
|
|
|
42,227
|
|
|
|
116,198
|
|
|
93,857
|
|
|
|
$
|
288,955
|
|
|
$
|
265,793
|
|
|
Operating Profit (Loss):
|
|
|
|
|
Industrial
|
$
|
18,243
|
|
|
$
|
18,776
|
|
|
Energy
|
293
|
|
|
3,210
|
|
|
Engineered Solutions
|
6,334
|
|
|
755
|
|
|
General Corporate
|
(10,197
|
)
|
|
(14,270
|
)
|
|
|
$
|
14,673
|
|
|
$
|
8,471
|
|
|
|
|
|
|
|
|
|
|
|
|
November 30, 2017
|
|
August 31, 2017
|
Assets by Segment:
|
|
|
|
Industrial
|
$
|
314,215
|
|
|
$
|
329,134
|
|
Energy
|
480,402
|
|
|
482,963
|
|
Engineered Solutions
|
539,978
|
|
|
531,068
|
|
General Corporate
|
155,646
|
|
|
173,790
|
|
|
$
|
1,490,241
|
|
|
$
|
1,516,955
|
|
In addition to the impact of foreign currency exchange rate changes, the comparability of segment and product line information is impacted by acquisition/divestiture activities, impairment charges, director and officer transition charges, restructuring costs and related benefits. Corporate assets, which are not allocated, principally represent cash and cash equivalents, capitalized debt issuance costs and deferred income taxes.
Note 14. Commitments and Contingencies
The Company had outstanding letters of credit of
$14.3 million
and
$14.5 million
at
November 30, 2017
and
August 31, 2017
, respectively, the majority of which relate to commercial contracts and self-insured workers compensation programs.
The Company is a party to various legal proceedings that have arisen in the normal course of business. These legal proceedings typically include product liability, environmental, labor, patent claims and other disputes. The Company has recorded reserves for loss contingencies based on the specific circumstances of each case. Such reserves are recorded when it is probable that a loss has been incurred and can be reasonably estimated. In the opinion of management, resolution of these contingencies are not expected to have a material adverse effect on the Company’s financial condition, results of operations or cash flows.
The Company remains contingently liable for lease payments under leases of businesses that it previously divested or spun-off, in the event that such businesses are unable to fulfill their future lease payment obligations. The discounted present value of future minimum lease payments for these leases was
$12.8 million
using a weighted average discount rate of
2.62%
at
November 30, 2017
.
The Company has facilities in numerous geographic locations that are subject to a range of environmental laws and regulations. Environmental expenditures over the past two years have not been material. Management believes that such costs will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.
Note 15. 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
|
|