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.

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 June 30, 2016, 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 income (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 June 30, 2016
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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

 
$
4,052

 
$
333

 
$
11,548

 
$
—

 
$
15,934

 
 
Restricted investments
 
260

 
—

 
—

 
—

 
—

 
260

 
 
Accounts receivable, net
 
—

 
65,714

 
1,542

 
21,740

 
—

 
88,996

 
 
Inventories, net
 
—

 
160,261

 
5,137

 
65,326

 
(717
)
 
230,007

 
 
Other current assets
 
—

 
10,575

 
96

 
2,178

 
—

 
12,849

 
 
 
Total current assets
 
261

 
240,602

 
7,108

 
100,792

 
(717
)
 
348,046

 
 
Intercompany notes receivable
 
105,446

 
121,171

 
(3,541
)
 
(121,983
)
 
(101,093
)
 
—

 
 
Intercompany interest receivable
 
6,116

 
9,740

 
—

 
—

 
(15,856
)
 
—

 
 
Investments in subsidiaries
 
(904,980
)
 
55,647

 
4,178

 
234,865

 
610,290

 
—

 
 
Property and equipment, net
 
—

 
101,219

 
277

 
9,874

 
—

 
111,370

 
 
Goodwill
 
814,413

 
350,968

 
3,240

 
33,270

 
(584,841
)
 
617,050

 
 
Other intangibles, net
 
692,874

 
—

 
4,360

 
39,122

 
—

 
736,356

 
 
Restricted investments
 
1,286

 
—

 
—

 
—

 
—

 
1,286

 
 
Deferred financing fees, net
 
—

 
1,083

 
—

 
—

 
—

 
1,083

 
 
Investment in trust common securities
 
3,261

 
—

 
—

 
—

 
—

 
3,261

 
 
Other assets
 
—

 
3,012

 
25

 
3,200

 
—

 
6,237

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
718,677

 
$
883,442

 
$
15,647

 
$
299,140

 
$
(92,217
)
 
$
1,824,689

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$
—

 
$
61,469

 
$
662

 
$
10,943

 
$
—

 
$
73,074

 
 
Current portion of senior term loans
 
—

 
5,500

 
—

 
—

 
—

 
5,500

 
 
Current portion of capitalized lease and other obligations
—

 
201

 
—

 
—

 
—

 
201

 
 
Intercompany interest payable
 
—

 
6,116

 
—

 
9,740

 
(15,856
)
 
—

 
 
Accrued expenses:
 
 
 
 
 
 
 
 
 
 
 


 
 
 
Salaries and wages
 
—

 
5,221

 
117

 
942

 
—

 
6,280

 
 
 
Pricing allowances
 
—

 
3,270

 
2

 
1,482

 
—

 
4,754

 
 
 
Income and other taxes
 
48

 
2,471

 
79

 
1,238

 
—

 
3,836

 
 
 
Interest
 
—

 
9,983

 
—

 
—

 
—

 
9,983

 
 
 
Deferred compensation
 
260

 
—

 
—

 
—

 
—

 
260

 
 
 
Other accrued expenses
 
—

 
7,459

 
39

 
2,299

 
—

 
9,797

 
 
 
 
Total current liabilities
 
308

 
101,690

 
899

 
26,644

 
(15,856
)
 
113,685

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Page 2 of 11



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



Condensed Consolidating Balance Sheet (Unaudited)
As of June 30, 2016
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
—

 
522,386

 
—

 
—

 
—

 
522,386

 
 
Bank revolving credit
 
—

 
16,000

 
—

 
—

 
—

 
16,000

 
 
Long term capitalized leases and other obligations
 
—

 
218

 
—

 
—

 
—

 
218

 
 
Long term senior notes
 
—

 
323,332

 
—

 
—

 
—

 
323,332

 
 
Junior subordinated debentures
 
129,186

 
—

 
—

 
—

 
—

 
129,186

 
 
Deferred compensation
 
1,286

 
—

 
—

 
—

 
—

 
1,286

 
 
Deferred income taxes, net
 
230,557

 
—

 
2,785

 
8,838

 
—

 
242,180

 
 
Other non-current liabilities
 
—

 
6,622

 
—

 
336

 
—

 
6,958

 
 
 
 
Total liabilities
 
361,337

 
1,075,694

 
3,684

 
35,818

 
(121,302
)
 
1,355,231

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commitments and Contingencies
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity:
 











 
 
Preferred Stock:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock, $.01 par, 5,000 shares authorized, none issued and outstanding at March 31, 2016
 
—

 
—

 
—

 
—

 
—

 
—

 
 
Common Stock:
 
 
 
 
 
 
 
 
 
 
 


 
 
 
Common stock, $.01 par, 5,000 shares authorized, issued and outstanding at March 31, 2016
 
—

 
—

 
50

 
—

 
(50
)
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
Additional paid-in capital
 
634,730

 
5,842

 
10,197

 
375,287

 
(479,184
)
 
546,872

 
 
Accumulated deficit
 
(277,390
)
 
(179,752
)
 
1,716

 
(31,096
)
 
438,404

 
(48,118
)
 
 
Accumulated other comprehensive (loss) income
 
—

 
(18,342
)
 
—

 
(80,869
)
 
69,915

 
(29,296
)
 
 
 
Total stockholders' equity
 
357,340

 
(192,252
)
 
11,963

 
263,322

 
29,085

 
469,458

 
 
 
 
Total liabilities and stockholders' equity
 
$
718,677

 
$
883,442

 
$
15,647

 
$
299,140

 
$
(92,217
)
 
$
1,824,689



Page 3 of 11



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



Condensed Consolidating Balance Sheet (Unaudited)
As of December 31, 2015
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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

 
$
3,023

 
$
612

 
$
7,749

 
$
—

 
$
11,385

 
 
Restricted investments
 
639

 
—

 
—

 
—

 
—

 
639

 
 
Accounts receivable, net
 
—

 
55,665

 
1,020

 
16,896

 
—

 
73,581

 
 
Inventories, net
 
—

 
171,999

 
5,447

 
67,040

 
(803
)
 
243,683

 
 
Deferred income taxes, net
 
12,666

 
277

 
501

 
604

 
(167
)
 
13,881

 
 
Other current assets
 
—

 
7,671

 
75

 
2,156

 
—

 
9,902

 
 
 
Total current assets
 
13,306


238,635


7,655


94,445


(970
)

353,071

 
 
Intercompany notes receivable
 
105,446

 
117,368

 
(4,645
)
 
(112,723
)
 
(105,446
)
 
—

 
 
Intercompany interest receivable
 
—

 
6,359

 
—

 
—

 
(6,359
)
 
—

 
 
Investments in subsidiaries
 
(891,702
)
 
55,647

 
4,178

 
220,764

 
611,113

 
—

 
 
Property and equipment, net
 
—

 
101,034

 
308

 
9,050

 
—

 
110,392

 
 
Goodwill
 
814,413

 
350,968

 
3,240

 
31,735

 
(584,841
)
 
615,515

 
 
Other intangibles, net
 
710,820

 
—

 
4,467

 
38,196

 
—

 
753,483

 
 
Restricted investments
 
1,382

 
—

 
—

 
—

 
—

 
1,382

 
 
Deferred income taxes
 
52,604

 
143

 
(979
)
 
2,909

 
(54,677
)
 
—

 
 
Deferred financing fees, net
 
—

 
1,263

 
—

 
—

 
—

 
1,263

 
 
Investment in trust common securities
 
3,261

 
—

 
—

 
—

 
—

 
3,261

 
 
Other assets
 
—

 
3,102

 
25

 
3,505

 
—

 
6,632

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
Total assets
 
$
809,530


$
874,519


$
14,249


$
287,881


$
(141,180
)

$
1,844,999

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 

 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 

 
 
Accounts payable
 
$
—

 
$
51,095

 
$
710

 
$
13,203

 
$
—

 
$
65,008

 
 
Current portion of senior term loans
 
—

 
5,500

 
—

 
—

 
—

 
5,500

 
 
Current portion of capitalized lease and other obligations
—

 
217

 
—

 
—

 
—

 
217

 
 
Intercompany interest payable
 
—

 
—

 
—

 
6,359

 
(6,359
)
 
—

 
 
Accrued expenses:
 
 
 
 
 
 
 
 
 
 
 

 
 
 
Salaries and wages
 
—

 
4,861

 
94

 
453

 
—

 
5,408

 
 
 
Pricing allowances
 
—

 
3,991

 
3

 
3,222

 
—

 
7,216

 
 
 
Income and other taxes
 
(357
)
 
2,497

 
28

 
814

 
—

 
2,982

 
 
 
Interest
 
—

 
9,843

 
—

 
—

 
—

 
9,843

 
 
 
Deferred compensation
 
639

 
—

 
—

 
—

 
—

 
639

 
 
 
Other accrued expenses
 
—

 
6,325

 
38

 
1,546

 
—

 
7,909

 
 
 
 
Total current liabilities
 
282


84,329


873


25,597


(6,359
)

104,722

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Page 4 of 11



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



Condensed Consolidating Balance Sheet (Unaudited)
As of December 31, 2015
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
—

 
524,025

 
—

 
—

 
—

 
524,025

 
 
Bank revolving credit
 
—

 
28,000

 
—

 
—

 
—

 
28,000

 
 
Long term capitalized leases and other obligations
 
—

 
310

 
—

 
—

 
—

 
310

 
 
Long term senior notes
 
—

 
322,777

 
—

 
—

 
—

 
322,777

 
 
Junior subordinated debentures
 
129,707

 
—

 
—

 
—

 
—

 
129,707

 
 
Deferred compensation
 
1,382

 
—

 
—

 
—

 
—

 
1,382

 
 
Deferred income taxes, net
 
300,008

 
—

 
1,967

 
12,082

 
(54,844
)
 
259,213

 
 
Other non-current liabilities
 
—

 
6,003

 
—

 
316

 
—

 
6,319

 
 
 
 
Total liabilities
 
431,379


1,070,890


2,840


37,995


(166,649
)

1,376,455

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
Commitments and Contingencies
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
Stockholders' Equity:
 
 
 
 
 
 
 
 
 
 
 


 
 
Preferred Stock:
 
 
 
 
 
 
 
 
 
 
 


 
 
 
Preferred stock, $.01 par, 5,000 shares authorized, none issued and outstanding at December 31, 2015
 
—

 
—

 
—

 
—

 
—

 
—

 
 
Common Stock:
 
 
 
 
 
 
 
 
 
 
 


 
 
 
Common stock, $.01 par, 5,000 shares authorized, issued and outstanding at December 31, 2015
 
—

 
—

 
50

 
—

 
(50
)
 
—

 
 
Additional paid-in capital
 
633,612

 
5,842

 
10,197

 
375,287

 
(479,184
)
 
545,754

 
 
Accumulated deficit
 
(255,461
)
 
(178,533
)
 
1,162

 
(29,875
)
 
420,687

 
(42,020
)
 
 
Accumulated other comprehensive (loss) income
 
—

 
(23,680
)
 
—

 
(95,526
)
 
84,016

 
(35,190
)
 
 
 
Total stockholders' equity
 
378,151


(196,371
)

11,409


249,886


25,469


468,544

 
 
 
 
Total liabilities and stockholders' equity
 
$
809,530


$
874,519


$
14,249


$
287,881


$
(141,180
)

$
1,844,999



Page 5 of 11



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



Condensed Consolidating Statement of Comprehensive Income (Unaudited)
Three Months Ended June 30, 2016
(Amounts in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guarantors
 
Issuer
 
 
 
Non-
 
 
 
 
 
 
 
 
 
The Hillman
 
The Hillman
 
Guarantor
 
Guarantor
 
Consolidating
 
 
 
 
 
 
 
Companies, Inc.
 
Group, Inc.
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
—

 
$
179,864

 
$
5,228

 
$
41,808

 
—

 
$
226,900

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

 
90,721

 
3,494

 
27,864

 
—

 
122,079

 
Selling, general and administrative expenses
 
551

 
54,484

 
1,091

 
10,734

 
—

 
66,860

 
Depreciation
 
—

 
7,578

 
20

 
452

 
—

 
8,050

 
Amortization
 
8,974

 
—

 
54

 
463

 
—

 
9,491

 
Intercompany administrative (income) expense
 
—

 
(83
)
 
—

 
83

 
—

 
—

 
Management and transaction fees to related party
 
—

 
136

 
—

 
—

 
—

 
136

 
Other expense (income)
 
(27
)
 
(14
)
 
—

 
300

 
—

 
259

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income from operations
 
(9,498
)
 
27,042

 
569

 
1,912

 
—

 
20,025

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

 
—

 
—

 
—

 
—

 
Interest (income) expense, net
 
(264
)
 
11,648

 
—

 
1,482

 
—

 
12,866

 
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
(9,233
)
 
12,336

 
569

 
430

 
—

 
4,102

 
Equity in subsidiaries' income (loss)
 
11,616

 
(720
)
 
—

 
—

 
(10,896
)
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income taxes
 
2,383

 
11,616

 
569

 
430

 
(10,896
)
 
4,102

 
 
Income tax provision
 
637

 
—

 
58

 
1,661

 
—

 
2,356

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (loss) income
 
$
1,746

 
$
11,616

 
$
511

 
$
(1,231
)
 
$
(10,896
)
 
$
1,746

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive (loss) income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
 
—

 
243

 
—

 
249

 
(682
)
 
(190
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total comprehensive (loss) income
 
$
1,746

 
$
11,859

 
$
511

 
$
(982
)
 
$
(11,578
)
 
$
1,556



Page 6 of 11



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



Condensed Consolidating Statement of Comprehensive Loss (Unaudited)
Three Months Ended June 30, 2015
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guarantors
 
Issuer
 
 
 
Non-
 
 
 
 
 
 
 
 
 
The Hillman
 
The Hillman
 
Guarantor
 
Guarantor
 
Consolidating
 
 
 
 
 
 
 
Companies, Inc.
 
Group, Inc.
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
—

 
$
167,821

 
$
5,628

 
$
43,369

 
$
—

 
$
216,818

 
Cost of sales (exclusive of depreciation and
 
 
 
 
 
 
 
 
 
 
 

 
 
amortization shown separately below)
 
—

 
86,082

 
4,039

 
28,866

 
—

 
118,987

 
Selling, general and administrative expenses
 
(211
)
 
50,913

 
1,034

 
12,861

 
—

 
64,597

 
Transaction, acquisition and integration expenses
 
—

 
92

 
—

 
—

 
—

 
92

 
Depreciation
 
—

 
6,519

 
18

 
434

 
—

 
6,971

 
Amortization
 
8,972

 
—

 
54

 
492

 
—

 
9,518

 
Intercompany administrative (income) expense
 
—

 
(109
)
 
—

 
109

 
—

 
—

 
Management fees to related party
 
—

 
155

 
—

 
—

 
—

 
155

 
Other (income) expense, net
 
264

 
(752
)
 
2

 
(232
)
 
—

 
(718
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income from operations
 
(9,025
)
 
24,921

 
481

 
839

 
—

 
17,216

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

 
—

 
—

 
—

 
—

 
Interest (income) expense, net
 
(242
)
 
11,244

 
—

 
1,616

 
—

 
12,618

 
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
(8,783
)
 
10,619

 
481

 
(777
)
 
—

 
1,540

 
Equity in subsidiaries' (loss) income
 
9,610

 
(1,009
)
 
—

 
—

 
(8,601
)
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income before income taxes
 
827

 
9,610

 
481

 
(777
)
 
(8,601
)
 
1,540

 
 
Income tax (benefit) provision
 
5,370

 
—

 
(23
)
 
736

 
—

 
6,083

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (loss) income
 
$
(4,543
)
 
$
9,610

 
$
504

 
$
(1,513
)
 
$
(8,601
)
 
$
(4,543
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive (loss) income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
 
—

 
79

 
—

 
423

 
(875
)
 
(373
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total comprehensive (loss) income
 
$
(4,543
)
 
$
9,689

 
$
504

 
$
(1,090
)
 
$
(9,476
)
 
$
(4,916
)


Page 7 of 11



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



Condensed Consolidating Statement of Comprehensive Loss (Unaudited)
Six Months Ended June 30, 2016
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guarantors
 
Issuer
 
 
 
Non-
 
 
 

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

 
$
335,225

 
$
9,450

 
$
71,829

 
$
—

 
$
416,504

 
Cost of sales (exclusive of depreciation and
 
 
 
 
 
 
 
 
 
 
 

 
 
amortization shown separately below)
 
—

 
170,705

 
6,285

 
48,066

 
—

 
225,056

 
Selling, general and administrative expenses
 
1,135

 
108,813

 
2,094

 
20,333

 
—

 
132,375

 
Depreciation
 
—

 
15,497

 
39

 
884

 
—

 
16,420

 
Amortization
 
17,947

 
—

 
108

 
899

 
—

 
18,954

 
Intercompany administrative (income) expense
 
—

 
(192
)
 
—

 
192

 
—

 
—

 
Management fees to related party
 
—

 
272

 
—

 
—

 
—

 
272

 
Other expense (income)
 
(17
)
 
504

 
—

 
(36
)
 
—

 
451

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
(Loss) income from operations
 
(19,065
)

39,626


924


1,491


—


22,976

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Intercompany interest (income) expense
 
(6,116
)
 
6,116

 
—

 
—

 
—

 
—

 
Interest (income) expense, net
 
(522
)
 
23,525

 
—

 
2,906

 
—

 
25,909

 
Interest expense on junior subordinated debentures
 
6,304

 
—

 
—

 
—

 
—

 
6,304

 
Investment income on trust common securities
 
(189
)
 
—

 
—

 
—

 
—

 
(189
)
 
 
(Loss) income before equity in subsidiaries' income
(18,542
)

9,985


924


(1,415
)

—


(9,048
)
 
Equity in subsidiaries' (loss) income
 
9,192

 
(793
)
 
—

 
—

 
(8,399
)
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
(Loss) income before income taxes
 
(9,350
)

9,192


924


(1,415
)

(8,399
)

(9,048
)
 
 
Income tax (benefit) provision
 
(3,252
)
 
—

 
370

 
(68
)
 
—

 
(2,950
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Net (loss) income
 
$
(6,098
)

$
9,192


$
554


$
(1,347
)

$
(8,399
)

$
(6,098
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Other comprehensive income (loss):
 
 
 

 
 
 
 
 
 
 

 
 
Foreign currency translation adjustments
 
—

 
5,338

 
—

 
14,657

 
(14,101
)
 
5,894

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Total comprehensive (loss) income
 
$
(6,098
)

$
14,530


$
554


$
13,310


$
(22,500
)

$
(204
)


Page 8 of 11



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



Condensed Consolidating Statement of Comprehensive Loss (Unaudited)
Six Months Ended June 30, 2015
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
Guarantors
 
Issuer
 
 
 
Non-
 
 
 
 
 
 
 
 
 
The Hillman
 
The Hillman
 
Guarantor
 
Guarantor
 
Consolidating
 
 
 
 
 
 
 
Companies, Inc.
 
Group, Inc.
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Net sales
 
$
—

 
$
311,942

 
$
10,741

 
$
74,831

 
$
—

 
$
397,514

 
Cost of sales (exclusive of depreciation and
 
 
 

 

 
 
 
 
 

 
 
amortization shown separately below)
 
—

 
165,127

 
7,731

 
49,477

 
—

 
222,335

 
Selling, general and administrative expenses
 
43

 
100,836

 
2,052

 
23,364

 
—

 
126,295

 
Transaction, acquisition and integration expenses
 
—

 
257

 
—

 
—

 
—

 
257

 
Depreciation
 
—

 
13,468

 
35

 
1,005

 
—

 
14,508

 
Amortization
 
17,946

 
—

 
108

 
981

 
—

 
19,035

 
Intercompany administrative (income) expense
 
—

 
(217
)
 
—

 
217

 
—

 
—

 
Management fees to related party
 
—

 
306

 
—

 
—

 
—

 
306

 
Other (income) expense, net
 
214

 
789

 
—

 
(491
)
 
—

 
512

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income from operations
 
(18,203
)
 
31,376

 
815

 
278

 
—

 
14,266

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Intercompany interest (income) expense
 
(6,115
)
 
6,115

 
—

 
—

 
—

 
—

 
Interest (income) expense, net
 
(478
)
 
22,507

 
—

 
3,215

 
—

 
25,244

 
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
(17,726
)
 
2,754

 
815

 
(2,937
)
 
—

 
(17,094
)
 
Equity in subsidiaries' (loss) income
 
902

 
(1,852
)
 
—

 
—

 
950

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
(Loss) income before income taxes
 
(16,824
)
 
902

 
815

 
(2,937
)
 
950

 
(17,094
)
 
 
Income tax (benefit) provision
 
(2,416
)
 
—

 
133

 
(403
)
 
—

 
(2,686
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (loss) income
 
$
(14,408
)
 
$
902

 
$
682

 
$
(2,534
)
 
$
950

 
$
(14,408
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Other comprehensive (loss) income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
 
—

 
(7,150
)
 
—

 
(24,105
)
 
20,370

 
(10,885
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total comprehensive (loss) income
 
$
(14,408
)
 
$
(6,248
)
 
$
682

 
$
(26,639
)
 
$
21,320

 
$
(25,293
)


Page 9 of 11



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



 
Consolidating Statement of Cash Flows (Unaudited)
 
Six Months Ended June 30, 2016
 
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
$
(15,290
)
 
$
9,859

 
$
554

 
$
(1,221
)
 
$
—

 
$
(6,098
)
 
 
Adjustments to reconcile net (loss) income to net cash
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
provided by (used for) operating activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
17,947

 
15,497

 
147

 
1,783

 
—

 
35,374

 
 
 
Gain on sale of property and equipment
 
—

 
4

 
—

 
—

 
—

 
4

 
 
 
Deferred income tax (benefit) provision
 
(4,181
)
 
420

 
340

 
(120
)
 
—

 
(3,541
)
 
 
 
Deferred financing and original issue discount amortization
 
(521
)
 
1,846

 
—

 
—

 
—

 
1,325

 
 
 
Stock-based compensation expense
 
1,118

 
—

 
—

 
—

 
—

 
1,118

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

 
659

 
—

 
—

 
—

 
659

 
 
 
Changes in operating items:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts receivable
 
—

 
(10,049
)
 
(522
)
 
(4,144
)
 
—

 
(14,715
)
 
 
 
 
Inventories
 
—

 
11,652

 
310

 
6,022

 
—

 
17,984

 
 
 
 
Other assets
 
(6,116
)
 
(3,158
)
 
(1,125
)
 
6,426

 
—

 
(3,973
)
 
 
 
 
Accounts payable
 
—

 
10,374

 
(48
)
 
(2,631
)
 
—

 
7,695

 
 
 
 
Other accrued liabilities
 
405

 
887

 
73

 
(1,026
)
 
—

 
339

 
 
 
 
Other items, net
 
6,638

 
(6,620
)
 
—

 
(60
)
 
—

 
(42
)
 
 
 
Net cash provided by (used for) operating activities
 
—

 
31,371

 
(271
)
 
5,029

 
—

 
36,129

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
—

 
(15,735
)
 
(8
)
 
(1,174
)
 
—

 
(16,917
)
 
 
 
Net cash used for investing activities
 
—


(15,735
)

(8
)

(1,174
)

—


(16,917
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Repayments of senior term loans
 
—

 
(2,750
)
 
—

 
—

 
—

 
(2,750
)
 
 
Borrowings on revolving credit loans
 
—

 
16,000

 
—

 
—

 
—

 
16,000

 
 
Repaymnets of revolving credit loans
 
—

 
(28,000
)
 
—

 
—

 
—

 
(28,000
)
 
 
Principal payments under capitalized lease obligations
 
—

 
(118
)
 
—

 
—

 
—

 
(118
)
 
 
 
Net cash used for financing activities
 
—

 
(14,868
)
 
—

 
—

 
—

 
(14,868
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effect of exchange rate changes on cash
 
—

 
261

 
—

 
(56
)
 
—

 
205

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (decrease) increase in cash and cash equivalents
 
—

 
1,029

 
(279
)
 
3,799

 
—

 
4,549

 
Cash and cash equivalents at beginning of period
 
1

 
3,023

 
612

 
7,749

 
—

 
11,385

 
Cash and cash equivalents at end of period
 
$
1

 
$
4,052

 
$
333

 
$
11,548

 
$
—

 
$
15,934



Page 10 of 11



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 30, 2015
 
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
$
(15,310
)
 
$
2,537

 
$
682

 
$
(2,317
)
 
$
—

 
$
(14,408
)
 
 
Adjustments to reconcile net (loss) income to net cash
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
provided by (used for) operating activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
17,947

 
13,473

 
142

 
1,981

 
—

 
33,543

 
 
 
Gain on sale of property and equipment
 
—

 
223

 
1

 
(895
)
 
—

 
(671
)
 
 
 
Deferred income tax (benefit) provision
 
(2,926
)
 
—

 
104

 
(441
)
 
—

 
(3,263
)
 
 
 
Deferred financing and original issue discount amortization
 
(479
)
 
1,848

 
—

 
—

 
—

 
1,369

 
 
 
Stock-based compensation expense
 
257

 
—

 
—

 
—

 
—

 
257

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

 
1,264

 
—

 
—

 
—

 
1,264

 
 
 
Changes in operating items:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts receivable
 
—

 
(23,906
)
 
(448
)
 
(7,599
)
 
—

 
(31,953
)
 
 
 
 
Inventories
 
—

 
(35,948
)
 
155

 
(19,861
)
 
—

 
(55,654
)
 
 
 
 
Other assets
 
(6,115
)
 
(2,675
)
 
(602
)
 
15,547

 
—

 
6,155

 
 
 
 
Accounts payable
 
—

 
17,317

 
(48
)
 
11,208

 
—

 
28,477

 
 
 
 
Other accrued liabilities
 
489

 
698

 
37

 
1,163

 
—

 
2,387

 
 
 
 
Other items, net
 
6,277

 
(5,825
)
 
—

 
(414
)
 
—

 
38

 
 
 
Net cash provided by (used for) operating activities
 
140

 
(30,994
)
 
23

 
(1,628
)
 
—

 
(32,459
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from sale of property and equipment
 
—

 
—

 
—

 
2,295

 
—

 
2,295

 
 
Capital expenditures
 
—

 
(13,479
)
 
(35
)
 
(756
)
 
—

 
(14,270
)
 
 
 
Net cash (used for) provided by investing activities
 
—

 
(13,479
)
 
(35
)
 
1,539

 
—

 
(11,975
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 

 
 
Repayments of senior term loans
 
—

 
(2,750
)
 
—

 
—

 
—

 
(2,750
)
 
 
Borrowings on revolving credit loans
 
—

 
44,000

 
—

 
—

 
—

 
44,000

 
 
Principal payments under capitalized lease obligations
 
—

 
(101
)
 
—

 
—

 
—

 
(101
)
 
 
Proceeds from sale of stock
 
400

 
—

 
—

 
—

 
—

 
400

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

 
—

 
—

 
—

 
(540
)
 
 
 
Net cash (used for) financing activities
 
(140
)
 
41,149

 
—

 
—

 
—

 
41,009

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effect of exchange rate changes on cash
 
—

 
(7,150
)
 
—

 
(313
)
 
—

 
(7,463
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Net (decrease) increase in cash and cash equivalents
 
—

 
(10,474
)
 
(12
)
 
(402
)
 
—

 
(10,888
)
 
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

 
$
2,717

 
$
684

 
$
4,195

 
$
—

 
$
7,597



Page 11 of 11