HILLMAN COMPANIES INC - FORM 10-Q - EX-99.1 - EXHIBIT 99.1 6.30.2016

Attached files

file	filename
EX-31.1 - EXHIBIT 31.1 6.30.2016 - HILLMAN COMPANIES INC	exhibit311-certificationof.htm
10-Q - 10-Q 6.30.2016 - HILLMAN COMPANIES INC	hillman10-q6302016.htm
EX-32.2 - EXHIBIT 32.2 6.30.2016 - HILLMAN COMPANIES INC	exhibit322-certificationof.htm
EX-32.1 - EXHIBIT 32.1 6.30.2016 - HILLMAN COMPANIES INC	exhibit321-certificationof.htm
EX-31.2 - EXHIBIT 31.2 6.30.2016 - HILLMAN COMPANIES INC	exhibit312-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 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

HILLMAN COMPANIES INC - FORM 10-Q - EX-99.1 - EXHIBIT 99.1 6.30.2016 - August 15, 2016

Attached files

HILLMAN COMPANIES INC Reports