UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 3, 2004
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 333-110531
NORCROSS SAFETY PRODUCTS L.L.C.
(Exact name of Registrant as Specified in its Charter)
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Delaware |
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61-1283304 |
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(State or Other Jurisdiction of Incorporation or Organization) |
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(I.R.S. Employer Identification No.) |
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2211 York Road, Suite 215 Oak Brook, Illinois 60523 |
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60523 |
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(Address of Principal Executive Offices) |
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(Zip Code) |
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Registrant’s telephone number, including area code: |
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(630) 572-5715 |
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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No ý
Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes o No ý
On May 11, 2004 Norcross Safety Products L.L.C. had 100 units outstanding, all of which were owned by a holding company.
NORCROSS SAFETY PRODUCTS L.L.C.
FORM 10-Q QUARTERLY REPORT
For the Quarterly Period Ended April 3, 2004
TABLE OF CONTENTS
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1 |
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1 |
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2 |
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3 |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
17 |
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Item 3. Quantitative and Qualitative Disclosures About Market Risk |
24 |
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25 |
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26 |
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26 |
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27 |
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28 |
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29 |
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PART I
FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
NORCROSS SAFETY PRODUCTS L.L.C.
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands) (Unaudited)
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December 31, |
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April 3, |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
16,341 |
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$ |
6,860 |
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Accounts receivable, less allowance of $2,493 and $2,542 in 2003 and 2004, respectively |
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53,291 |
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62,320 |
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Inventories |
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80,828 |
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82,143 |
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Deferred income taxes |
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30 |
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29 |
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Prepaid expenses and other current assets |
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3,833 |
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4,221 |
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Total current assets |
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154,323 |
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155,573 |
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Property, plant, and equipment, net |
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56,213 |
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54,832 |
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Deferred financing costs, net |
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10,832 |
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10,391 |
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Goodwill, net |
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130,032 |
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128,984 |
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Other intangible assets, net |
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5,641 |
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5,783 |
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Due from NSP Holdings L.L.C. |
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16,113 |
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16,291 |
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Other noncurrent assets |
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5,535 |
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5,565 |
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Total assets |
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$ |
378,689 |
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$ |
377,419 |
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Liabilities and member’s equity |
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Current liabilities: |
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Accounts payable |
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$ |
18,157 |
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$ |
18,359 |
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Accrued expenses |
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27,837 |
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20,608 |
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Current maturities of long-term obligations |
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3,378 |
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3,242 |
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Total current liabilities |
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49,372 |
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42,209 |
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Pension, post-retirement, and deferred compensation |
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24,318 |
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25,105 |
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Long-term obligations |
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253,814 |
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253,036 |
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Other noncurrent liabilities |
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430 |
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428 |
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Deferred income taxes |
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1,937 |
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1,890 |
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Minority interest |
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124 |
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129 |
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280,623 |
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280,588 |
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Member’s equity: |
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Contributed capital |
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116,060 |
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116,060 |
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Accumulated deficit |
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(64,791 |
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(57,464 |
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Accumulated other comprehensive loss |
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(2,575 |
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(3,974 |
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Total member’s equity |
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48,694 |
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54,622 |
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Total liabilities and member’s equity |
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$ |
378,689 |
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$ |
377,419 |
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(1) December 31, 2003 balances were obtained from audited financial statements.
See notes to unaudited consolidated financial statements.
1
NORCROSS SAFETY PRODUCTS L.L.C.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands) (Unaudited)
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Three months ended |
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March 29, |
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April 3, |
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Net sales |
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$ |
85,815 |
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$ |
109,073 |
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Cost of goods sold |
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55,053 |
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68,877 |
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Gross profit |
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30,762 |
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40,196 |
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Operating expenses: |
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Selling |
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8,525 |
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10,404 |
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Distribution |
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4,009 |
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5,198 |
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General and administrative |
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8,151 |
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9,968 |
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Amortization of intangibles |
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811 |
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126 |
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Total operating expenses |
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21,496 |
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25,696 |
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Income from operations |
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9,266 |
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14,500 |
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Other expense (income): |
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Interest expense |
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6,713 |
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5,636 |
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Interest income |
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(20 |
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(35 |
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Other, net |
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(176 |
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534 |
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Income before income taxes and minority interest |
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2,749 |
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8,365 |
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Income tax expense |
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448 |
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1,033 |
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Minority interest |
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— |
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5 |
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Net income |
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$ |
2,301 |
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$ |
7,327 |
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See notes to unaudited consolidated financial statements.
2
NORCROSS SAFETY PRODUCTS L.L.C.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands) (Unaudited)
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Three months ended |
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March 29, |
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April 3, |
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Operating activities |
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Net income |
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$ |
2,301 |
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$ |
7,327 |
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Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
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Depreciation |
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2,540 |
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2,853 |
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Amortization of intangibles |
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811 |
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126 |
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Amortization of deferred financing costs |
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507 |
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441 |
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Amortization of original issue discount |
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254 |
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22 |
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Write-off of deferred financing costs |
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1,270 |
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— |
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Deferred income taxes |
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63 |
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(46 |
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Minority interest |
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— |
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5 |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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(2,523 |
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(9,029 |
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Inventories |
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(2,019 |
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(1,315 |
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Prepaid expenses and other current assets |
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(303 |
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(388 |
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Other noncurrent assets |
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(101 |
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(30 |
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Accounts payable |
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2,206 |
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202 |
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Accrued expenses |
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(2,274 |
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(7,229 |
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Pension, postretirement, and deferred compensation |
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147 |
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787 |
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Other noncurrent liabilities |
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(5 |
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(2 |
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