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EX-32.1 - EXHIBIT 32.1 03.31.2016 - HILLMAN COMPANIES INCexhibit321-certificationof.htm
10-Q - 10-Q 03.31.2016 - HILLMAN COMPANIES INChillman10-q3312016.htm
EX-31.2 - EXHIBIT 31.2 03.31.2016 - HILLMAN COMPANIES INCexhibit312-certificationof.htm
EX-32.2 - EXHIBIT 32.2 03.31.2016 - HILLMAN COMPANIES INCexhibit322-certificationof.htm
EX-31.1 - EXHIBIT 31.1 03.31.2016 - HILLMAN COMPANIES INCexhibit311-certificationof.htm

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 March 31, 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 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 March 31, 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

 
$
4,058

 
$
671

 
$
4,826

 
$

 
$
9,556

 
 
Restricted investments
 
240

 

 

 

 

 
240

 
 
Accounts receivable, net
 

 
64,398

 
1,319

 
18,277

 

 
83,994

 
 
Inventories, net
 

 
161,477

 
5,371

 
73,297

 
(653
)
 
239,492

 
 
Deferred income taxes, net
 
12,661

 
277

 
514

 
602

 
(14,054
)
 

 
 
Other current assets
 

 
9,684

 
78

 
3,063

 

 
12,825

 
 
 
Total current assets
 
12,902

 
239,894

 
7,953

 
100,065

 
(14,707
)
 
346,107

 
 
Intercompany notes receivable
 
105,446

 
125,874

 
(4,368
)
 
(121,506
)
 
(105,446
)
 

 
 
Intercompany interest receivable
 
3,058

 
8,245

 

 

 
(11,303
)
 

 
 
Investments in subsidiaries
 
(897,816
)
 
55,647

 
4,178

 
234,183

 
603,808

 

 
 
Property and equipment, net
 

 
98,963

 
291

 
9,556

 

 
108,810

 
 
Goodwill
 
814,413

 
350,968

 
3,240

 
33,397

 
(584,841
)
 
617,177

 
 
Other intangibles, net
 
701,846

 

 
4,414

 
39,733

 

 
745,993

 
 
Restricted investments
 
1,251

 

 

 

 

 
1,251

 
 
Deferred income taxes
 
53,091

 
143

 
(1,304
)
 
5,093

 
(57,023
)
 

 
 
Deferred financing fees, net
 

 
1,173

 

 

 

 
1,173

 
 
Investment in trust common securities
 
3,261

 

 

 

 

 
3,261

 
 
Other assets
 

 
3,411

 
25

 
3,488

 

 
6,924

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
797,452

 
$
884,318

 
$
14,429

 
$
304,009

 
$
(169,512
)
 
$
1,830,696

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$

 
$
46,274

 
$
722

 
$
12,371

 
$

 
$
59,367

 
 
Current portion of senior term loans
 

 
5,500

 

 

 

 
5,500

 
 
Current portion of capitalized lease and other obligations

 
215

 

 

 

 
215

 
 
Intercompany interest payable
 

 
3,058

 

 
8,245

 
(11,303
)
 

 
 
Accrued expenses:
 
 
 
 
 
 
 
 
 
 
 


 
 
 
Salaries and wages
 

 
7,180

 
184

 
1,110

 

 
8,474

 
 
 
Pricing allowances
 

 
2,921

 
5

 
1,136

 

 
4,062

 
 
 
Income and other taxes
 
(102
)
 
2,366

 
74

 
1,329

 

 
3,667

 
 
 
Interest
 

 
4,837

 

 

 

 
4,837

 
 
 
Deferred compensation
 
240

 

 

 

 

 
240

 
 
 
Other accrued expenses
 

 
7,382

 
40

 
2,663

 

 
10,085

 
 
 
 
Total current liabilities
 
138

 
79,733

 
1,025

 
26,854

 
(11,303
)
 
96,447

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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 March 31, 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
 

 
523,206

 

 

 

 
523,206

 
 
Bank revolving credit
 

 
43,000

 

 

 

 
43,000

 
 
Long term capitalized leases and other obligations
 

 
250

 

 

 

 
250

 
 
Long term senior notes
 

 
323,054

 

 

 

 
323,054

 
 
Junior subordinated debentures
 
129,449

 

 

 

 

 
129,449

 
 
Deferred compensation
 
1,251

 

 

 

 

 
1,251

 
 
Deferred income taxes, net
 
296,346

 

 
1,952

 
12,516

 
(71,077
)
 
239,737

 
 
Other non-current liabilities
 

 
6,589

 

 
335

 

 
6,924

 
 
 
 
Total liabilities
 
427,184

 
1,081,278

 
2,977

 
39,705

 
(187,826
)
 
1,363,318

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
634,206

 
5,842

 
10,197

 
375,287

 
(479,184
)
 
546,348

 
 
Accumulated deficit
 
(263,938
)
 
(184,217
)
 
1,205

 
(29,865
)
 
426,951

 
(49,864
)
 
 
Accumulated other comprehensive (loss) income
 

 
(18,585
)
 

 
(81,118
)
 
70,597

 
(29,106
)
 
 
 
Total stockholders' equity
 
370,268

 
(196,960
)
 
11,452

 
264,304

 
18,314

 
467,378

 
 
 
 
Total liabilities and stockholders' equity
 
$
797,452

 
$
884,318

 
$
14,429

 
$
304,009

 
$
(169,512
)
 
$
1,830,696



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, 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 13


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 13


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



Condensed Consolidating Statements of Comprehensive Loss (Unaudited)
Three Months Ended March 31, 2016
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guarantors
 
Issuer
 
 
 
Non-
 
 
 
 
 
 
 
 
 
The Hillman
 
The Hillman
 
Guarantor
 
Guarantor
 
Consolidating
 
 
 
 
 
 
 
Companies, Inc.
 
Group, Inc.
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
$

 
$
155,361

 
$
4,222

 
$
30,021

 
$

 
$
189,604

 
Cost of sales (exclusive of depreciation and
 
 
 
 
 
 
 
 
 
 
 

 
 
amortization shown separately below)
 

 
79,984

 
2,791

 
20,202

 

 
102,977

 
Selling, general and administrative expenses
 
584

 
54,329

 
1,003

 
9,599

 

 
65,515

 
Transaction, acquisition and integration expenses
 

 

 

 

 

 

 
Depreciation
 

 
7,919

 
19

 
432

 

 
8,370

 
Amortization
 
8,973

 

 
54

 
436

 

 
9,463

 
Intercompany administrative (income) expense
 

 
(109
)
 

 
109

 

 

 
Management fees to related party
 

 
136

 

 

 

 
136

 
Other expense (income)
 
10

 
644

 

 
(462
)
 

 
192

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
(Loss) income from operations
 
(9,567
)

12,458


355


(295
)



2,951

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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

 

 

 

 

 
Interest (income) expense, net
 
(258
)
 
11,877

 

 
1,424

 

 
13,043

 
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
(9,309
)

(2,477
)

355


(1,719
)



(13,150
)
 
Equity in subsidiaries' (loss) income
 
(2,424
)
 
53

 

 

 
2,371

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
(Loss) income before income taxes
 
(11,733
)

(2,424
)

355


(1,719
)

2,371


(13,150
)
 
 
Income tax (benefit) provision
 
(3,889
)
 

 
312

 
(1,729
)
 

 
(5,306
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Net (loss) income
 
$
(7,844
)

$
(2,424
)

$
43


$
10


$
2,371


$
(7,844
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Other comprehensive income (loss):
 
 
 

 
 
 
 
 
 
 

 
 
Foreign currency translation adjustments
 

 
5,095

 

 
14,408

 
(13,419
)
 
6,084

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Total comprehensive (loss) income
 
$
(7,844
)

$
2,671


$
43


$
14,418


$
(11,048
)

$
(1,760
)


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)
Three Months Ended March 31, 2015
(Amounts in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guarantors
 
Issuer
 
 
 
Non-
 
 
 
 
 
 
 
 
 
The Hillman
 
The Hillman
 
Guarantor
 
Guarantor
 
Consolidating
 
 
 
 
 
 
 
Companies, Inc.
 
Group, Inc.
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
$

 
$
144,121

 
$
5,113

 
$
31,462

 
$

 
$
180,696

 
Cost of sales (exclusive of depreciation and
 
 
 
 
 
 
 
 
 
 
 

 
 
amortization shown separately below)
 

 
79,045

 
3,692

 
20,611

 

 
103,348

 
Selling, general and administrative expenses
 
254

 
49,923

 
1,018

 
10,503

 

 
61,698

 
Transaction, acquisition and integration expenses
 

 
165

 

 

 

 
165

 
Depreciation
 

 
6,949

 
17

 
571

 

 
7,537

 
Amortization
 
8,974

 

 
54

 
489

 

 
9,517

 
Intercompany administrative (income) expense
 

 
(108
)
 

 
108

 

 

 
Management and transaction fees to related party
 

 
151

 

 

 

 
151

 
Other (income) expense
 
(50
)
 
1,541

 
(2
)
 
(259
)
 

 
1,230

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income from operations
 
(9,178
)
 
6,455

 
334

 
(561
)
 

 
(2,950
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intercompany interest (income) expense
 
(3,057
)
 
3,057

 

 

 

 

 
Interest (income) expense, net
 
(235
)
 
11,263

 

 
1,599

 

 
12,627

 
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
(8,943
)
 
(7,865
)
 
334

 
(2,160
)
 

 
(18,634
)
 
Equity in subsidiaries' (loss) income
 
(8,708
)
 
(843
)
 

 

 
9,551

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
 
(17,651
)
 
(8,708
)
 
334

 
(2,160
)
 
9,551

 
(18,634
)
 
 
Income tax (benefit) provision
 
(7,786
)
 

 
156

 
(1,139
)
 

 
(8,769
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (loss) income
 
$
(9,865
)
 
$
(8,708
)
 
$
178

 
$
(1,021
)
 
$
9,551

 
$
(9,865
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive (loss) income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
 

 
(7,229
)
 

 
(24,528
)
 
21,245

 
(10,512
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total comprehensive (loss) income
 
$
(9,865
)
 
$
(15,937
)
 
$
178

 
$
(25,549
)
 
$
30,796

 
$
(20,377
)


Page 7 of 13


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



 
Consolidating Statement of Cash Flows (Unaudited)
 
Three Months Ended March 31, 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
 
$
(5,420
)
 
$
(2,477
)
 
$
43

 
$
10

 
$

 
$
(7,844
)
 
 
Adjustments to reconcile net (loss) income to net cash
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
provided by (used for) operating activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
8,973

 
7,919

 
72

 
869

 

 
17,833

 
 
 
Gain on sale of property and equipment
 

 
4

 

 

 

 
4

 
 
 
Deferred income tax (benefit) provision
 
(4,144
)
 

 
297

 
(2,030
)
 

 
(5,877
)
 
 
 
Deferred financing and original issue discount amortization
 
(258
)
 
923

 

 

 

 
665

 
 
 
Stock-based compensation expense
 
594

 

 

 

 

 
594

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

 
641

 

 

 

 
641

 
 
 
Changes in operating items:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts receivable
 

 
(8,733
)
 
(299
)
 
(461
)
 

 
(9,493
)
 
 
 
 
Inventories
 

 
10,372

 
76

 
(2,149
)
 

 
8,299

 
 
 
 
Other assets
 
(3,058
)
 
(4,825
)
 
(280
)
 
2,645

 

 
(5,518
)
 
 
 
 
Accounts payable
 

 
(4,821
)
 
12

 
(658
)
 

 
(5,467
)
 
 
 
 
Other accrued liabilities
 
255

 
(2,831
)
 
140

 
(957
)
 

 
(3,393
)
 
 
 
 
Other items, net
 
3,058

 
(3,048
)
 

 
(51
)
 

 
(41
)
 
 
 
Net cash provided by (used for) operating activities
 

 
(6,876
)
 
61

 
(2,782
)
 

 
(9,597
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 

 
(5,912
)
 
(2
)
 
(390
)
 

 
(6,304
)
 
 
 
Net cash (used for) provided by investing activities
 


(5,912
)

(2
)

(390
)



(6,304
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Repayments of senior term loans
 

 
(1,375
)
 

 

 

 
(1,375
)
 
 
Borrowings on revolving credit loans
 

 
16,000

 

 

 

 
16,000

 
 
Repaymnets of revolving credit loans
 

 
(1,000
)
 

 

 

 
(1,000
)
 
 
Principal payments under capitalized lease obligations
 

 
(66
)
 

 

 

 
(66
)
 
 
 
Net cash (used for) provided by financing activities
 

 
13,559

 

 

 

 
13,559

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effect of exchange rate changes on cash
 

 
264

 

 
249

 

 
513

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (decrease) increase in cash and cash equivalents
 

 
1,035

 
59

 
(2,923
)
 

 
(1,829
)
 
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

 
$
4,058

 
$
671

 
$
4,826

 
$

 
$
9,556



Page 8 of 13


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



 
Consolidating Statement of Cash Flows (Unaudited)
 
Three Months Ended March 31, 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
 
$
(1,157
)
 
$
(7,865
)
 
$
178

 
$
(1,021
)
 

 
$
(9,865
)
 
 
Adjustments to reconcile net (loss) income to net cash
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
provided by used for operating activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
8,974

 
6,949

 
70

 
1,061

 

 
17,054

 
 
 
Dispositions of property and equipment
 

 
16

 

 
47

 

 
63

 
 
 
Deferred income tax (benefit) provision
 
(8,040
)
 

 
142

 
(1,262
)
 

 
(9,160
)
 
 
 
Deferred financing and original issue discount amortization
 
(237
)
 
924

 

 

 

 
687

 
 
 
Stock-based compensation expense
 
204

 

 

 

 

 
204

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

 
1,543

 

 

 

 
1,543

 
 
 
Changes in operating items:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts receivable
 

 
(15,443
)
 
(865
)
 
(1,649
)
 

 
(17,957
)
 
 
 
 
Inventories
 

 
(15,145
)
 
373

 
(12,841
)
 

 
(27,613
)
 
 
 
 
Other assets
 
(3,057
)
 
(4,132
)
 
20

 
7,690

 

 
521

 
 
 
 
Accounts payable
 

 
4,492

 
(270
)
 
6,828

 

 
11,050

 
 
 
 
Interest payable on junior subordinated debentures
 

 

 

 

 

 

 
 
 
 
Other accrued liabilities
 
368

 
(2,248
)
 
36

 
(1,279
)
 

 
(3,123
)
 
 
 
 
Other items, net
 
3,485

 
(3,447
)
 

 
(367
)
 

 
(329
)
 
 
 
Net cash provided by (used for) operating activities
 
540

 
(34,356
)
 
(316
)
 
(2,793
)
 

 
(36,925
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 

 
(5,994
)
 

 
(434
)
 

 
(6,428
)
 
 
 
Net cash (used for) provided by investing activities
 

 
(5,994
)
 

 
(434
)
 

 
(6,428
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Repayments of senior term loans
 

 
(1,375
)
 

 

 

 
(1,375
)
 
 
  Borrowings on revolving credit loans
 

 
29,000

 

 

 

 
29,000

 
 
  Principal payments under capitalized lease obligations
 

 
(50
)
 

 

 

 
(50
)
 
 
  Purchase of stock from a former member of management
 
(540
)
 

 

 

 

 
(540
)
 
 
 
Net cash (used for) financing activities
 
(540
)
 
27,575

 

 

 

 
27,035

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effect of exchange rate changes on cash
 

 
184

 

 
(214
)
 

 
(30
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (decrease) increase in cash and cash equivalents
 

 
(12,591
)
 
(316
)
 
(3,441
)
 

 
(16,348
)
 
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

 
600

 
380

 
1,156

 

 
2,137



Page 9 of 13