Form: 10-Q

Quarterly report pursuant to Section 13 or 15(d)

November 16, 2015


THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
Supplemental Consolidating Guarantor and Non-Guarantor Financial Information
(dollars in thousands)


EXHIBIT 99.1


On June 30, 2014, affiliates of CCMP Capital Advisors, LLC (“CCMP”) and Oak Hill Capital Partners III, L.P., Oak Hill Capital
Management Partners III, L.P. and OHCP III HC RO, L.P.), together with certain current and former members of Hillman’s
management, consummated a merger transaction (the “Merger Transaction”) pursuant to the terms and conditions of an Agreement and Plan of Merger dated as of May 16, 2014.

The Company, through Hillman Group, had issued $265,000 in aggregate principal amount of 10.875% Senior Notes that were
scheduled to mature on June 1, 2018. In connection with the Merger Transaction, the 10.875% Senior Notes were repaid and
terminated.

Hillman Group issued $330,000 aggregate principal amount of its senior notes due July 15, 2022 (the “6.375% Senior Notes”). The 6.375% Senior Notes, of which $330,000 aggregate principal amount was outstanding as of September 30, 2015, are fully and unconditionally guaranteed on a joint and several basis by The Hillman Companies, Inc., Hillman Investment Company, and certain of the Company’s wholly-owned subsidiaries. The non-guarantor information presented represents our Australian, Canadian, and Mexican subsidiaries.

The following financial information presents condensed consolidating statements of comprehensive loss, balance sheets, and cash flows for the Hillman Group, all guarantor subsidiaries, all non-guarantor subsidiaries, and the eliminations necessary to provide the consolidated results for the Hillman Companies and subsidiaries. For purposes of this presentation, we have accounted for investments in our subsidiaries using the equity method of accounting. The principal consolidating adjustments eliminate investment in subsidiary and intercompany balances and transactions.




THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
Supplemental Consolidating Guarantor and Non-Guarantor Financial Information



Condensed Consolidating Balance Sheet (Unaudited)
As of September 30, 2015
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Successor
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guarantors
 
Issuer
 
 
 
Non-
 
 
 
 
 
 
 
 
 
 
The Hillman
 
The Hillman
 
Guarantor
 
Guarantor
 
Consolidating
 
 
 
 
 
 
 
 
Companies, Inc.
 
Group, Inc.
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Consolidated
 
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
1

 
$
2,846

 
$
693

 
$
5,145

 
$

 
$
8,685

 
 
Restricted investments
 
855

 

 

 

 

 
855

 
 
Accounts receivable, net
 

 
83,658

 
1,527

 
26,909

 

 
112,094

 
 
Inventories, net
 

 
176,712

 
5,351

 
72,056

 
(749
)
 
253,370

 
 
Deferred income taxes, net
 
10,545

 
277

 
548

 
76

 
(97
)
 
11,349

 
 
Other current assets
 

 
7,568

 
83

 
3,003

 

 
10,654

 
 
 
Total current assets
 
11,401

 
271,061

 
8,202

 
107,189

 
(846
)
 
397,007

 
 
Intercompany notes receivable
 
105,446

 
115,317

 
(5,500
)
 
(109,817
)
 
(105,446
)
 

 
 
Intercompany interest receivable
 
9,174

 
5,239

 

 

 
(14,413
)
 

 
 
Investments in subsidiaries
 
(897,812
)
 
55,647

 
4,178

 
231,221

 
606,766

 

 
 
Property and equipment, net
 

 
100,451

 
328

 
9,623

 

 
110,402

 
 
Goodwill
 
814,413

 
350,968

 
3,240

 
33,155

 
(584,841
)
 
616,935

 
 
Other intangibles, net
 
719,793

 

 
4,521

 
40,358

 

 
764,672

 
 
Restricted investments
 
1,213

 

 

 

 

 
1,213

 
 
Deferred income taxes
 
51,457

 
143

 
(1,013
)
 
3,026

 
(53,613
)
 

 
 
Deferred financing fees, net
 

 
21,636

 

 

 

 
21,636

 
 
Investment in trust common securities
 
3,261

 

 

 

 

 
3,261

 
 
Other assets
 

 
2,533

 
25

 
1,978

 

 
4,536

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
818,346

 
$
922,995

 
$
13,981

 
$
316,733

 
$
(152,393
)
 
$
1,919,662

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$

 
$
53,043

 
$
416

 
$
23,743

 
$

 
$
77,202

 
 
Current portion of senior term loans
 

 
5,500

 

 

 

 
5,500

 
 
Current portion of capitalized lease and other obligations

 
212

 

 

 

 
212

 
 
Intercompany interest payable
 

 
9,173

 

 
5,240

 
(14,413
)
 

 
 
Accrued expenses:
 
 
 
 
 
 
 
 
 
 
 


 
 
 
Salaries and wages
 

 
6,946

 
147

 
1,222

 

 
8,315

 
 
 
Pricing allowances
 

 
3,991

 
3

 
3,192

 

 
7,186

 
 
 
Income and other taxes
 
(66
)
 
2,787

 
98

 
846

 

 
3,665

 
 
 
Interest
 

 
4,964

 

 

 

 
4,964

 
 
 
Deferred compensation
 
855

 

 

 

 

 
855

 
 
 
Other accrued expenses
 

 
8,083

 
39

 
2,667

 

 
10,789

 
 
 
 
Total current liabilities
 
789

 
94,699

 
703

 
36,910

 
(14,413
)
 
118,688

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Page 2 of 13


THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
Supplemental Consolidating Guarantor and Non-Guarantor Financial Information



Condensed Consolidating Balance Sheet (Unaudited)
As of September 30, 2015
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Successor
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guarantors
 
Issuer
 
 
 
Non-
 
 
 
 
 
 
 
 
 
 
The Hillman
 
The Hillman
 
Guarantor
 
Guarantor
 
Consolidating
 
 
 
 
 
 
 
 
Companies, Inc.
 
Group, Inc.
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Consolidated
 
  LIABILITIES AND STOCKHOLDERS' EQUITY(CONTINUED)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intercompany debt payable
 

 
105,446

 

 

 
(105,446
)
 

 
 
Long term senior term loans
 

 
537,625

 

 

 

 
537,625

 
 
Bank revolving credit
 

 
51,000

 

 

 

 
51,000

 
 
Long term capitalized leases and other obligations
 

 
268

 

 

 

 
268

 
 
Long term senior notes
 

 
330,000

 

 

 

 
330,000

 
 
Junior subordinated debentures
 
129,960

 

 

 

 

 
129,960

 
 
Deferred compensation
 
1,213

 

 

 

 

 
1,213

 
 
Deferred income taxes, net
 
300,961

 

 
1,992

 
12,394

 
(53,710
)
 
261,637

 
 
Other non-current liabilities
 

 
6,975

 

 
331

 

 
7,306

 
 
 
 
Total liabilities
 
432,923

 
1,126,013

 
2,695

 
49,635

 
(173,569
)
 
1,437,697

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commitments and Contingencies
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred Stock:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock, $.01 par, 5,000 shares authorized, none issued and outstanding at September 30, 2015
 

 

 

 

 

 

 
 
Common Stock:
 
 
 
 
 
 
 
 
 
 
 


 
 
 
Common stock, $.01 par, 5,000 shares authorized, issued and outstanding at September 30, 2015
 

 

 
50

 

 
(50
)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
Additional paid-in capital
 
633,002

 
5,842

 
10,197

 
375,287

 
(479,184
)
 
545,144

 
 
Accumulated deficit
 
(247,579
)
 
(189,086
)
 
1,039

 
(24,610
)
 
426,851

 
(33,385
)
 
 
Accumulated other comprehensive (loss) income
 

 
(19,774
)
 

 
(83,579
)
 
73,559

 
(29,794
)
 
 
 
Total stockholders' equity
 
385,423

 
(203,018
)
 
11,286

 
267,098

 
21,176

 
481,965

 
 
 
 
Total liabilities and stockholders' equity
 
$
818,346

 
$
922,995

 
$
13,981

 
$
316,733

 
$
(152,393
)
 
$
1,919,662

 
 
 
 
 
 













Page 3 of 13


THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
Supplemental Consolidating Guarantor and Non-Guarantor Financial Information



Condensed Consolidating Balance Sheet (Unaudited)
As of December 31, 2014
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Successor
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guarantors
 
Issuer
 
 
 
Non-
 
 
 
 
 
 
 
 
 
 
The Hillman
 
The Hillman
 
Guarantor
 
Guarantor
 
Consolidating
 
 
 
 
 
 
 
 
Companies, Inc.
 
Group, Inc.
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Consolidated
 
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
1

 
$
13,191

 
$
696

 
$
4,597

 
$

 
$
18,485

 
 
Restricted investments
 
494

 

 

 

 

 
494

 
 
Accounts receivable, net
 

 
65,270

 
1,175

 
23,439

 

 
89,884

 
 
Inventories, net
 

 
141,472

 
5,687

 
57,885

 
(321
)
 
204,723

 
 
Deferred income taxes, net
 
11,191

 
277

 
538

 
1,331

 
(98
)
 
13,239

 
 
Other current assets
 

 
8,142

 
124

 
2,058

 

 
10,324

 
 
 
Total current assets
 
11,686


228,352


8,220


89,310


(419
)

337,149

 
 
Intercompany notes receivable
 
105,446

 
112,977

 
(6,975
)
 
(106,002
)
 
(105,446
)
 

 
 
Intercompany interest receivable
 

 
948

 

 

 
(948
)
 

 
 
Investments in subsidiaries
 
(840,201
)
 
69,419

 
4,300

 
271,714

 
494,768

 

 
 
Property and equipment, net
 

 
101,299

 
298

 
12,934

 

 
114,531

 
 
Goodwill
 
789,870

 
338,696

 
3,240

 
37,780

 
(548,026
)
 
621,560

 
 
Other intangibles, net
 
746,714

 

 
4,682

 
47,545

 

 
798,941

 
 
Restricted investments
 
1,750

 

 

 

 

 
1,750

 
 
Deferred income taxes
 
53,715

 
143

 
(477
)
 
(2
)
 
(53,379
)
 

 
 
Deferred financing fees, net
 

 
24,407

 

 

 

 
24,407

 
 
Investment in trust common securities
 
3,261

 

 

 

 

 
3,261

 
 
Other assets
 

 
1,317

 
25

 
72

 

 
1,414

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
Total assets
 
$
872,241


$
877,558


$
13,313


$
353,351


$
(213,450
)

$
1,903,013

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 

 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 

 
 
Accounts payable
 
$

 
$
53,487

 
$
422

 
$
12,553

 
$

 
$
66,462

 
 
Current portion of senior term loans
 

 
5,500

 

 

 

 
5,500

 
 
Current portion of capitalized lease and other obligations

 
207

 

 

 

 
207

 
 
Intercompany interest payable
 

 

 

 
948

 
(948
)
 

 
 
Accrued expenses:
 
 
 
 
 
 
 
 
 
 
 

 
 
 
Salaries and wages
 

 
4,144

 
120

 
983

 

 
5,247

 
 
 
Pricing allowances
 

 
3,621

 
3

 
3,038

 

 
6,662

 
 
 
Income and other taxes
 
(581
)
 
2,325

 
37

 
1,520

 

 
3,301

 
 
 
Interest
 

 
10,587

 

 

 

 
10,587

 
 
 
Deferred compensation
 
494

 

 

 

 

 
494

 
 
 
Other accrued expenses
 

 
6,990

 
40

 
393

 

 
7,423

 
 
 
 
Total current liabilities
 
(87
)

86,861


622


19,435


(948
)

105,883

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Page 4 of 13


THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
Supplemental Consolidating Guarantor and Non-Guarantor Financial Information



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Balance Sheet (Unaudited)
As of December 31, 2014
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Successor
 
 
 
 
 
 
Guarantors
 
Issuer
 
 
 
Non-
 
 
 
 
 
 
 
 
 
 
The Hillman
 
The Hillman
 
Guarantor
 
Guarantor
 
Consolidating
 
 
 
 
 
 
 
 
Companies, Inc.
 
Group, Inc.
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Consolidated
 
  LIABILITIES AND STOCKHOLDERS' EQUITY(CONTINUED)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intercompany debt payable
 

 
105,446

 

 

 
(105,446
)
 

 
 
Long term senior term loans
 

 
541,750

 

 

 

 
541,750

 
 
Long term capitalized leases and other obligations
 

 
400

 

 

 

 
400

 
 
Long term senior notes
 

 
330,000

 

 

 

 
330,000

 
 
Junior subordinated debentures
 
130,685

 

 

 

 

 
130,685

 
 
Deferred compensation
 
1,750

 

 

 

 

 
1,750

 
 
Deferred income taxes, net
 
310,804

 

 
2,037

 
14,417

 
(53,477
)
 
273,781

 
 
Other non-current liabilities
 

 
4,359

 

 
1,262

 

 
5,621

 
 
 
 
Total liabilities
 
443,152


1,068,816


2,659


35,114


(159,871
)

1,389,870

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
Commitments and Contingencies
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
Stockholders' Equity:
 
 
 
 
 
 
 
 
 
 
 


 
 
Preferred Stock:
 
 
 
 
 
 
 
 
 
 
 


 
 
 
Preferred stock, $.01 par, 5,000 shares authorized, none issued and outstanding at December 31, 2014
 

 

 

 

 

 

 
 
Common Stock:
 
 
 
 
 
 
 
 
 
 
 


 
 
 
Common stock, $.01 par, 5,000 shares authorized, issued and outstanding at December 31, 2014
 

 

 
50

 

 
(50
)
 

 
 
Additional paid-in capital
 
632,602

 
5,842

 
10,197

 
375,287

 
(479,324
)
 
544,604

 
 
Accumulated deficit
 
(203,513
)
 
(188,780
)
 
407

 
(11,484
)
 
384,433

 
(18,937
)
 
 
Accumulated other comprehensive (loss) income
 

 
(8,320
)
 

 
(45,566
)
 
41,362

 
(12,524
)
 
 
 
Total stockholders' equity
 
429,089


(191,258
)

10,654


318,237


(53,579
)

513,143

 
 
 
 
Total liabilities and stockholders' equity
 
$
872,241


$
877,558


$
13,313


$
353,351


$
(213,450
)

$
1,903,013

 
 
 
 
 
 













Page 5 of 13


THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
Supplemental Consolidating Guarantor and Non-Guarantor Financial Information



Condensed Consolidating Statements of Comprehensive Loss (Unaudited)
For the three months ended September 30, 2015
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Successor
 
 
 
 
 
Guarantors
 
Issuer
 
 
 
Non-
 
 
 
 
 
 

 
 
The Hillman
 
The Hillman
 
Guarantor
 
Guarantor
 
Consolidating
 
 
 
 
 
 
 
Companies, Inc.
 
Group, Inc.
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
$

 
$
167,260

 
$
5,116

 
$
37,557

 
$

 
$
209,933

 
Cost of sales (exclusive of depreciation and
 
 
 
 
 
 
 
 
 
 
 
 
 
 
amortization shown separately below)
 

 
84,928

 
3,575

 
25,337

 

 
113,840

 
Selling, general and administrative expenses
 
312

 
51,820

 
990

 
12,755

 

 
65,877

 
Depreciation
 

 
7,144

 
19

 
448

 

 
7,611

 
Amortization
 
8,974

 

 
53

 
461

 

 
9,488

 
Intercompany administrative (income) expense
 

 
(109
)
 

 
109

 

 

 
Management fees to related party
 

 
156

 

 

 

 
156

 
Other expense, net
 
111

 
1,252

 
14

 
1,151

 

 
2,528

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income from operations
 
(9,397
)
 
22,069

 
465

 
(2,704
)
 

 
10,433

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intercompany interest (income) expense
 
(3,058
)
 
3,058

 

 

 

 

 
Interest (income) expense, net
 
(246
)
 
11,443

 

 
1,406

 

 
12,603

 
Interest expense on junior subordinated debentures
 
3,152

 

 

 

 

 
3,152

 
Investment income on trust common securities
 
(95
)
 

 

 

 

 
(95
)
 
 
(Loss) income before equity in subsidiaries' income
(9,150
)
 
7,568

 
465

 
(4,110
)
 

 
(5,227
)
 
Equity in subsidiaries' income (loss)
 
5,127

 
(2,441
)
 

 

 
(2,686
)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income before income taxes
 
(4,023
)
 
5,127

 
465

 
(4,110
)
 
(2,686
)
 
(5,227
)
 
 
Income tax (benefit) provision
 
(3,983
)
 

 
393

 
(1,597
)
 

 
(5,187
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
(40
)
 
$
5,127

 
$
72

 
$
(2,513
)
 
$
(2,686
)
 
$
(40
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive (loss) income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
 

 
(4,304
)
 

 
(13,908
)
 
11,827

 
(6,385
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total comprehensive income (loss)
 
$
(40
)
 
$
823

 
$
72

 
$
(16,421
)
 
$
9,141

 
$
(6,425
)


Page 6 of 13


THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
Supplemental Consolidating Guarantor and Non-Guarantor Financial Information



Condensed Consolidating Statements of Comprehensive Income (Unaudited)
For the three months ended September 30, 2014 (Adjusted)
(Amounts in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Successor
 
 
 
 
 
Guarantors
 
Issuer
 
 
 
Non-
 
 
 
 
 
 
 
 
 
The Hillman
 
The Hillman
 
Guarantor
 
Guarantor
 
Consolidating
 
 
 
 
 
 
 
Companies, Inc.
 
Group, Inc.
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 

 
$
151,167

 
$
5,233

 
$
39,556

 

 
$
195,956

 
Cost of sales (exclusive of depreciation and
 
 
 
 
 
 
 
 
 
 
 

 
 
amortization shown separately below)
 

 
71,287

 
3,721

 
24,647

 

 
99,655

 
Selling, general and administrative expenses
 
332

 
45,556

 
995

 
11,107

 

 
57,990

 
Transaction, acquisition and integration expenses
 

 
79

 

 

 

 
79

 
Depreciation
 

 
8,254

 
18

 
705

 

 
8,977

 
Amortization
 
8,202

 
772

 
54

 
552

 

 
9,580

 
Intercompany administrative (income) expense
 

 
(108
)
 

 
108

 

 

 
Management and transaction fees to related party
 

 
138

 

 

 

 
138

 
Other expense (income)
 
5

 
(59
)
 

 
(972
)
 

 
(1,026
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income from operations
 
(8,539
)
 
25,248

 
445

 
3,409

 

 
20,563

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intercompany interest (income) expense
 
(3,057
)
 
3,057

 

 

 

 

 
Interest (income) expense, net
 
(226
)
 
13,137

 

 
1,763

 

 
14,674

 
Interest expense on junior subordinated debentures
 
3,152

 

 

 

 

 
3,152

 
Investment income on trust common securities
 
(94
)
 

 

 

 

 
(94
)
 
 
(Loss) income before equity in subsidiaries' income
(8,314
)
 
9,054

 
445

 
1,646

 

 
2,831

 
Equity in subsidiaries' income (loss)
 
10,554

 
891

 

 

 
(11,445
)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
 
2,240

 
9,945

 
445

 
1,646

 
(11,445
)
 
2,831

 
 
Income tax provision
 
1,306

 
(609
)
 
303

 
897

 

 
1,897

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
934

 
$
10,554

 
$
142

 
$
749

 
$
(11,445
)
 
$
934

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive (loss) income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
 

 
(4,766
)
 

 
(12,209
)
 
12,095

 
(4,880
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total comprehensive income (loss)
 
$
934

 
$
5,788

 
$
142

 
$
(11,460
)
 
$
650

 
$
(3,946
)


Page 7 of 13


THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
Supplemental Consolidating Guarantor and Non-Guarantor Financial Information



Condensed Consolidating Statements of Comprehensive Loss (Unaudited)
For the nine months ended September 30, 2015
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Successor
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guarantors
 
Issuer
 
 
 
Non-
 
 
 
 
 
 
 
 
 
The Hillman
 
The Hillman
 
Guarantor
 
Guarantor
 
Consolidating
 
 
 
 
 
 
 
Companies, Inc.
 
Group, Inc.
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
$

 
$
479,202

 
$
15,857

 
$
112,388

 
$

 
$
607,447

 
Cost of sales (exclusive of depreciation and
 
 
 
 
 
 
 
 
 
 
 

 
 
amortization shown separately below)
 

 
250,055

 
11,306

 
74,814

 

 
336,175

 
Selling, general and administrative expenses
 
612

 
152,400

 
3,042

 
36,118

 

 
192,172

 
Transaction, acquisition and integration expenses
 

 
257

 

 

 

 
257

 
Depreciation
 

 
20,612

 
54

 
1,453

 

 
22,119

 
Amortization
 
26,920

 

 
161

 
1,442

 

 
28,523

 
Intercompany administrative (income) expense
 

 
(326
)
 

 
326

 

 

 
Management fees to related party
 

 
462

 

 

 

 
462

 
Other expense
 
68

 
2,514

 
14

 
444

 

 
3,040

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
(Loss) income from operations
 
(27,600
)

53,228


1,280


(2,209
)



24,699

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Intercompany interest (income) expense
 
(9,173
)
 
9,173

 

 

 

 

 
Interest (income) expense, net
 
(724
)
 
33,950

 

 
4,621

 

 
37,847

 
Interest expense on junior subordinated debentures
 
9,457

 

 

 

 

 
9,457

 
Investment income on trust common securities
 
(284
)
 

 

 

 

 
(284
)
 
 
(Loss) income before equity in subsidiaries' income
(26,876
)

10,105


1,280


(6,830
)



(22,321
)
 
Equity in subsidiaries' income (loss)
 
6,029

 
(4,076
)
 

 

 
(1,953
)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
(Loss) income before income taxes
 
(20,847
)

6,029


1,280


(6,830
)

(1,953
)

(22,321
)
 
 
Income tax (benefit) provision
 
(6,399
)
 

 
526

 
(2,000
)
 

 
(7,873
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Net (loss) income
 
$
(14,448
)

$
6,029


$
754


$
(4,830
)

$
(1,953
)

$
(14,448
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Other comprehensive (loss) income:
 
 
 

 
 
 
 
 
 
 

 
 
Foreign currency translation adjustments
 

 
(11,454
)
 

 
(38,013
)
 
32,197

 
(17,270
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Total comprehensive (loss) income
 
$
(14,448
)

$
(5,425
)

$
754


$
(42,843
)

$
30,244


$
(31,718
)


Page 8 of 13


THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
Supplemental Consolidating Guarantor and Non-Guarantor Financial Information



Condensed Consolidating Statements of Comprehensive Income (Unaudited)
For the period from June 30, 2014 through September 30, 2014 (Adjusted)
(Amounts in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Successor
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guarantors
 
Issuer
 
 
 
Non-
 
 
 
 
 
 
 
 
 
The Hillman
 
The Hillman
 
Guarantor
 
Guarantor
 
Consolidating
 
 
 
 
 
 
 
Companies, Inc.
 
Group, Inc.
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 

 
$
151,167

 
$
5,233

 
$
39,556

 

 
$
195,956

 
Cost of sales (exclusive of depreciation and
 
 
 
 
 
 
 
 
 
 
 
 
 
 
amortization shown separately below)
 

 
71,287

 
3,721

 
24,647

 

 
99,655

 
Selling, general and administrative expenses
 
332

 
45,556

 
995

 
11,107

 

 
57,990

 
Transaction, acquisition and integration expenses
 
22,018

 
79

 

 

 

 
22,097

 
Depreciation
 

 
8,254

 
18

 
705

 

 
8,977

 
Amortization
 
8,202

 
772

 
54

 
552

 

 
9,580

 
Intercompany administrative (income) expense
 

 
(108
)
 

 
108

 

 

 
Management and transaction fees to related party
 

 
138

 

 

 

 
138

 
Other expense (income)
 
5

 
(59
)
 

 
(972
)
 

 
(1,026
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income from operations
 
(30,557
)
 
25,248

 
445

 
3,409

 

 
(1,455
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intercompany interest (income) expense
 
(3,057
)
 
3,057

 

 

 

 

 
Interest (income) expense, net
 
(226
)
 
13,137

 

 
1,763

 

 
14,674

 
Interest expense on junior subordinated debentures
 
3,152

 

 

 

 

 
3,152

 
Investment income on trust common securities
 
(94
)
 

 

 

 

 
(94
)
 
 
(Loss) income before equity in subsidiaries' income
(30,332
)
 
9,054

 
445

 
1,646

 

 
(19,187
)
 
Equity in subsidiaries' income (loss)
 
10,555

 
891

 

 

 
(11,446
)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
 
(19,777
)
 
9,945

 
445

 
1,646

 
(11,446
)
 
(19,187
)
 
 
Income tax (benefit) provision
 
(4,921
)
 
(610
)
 
303

 
897

 

 
(4,331
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (loss) income
 
$
(14,856
)
 
$
10,555

 
$
142

 
$
749

 
$
(11,446
)
 
$
(14,856
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive (loss) income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
 

 
(4,766
)
 

 
(12,209
)
 
12,095

 
(4,880
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total comprehensive (loss) income
 
$
(14,856
)
 
$
5,789

 
$
142

 
$
(11,460
)
 
$
649

 
$
(19,736
)


Page 9 of 13


THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
Supplemental Consolidating Guarantor and Non-Guarantor Financial Information



Condensed Consolidating Statements of Comprehensive Income (Loss) (Unaudited)
For the six months ended June 29, 2014
(Amounts in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Predecessor
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guarantors
 
Issuer
 
 
 
Non-
 
 
 
 
 
 
 
 
 
The Hillman
 
The Hillman
 
Guarantor
 
Guarantor
 
Consolidating
 
 
 
 
 
 
 
Companies, Inc.
 
Group, Inc.
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 

 
$
263,194

 
$
16,053

 
$
78,130

 

 
357,377

 
Cost of sales (exclusive of depreciation and
 
 
 
 
 
 
 
 
 
 
 

 
 
amortization shown separately below)
 

 
123,971

 
11,185

 
48,186

 

 
183,342

 
Selling, general and administrative expenses
 
39,324

 
90,090

 
3,656

 
23,692

 

 
156,762

 
Transaction, acquisition and integration expenses
 

 
31,681

 

 

 

 
31,681

 
Depreciation
 

 
12,789

 
48

 
1,312

 

 
14,149

 
Amortization
 
9,029

 
1,543

 

 
521

 

 
11,093

 
Intercompany administrative (income) expense
 

 
(216
)
 

 
216

 

 

 
Management and transaction fees to related party
 

 
15

 

 

 

 
15

 
Other (income) expense, net
 
(95
)
 
151

 
10

 
(343
)
 

 
(277
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
(Loss) income from operations
 
(48,258
)

3,170


1,154


4,546



 
(39,388
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Intercompany interest (income) expense
 
(6,117
)
 
6,117

 

 

 

 

 
Interest (income) expense, net
 
(103
)
 
19,802

 

 
3,451

 

 
23,150

 
Interest expense on junior subordinated debentures
 
6,305

 

 

 

 

 
6,305

 
Investment income on trust common securities
 
(189
)
 

 

 

 

 
(189
)
 
 
(Loss) income before equity in subsidiaries' income
(48,154
)

(22,749
)

1,154


1,095



 
(68,654
)
 
Equity in subsidiaries' (loss) income
 
(21,498
)
 
1,251

 

 

 
20,247

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
(Loss) income before income taxes
 
(69,652
)

(21,498
)

1,154


1,095


20,247

 
(68,654
)
 
 
Income tax (benefit) provision
 
(25,126
)
 

 
426

 
572

 

 
(24,128
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Net (loss) income
 
$
(44,526
)

$
(21,498
)

$
728


$
523


$
20,247

 
$
(44,526
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Other comprehensive (loss) income:
 
 
 
 
 
 
 
 
 
 
 

 
 
Foreign currency translation adjustments
 

 
(151
)
 

 
(102
)
 
158

 
(95
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Total comprehensive (loss) income
 
$
(44,526
)

$
(21,649
)

$
728


$
421


$
20,405

 
$
(44,621
)


Page 10 of 13


THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
Supplemental Consolidating Guarantor and Non-Guarantor Financial Information



 
Consolidating Statement of Cash Flows (Unaudited)
 
For the nine months ended September 30, 2015
 
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Successor
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guarantors
 
Issuer
 
 
 
Non-
 
 
 
 
 
 
 
 
 
 
The Hillman
 
The Hillman
 
Guarantor
 
Guarantor
 
Consolidating
 
 
 
 
 
 
 
 
Companies, Inc.
 
Group, Inc.
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (loss) income
 
$
(20,477
)
 
$
10,105

 
$
754

 
$
(4,830
)
 
$

 
$
(14,448
)
 
 
Adjustments to reconcile net (loss) income to net cash
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
provided by (used for) operating activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
26,949

 
20,612

 
215

 
2,866

 

 
50,642

 
 
 
Gain on sale of property and equipment
 

 
288

 
30

 
(869
)
 

 
(551
)
 
 
 
Deferred income tax (benefit) provision
 
(6,939
)
 
277

 
481

 
(2,278
)
 

 
(8,459
)
 
 
 
Deferred financing and original issue discount amortization
 
(725
)
 
2,771

 

 

 

 
2,046

 
 
 
Stock-based compensation expense
 
680

 

 

 

 

 
680

 
 
 
Other non-cash interest and change in value of interest rate swap
 

 
2,528

 

 

 

 
2,528

 
 
 
Changes in operating items:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts receivable
 

 
(18,388
)
 
(352
)
 
(6,149
)
 

 
(24,889
)
 
 
 
 
Inventories
 

 
(34,812
)
 
336

 
(21,624
)
 

 
(56,100
)
 
 
 
 
Other assets
 
(9,173
)
 
(9,951
)
 
(1,434
)
 
19,046

 

 
(1,512
)
 
 
 
 
Accounts payable
 

 
(444
)
 
(6
)
 
12,404

 

 
11,954

 
 
 
 
Other accrued liabilities
 
515

 
(896
)
 
87

 
1,823

 

 
1,529

 
 
 
 
Other items, net
 
9,310

 
(9,512
)
 

 
(305
)
 

 
(507
)
 
 
 
Net cash provided by (used for) operating activities
 
140

 
(37,422
)
 
111

 
84

 

 
(37,087
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from sale of property and equipment
 

 

 

 
2,230

 

 
2,230

 
 
Capital expenditures
 

 
(19,791
)
 
(114
)
 
(1,057
)
 

 
(20,962
)
 
 
 
Net cash (used for) provided by investing activities
 


(19,791
)

(114
)

1,173




(18,732
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Repayments of senior term loans
 

 
(4,125
)
 

 

 

 
(4,125
)
 
 
Borrowings on revolving credit loans
 

 
53,000

 

 

 

 
53,000

 
 
Repaymnets of revolving credit loans
 

 
(2,000
)
 

 

 

 
(2,000
)
 
 
Principal payments under capitalized lease obligations
 

 
(127
)
 

 

 

 
(127
)
 
 
Proceeds from Holdco sale of stock
 
400

 

 

 

 

 
400

 
 
Purchase of Holdco stock from a former member of management
 
(540
)
 

 

 

 

 
(540
)
 
 
 
Net cash (used for) provided by financing activities
 
(140
)
 
46,748

 

 

 

 
46,608

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effect of exchange rate changes on cash
 

 
120

 

 
(709
)
 

 
(589
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (decrease) increase in cash and cash equivalents
 

 
(10,345
)
 
(3
)
 
548

 

 
(9,800
)
 
Cash and cash equivalents at beginning of period
 
1

 
13,191

 
696

 
4,597

 

 
18,485

 
Cash and cash equivalents at end of period
 
$
1

 
$
2,846

 
$
693

 
$
5,145

 
$

 
$
8,685



Page 11 of 13


THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
Supplemental Consolidating Guarantor and Non-Guarantor Financial Information



 
Condensed Consolidating Statement of Cash Flows (Unaudited)
 
Period from June 30, 2014 through September 30, 2014 (Adjusted)
 
(Amounts in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Successor
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guarantors
 
Issuer
 
 
 
Non-
 
 
 
 
 
 
 
 
 
 
The Hillman
 
The Hillman
 
Guarantor
 
Guarantor
 
Consolidating
 
 
 
 
 
 
 
 
Companies, Inc.
 
Group, Inc.
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (loss) income
 
$
(3,648
)
 
$
(12,099
)
 
142

 
749

 

 
$
(14,856
)
 
 
Adjustments to reconcile net (loss) income to net cash provided by (used for) operating activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
8,204

 
9,024

 
72

 
1,257

 

 
18,557

 
 
 
Loss on sale of property and equipment
 

 
20

 

 

 

 
20

 
 
 
Deferred income tax (benefit) provision
 
(2,236
)
 
(875
)
 
(29
)
 
1,282

 

 
(1,858
)
 
 
 
Deferred financing and original issue discount amortization
 
226

 
1,024

 

 

 

 
1,250

 
 
 
Stock-based compensation expense
 
336

 

 

 

 

 
336

 
 
 
Other non-cash interest expense and change in value of interest rate swap
 

 
137

 

 

 

 
137

 
 
 
Changes in operating items:
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
Accounts receivable
 

 
(294
)
 
336

 
1,885

 

 
1,927

 
 
 
 
Inventories
 

 
(5,888
)
 
(153
)
 
(1,505
)
 

 
(7,546
)
 
 
 
 
Other assets
 

 
1,620

 
746

 
(12,410
)
 

 
(10,044
)
 
 
 
 
Accounts payable
 

 
(5,700
)
 
(503
)
 
6,691

 

 
488

 
 
 
 
Other accrued liabilities
 
(135
)
 
(24,954
)
 
14

 
(2,766
)
 

 
(27,841
)
 
 
 
 
Other items, net
 
182,940

 
(181,335
)
 
(739
)
 
41

 

 
907

 
 
 
Net cash provided by (used for) operating activities
 
185,687

 
(219,320
)
 
(114
)
 
(4,776
)
 

 
(38,523
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase of predecessor equity securities
 
(729,616
)
 

 

 

 

 
(729,616
)
 
 
Capital expenditures
 

 
(5,729
)
 
(24
)
 
(387
)
 

 
(6,140
)
 
 
 
Net cash used for investing activities
 
(729,616
)
 
(5,729
)
 
(24
)
 
(387
)
 

 
(735,756
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Borrowings of senior term loans
 

 
550,000

 

 

 

 
550,000

 
 
Repayments of senior term loans
 

 
(384,407
)
 

 

 

 
(384,407
)
 
 
Borrowings of senior notes
 

 
330,000

 

 

 

 
330,000

 
 
Repayments of senior notes
 

 
(265,000
)
 

 

 

 
(265,000
)
 
 
Proceeds from sale of successor equity securities
 
542,929

 

 

 

 

 
542,929

 
 
Capital contribution from board member
 
1,000

 

 

 

 

 
1,000

 
 
Financing fees, net
 

 
(26,355
)
 

 

 

 
(26,355
)
 
 
Borrowings on revolving credit loans
 

 
16,000

 

 

 

 
16,000

 
 
Repayments of revolving credit loans
 

 
(13,000
)
 

 

 

 
(13,000
)
 
 
Principal payments under capital lease obligations
 

 
(47
)
 

 

 

 
(47
)
 
 
 
Net cash provided by financing activities
 
543,929

 
207,191

 

 

 

 
751,120

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effect of exchange rate changes on cash
 

 
1,028

 

 
(338
)
 

 
690

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (decrease) increase in cash and cash equivalents
 

 
(16,830
)
 
(138
)
 
(5,501
)
 

 
(22,469
)
 
Cash and cash equivalents at beginning of period
 
1

 
21,983

 
668

 
10,378

 

 
33,030

 
Cash and cash equivalents at end of period
 
$
1

 
$
5,153

 
$
530

 
$
4,877

 

 
$
10,561


Page 12 of 13


THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
Supplemental Consolidating Guarantor and Non-Guarantor Financial Information



 
Consolidating Statement of Cash Flows (Unaudited)
 
For the six months ended June 29, 2014
 
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Predecessor
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guarantors
 
Issuer
 
 
 
Non-
 
 
 
 
 
 
 
 
 
 
The Hillman
 
The Hillman
 
Guarantor
 
Guarantor
 
Consolidating
 
 
 
 
 
 
 
 
Companies, Inc.
 
Group, Inc.
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (loss) income
 
$
(23,029
)
 
$
(22,749
)
 
$
728

 
$
524

 
$

 
$
(44,526
)
 
 
Adjustments to reconcile net (loss) income to net cash provided by (used for) operating activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
9,029

 
14,332

 
48

 
1,833

 

 
25,242

 
 
 
Deferred income tax (benefit) provision
 
(24,245
)
 

 
206

 
(419
)
 

 
(24,458
)
 
 
 
Deferred financing and original issue discount amortization
 
(103
)
 
1,477

 

 

 

 
1,374

 
 
 
Stock-based compensation expense
 
39,229

 

 

 

 

 
39,229

 
 
 
Changes in operating items:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts receivable
 

 
(17,638
)
 
(633
)
 
(6,996
)
 

 
(25,267
)
 
 
 
 
Inventories
 

 
(17,769
)
 
(666
)
 
584

 

 
(17,851
)
 
 
 
 
Other assets
 

 
(3,199
)
 
678

 
11,320

 

 
8,799

 
 
 
 
Accounts payable
 

 
25,944

 
236

 
(5,369
)
 

 
20,811

 
 
 
 
Interest payable on junior subordinated debentures
 
1,019

 

 

 

 

 
1,019

 
 
 
 
Other accrued liabilities
 
(123
)
 
28,651

 
(4
)
 
2,659

 

 
31,183

 
 
 
 
Other items, net
 
(2,251
)
 
(1,168
)
 
(659
)
 
235

 

 
(3,843
)
 
 
 
Net cash (used for) provided by operating activities
 
(474
)
 
7,881

 
(66
)
 
4,371

 

 
11,712

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 

 
(12,224
)
 
(57
)
 
(652
)
 

 
(12,933
)
 
 
 
Net cash (used for) investing activities
 

 
(12,224
)
 
(57
)
 
(652
)
 

 
(12,933
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Repayments of senior term loans
 

 
(992
)
 

 

 

 
(992
)
 
 
Principal payments under capitalized lease obligations
 

 
(84
)
 

 

 

 
(84
)
 
 
Proceeds from exercise of stock options
 
474

 

 

 

 

 
474

 
 
 
Net cash provided by (used for) financing activities
 
474

 
(1,076
)
 

 

 

 
(602
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effect of exchange rate changes on cash
 

 
(151
)
 

 
35

 

 
(116
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (decrease) increase in cash and cash equivalents
 

 
(5,570
)
 
(123
)
 
3,754

 

 
(1,939
)
 
Cash and cash equivalents at beginning of period
 
1

 
27,553

 
791

 
6,624

 

 
34,969

 
Cash and cash equivalents at end of period
 
$
1

 
$
21,983

 
$
668

 
$
10,378

 
$

 
$
33,030



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