Condensed Consolidating Financial Statements and Victor Technologies Group, Inc. (Parent) Financial Information

6 Months Ended

Jun. 30, 2013

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Statements and Victor Technologies Group, Inc. (Parent) Financial Information

The 9% Senior Secured Notes due 2017 are obligations of, and were issued by, Victor Technologies. Each guarantor is wholly-owned by Victor Technologies. The Company’s management has determined the most appropriate presentation is to “push down” the Senior Secured Notes due 2017 to the guarantors in the accompanying condensed financial information, as such entities fully and unconditionally guarantee the Senior Secured Notes due 2017, and these subsidiaries are jointly and severally liable for all payments under these notes. The Senior Secured Notes due 2017 were issued to finance the acquisition of the Company along with new stockholder’s equity. The guarantor subsidiaries’ cash flow will service the debt.

The following financial information presents the guarantors and non-guarantors of the 9% Senior Secured Notes due 2017 and, prior to February 1, 2011, the 9¼% Senior Subordinated Notes due 2014, in accordance with Rule 3-10 of Regulation S-X. The condensed consolidating financial information includes the accounts of Victor Technologies Group, Inc. (parent only), and the combined accounts of guarantor subsidiaries and combined accounts of the non-guarantor subsidiaries for the periods indicated. Separate financial statements of the parent and each of the guarantor subsidiaries are not presented because management has determined such information is not material in assessing the financial condition, cash flows or results of operations of the Company and its subsidiaries. The Company’s Australian subsidiaries are included as guarantors for all years presented. Additionally, approximately 80% of the assets and 70% of the net sales have been pledged by the non-guarantor subsidiaries to the holders of the Senior Secured Notes.

VICTOR TECHNOLOGIES GROUP, INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2013

(unaudited)

(Dollars in thousands)



	Parent Victor Technologies Group, Inc.		Guarantors			Non- Guarantors			Eliminations			Consolidated
Net sales	$	—	$	99,278		$	27,445		$	—		$	126,723
Cost of goods sold	—		55,229			22,386			—			77,615
Gross margin	—		44,049			5,059			—			49,108
Selling, general and administrative expenses	—		23,313			3,728			—			27,041
Amortization of intangibles	—		1,629			13			—			1,642
Restructuring (credit)	—		(1,327		)	—			—			(1,327		)
Operating income	—		20,434			1,318			—			21,752
Other income (expense):
Interest, net	—		(8,448		)	(7		)	—			(8,455		)
Amortization of deferred financing costs	—		(661		)	—			—			(661		)
Equity in net income (loss) of subsidiaries	9,755		—			—			(9,755		)	—
Income (loss) before income tax provision	9,755		11,325			1,311			(9,755		)	12,636
Income tax provision	—		2,472			409			—			2,881
Net income (loss)	$	9,755	$	8,853		$	902		$	(9,755	)	$	9,755

VICTOR TECHNOLOGIES GROUP, INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2012

(unaudited)

(Dollars in thousands)



	Parent Victor Technologies Group, Inc.		Guarantors			Non- Guarantors			Eliminations			Consolidated
Net sales	$	—	$	107,150		$	25,107		$	—		$	132,257
Cost of goods sold	—		64,994			20,120			—			85,114
Gross margin	—		42,156			4,987			—			47,143
Selling, general and administrative expenses	—		23,974			3,485			—			27,459
Amortization of intangibles	—		1,584			—			—			1,584
Restructuring costs	—		848			—			—			848
Operating income (loss)	—		15,750			1,502			—			17,252
Other income (expense):
Interest, net	—		(8,431		)	(22		)	—			(8,453		)
Amortization of deferred financing costs	—		(604		)	—			—			(604		)
Equity in net income (loss) of subsidiaries	5,986		—			—			(5,986		)	—
Income (loss) before income tax provision	5,986		6,715			1,480			(5,986		)	8,195
Income tax provision	—		1,819			390			—			2,209
Net income (loss)	$	5,986	$	4,896		$	1,090		$	(5,986	)	$	5,986

VICTOR TECHNOLOGIES GROUP, INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2013

(unaudited)

(Dollars in thousands)



	Parent Victor Technologies Group, Inc.		Guarantors			Non- Guarantors			Eliminations			Consolidated
Net sales	$	—	$	198,447		$	52,208		$	—		$	250,655
Cost of goods sold	—		113,865			42,534			—			156,399
Gross margin	—		84,582			9,674			—			94,256
Selling, general and administrative expenses	—		48,832			4,883			—			53,715
Amortization of intangibles	—		3,261			27			—			3,288
Restructuring costs	—		5,528			—			—			5,528
Operating income	—		26,961			4,764			—			31,725
Other income (expense):
Interest, net	—		(16,846		)	(20		)	—			(16,866		)
Amortization of deferred financing costs	—		(1,308		)	—			—			(1,308		)
Equity in net income (loss) of subsidiaries	10,464		—			—			(10,464		)	—
Income (loss) before income tax provision	10,464		8,807			4,744			(10,464		)	13,551
Income tax provision	—		2,371			716			—			3,087
Net income (loss)	$	10,464	$	6,436		$	4,028		$	(10,464	)	$	10,464

VICTOR TECHNOLOGIES GROUP, INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2012

(unaudited)

(Dollars in thousands)



	Parent Victor Technologies Group, Inc.		Guarantors			Non- Guarantors			Eliminations			Consolidated
Net sales	$	—	$	211,027		$	48,101		$	—		$	259,128
Cost of goods sold	—		129,432			38,685			—			168,117
Gross margin	—		81,595			9,416			—			91,011
Selling, general and administrative expenses	—		46,833			7,068			—			53,901
Amortization of intangibles	—		3,167			—			—			3,167
Restructuring costs	—		1,659			—			—			1,659
Operating income (loss)	—		29,936			2,348			—			32,284
Other income (expense):
Interest, net	—		(15,137		)	(46		)	—			(15,183		)
Amortization of deferred financing costs	—		(1,100		)	—			—			(1,100		)
Equity in net income (loss) of subsidiaries	11,198		—			—			(11,198		)	—
Income (loss) before income tax provision	11,198		13,699			2,302			(11,198		)	16,001
Income tax provision	—		4,448			355			—			4,803
Net income (loss)	$	11,198	$	9,251		$	1,947		$	(11,198	)	$	11,198

VICTOR TECHNOLOGIES GROUP, INC.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

THREE MONTHS ENDED JUNE 30, 2013

(unaudited)

(Dollars in thousands)



	Parent Victor Technologies Group, Inc.			Guarantors			Non- Guarantors			Eliminations			Consolidated
Net income (loss)	$	9,755		$	8,853		$	902		$	(9,755	)	$	9,755

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments
Other comprehensive income (loss) before reclassification	(6,956		)	(4,745		)	(584		)	5,329			(6,956		)
Less: Amounts reclassified to income	—			—			—			—			—

Pension and postretirement
Other comprehensive income (loss) before reclassification	(50		)	(50		)	—			50			(50		)
Less: Amounts reclassified to income	(62		)	(85		)	23			62			(62		)

Comprehensive income (loss)	$	2,687		$	3,973		$	341		$	(4,314	)	$	2,687

VICTOR TECHNOLOGIES GROUP, INC.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

THREE MONTHS ENDED JUNE 30, 2012

(unaudited)

(Dollars in thousands)



	Parent Victor Technologies Group, Inc.			Guarantors			Non- Guarantors			Eliminations			Consolidated
Net income (loss)	$	5,986		$	4,896		$	1,090		$	(5,986	)	$	5,986

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments
Other comprehensive income (loss) before reclassification	(2,081		)	(2,073		)	(8		)	2,081			(2,081		)
Less: Amounts reclassified to income	—			—			—			—			—

Pension and postretirement
Other comprehensive income (loss) before reclassification	—			—			—			—			—
Less: Amounts reclassified to income	56			47			9			(56		)	56

Comprehensive income (loss)	$	3,961		$	2,870		$	1,091		$	(3,961	)	$	3,961

VICTOR TECHNOLOGIES GROUP, INC.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

SIX MONTHS ENDED JUNE 30, 2013

(unaudited)

(Dollars in thousands)



	Parent Victor Technologies Group, Inc.			Guarantors			Non- Guarantors			Eliminations			Consolidated
Net income (loss)	$	10,464		$	6,436		$	4,028		$	(10,464	)	$	10,464

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments
Other comprehensive income (loss) before reclassification	(7,056		)	(2,378		)	(1,060		)	3,438			(7,056		)
Less: Amounts reclassified to income	—			—			—			—			—

Pension and postretirement
Other comprehensive income (loss) before reclassification	1,252			1,252			—			(1,252		)	1,252
Less: Amounts reclassified to income	141			101			40			(141		)	141

Comprehensive income (loss)	$	4,801		$	5,411		$	3,008		$	(8,419	)	$	4,801

VICTOR TECHNOLOGIES GROUP, INC.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

SIX MONTHS ENDED JUNE 30, 2012

(unaudited)

(Dollars in thousands)



	Parent Victor Technologies Group, Inc.		Guarantors		Non- Guarantors			Eliminations			Consolidated
Net income (loss)	$	11,198	$	9,251	$	1,947		$	(11,198	)	$	11,198

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments
Other comprehensive income (loss) before reclassification	215		1,391		(50		)	(1,341		)	215
Less: Amounts reclassified to income	—		—		—			—			—

Pension and postretirement
Other comprehensive income (loss) before reclassification	—		—		—			—			—
Less: Amounts reclassified to income	39		38		1			(39		)	39

Comprehensive income (loss)	$	11,452	$	10,680	$	1,898		$	(12,578	)	$	11,452

VICTOR TECHNOLOGIES GROUP, INC.

CONDENSED CONSOLIDATING BALANCE SHEET

JUNE 30, 2013

(unaudited)

(Dollars in thousands)



	Parent Victor Technologies Group, Inc.			Guarantors			Non- Guarantors			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	—		$	33,111		$	7,003		$	—		$	40,114
Accounts receivable, net	—			63,524			13,648			—			77,172
Inventories	—			88,595			13,041			—			101,636
Prepaid expenses and other	—			5,554			6,647			—			12,201
Prepaid income taxes	—			1,574			298			—			1,872
Deferred tax assets	—			2,423			—			—			2,423
Assets held for sale	—			9,250			2,180			—			11,430
Total current assets	—			204,031			42,817			—			246,848
Property, plant and equipment, net	—			45,079			11,542			—			56,621
Goodwill	—			176,500			4,822			—			181,322
Intangibles, net	—			133,473			238			—			133,711
Deferred financing fees	—			14,178			—			—			14,178
Other assets	—			556			—			—			556
Investment in and advances to subsidiaries	169,088			79,232			—			(248,320		)	—
Total assets	$	169,088		$	653,049		$	59,419		$	(248,320	)	$	633,236
LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIT)
Current Liabilities:
Current maturities of long-term obligations	$	—		$	1,256		$	63		$	—		$	1,319
Accounts payable	—			25,876			10,970			—			36,846
Accrued and other liabilities	—			27,713			5,746			—			33,459
Accrued interest	—			1,477			—			—			1,477
Income taxes payable	—			16			969			—			985
Deferred tax liability	—			4,436			—			—			4,436
Total current liabilities	—			60,774			17,748			—			78,522
Long-term obligations, less current maturities	—			357,203			30			—			357,233
Deferred tax liabilities	—			78,471			147			—			78,618
Other long-term liabilities	—			14,043			2,020			—			16,063
Net equity (deficit) and advances to / from subsidiaries	66,288			27,382			(37,092		)	(56,578		)	—
Stockholder's equity (deficit):
Common stock	—			2,555			55,782			(58,337		)	—
Additional paid-in-capital	86,056			113,798			15,829			(129,627		)	86,056
Retained Earnings / (Accumulated deficit)	24,150			1,615			5,027			(6,642		)	24,150
Accumulated other comprehensive income (loss)	(7,406		)	(2,792		)	(72		)	2,864			(7,406		)
Total stockholder's equity (deficit)	102,800			115,176			76,566			(191,742		)	102,800
Total liabilities and stockholder's equity (deficit)	$	169,088		$	653,049		$	59,419		$	(248,320	)	$	633,236

VICTOR TECHNOLOGIES GROUP, INC.

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2012

(Dollars in thousands)



	Parent Victor Technologies Group, Inc.			Guarantors			Non- Guarantors			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	—		$	26,952		$	5,427		$	—		$	32,379
Accounts receivable, net	—			52,709			12,277			—			64,986
Inventories	—			89,398			11,211			—			100,609
Prepaid expenses and other	—			5,654			6,838			—			12,492
Deferred tax assets	—			2,423			—			—			2,423
Total current assets	—			177,136			35,753			—			212,889
Property, plant and equipment, net	—			61,819			14,075			—			75,894
Goodwill	—			182,225			4,898			—			187,123
Intangibles, net	—			136,202			586			—			136,788
Deferred financing fees	—			15,486			—			—			15,486
Other assets	—			559			—			—			559
Investment in and advances to subsidiaries	174,751			79,232			—			(253,983		)	—
Total assets	$	174,751		$	652,659		$	55,312		$	(253,983	)	$	628,739
LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIT)
Current Liabilities:
Current maturities of long-term obligations	$	—		$	1,248		$	315		$	—		$	1,563
Accounts payable	—			23,308			6,401			—			29,709
Accrued and other liabilities	—			30,495			6,222			—			36,717
Accrued interest	—			1,479			—			—			1,479
Income taxes payable	—			(140		)	452			—			312
Deferred tax liability	—			4,436			—			—			4,436
Total current liabilities	—			60,826			13,390			—			74,216
Long-term obligations, less current maturities	—			357,463			57			—			357,520
Deferred tax liabilities	—			80,618			149			—			80,767
Other long-term liabilities	—			16,596			2,205			—			18,801
Net equity (deficit) and advances to / from subsidiaries	77,316			21,381			(35,341		)	(63,356		)	—
Stockholder's equity (deficit):
Common stock	—			2,555			55,782			(58,337		)	—
Additional paid-in-capital	85,492			113,796			15,597			(129,393		)	85,492
Retained Earnings / (Accumulated deficit)	13,686			4,032			1,901			(5,933		)	13,686
Accumulated other comprehensive income (loss)	(1,743		)	(4,608		)	1,572			3,036			(1,743		)
Total stockholder's equity (deficit)	97,435			115,775			74,852			(190,627		)	97,435
Total liabilities and stockholder's equity (deficit)	$	174,751		$	652,659		$	55,312		$	(253,983	)	$	628,739

VICTOR TECHNOLOGIES GROUP, INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2013

(unaudited)

(Dollars in thousands)



	Parent Victor Technologies Group, Inc.			Guarantors			Non- Guarantors			Eliminations			Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	11,082		$	8,288		$	4,346		$	(10,464	)	$	13,252
Cash flows from investing activities:
Capital expenditures	—			(2,684		)	(561		)	—			(3,245		)
Other	—			(199		)	(20		)	—			(219		)
Net cash provided by (used in) investing activities	—			(2,883		)	(581		)	—			(3,464		)
Cash flows from financing activities:
Repayments of other long-term obligations	—			(612		)	(275		)	—			(887		)
Changes in net equity	(11,028		)	2,472			(1,908		)	10,464			—
Other	(54		)	—			—			—			(54		)
Net cash provided by (used in) financing activities	(11,082		)	1,860			(2,183		)	10,464			(941		)
Effect of exchange rate changes on cash and cash equivalents	—			(1,106		)	(6		)	—			(1,112		)
Total increase in cash and cash equivalents	—			6,159			1,576			—			7,735
Total cash and cash equivalents beginning of period	—			26,952			5,427			—			32,379
Total cash and cash equivalents end of period	$	—		$	33,111		$	7,003		$	—		$	40,114

VICTOR TECHNOLOGIES GROUP, INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2012

(unaudited)

(Dollars in thousands)



	Parent Victor Technologies Group, Inc.			Guarantors			Non- Guarantors			Eliminations			Consolidated
Cash flows from operations:
Net cash provided by (used in) operating activities	$	11,576		$	7,516		$	(1,679	)	$	(11,198	)	$	6,215
Cash flows from investing activities:
Capital expenditures	—			(4,787		)	(913		)	—			(5,700		)
Other	—			(389		)	100			—			(289		)
Net cash provided by (used in) investing activities	—			(5,176		)	(813		)	—			(5,989		)
Cash flows from financing activities:
Issuance of Additional Notes of Senior Secured Notes due 2017	—			100,000			—			—			100,000
Senior Secured Notes discount	—			(5,200		)	—			—			(5,200		)
Repayments of other long-term obligations	—			(594		)	(224		)	—			(818		)
Dividend payment to Parent	(93,507		)	—			—			—			(93,507		)
Deferred financing fees	—			(4,409		)	—			—			(4,409		)
Changes in net equity	82,419			(95,014		)	1,397			11,198			—
Other	(488		)	—			—			—			(488		)
Net cash provided by (used in) financing activities	(11,576		)	(5,217		)	1,173			11,198			(4,422		)
Effect of exchange rate changes on cash and cash equivalents	—			143			(35		)	—			108
Total increase (decrease) in cash and cash equivalents	—			(2,734		)	(1,354		)	—			(4,088		)
Total cash and cash equivalents beginning of period	—			15,298			5,558			—			20,856
Total cash and cash equivalents end of period	$	—		$	12,564		$	4,204		$	—		$	16,768

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

+ References+ Details

Victor Technologies Group, Inc. 10-Q