EXHIBIT 99.1
Published on November 14, 2016
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 September 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 September 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 |
$ |
1,751 |
$ |
— |
$ |
3,691 |
$ |
— |
$ |
5,443 |
||||||||||||||||
Accounts receivable, net |
— |
62,225 |
— |
19,624 |
— |
81,849 |
||||||||||||||||||||||
Inventories, net |
— |
164,868 |
— |
66,462 |
(803 |
) |
230,527 |
|||||||||||||||||||||
Other current assets |
260 |
9,678 |
— |
1,782 |
— |
11,720 |
||||||||||||||||||||||
Total current assets |
261 |
238,522 |
— |
91,559 |
(803 |
) |
329,539 |
|||||||||||||||||||||
Intercompany notes receivable |
105,446 |
115,287 |
— |
(115,287 |
) |
(105,446 |
) |
— |
||||||||||||||||||||
Intercompany interest receivable |
9,174 |
11,120 |
— |
— |
(20,294 |
) |
— |
|||||||||||||||||||||
Investments in subsidiaries |
(893,532 |
) |
46,430 |
3,121 |
222,539 |
621,442 |
— |
|||||||||||||||||||||
Property and equipment, net |
— |
104,075 |
— |
11,847 |
— |
115,922 |
||||||||||||||||||||||
Goodwill |
814,413 |
354,328 |
— |
32,798 |
(584,961 |
) |
616,578 |
|||||||||||||||||||||
Other intangibles, net |
688,206 |
— |
— |
38,115 |
— |
726,321 |
||||||||||||||||||||||
Other assets |
4,688 |
4,368 |
— |
2,881 |
— |
11,937 |
||||||||||||||||||||||
Total assets |
$ |
728,656 |
$ |
874,130 |
$ |
3,121 |
$ |
284,452 |
$ |
(90,062 |
) |
$ |
1,800,297 |
|||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||||||||||
Accounts payable |
$ |
— |
$ |
60,592 |
$ |
— |
$ |
10,105 |
$ |
— |
$ |
70,697 |
||||||||||||||||
Current portion of senior term loans |
— |
5,500 |
— |
— |
— |
5,500 |
||||||||||||||||||||||
Current portion of capitalized lease and other obligations |
— |
158 |
— |
— |
— |
158 |
||||||||||||||||||||||
Intercompany interest payable |
— |
9,174 |
— |
11,120 |
(20,294 |
) |
— |
|||||||||||||||||||||
Accrued expenses: |
— |
|||||||||||||||||||||||||||
Salaries and wages |
— |
7,733 |
— |
1,726 |
— |
9,459 |
||||||||||||||||||||||
Pricing allowances |
— |
3,378 |
— |
1,217 |
— |
4,595 |
||||||||||||||||||||||
Income and other taxes |
(229 |
) |
2,840 |
— |
859 |
— |
3,470 |
|||||||||||||||||||||
Interest |
— |
4,517 |
— |
— |
— |
4,517 |
||||||||||||||||||||||
Other accrued expenses |
260 |
7,553 |
— |
1,638 |
— |
9,451 |
||||||||||||||||||||||
Total current liabilities |
31 |
101,445 |
— |
26,665 |
(20,294 |
) |
107,847 |
|||||||||||||||||||||
Intercompany debt payable |
— |
105,446 |
— |
— |
(105,446 |
) |
— |
|||||||||||||||||||||
Long term debt |
128,916 |
845,358 |
— |
— |
— |
974,274 |
||||||||||||||||||||||
Deferred income taxes, net |
233,754 |
— |
— |
8,673 |
— |
242,427 |
||||||||||||||||||||||
Other non-current liabilities |
1,427 |
6,121 |
— |
333 |
— |
7,881 |
||||||||||||||||||||||
Total liabilities |
364,128 |
1,058,370 |
— |
35,671 |
(125,740 |
) |
1,332,429 |
|||||||||||||||||||||
Commitments and Contingencies |
||||||||||||||||||||||||||||
Stockholders' Equity: |
||||||||||||||||||||||||||||
Preferred stock, $.01 par, 5,000 shares authorized, none issued and outstanding at March 31, 2016 |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||
Common stock, $.01 par, 5,000 shares authorized, issued and outstanding at March 31, 2016 |
— |
50 |
— |
— |
(50 |
) |
— |
|||||||||||||||||||||
Additional paid-in capital |
640,093 |
7,069 |
4,180 |
375,287 |
(479,184 |
) |
547,445 |
|||||||||||||||||||||
Accumulated deficit |
(275,565 |
) |
(172,253 |
) |
(1,059 |
) |
(42,606 |
) |
442,928 |
(48,555 |
) |
|||||||||||||||||
Accumulated other comprehensive (loss) income |
— |
(19,106 |
) |
— |
(83,900 |
) |
71,984 |
(31,022 |
) |
|||||||||||||||||||
Total stockholders' equity |
364,528 |
(184,240 |
) |
3,121 |
248,781 |
35,678 |
467,868 |
|||||||||||||||||||||
Total liabilities and stockholders' equity |
$ |
728,656 |
$ |
874,130 |
$ |
3,121 |
$ |
284,452 |
$ |
(90,062 |
) |
$ |
1,800,297 |
Page 2
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 |
||||||||||||||||
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 |
639 |
7,671 |
75 |
2,156 |
— |
10,541 |
||||||||||||||||||||||
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 |
||||||||||||||||||||||
Deferred income taxes |
52,604 |
143 |
(979 |
) |
2,909 |
(54,677 |
) |
— |
||||||||||||||||||||
Other assets |
4,643 |
4,365 |
25 |
3,505 |
— |
12,538 |
||||||||||||||||||||||
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 |
||||||||||||||||||||||
Other accrued expenses |
639 |
6,325 |
38 |
1,546 |
— |
8,548 |
||||||||||||||||||||||
Total current liabilities |
282 |
84,329 |
873 |
25,597 |
(6,359 |
) |
104,722 |
|||||||||||||||||||||
Intercompany debt payable |
— |
105,446 |
— |
— |
(105,446 |
) |
— |
|||||||||||||||||||||
Long term |
129,707 |
875,112 |
— |
— |
— |
1,004,819 |
||||||||||||||||||||||
Deferred income taxes, net |
300,008 |
— |
1,967 |
12,082 |
(54,844 |
) |
259,213 |
|||||||||||||||||||||
Other non-current liabilities |
1,382 |
6,003 |
— |
316 |
— |
7,701 |
||||||||||||||||||||||
Total liabilities |
431,379 |
1,070,890 |
2,840 |
37,995 |
(166,649 |
) |
1,376,455 |
|||||||||||||||||||||
Commitments and Contingencies |
||||||||||||||||||||||||||||
Stockholders' Equity: |
||||||||||||||||||||||||||||
Preferred stock, $.01 par, 5,000 shares authorized, none issued and outstanding at December 31, 2015 |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||
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 3
THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
Supplemental Consolidating Guarantor and Non-Guarantor Financial Information
Condensed Consolidating Statement of Comprehensive Income (Unaudited) | |||||||||||||||||||||||||||
Three Months Ended September 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 |
$ |
— |
$ |
174,716 |
$ |
1,495 |
$ |
35,317 |
$ |
— |
$ |
211,528 |
|||||||||||||||
Cost of sales (exclusive of depreciation and |
|||||||||||||||||||||||||||
amortization shown separately below) |
— |
86,705 |
1,020 |
23,314 |
— |
111,039 |
|||||||||||||||||||||
Selling, general and administrative expenses |
634 |
55,883 |
367 |
11,258 |
— |
68,142 |
|||||||||||||||||||||
Depreciation |
— |
7,528 |
7 |
439 |
— |
7,974 |
|||||||||||||||||||||
Amortization |
9,009 |
— |
17 |
455 |
— |
9,481 |
|||||||||||||||||||||
Intercompany administrative (income) expense |
— |
(72 |
) |
— |
72 |
— |
— |
||||||||||||||||||||
Management and transaction fees to related party |
— |
148 |
— |
— |
— |
148 |
|||||||||||||||||||||
Other expense (income) |
(61 |
) |
(509 |
) |
— |
(456 |
) |
— |
(1,026 |
) |
|||||||||||||||||
(Loss) income from operations |
(9,582 |
) |
25,033 |
84 |
235 |
— |
15,770 |
||||||||||||||||||||
Intercompany interest (income) expense |
(3,058 |
) |
3,058 |
— |
— |
— |
— |
||||||||||||||||||||
Interest (income) expense, net |
(269 |
) |
11,477 |
— |
1,463 |
— |
12,671 |
||||||||||||||||||||
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 |
(9,312 |
) |
10,498 |
84 |
(1,228 |
) |
— |
42 |
|||||||||||||||||||
Equity in subsidiaries' income (loss) |
9,295 |
(1,203 |
) |
— |
— |
(8,092 |
) |
— |
|||||||||||||||||||
Income before income taxes |
(17 |
) |
9,295 |
84 |
(1,228 |
) |
(8,092 |
) |
42 |
||||||||||||||||||
Income tax provision |
420 |
— |
34 |
25 |
— |
479 |
|||||||||||||||||||||
Net (loss) income |
$ |
(437 |
) |
$ |
9,295 |
$ |
50 |
$ |
(1,253 |
) |
$ |
(8,092 |
) |
$ |
(437 |
) |
|||||||||||
Other comprehensive (loss) income: |
|||||||||||||||||||||||||||
Foreign currency translation adjustments |
— |
(764 |
) |
— |
(3,031 |
) |
2,069 |
(1,726 |
) |
||||||||||||||||||
Total comprehensive (loss) income |
$ |
(437 |
) |
$ |
8,531 |
$ |
50 |
$ |
(4,284 |
) |
$ |
(6,023 |
) |
$ |
(2,163 |
) |
Page 4
THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
Supplemental Consolidating Guarantor and Non-Guarantor Financial Information
Condensed Consolidating Statement of Comprehensive Loss (Unaudited) | |||||||||||||||||||||||||||
Three Months Ended September 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 |
$ |
— |
$ |
167,260 |
$ |
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 |
|||||||||||||||||||||
Transaction, acquisition and integration expenses |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||
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 (income) 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' (loss) income |
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 (loss) income |
$ |
(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 (loss) income |
$ |
(40 |
) |
$ |
823 |
$ |
72 |
$ |
(16,421 |
) |
$ |
9,141 |
$ |
(6,425 |
) |
Page 5
THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
Supplemental Consolidating Guarantor and Non-Guarantor Financial Information
Condensed Consolidating Statement of Comprehensive Loss (Unaudited) | |||||||||||||||||||||||||||
Nine Months Ended September 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 |
$ |
— |
$ |
509,941 |
$ |
10,945 |
$ |
107,146 |
$ |
— |
$ |
628,032 |
|||||||||||||||
Cost of sales (exclusive of depreciation and |
|||||||||||||||||||||||||||
amortization shown separately below) |
— |
257,410 |
7,305 |
71,380 |
— |
336,095 |
|||||||||||||||||||||
Selling, general and administrative expenses |
1,769 |
164,696 |
2,461 |
31,591 |
— |
200,517 |
|||||||||||||||||||||
Depreciation |
— |
23,025 |
46 |
1,323 |
— |
24,394 |
|||||||||||||||||||||
Amortization |
26,956 |
— |
125 |
1,354 |
— |
28,435 |
|||||||||||||||||||||
Intercompany administrative (income) expense |
— |
(264 |
) |
— |
264 |
— |
— |
||||||||||||||||||||
Management fees to related party |
— |
420 |
— |
— |
— |
420 |
|||||||||||||||||||||
Other expense (income) |
(78 |
) |
121 |
— |
(618 |
) |
— |
(575 |
) |
||||||||||||||||||
(Loss) income from operations |
(28,647 |
) |
64,533 |
1,008 |
1,852 |
— |
38,746 |
||||||||||||||||||||
Intercompany interest (income) expense |
(9,174 |
) |
9,174 |
— |
— |
— |
— |
||||||||||||||||||||
Interest (income) expense, net |
(791 |
) |
35,002 |
— |
4,369 |
— |
38,580 |
||||||||||||||||||||
Interest expense on junior subordinated debentures |
9,456 |
— |
— |
— |
— |
9,456 |
|||||||||||||||||||||
Investment income on trust common securities |
(284 |
) |
— |
— |
— |
— |
(284 |
) |
|||||||||||||||||||
(Loss) income before equity in subsidiaries' income |
(27,854 |
) |
20,357 |
1,008 |
(2,517 |
) |
— |
(9,006 |
) |
||||||||||||||||||
Equity in subsidiaries' (loss) income |
18,487 |
(1,870 |
) |
— |
— |
(16,617 |
) |
— |
|||||||||||||||||||
(Loss) income before income taxes |
(9,367 |
) |
18,487 |
1,008 |
(2,517 |
) |
(16,617 |
) |
(9,006 |
) |
|||||||||||||||||
Income tax (benefit) provision |
(2,832 |
) |
— |
404 |
(43 |
) |
— |
(2,471 |
) |
||||||||||||||||||
Net (loss) income |
$ |
(6,535 |
) |
$ |
18,487 |
$ |
604 |
$ |
(2,474 |
) |
$ |
(16,617 |
) |
$ |
(6,535 |
) |
|||||||||||
Other comprehensive income (loss): |
|||||||||||||||||||||||||||
Foreign currency translation adjustments |
— |
4,574 |
— |
11,626 |
(12,032 |
) |
4,168 |
||||||||||||||||||||
Total comprehensive (loss) income |
$ |
(6,535 |
) |
$ |
23,061 |
$ |
604 |
$ |
9,152 |
$ |
(28,649 |
) |
$ |
(2,367 |
) |
Page 6
THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
Supplemental Consolidating Guarantor and Non-Guarantor Financial Information
Condensed Consolidating Statement of Comprehensive Loss (Unaudited) | |||||||||||||||||||||||||||
Nine Months Ended September 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 |
$ |
— |
$ |
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 (income) expense, net |
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' (loss) income |
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 7
THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
Supplemental Consolidating Guarantor and Non-Guarantor Financial Information
Consolidating Statement of Cash Flows (Unaudited) |
||||||||||||||||||||||||||||
Nine Months Ended September 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 |
$ |
(6,535 |
) |
$ |
18,487 |
$ |
604 |
$ |
(2,474 |
) |
$ |
(16,617 |
) |
$ |
(6,535 |
) |
||||||||||||
Adjustments to reconcile net (loss) income to net cash |
||||||||||||||||||||||||||||
provided by (used for) operating activities: |
||||||||||||||||||||||||||||
Depreciation and amortization |
26,956 |
23,025 |
171 |
2,677 |
— |
52,829 |
||||||||||||||||||||||
Gain on sale of property and equipment |
— |
4 |
— |
— |
— |
4 |
||||||||||||||||||||||
Deferred income tax (benefit) provision |
(984 |
) |
420 |
(2,445 |
) |
(148 |
) |
— |
(3,157 |
) |
||||||||||||||||||
Deferred financing and original issue discount amortization |
(791 |
) |
2,770 |
— |
— |
— |
1,979 |
|||||||||||||||||||||
Stock-based compensation expense |
1,691 |
— |
— |
— |
— |
1,691 |
||||||||||||||||||||||
Loss on disposition |
— |
— |
— |
832 |
— |
832 |
||||||||||||||||||||||
Equity in subsidiaries' loss (income) |
(18,487 |
) |
1,870 |
— |
— |
16,617 |
— |
|||||||||||||||||||||
Other non-cash interest and change in value of interest rate swap |
— |
150 |
— |
— |
— |
150 |
||||||||||||||||||||||
Changes in operating items: |
||||||||||||||||||||||||||||
Accounts receivable |
— |
(6,560 |
) |
1,020 |
(3,132 |
) |
— |
(8,672 |
) |
|||||||||||||||||||
Inventories |
— |
7,131 |
5,447 |
3,456 |
— |
16,034 |
||||||||||||||||||||||
Other assets |
(9,174 |
) |
8,595 |
(4,545 |
) |
2,450 |
— |
(2,674 |
) |
|||||||||||||||||||
Accounts payable |
— |
9,497 |
(710 |
) |
(2,105 |
) |
— |
6,682 |
||||||||||||||||||||
Other accrued liabilities |
128 |
(1,534 |
) |
(125 |
) |
(1,756 |
) |
— |
(3,287 |
) |
||||||||||||||||||
Other items, net |
7,196 |
(7,258 |
) |
(21 |
) |
(190 |
) |
— |
(273 |
) |
||||||||||||||||||
Net cash provided by (used for) operating activities |
— |
56,597 |
(604 |
) |
(390 |
) |
— |
55,603 |
||||||||||||||||||||
Cash flows from investing activities: |
||||||||||||||||||||||||||||
Capital expenditures |
— |
(25,739 |
) |
(8 |
) |
(3,655 |
) |
— |
(29,402 |
) |
||||||||||||||||||
Net cash used for investing activities |
— |
(25,739 |
) |
(8 |
) |
(3,655 |
) |
— |
(29,402 |
) |
||||||||||||||||||
Cash flows from financing activities: |
||||||||||||||||||||||||||||
Repayments of senior term loans |
— |
(4,125 |
) |
— |
— |
— |
(4,125 |
) |
||||||||||||||||||||
Borrowings on revolving credit loans |
— |
16,000 |
— |
— |
— |
16,000 |
||||||||||||||||||||||
Repayments of revolving credit loans |
— |
(44,000 |
) |
— |
— |
— |
(44,000 |
) |
||||||||||||||||||||
Principal payments under capitalized lease obligations |
— |
(198 |
) |
— |
— |
— |
(198 |
) |
||||||||||||||||||||
Net cash used for financing activities |
— |
(32,323 |
) |
— |
— |
— |
(32,323 |
) |
||||||||||||||||||||
Effect of exchange rate changes on cash |
— |
193 |
— |
(13 |
) |
— |
180 |
|||||||||||||||||||||
Net (decrease) increase in cash and cash equivalents |
— |
(1,272 |
) |
(612 |
) |
(4,058 |
) |
— |
(5,942 |
) |
||||||||||||||||||
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 |
$ |
1,751 |
$ |
— |
$ |
3,691 |
$ |
— |
$ |
5,443 |
Page 8
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) |
||||||||||||||||||||||||||||
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 |
$ |
(14,448 |
) |
$ |
6,029 |
$ |
754 |
$ |
(4,830 |
) |
$ |
(1,953 |
) |
$ |
(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 |
||||||||||||||||||||||
Equity in subsidiaries' loss (income) |
(6,029 |
) |
4,076 |
— |
— |
1,953 |
— |
|||||||||||||||||||||
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 |
||||||||||||||||||||||
Repayments of revolving credit loans |
— |
(2,000 |
) |
— |
— |
— |
(2,000 |
) |
||||||||||||||||||||
Principal payments under capitalized lease obligations |
— |
(127 |
) |
— |
— |
— |
(127 |
) |
||||||||||||||||||||
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 |
) |
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 9