Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 28, 2019 | Nov. 12, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 28, 2019 | |
Entity Registrant Name | HILLMAN COMPANIES INC | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 23-2874736 | |
Entity Address, Address Line One | 10590 Hamilton Avenue | |
Entity Address, City or Town | Cincinnati | |
Entity Address, State or Province | OH | |
Entity Address, Postal Zip Code | 45231 | |
Amendment Flag | false | |
Entity File Number | 1-13293 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
City Area Code | 513 | |
Local Phone Number | 851-4900 | |
Entity Central Index Key | 0001029831 | |
Current Fiscal Year End Date | --12-28 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 5,000 | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 12,942 | $ 28,234 |
Accounts receivable, net of allowances of $1,343 ($846 - 2018) | 115,670 | 110,799 |
Inventories, net | 333,384 | 320,281 |
Other current assets | 9,516 | 18,727 |
Total current assets | 471,512 | 478,041 |
Property and equipment, net of accumulated depreciation of $164,299 ($131,169 - 2018) | 202,892 | 208,279 |
Goodwill | 818,534 | 803,847 |
Other intangibles, net of accumulated amortization of $217,105 ($176,677 - 2018) | 896,683 | 930,525 |
Operating lease right of use assets | 79,946 | |
Other assets | 10,297 | 10,778 |
Total assets | 2,479,864 | 2,431,470 |
Current liabilities: | ||
Accounts payable | 141,285 | 135,059 |
Current portion of debt and capital leases | 11,284 | 10,985 |
Current portion of operating lease liabilities | 11,668 | |
Accrued expenses: | ||
Salaries and wages | 21,153 | 9,881 |
Pricing allowances | 7,175 | 5,404 |
Income and other taxes | 4,216 | 3,325 |
Interest | 9,874 | 15,423 |
Other accrued expenses | 23,462 | 17,941 |
Total current liabilities | 230,117 | 198,018 |
Long term debt | 1,576,197 | 1,586,084 |
Deferred income taxes, net | 198,864 | 200,696 |
Operating lease liabilities | 71,105 | |
Other non-current liabilities | 27,487 | 7,565 |
Total liabilities | 2,103,770 | 1,992,363 |
Commitments and contingencies | ||
Stockholder's Equity: | ||
Preferred stock, $.01 par, 5,000 shares authorized, none issued or outstanding at September 28, 2019 and December 29, 2018 | 0 | 0 |
Common stock, $.01 par, 5,000 shares authorized, issued and outstanding at September 28, 2019 and December 29, 2018 | 0 | 0 |
Additional paid-in capital | 552,184 | 549,528 |
(Accumulated deficit) retained earnings | (142,121) | (72,831) |
Accumulated other comprehensive loss | (33,969) | (37,590) |
Total stockholder's equity | 376,094 | 439,107 |
Total liabilities and stockholder's equity | $ 2,479,864 | $ 2,431,470 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 1,343 | $ 846 |
Property and equipment, accumulated depreciation | 164,299 | 131,169 |
Other intangible assets, accumulated amortization | $ 217,105 | $ 176,677 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000 | 5,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 5,000 | 5,000 |
Common stock, shares issued | 5,000 | 5,000 |
Common stock, shares outstanding | 5,000 | 5,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 317,277,000 | $ 243,839,000 | $ 929,564,000 | $ 697,588,000 |
Cost of sales (exclusive of depreciation and amortization shown separately below) | 176,586,000 | 130,321,000 | 523,816,000 | 373,938,000 |
Selling, general and administrative expenses | 99,329,000 | 83,575,000 | 288,047,000 | 233,448,000 |
Depreciation | 16,269,000 | 12,004,000 | 48,740,000 | 30,481,000 |
Amortization | 14,665,000 | 10,437,000 | 44,114,000 | 29,872,000 |
Management fees to related party | 140,000 | 134,000 | 396,000 | 396,000 |
Other expense | 335,000 | 721,000 | 5,687,000 | 1,736,000 |
Income from operations | 9,953,000 | 6,647,000 | 18,764,000 | 27,717,000 |
Interest expense, net | 24,882,000 | 16,122,000 | 77,509,000 | 44,054,000 |
Interest expense on junior subordinated debentures | 3,152,000 | 3,152,000 | 9,456,000 | 9,456,000 |
Gain (Loss) on Interest Rate Derivative Instruments Not Designated as Hedging Instruments | 315,000 | (259,000) | 3,217,000 | (1,677,000) |
Refinancing charges | 0 | 0 | 0 | (8,542,000) |
Investment income on trust common securities | (95,000) | (95,000) | (284,000) | (284,000) |
Loss before income taxes | (18,301,000) | (12,273,000) | (71,134,000) | (32,374,000) |
Income tax (benefit) expense | (3,775,000) | (1,565,000) | (1,844,000) | 2,182,000 |
Net loss | (14,526,000) | (10,708,000) | (69,290,000) | (34,556,000) |
Net loss from above | (14,526,000) | (10,708,000) | (69,290,000) | (34,556,000) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (1,705,000) | 2,790,000 | 3,621,000 | (3,892,000) |
Total other comprehensive income (loss) | (1,705,000) | 2,790,000 | 3,621,000 | (3,892,000) |
Comprehensive loss | $ (16,231,000) | $ (7,918,000) | $ (65,669,000) | $ (38,448,000) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (69,290) | $ (34,556) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 92,854 | 60,353 |
Deferred income taxes | (2,522) | 1,876 |
Deferred financing and original issue discount amortization | 2,779 | 1,522 |
Stock-based compensation expense | 1,906 | 1,219 |
Loss on debt restructuring | 0 | 8,542 |
Asset impairment | 6,896 | 832 |
(Gain) loss on disposal of property and equipment | (123) | 300 |
Other non-cash interest and change in value of interest rate swap | 3,217 | (1,677) |
Changes in operating items: | ||
Accounts receivable | (4,707) | (16,059) |
Inventories | (13,232) | (45,687) |
Other assets | 2,212 | (1,089) |
Accounts payable | 4,508 | 38,482 |
Other accrued liabilities | 10,369 | (8,205) |
Net cash provided by operating activities | 34,867 | 5,853 |
Cash flows from investing activities: | ||
Payments to Acquire Businesses, Net of Cash Acquired | 6,135 | 154,498 |
Capital expenditures | (41,097) | (54,222) |
Proceeds from sale of property and equipment | 9,929 | 0 |
Net cash used for investing activities | (37,303) | (208,720) |
Cash flows from financing activities: | ||
Repayments of senior term loans | (7,956) | (532,488) |
Borrowings on senior term loans | 0 | 695,000 |
Financing fees | 0 | (12,717) |
Borrowings on revolving credit loans | 27,500 | 117,500 |
Repayments of revolving credit loans | (32,700) | (62,500) |
Principal payments under finance and capitalized lease obligations | 484 | |
Principal payments under finance and capitalized lease obligations | (160) | |
Proceeds from exercise of stock options | 0 | 200 |
Proceeds from sale of Holdco stock | 750 | 0 |
Dividend to Holdco | 0 | (3,780) |
Net cash (used for) provided by financing activities | (12,890) | 201,055 |
Effect of exchange rate changes on cash | 34 | 48 |
Net decrease in cash and cash equivalents | (15,292) | (1,764) |
Cash and cash equivalents at beginning of period | 28,234 | 9,937 |
Cash and cash equivalents at end of period | 12,942 | 8,173 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 77,340 | 44,773 |
Income taxes paid | 700 | 632 |
11.6% Junior Subordinated Debentures - Preferred | ||
Supplemental disclosure of cash flow information: | ||
Interest paid | $ 9,172 | $ 9,172 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in-capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss |
Beginning Balance at Dec. 30, 2017 | $ 527,403 | $ 0 | $ 551,518 | $ 2,422 | $ (26,537) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (10,317) | (10,317) | |||
Stock-based compensation | 487 | 487 | |||
Foreign currency translation adjustments | (3,039) | (3,039) | |||
Other | 11 | 15 | (4) | ||
Ending Balance at Mar. 31, 2018 | 506,693 | 0 | 552,020 | (15,751) | (29,576) |
Beginning Balance at Dec. 30, 2017 | 527,403 | 0 | 551,518 | 2,422 | (26,537) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (34,556) | ||||
Proceeds from sale of Holdco stock | 0 | ||||
Dividend to Holdco | (3,780) | ||||
Foreign currency translation adjustments | (3,892) | ||||
Ending Balance at Sep. 29, 2018 | 480,780 | 0 | 549,159 | (37,950) | (30,429) |
Beginning Balance at Mar. 31, 2018 | 506,693 | 0 | 552,020 | (15,751) | (29,576) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (13,531) | (13,531) | |||
Stock-based compensation | 505 | 505 | |||
Proceeds from exercise of stock options | 200 | 200 | |||
Foreign currency translation adjustments | (3,643) | (3,643) | |||
Other | (10) | (10) | |||
Ending Balance at Jun. 30, 2018 | 490,214 | 0 | 552,715 | (29,282) | (33,219) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (10,708) | (10,708) | |||
Stock-based compensation | 227 | 227 | |||
Dividend to Holdco | (3,780) | (3,780) | |||
Foreign currency translation adjustments | 2,790 | 2,790 | |||
Other | (3) | 3 | |||
Ending Balance at Sep. 29, 2018 | 480,780 | 0 | 549,159 | (37,950) | (30,429) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative effect of change in accounting principles | 2,040 | 2,040 | |||
Beginning Balance at Dec. 29, 2018 | 439,107 | 0 | 549,528 | (72,831) | (37,590) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (35,268) | (35,268) | |||
Stock-based compensation | 361 | 361 | |||
Foreign currency translation adjustments | 2,779 | 2,779 | |||
Ending Balance at Mar. 30, 2019 | 406,979 | 0 | 549,889 | (108,099) | (34,811) |
Beginning Balance at Dec. 29, 2018 | 439,107 | 0 | 549,528 | (72,831) | (37,590) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (69,290) | ||||
Proceeds from sale of Holdco stock | 750 | ||||
Dividend to Holdco | 0 | ||||
Foreign currency translation adjustments | 3,621 | ||||
Ending Balance at Sep. 28, 2019 | 376,094 | 0 | 552,184 | (142,121) | (33,969) |
Beginning Balance at Mar. 30, 2019 | 406,979 | 0 | 549,889 | (108,099) | (34,811) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (19,496) | (19,496) | |||
Stock-based compensation | 301 | 301 | |||
Foreign currency translation adjustments | 2,547 | 2,547 | |||
Ending Balance at Jun. 29, 2019 | 390,331 | 550,190 | (127,595) | (32,264) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (14,526) | (14,526) | |||
Stock-based compensation | 1,244 | 1,244 | |||
Proceeds from sale of Holdco stock | 750 | 750 | |||
Foreign currency translation adjustments | (1,705) | (1,705) | |||
Ending Balance at Sep. 28, 2019 | $ 376,094 | $ 0 | $ 552,184 | $ (142,121) | $ (33,969) |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited financial statements include the condensed consolidated accounts of The Hillman Companies, Inc. and its wholly-owned subsidiaries (collectively “Hillman” or the “Company”) for the thirty-nine weeks ended September 28, 2019 . Unless the context requires otherwise, references to "Hillman," "we," "us," "our," or "our Company" refer to The Hillman Companies, Inc. and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. The Hillman Companies, Inc. is a wholly-owned subsidiary of HMAN Intermediate II Holdings Corp., and a wholly-owned subsidiary of HMAN Group Holdings Inc. (“Holdco”). The accompanying unaudited condensed consolidated financial statements present information in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and applicable rules of Regulation S-X. Accordingly, they do not include all information or footnotes required by U.S. generally accepted accounting principles for complete financial statements. Operating results for the thirty-nine weeks ended September 28, 2019 do not necessarily indicate the results that may be expected for the full year. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s annual report filed on Form 10-K for the year ended December 29, 2018 . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 28, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | The significant accounting policies should be read in conjunction with the significant accounting policies included in the Form 10-K for the year ended December 29, 2018 . Use of Estimates in the Preparation of Financial Statements: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses for the reporting periods. Actual results may differ from these estimates. Reclassifications: Certain amounts in the prior year consolidated financial statements were reclassified to conform to the current year’s presentation. The reclassifications were primarily related to the reclassification of the mark-to-market adjustment of our interest rate swap from other income/expense to its own line on the income statement below income from operations. The reclassification had no impact on the prior periods’ statement of financial position, net income (loss), cash flows, or stockholder’s equity. Revenue Recognition: Revenue is recognized when control of goods or services is transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company offers a variety of sales incentives to its customers primarily in the form of discounts, rebates, and slotting fees. Discounts are recognized in the consolidated financial statements at the date of the related sale. Rebates are based on the revenue to date and the contractual rebate percentage to be paid. A portion of the cost of the rebate is allocated to each underlying sales transaction. Discounts and rebates are included in the determination of net sales. The Company also establishes reserves for customer returns and allowances. The reserve is established based on historical rates of returns and allowances. The reserve is adjusted quarterly based on actual experience. Returns and allowances are included in the determination of net sales. The following table displays our disaggregated revenue by product category. Thirteen weeks ended September 28, 2019 Fastening Solutions Home and Access Solutions Consumer Connected Solutions Personal Protective Solutions Total Revenue United States 125,603 68,732 28,938 56,557 279,830 Canada 25,544 6,987 557 1,621 34,709 Other 1,634 186 — 918 2,738 Consolidated 152,781 75,905 29,495 59,096 317,277 Thirteen weeks ended September 29, 2018 Fastening Home and Access Solutions Consumer Connected Solutions Personal Protective Solutions Total Revenue United States 114,334 67,055 23,061 — 204,450 Canada 29,229 8,003 190 — 37,422 Other 1,721 246 — — 1,967 Consolidated 145,284 75,304 23,251 — 243,839 Thirty-nine weeks ended September 28, 2019 Fastening Home and Access Solutions Consumer Connected Solutions Personal Protective Solutions Total Revenue United States 353,290 199,482 84,625 178,952 816,349 Canada 80,350 18,881 1,351 4,045 104,627 Other 5,494 657 — 2,437 8,588 Consolidated 439,134 219,020 85,976 185,434 929,564 Thirty-nine weeks ended September 29, 2018 Fastening Home and Access Solutions Consumer Connected Solutions Personal Protective Solutions Total Revenue United States 334,363 192,587 54,288 — 581,238 Canada 89,561 20,818 195 — 110,574 Other 5,068 708 — — 5,776 Consolidated 428,992 214,113 54,483 — 697,588 Fastening solutions revenues consist primarily of the delivery of fasteners, anchors, and specialty products as well as in-store merchandising services for the related product category. Home and access solutions revenues consist primarily of the delivery of keys and key accessories, builders' hardware, wall hanging, threaded rod products, letters, numbers, and signs ("LNS") as well as in-store merchandising services for the related product categories and access to our proprietary key duplicating equipment. Consumer connected solutions revenues consist primarily of sales of keys and identification tags through self-service key duplicating machines and engraving kiosks. Personal protective solutions revenues consist primarily of the delivery of personal protective equipment such as gloves, soft sided tool storage, and eye-wear as well as in-store merchandising services for the related product category. The Company’s performance obligations under its arrangements with customers are providing products, in-store merchandising services, and access to key duplicating and engraving equipment. Generally, the price of the merchandising services and the access to the key duplicating and engraving equipment is included in the price of the related products. Control of products is transferred at the point in time when the customer accepts the goods. Judgment was required in applying the new revenue standard in determining the time at which to recognize revenue for the in-store services and the access to key duplicating and engraving equipment. The Company’s obligation to provide in-store service and access to key duplicating and engraving equipment is satisfied when control of the related products is transferred. Therefore, the entire amount of consideration related to the sale of products, in-store merchandising services, and access to key duplicating and engraving equipment is recognized upon the customer’s acceptance of the products. The revenues for all performance obligations are recognized upon the customer's acceptance of the products. The costs to obtain a contract are insignificant, and generally contract terms do not extend beyond one year. Therefore, these costs are expensed as incurred. Freight and shipping costs and the cost of our in-store merchandising services teams are recognized in selling, general, and administrative expense when control over products is transferred to the customer. The Company used the practical expedient regarding the existence of a significant financing component as payments are due in less than one year after delivery of the products. Long Lived Assets: The Company evaluates its long-lived assets, including definite-lived intangibles assets, for impairment including an evaluation based on the estimated undiscounted future cash flows as events or changes in circumstances indicate that the carrying amount of such assets may not be fully recoverable. In the thirteen and thirty-nine weeks ended September 28, 2019 , the Company recorded impairment losses of $96 and $6,896 , respectively, related to the loss on the disposal of its FastKey self-service key duplicating kiosks and related assets. In the thirteen and thirty-nine weeks ended September 29, 2018 , the Company recorded impairment losses of $832 , primarily related to restructuring in the Canada operating segment, see Note 9 - Restructuring for additional information. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 28, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). Subsequently, in July 2018 the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements and ASU 2018-10, Codification Improvements to Topic 842, Leases . Effective December 30, 2018, the Company adopted the comprehensive new lease standard issued by the FASB. The most significant impact was the recognition of right-of-use ("ROU") assets and liabilities for operating leases and finance leases applicable to lessees. The Company elected to utilize the transition guidance within the new standard which allows the Company to carry forward its historical lease classification(s). Operating and finance lease ROU assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement date. As the implicit rate is not determinable in most of the Company’s leases, management uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The Company elected to not separate lease and non-lease components for all classes of underlying assets in which it is the lessee and made an accounting policy election to not account for leases within an initial term of 12 months or less on the Condensed Consolidated Balance Sheet. The expected lease terms include options to extend or terminate the lease when it is reasonably certain the Company will exercise such option. Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term. As of December 30, 2018 , Company recorded an Operating ROU Asset of $72,785 and a Finance ROU Asset of $672 within our Condensed Consolidated Balance Sheet. Short-term and long-term operating lease liabilities were recorded as $12,040 and $63,291 , respectively. Short-term and long-term finance lease liabilities were determined to be $436 and $477 respectively. The adoption of this guidance did not have an impact on net income. During the thirteen weeks ended September 28, 2019 the Company corrected its method for determining the incremental borrowing rate. This correction resulted in an immaterial correction to the Company’s opening operating lease liability at December 30, 2018 and the interest on lease liabilities in the thirteen and thirty-nine weeks ended September 28, 2019 . See Note 11 - Leases of the Notes to the Condensed Consolidated Financial Statement for full lease disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses . The ASU sets forth a “current expected credit loss” (CECL) model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently assessing the impact of the adoption of this ASU on its Condensed Consolidated Financial Statements. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 28, 2019 | |
Business Acquisition [Line Items] | |
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | Minute Key Holdings, Inc. On August 10, 2018, the Company completed the acquisition of Minute Key Holdings, Inc . (“MinuteKey”), an innovative leader in self-service key duplicating kiosks for a total consideration reflecting an enterprise value of $156,289 . MinuteKey is headquartered in Boulder, Colorado and has operations in the United States and Canada. MinuteKey is included in the Company's United States and Canada reportable segments. The following table reconciles the final fair value of the acquired assets and assumed liabilities (net of purchase price accounting adjustments) to the total purchase price of the MinuteKey acquisition: Cash $ 1,791 Inventory 3,952 Other current assets 766 Property and equipment 29,888 Goodwill 59,237 Customer relationships 50,000 Technology 19,000 Trade names 5,400 Other non-current assets 16 Total assets acquired 170,050 Less: Liabilities assumed (13,761 ) Total purchase price $ 156,289 Net sales and operating income of the acquired business included in the Company's condensed consolidated statement of comprehensive income for thirteen weeks ended September 28, 2019 were approximately $15,689 and $206 , respectively. Net sales and operating loss for thirty-nine weeks ended September 28, 2019 were approximately $41,011 and $2,355 , respectively. Unaudited pro forma financial information has not been presented for MinuteKey as the financial results of MinuteKey were insignificant to the financial results of the Company on a standalone basis. Big Time Products On October 1, 2018, the Company acquired NB Parent Company, Inc. and its affiliated companies including Big Time Products, LLC and Rooster Products International, Inc. (collectively, "Big Time"), a leading provider of personal protection and work gear products ranging from work gloves, tool belts and jobsite storage for a purchase price of $348,834 . Big Time has business operations throughout North America and its financial results reside in the Company's United States, Canada and Mexico reportable segments. Measurement period adjustments for the thirteen and thirty-nine weeks ended September 28, 2019 were immaterial. See Note 5 - Goodwill and Other Intangible Assets . The following table reconciles the final fair value of the acquired assets and assumed liabilities (net of purchase price accounting adjustments) to the total purchase price of the Big Time acquisition: Cash $ 2,507 Accounts receivable 40,828 Inventory 40,216 Other current assets 1,623 Property and equipment 3,703 Goodwill 130,863 Customer relationships 189,000 Trade names 21,000 Other non-current assets 159 Total assets acquired 429,899 Less: Liabilities assumed (81,065 ) Total purchase price $ 348,834 The amount of net sales and operating income from Big Time included in the Company's condensed consolidated statement of comprehensive income for thirteen weeks ended September 28, 2019 was approximately $59,092 and $4,548 , respectively. Net sales and operating income from Big Time for thirty-nine weeks ended September 28, 2019 was approximately $185,432 and $16,843 , respectively. The following table provides unaudited pro forma results of the combined entities of Hillman and Big Time Products, had the acquisition occurred at the beginning of fiscal 2018: Thirteen weeks ended September 29, 2018 Thirty-nine weeks ended September 29, 2018 Net revenues 297,334 862,975 Net loss (10,550 ) (39,892 ) The pro forma results are based on assumptions that the Company believes are reasonable under certain circumstances. The pro forma results presented are not intended to be indicative of results that may occur in the future. The underlying pro forma information includes historical results of the Company, the Company's financing arrangements related to the Big Time acquisition, and certain purchase price accounting adjustments, including amortization of acquired intangibles. Sharp Systems, LLC On August 16, 2019, the Company acquired the assets of Sharp Systems, LLC ("Resharp"), a California-based innovative developer of automated knife sharpening systems, for a total purchase price of $21,100 , including a contingent consideration provision with an estimated fair value of $18,100 , with a maximum payout of $25,000 plus 1.8% of net knife-sharpening revenues for five years after the $25,000 is fully paid. Contingent consideration to be paid subsequent to September 28, 2019 is contingent upon several business performance metrics over a multi-year period. An amount of the acquisition consideration totaling $18,100 remains payable to the seller. Resharp's financial results reside within the Company's United States reportable segment. The following table reconciles the estimated fair value of the acquired assets to the net cash paid during the thirteen and thirty-nine weeks ended September 28, 2019 : Property and equipment 218 Goodwill 9,382 Technology 11,500 Total assets acquired 21,100 Less: Contingent consideration payable (18,100 ) Net cash paid 3,000 Net sales and operating results of the acquired business included in the Company's condensed consolidated statement of comprehensive income for thirteen weeks ended September 28, 2019 and for thirty-nine weeks ended September 28, 2019 were immaterial. Unaudited pro forma financial information has not been presented for Resharp as the financial results of Resharp were insignificant to the financial results of the Company on a standalone basis. Other Acquisitions On July 1, 2019, the Company acquired the assets of West Coast Washers, Inc for a total purchase price of $3,135 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill amounts by operating segment are summarized as follows: Goodwill at Acquisitions (1) Dispositions Adjustments (2) Other (3) Goodwill at December 29, 2018 September 28, 2019 United States $ 772,213 $ 9,382 $ — $ 4,488 $ — $ 786,083 Canada 27,938 — — — 820 28,758 Other 3,696 — — — (3 ) 3,693 Total $ 803,847 $ 9,382 $ — $ 4,488 $ 817 $ 818,534 (1) See Note 4 - Acquisitions of the Notes to condensed consolidated financial statements for additional information regarding the acquisition of Resharp in 2019. (2) These amounts relate to opening balance sheet adjustments resulting from the acquisitions of MinuteKey and Big Time Products. These adjustments were primarily related to $2,087 increase in inventory reserve and a $1,106 increase in assumed liabilities for Big Time, as well as a $633 increase in assumed liabilities for MinuteKey. These acquisitions were completed in the third and fourth quarters of 2018, respectively, and purchase price accounting adjustments are finalized as of the current period. (3) The "Other" change to goodwill relates to adjustments resulting from fluctuations in foreign currency exchange rates for the Canada and Mexico reporting units. Other intangibles, net, as of September 28, 2019 and December 29, 2018 consist of the following: Estimated September 28, 2019 December 29, 2018 Customer relationships 13-20 $ 940,727 $ 939,880 Trademarks - Indefinite Indefinite 85,406 85,228 Trademarks - Other 5-15 26,700 26,700 Technology and patents 7-12 60,955 55,394 Intangible assets, gross 1,113,788 1,107,202 Less: Accumulated amortization 217,105 176,677 Other intangibles, net $ 896,683 $ 930,525 The amortization expense for amortizable assets including the adjustments resulting from fluctuations in foreign currency exchange rates was $14,665 and $44,114 for the thirteen and thirty-nine weeks ended September 28, 2019 , respectively. Amortization expense for the thirteen and thirty-nine weeks ended September 29, 2018 was $10,437 and $29,872 , respectively. The Company tests goodwill and indefinite-lived intangible assets for impairment annually. Impairment is also tested when events or changes in circumstances indicate that the carrying values of the assets may be greater than their fair values. During the thirteen and thirty-nine weeks ended September 28, 2019 and the thirteen and thirty-nine weeks ended September 29, 2018 , the Company did not adjust goodwill to fair values as a result of any impairment analyses. In the thirty-nine weeks ended September 28, 2019, the Company recorded an impairment charge of $2,125 related to the loss on the disposal of our FastKey self-service key duplicating kiosks and related intangible assets. There were no such impairment charges taken in the thirteen weeks ended September 28, 2019 nor the thirteen and thirty-nine weeks ended September 29, 2018 . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies : The Company self-insures its product liability, automotive, workers' compensation, and general liability losses up to $250 per occurrence. Catastrophic coverage has been purchased from third party insurers for occurrences in excess of $250 up to $60,000 . The two risk areas involving the most significant accounting estimates are workers' compensation and automotive liability. Actuarial valuations performed by the Company's outside risk insurance expert were used by the Company's management to form the basis for workers' compensation and automotive liability loss reserves. The actuary contemplated the Company's specific loss history, actual claims reported, and industry trends among statistical and other factors to estimate the range of reserves required. Risk insurance reserves are comprised of specific reserves for individual claims and additional amounts expected for development of these claims, as well as for incurred but not yet reported claims. The Company believes that the liability of approximately $1,968 recorded for such risks is adequate as of September 28, 2019 . As of September 28, 2019 , the Company has provided certain vendors and insurers letters of credit aggregating $11,736 related to our product purchases and insurance coverage for product liability, workers’ compensation, and general liability. The Company self-insures group health claims up to an annual stop loss limit of $250 per participant. Historical group insurance loss experience forms the basis for the recognition of group health insurance reserves. Provisions for losses expected under these programs are recorded based on an analysis of historical insurance claim data and certain actuarial assumptions. The Company believes that the liability of approximately $2,162 recorded for such risks is adequate as of September 28, 2019 . The Company imports large quantities of fastener products which are subject to customs requirements and to tariffs and quotas set by governments through mutual agreements and bilateral actions. The Company could be subject to the assessment of additional duties and interest if it or its suppliers fail to comply with customs regulations or similar laws. The U.S. Department of Commerce (the "Department”) has received requests from petitioners to conduct administrative reviews of compliance with anti-dumping duty and countervailing duty laws for certain nails products sourced from Asian countries. The Company sourced products under review from vendors in China and Taiwan during the periods selected for review. The Company accrues for the duty expense once it is determined to be probable and the amount can be reasonably estimated. On March 16, 2018, the Department published updated results, which were finalized upon the completion of review of appeals in April 2018. Based on the final results, our liability was reduced to $2,146 at March 31, 2018 from $6,274 at December 30, 2017. The Company recorded income of $0 and $4,128 in the thirteen and thirty-nine weeks ended September 29, 2018 , which is included in Cost of Goods Sold on the Condensed Consolidated Statement of Comprehensive Loss. There were no related charges in the thirteen and thirty-nine weeks ended September 28, 2019 . On June 3, 2019, The Hillman Group, Inc. ("Hillman Group") filed a complaint for patent infringement against KeyMe, Inc., a provider of self-service key duplication kiosks, in the United States District Court for the Eastern District of Texas (Marshall Division). Hillman Group’s complaint alleges that KeyMe’s self-named and “Locksmith in a Box” key duplication kiosks infringe U.S. Patent Nos. 8,979,446 and 9,914,179, which are assigned to Hillman Group, and seeks damages and injunctive relief against KeyMe. After the United States Patent and Trademark Office issued U.S. Patent No. 10,400,474 to Hillman Group on September 3, 2019, Hillman Group filed a motion the same day to amend its initial complaint to add the new patent to the litigation. The Texas court granted the motion on September 13, 2019. KeyMe filed two motions in the case on July 25, 2019, the first seeking to dismiss Hillman Group's complaint under Rule 12(b)(3) of the Federal Rules of Civil Procedure for improper venue, or in the alternative, to move the case from Marshall, Texas to the Southern District of New York. KeyMe’s second motion seeks to transfer the venue of the case from Texas to New York under 28 U.S.C. § 1404. Briefing was completed on these motions on September 25, 2019, and they await a decision from the Texas court. On August 16, 2019, KeyMe filed a complaint for patent infringement against Hillman Group in the United States District Court for the District of Delaware. KeyMe alleges that Hillman’s KeyKrafter key duplication machines and MinuteKey self-service key duplication kiosks infringe KeyMe’s U.S. Patent No. 8,682,468 when those machines are used in conjunction with Hillman’s KeyHero system. KeyMe seeks damages and injunctive relief against Hillman. Hillman filed an answer to KeyMe’s complaint on October 23, 2019, and asserted counterclaims seeking declaratory judgments of invalidity and noninfringement of U.S. Patent No. 8,682,468. Management and legal counsel for the Company are of the opinion that the plaintiff’s claim is without merit and the Company should prevail in defending the suit. The Company is unable to estimate the possible loss or range of loss at this early stage in the case. In addition, legal proceedings are pending which are either in the ordinary course of business or incidental to the Company's business. Those legal proceedings incidental to the business of the Company are generally not covered by insurance or other indemnity. In the opinion of the Company's management, the ultimate resolution of the pending litigation matters will not have a material adverse effect on the consolidated financial position, operations, or cash flows of the Company. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 28, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | The Company has recorded aggregate management fee charges and expenses from CCMP Capital Advisors, LLC (“CCMP”), Oak Hill Capital Partners III, L.P., Oak Hill Capital Management Partners III, L.P. and OHCP III HC RO, L.P. (collectively, “Oak Hill Funds”) of $140 and $396 for the thirteen and thirty-nine weeks ended September 28, 2019 , respectively, and $134 and $396 for the thirteen and thirty-nine weeks ended September 29, 2018 , respectively. The Company recorded proceeds from the sale of Holdco stock to members of management and the Board of Directors of $750 for the thirty-nine weeks ended September 28, 2019 . There were no sales the thirty-nine weeks ended September 29, 2018 . In the thirty-nine weeks ended September 29, 2018 , the Company paid a dividend of approximately $3,780 to Holdco for the purchase of 4,200 shares of Holdco stock from former members of management. No such dividends were paid in the thirty-nine weeks ended September 28, 2019 . Gregory Mann and Gabrielle Mann are employed by Hillman. The Company leases an industrial warehouse and office facility from companies under the control of the Manns. The rental expense for the lease of this facility was $87 and $262 for the thirteen and thirty-nine weeks ended September 28, 2019 , respectively, and $87 and $262 for the thirteen and thirty-nine weeks ended September 29, 2018 , respectively. The Hillman Group Canada ULC, a subsidiary of Hillman, entered into three leases for five properties containing an industrial warehouse, manufacturing plant, and office facilities on February 19, 2013. The owners of the properties under one lease are relatives of Richard Paulin, who was employed by The Hillman Group Canada ULC until his retirement effective April 30, 2017, and the owner of the properties under the other two leases is a company which is owned by Richard Paulin and certain of his relatives. The rental expense incurred for these leases was $163 and $486 for the thirteen and thirty-nine weeks ended September 28, 2019 , respectively, and $164 and $501 for the thirteen and thirty-nine weeks ended September 29, 2018 , respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Accounting Standards Codification 740 (“ASC 740”) requires companies to apply their estimated annual effective tax rate on a year-to-date basis in each interim period. These rates are derived, in part, from expected annual pre-tax income or loss. In the thirteen and thirty-nine weeks ended September 28, 2019 and the thirteen and thirty-nine weeks ended September 29, 2018 , the Company applied an estimated annual effective tax rate to the interim period pre-tax loss to calculate the income tax benefit or provision. For the thirteen and thirty-nine weeks ended September 28, 2019 , the effective income tax rate was 20.6% and 2.6% , respectively. The Company recorded income tax benefit for the thirteen and thirty-nine weeks ended September 28, 2019 of $(3,775) and $(1,844) , respectively. The effective tax rate for the thirteen and thirty-nine weeks ended September 28, 2019 was primarily the result of the IRC Section 163(j) interest limitation. Consistent with prior periods, the primary impact of the effective tax rate differential for the thirteen weeks ended September 28, 2019 was due to the Company recording a valuation allowance on its interest limitation carryforward. In addition to the interest limitation, the effective income tax rate differed from the federal statutory tax rate for the thirty-nine weeks ended September 28, 2019 due to certain non-deductible expenses, and state and foreign income taxes. The effective income tax rate for the thirteen and thirty-nine weeks ended September 29, 2018 was 12.8% and (6.7)% , respectively. The Company recorded an income tax benefit for the thirteen weeks ended September 29, 2018 of $(1,565) and an income tax provision of $2,182 for the thirty-nine weeks ended September 29, 2018 . The effective income tax rate for the thirteen and thirty-nine weeks ended September 29, 2018 was primarily the result of the new provisions introduced by the Tax Cuts and Jobs Act (the "Tax Act") including the new provision on Global Intangible Low-Taxed Income ("GILTI") and the IRC Section 163(j) interest limitation. The effective income tax rate differed from the federal statutory rate in the thirteen and thirty-nine weeks ended September 29, 2018 |
Restructuring
Restructuring | 9 Months Ended |
Sep. 28, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | 9. Restructuring During 2018, the Company initiated plans to restructure the operations of the Canada segment. The restructuring seeks to streamline operations in the greater Toronto area by consolidating facilities, exiting certain lines of business, and rationalizing stock keeping units (“SKUs”). The intended result of the Canada restructuring will be a more streamlined and scalable operation focused on delivering optimal service and a broad offering of products across the Company's core categories. The Company expects to incur increased restructuring related charges and capital expenditures in our Canada segment over the next year as plans are finalized and implemented. The following is a summary of the charges incurred: Thirteen Weeks Ended Thirteen Weeks Ended Thirty-nine Weeks Ended Thirty-nine Weeks Ended Facility consolidation (1) Labor expense $ 451 $ 243 $ 962 $ 334 Inventory valuation adjustments 446 — 446 — Consulting and legal fees 57 87 173 242 Other 626 6 1,302 11 Exit of certain lines of business (2) Inventory valuation adjustments 285 1,152 294 1,152 Loss (gain) on disposal of assets (61 ) 796 (458 ) 796 Severance — 239 — 239 Other 70 — 392 — Total $ 1,874 $ 2,523 $ 3,111 $ 2,774 (1) Facility consolidation includes labor expense related to organizing inventory and equipment in preparation for the facility consolation, consulting and legal fees related to the project, and other expenses. These expenses were included in SG&A on the Condensed Consolidated Statement of Comprehensive Loss. (2) As part of the restructuring, the Company is exiting a manufacturing business line. Related charges included gains and losses on disposals of assets, and other expenses, which were included other income and expense, and SG&A on the Condensed Consolidated Statement of Comprehensive Loss, respectively. The following represents the roll forward of restructuring reserves for the current period: Balance at December 29, 2018 Impact to Earnings Cash Paid Balance at September 28, 2019 Severance and related $ 1,537 — (1,033 ) $ 504 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 28, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | The following table summarizes the Company’s debt: September 28, 2019 December 29, 2018 Revolving loans $ 103,000 $ 108,200 Senior term loan, due 2025 1,050,306 1,058,263 6.375% Senior Notes, due 2022 330,000 330,000 11.6% Junior Subordinated Debentures - Preferred 105,443 105,443 Junior Subordinated Debentures - Common 3,261 3,261 Capital & finance leases 2,276 1,213 1,594,286 1,606,380 (Add) unamortized premium on 11.6% Junior Subordinated Debentures 16,466 17,498 (Subtract) unamortized discount on Senior term loan (8,419 ) (9,558 ) (Subtract) current portion of long term debt, capital leases and finance leases (11,284 ) (10,985 ) (Subtract) deferred financing fees (14,852 ) (17,251 ) Total long term debt, net $ 1,576,197 $ 1,586,084 As of September 28, 2019 , there was $1,050,306 outstanding under the 2018 Term Loan. As of September 28, 2019 , the Company had $103,000 outstanding under the ABL Revolver along with $11,736 of letters of credit. The Company has approximately $35,264 of available borrowings under the ABL Revolver as a source of liquidity. Additional information with respect to the fair value of the Company’s fixed rate senior notes and junior subordinated debentures is included in Note 13 - Fair Value Measurements . |
Leases
Leases | 9 Months Ended |
Sep. 28, 2019 | |
Leases [Abstract] | |
Leases | 11. Leases Lessee The Company determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset. The Company leases certain distribution center locations, vehicles, forklifts, computer equipment, and its corporate headquarters with expiration dates through 2032. Certain lease arrangements include escalating rent payments and options to extend the lease term. Expected lease terms include these options to extend or terminate the lease when it is reasonably certain the Company will exercise the option. The Company's leasing arrangements do not contain material residual value guarantees nor material restrictive covenants. The components of operating and finance lease cost for the thirteen and thirty-nine weeks ended September 28, 2019 were as follows: Thirteen Weeks Ended Thirty-nine Weeks Ended Operating lease cost $ 5,101 $ 14,399 Short term lease costs 668 2,644 Variable lease costs 720 1,795 Finance lease cost: Amortization of right of use assets 190 425 Interest on lease liabilities 35 78 Rent expense is recognized on a straight-line basis over the expected lease term. Rent expense totaled $6,489 and $4,730 in the thirteen weeks ended September 28, 2019 and thirteen weeks ended September 29, 2018 , respectively. Rent expense totaled $18,838 and $13,554 in the thirty-nine weeks ended September 28, 2019 and thirty-nine weeks ended September 29, 2018 , respectively. Rent expense includes operating lease cost as well as expense for non-lease components such as common area maintenance, real estate taxes, real estate insurance, variable costs related to our leased vehicles and also short-term rental expenses. The implicit rate is not determinable in most of the Company’s leases, as such management uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The weighted average remaining lease terms and discount rates for all of our operating leases were as follows as of September 28, 2019 : Operating Leases (1) Finance Leases Weighted average remaining lease term 8.00 3.71 Weighted average discount rate 7.80 % 6.53 % (1) Upon adoption of the new lease standard, discount rates used for existing operating leases were established on December 30, 2018. Supplemental balance sheet information related to the Company's finance leases as of September 28, 2019 : September 28, 2019 Finance lease assets, net, included in property plant and equipment $ 2,075 Current portion of long-term debt 675 Long-term debt, less current portion 1,601 Total principal payable on finance leases 2,276 Supplemental cash flow information related to our operating leases was as follows for the thirty-nine weeks ended September 28, 2019 : Thirty-nine Weeks Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflow from operating leases $ 13,872 Operating cash outflow from finance leases 66 Financing cash outflow from finance leases 484 As of September 28, 2019 , our future minimum rental commitments are immaterial for lease agreements beginning after the current reporting period. Maturities of our lease liabilities for all operating and finance leases are as follows as of September 28, 2019 : Operating Leases Finance Leases Less than one year $ 17,582 $ 799 1 to 2 years 15,703 699 2 to 3 years 13,557 478 3 to 4 years 11,442 376 4 to 5 years 10,529 208 After 5 years 44,060 — Total future minimum rental commitments 112,873 2,560 Less - amounts representing interest (30,100 ) (284 ) Present value of lease liabilities $ 82,773 $ 2,276 As of December 29, 2018 , minimum lease payments under non-cancellable operating leases by period were expected to be as follows: Operating Leases Less than one year $ 17,326 1 to 2 years 14,736 2 to 3 years 13,305 3 to 4 years 12,012 4 to 5 years 9,541 After 5 years 16,664 Total future minimum rental commitments 83,584 Lessor The Company has certain arrangements for key duplication equipment under which we are the lessor. These leases meet the criteria for operating lease classification. Lease income associated with these leases is not material. |
Leases | 11. Leases Lessee The Company determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset. The Company leases certain distribution center locations, vehicles, forklifts, computer equipment, and its corporate headquarters with expiration dates through 2032. Certain lease arrangements include escalating rent payments and options to extend the lease term. Expected lease terms include these options to extend or terminate the lease when it is reasonably certain the Company will exercise the option. The Company's leasing arrangements do not contain material residual value guarantees nor material restrictive covenants. The components of operating and finance lease cost for the thirteen and thirty-nine weeks ended September 28, 2019 were as follows: Thirteen Weeks Ended Thirty-nine Weeks Ended Operating lease cost $ 5,101 $ 14,399 Short term lease costs 668 2,644 Variable lease costs 720 1,795 Finance lease cost: Amortization of right of use assets 190 425 Interest on lease liabilities 35 78 Rent expense is recognized on a straight-line basis over the expected lease term. Rent expense totaled $6,489 and $4,730 in the thirteen weeks ended September 28, 2019 and thirteen weeks ended September 29, 2018 , respectively. Rent expense totaled $18,838 and $13,554 in the thirty-nine weeks ended September 28, 2019 and thirty-nine weeks ended September 29, 2018 , respectively. Rent expense includes operating lease cost as well as expense for non-lease components such as common area maintenance, real estate taxes, real estate insurance, variable costs related to our leased vehicles and also short-term rental expenses. The implicit rate is not determinable in most of the Company’s leases, as such management uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The weighted average remaining lease terms and discount rates for all of our operating leases were as follows as of September 28, 2019 : Operating Leases (1) Finance Leases Weighted average remaining lease term 8.00 3.71 Weighted average discount rate 7.80 % 6.53 % (1) Upon adoption of the new lease standard, discount rates used for existing operating leases were established on December 30, 2018. Supplemental balance sheet information related to the Company's finance leases as of September 28, 2019 : September 28, 2019 Finance lease assets, net, included in property plant and equipment $ 2,075 Current portion of long-term debt 675 Long-term debt, less current portion 1,601 Total principal payable on finance leases 2,276 Supplemental cash flow information related to our operating leases was as follows for the thirty-nine weeks ended September 28, 2019 : Thirty-nine Weeks Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflow from operating leases $ 13,872 Operating cash outflow from finance leases 66 Financing cash outflow from finance leases 484 As of September 28, 2019 , our future minimum rental commitments are immaterial for lease agreements beginning after the current reporting period. Maturities of our lease liabilities for all operating and finance leases are as follows as of September 28, 2019 : Operating Leases Finance Leases Less than one year $ 17,582 $ 799 1 to 2 years 15,703 699 2 to 3 years 13,557 478 3 to 4 years 11,442 376 4 to 5 years 10,529 208 After 5 years 44,060 — Total future minimum rental commitments 112,873 2,560 Less - amounts representing interest (30,100 ) (284 ) Present value of lease liabilities $ 82,773 $ 2,276 As of December 29, 2018 , minimum lease payments under non-cancellable operating leases by period were expected to be as follows: Operating Leases Less than one year $ 17,326 1 to 2 years 14,736 2 to 3 years 13,305 3 to 4 years 12,012 4 to 5 years 9,541 After 5 years 16,664 Total future minimum rental commitments 83,584 Lessor The Company has certain arrangements for key duplication equipment under which we are the lessor. These leases meet the criteria for operating lease classification. Lease income associated with these leases is not material. |
Derivatives and Hedging
Derivatives and Hedging | 9 Months Ended |
Sep. 28, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging | 12. Derivatives and Hedging : The Company uses derivative financial instruments to manage our exposures to (1) interest rate fluctuations on our floating rate senior debt and (2) fluctuations in foreign currency exchange rates. The Company measures those instruments at fair value and recognizes changes in the fair value of derivatives in earnings in the period of change, unless the derivative qualifies as an effective hedge that offsets certain exposures. Interest Rate Swap Agreements On January 8, 2018 , the Company entered into a forward Interest Rate Swap Agreement ("2018 Swap 1") with three -year terms for notional amounts of $90,000 . The forward start date of the 2018 Swap was September 30, 2018 and the termination date is June 30, 2021 . The 2018 Swap 1 has a determined interest rate of 2.3% plus the applicable interest rate margin of 4.0% for an effective rate of 6.3% . On November 8, 2018 , the Company entered into another new forward Interest Rate Swap Agreement ("2018 Swap 2") with three-year terms for $60,000 notional amount. The forward start date of the 2018 Swap 2 was November 30, 2018 and the termination date is November 30, 2022 . The 2018 Swap 2 has an interest rate of 2.1% plus the applicable interest rate margin of 4.0% for an effective rate of 6.1% . The fair value of the 2018 Swaps were $4,201 as of September 28, 2019 . These were reported on the condensed consolidated balance sheet in other non-current liabilities. An increase in other expense was recorded in the statement of comprehensive loss for the unfavorable change of $3,217 in fair value since December 29, 2018 . The fair value of 2018 Swap 1 was $394 as of December 29, 2018 and it was reported on the consolidated balance sheet in other non-current assets. The fair value of 2018 Swap 2 was $1,378 and it was reported on the consolidated balance sheet in other non-current liabilities as of December 29, 2018 . The Company's interest rate swap agreements do not qualify for hedge accounting treatment because they did not meet the provisions specified in ASC 815, Derivatives and Hedging (“ASC 815”). Accordingly, the gain or loss on these derivatives was recognized in current earnings. Foreign Currency Forward Contracts During 2018 and 2019 the Company entered into multiple foreign currency forward contracts. The purpose of the Company's foreign currency forward contracts is to manage the Company's exposure to fluctuations in the exchange rate of the Canadian dollar. The total notional amount of contracts outstanding was C$5,999 and C$5,790 as of September 28, 2019 and December 29, 2018 , respectively. The total fair value of the outstanding foreign currency forward contracts was $5 as of September 28, 2019 and was reported on the condensed consolidated balance sheet in other current assets. The total fair value of the outstanding foreign currency forward contracts was $152 as of December 29, 2018 and was reported on the condensed consolidated balance sheet in other current liabilities. An increase in other expense of $13 , including contracts settled during the thirty-nine weeks ended September 28, 2019 , was recorded in the statement of comprehensive loss for the change in fair value from December 29, 2018 . The Company's foreign currency forward contracts do not qualify for hedge accounting treatment because they did not meet the provisions specified in ASC 815. Accordingly, the gain or loss on these derivatives was recognized in current earnings. The Company does not enter into derivative transactions for speculative purposes and, therefore, holds no derivative instruments for trading purposes. Additional information with respect to the fair value of derivative instruments is included in Note 13 - Fair Value Measurements . |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | The Company uses the accounting guidance that applies to all assets and liabilities that are being measured and reported on a fair value basis. The guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions. The following tables set forth the Company’s financial assets and liabilities that were measured at fair value on a recurring basis during the period, by level, within the fair value hierarchy: As of September 28, 2019 Level 1 Level 2 Level 3 Total Trading securities $ 1,716 $ — $ — $ 1,716 Interest rate swaps — (4,201 ) — (4,201 ) Foreign exchange forward contracts — 5 — 5 Contingent consideration payable — — (18,100 ) (18,100 ) As of December 29, 2018 Level 1 Level 2 Level 3 Total Trading securities $ 1,905 $ — $ — $ 1,905 Interest rate swaps — (984 ) — (984 ) Foreign exchange forward contracts — (152 ) — (152 ) Trading securities are valued using quoted prices on an active exchange. Trading securities represent assets held in a Rabbi Trust to fund deferred compensation liabilities and are included as other assets on the accompanying condensed consolidated balance sheets. The Company utilizes interest rate swap contracts to manage our targeted mix of fixed and floating rate debt, and these contracts are valued using observable benchmark rates at commonly quoted intervals for the full term of the swap contracts. As of September 28, 2019 , the 2018 Swap 1 and 2018 Swap 2 were recorded as other non-current liabilities on the accompanying condensed consolidated balance sheets. As of December 29, 2018 , 2018 Swap 1 was recorded as a non-current asset and 2018 Swap 2 was recorded as an other non-current liability on the accompanying condensed consolidated balance sheets. The Company utilizes foreign exchange forward contracts to manage our exposure to currency fluctuations in the Canadian dollar versus the U.S. dollar. The forward contracts were valued using observable benchmark rates at commonly quoted intervals during the term of the forward contract. As of September 28, 2019 the foreign exchange forward contracts were included in other current assets on the accompanying condensed consolidated balance sheets. As of December 29, 2018 , the foreign exchange forward contracts were included in other current liabilities on the accompanying condensed consolidated balance sheets. The contingent consideration represents future potential earn-out payments related to the Resharp acquisition in 2019, see Note 4 - Acquisitions of the Notes to the condensed consolidated financial statements for additional details. The estimated fair value of the contingent earn-out was determined using a Monte Carlo analysis examining the frequency and mean value of the resulting earn-out payments. The resulting value captures the risk associated with the form of the payout structure. The risk neutral method is applied, resulting in a value that captures the risk associated with the form of the payout structure and the projection risk. The carrying amount of the liability may fluctuate significantly and actual amounts paid may be materially different from the estimated value of the liability. As of September 28, 2019 , the contingent consideration was recorded as $2,275 of other current liabilities and $15,825 in other non-current liabilities on the accompanying condensed consolidated balance sheets. The fair value of the Company's fixed rate senior notes and junior subordinated debentures as of September 28, 2019 and December 29, 2018 were determined by utilizing current trading prices obtained from indicative market data. As a result, the fair value measurements of the Company's senior term notes and debentures are considered to be Level 2. September 28, 2019 December 29, 2018 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value 6.375% Senior Notes $ 326,944 $ 308,550 $ 326,110 $ 267,300 Junior Subordinated Debentures 125,170 149,827 126,202 130,636 Cash, accounts receivable, accounts payable, and accrued liabilities are reflected in the condensed consolidated financial statements at book value, which approximates fair value, due to the short-term nature of these instruments. The carrying amount of the long-term debt under the revolving credit facility approximates the fair value at September 28, 2019 and December 29, 2018 as the interest rate is variable and approximates current market rates. The Company also believes the carrying amount of the long-term debt under the senior term loan approximates the fair value at September 28, 2019 and December 29, 2018 because, while subject to a minimum LIBOR floor rate, the interest rate approximates current market rates of debt with similar terms and comparable credit risk. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 28, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | The Company’s segment reporting structure uses the Company’s management reporting structure as the foundation for how the Company manages its business. The Company periodically evaluates its segment reporting structure in accordance with ASC 350-20-55 and has concluded that it has three reportable segments as of September 28, 2019 : The United States, Canada, and All Other. The United States segment and the Canada segment are considered material by the Company’s management as of September 28, 2019 . The Company's other segments have been combined in the "All Other" category. The Company evaluates the performance of its segments based on revenue and income (loss) from operations, and does not include segment assets nor non-operating income/expense items for management reporting purposes. The table below presents revenues and income (loss) from operations for our reportable segments for the thirteen and thirty-nine weeks ended September 28, 2019 and thirteen and thirty-nine weeks ended September 29, 2018 . Thirteen Weeks Ended Thirteen Weeks Ended Thirty-nine Weeks Ended Thirty-nine Weeks Ended Revenues United States $ 279,830 $ 204,450 $ 816,349 $ 581,238 Canada 34,709 37,422 104,627 110,574 All Other 2,738 1,967 8,588 5,776 Total revenues $ 317,277 $ 243,839 $ 929,564 $ 697,588 Segment income (loss) from operations United States $ 11,578 $ 7,842 $ 18,876 $ 28,775 Canada (1,853 ) (1,514 ) (963 ) (1,671 ) All Other 228 319 851 613 Total income from operations $ 9,953 $ 6,647 $ 18,764 $ 27,717 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 28, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses for the reporting periods. Actual results may differ from these estimates. |
Revenue Recognition | Revenue Recognition: Revenue is recognized when control of goods or services is transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company offers a variety of sales incentives to its customers primarily in the form of discounts, rebates, and slotting fees. Discounts are recognized in the consolidated financial statements at the date of the related sale. Rebates are based on the revenue to date and the contractual rebate percentage to be paid. A portion of the cost of the rebate is allocated to each underlying sales transaction. Discounts and rebates are included in the determination of net sales. The Company also establishes reserves for customer returns and allowances. The reserve is established based on historical rates of returns and allowances. The reserve is adjusted quarterly based on actual experience. Returns and allowances are included in the determination of net sales. The following table displays our disaggregated revenue by product category. Thirteen weeks ended September 28, 2019 Fastening Solutions Home and Access Solutions Consumer Connected Solutions Personal Protective Solutions Total Revenue United States 125,603 68,732 28,938 56,557 279,830 Canada 25,544 6,987 557 1,621 34,709 Other 1,634 186 — 918 2,738 Consolidated 152,781 75,905 29,495 59,096 317,277 Thirteen weeks ended September 29, 2018 Fastening Home and Access Solutions Consumer Connected Solutions Personal Protective Solutions Total Revenue United States 114,334 67,055 23,061 — 204,450 Canada 29,229 8,003 190 — 37,422 Other 1,721 246 — — 1,967 Consolidated 145,284 75,304 23,251 — 243,839 Thirty-nine weeks ended September 28, 2019 Fastening Home and Access Solutions Consumer Connected Solutions Personal Protective Solutions Total Revenue United States 353,290 199,482 84,625 178,952 816,349 Canada 80,350 18,881 1,351 4,045 104,627 Other 5,494 657 — 2,437 8,588 Consolidated 439,134 219,020 85,976 185,434 929,564 Thirty-nine weeks ended September 29, 2018 Fastening Home and Access Solutions Consumer Connected Solutions Personal Protective Solutions Total Revenue United States 334,363 192,587 54,288 — 581,238 Canada 89,561 20,818 195 — 110,574 Other 5,068 708 — — 5,776 Consolidated 428,992 214,113 54,483 — 697,588 Fastening solutions revenues consist primarily of the delivery of fasteners, anchors, and specialty products as well as in-store merchandising services for the related product category. Home and access solutions revenues consist primarily of the delivery of keys and key accessories, builders' hardware, wall hanging, threaded rod products, letters, numbers, and signs ("LNS") as well as in-store merchandising services for the related product categories and access to our proprietary key duplicating equipment. Consumer connected solutions revenues consist primarily of sales of keys and identification tags through self-service key duplicating machines and engraving kiosks. Personal protective solutions revenues consist primarily of the delivery of personal protective equipment such as gloves, soft sided tool storage, and eye-wear as well as in-store merchandising services for the related product category. The Company’s performance obligations under its arrangements with customers are providing products, in-store merchandising services, and access to key duplicating and engraving equipment. Generally, the price of the merchandising services and the access to the key duplicating and engraving equipment is included in the price of the related products. Control of products is transferred at the point in time when the customer accepts the goods. Judgment was required in applying the new revenue standard in determining the time at which to recognize revenue for the in-store services and the access to key duplicating and engraving equipment. The Company’s obligation to provide in-store service and access to key duplicating and engraving equipment is satisfied when control of the related products is transferred. Therefore, the entire amount of consideration related to the sale of products, in-store merchandising services, and access to key duplicating and engraving equipment is recognized upon the customer’s acceptance of the products. The revenues for all performance obligations are recognized upon the customer's acceptance of the products. The costs to obtain a contract are insignificant, and generally contract terms do not extend beyond one year. Therefore, these costs are expensed as incurred. Freight and shipping costs and the cost of our in-store merchandising services teams are recognized in selling, general, and administrative expense when control over products is transferred to the customer. The Company used the practical expedient regarding the existence of a significant financing component as payments are due in less than one year after delivery of the products. |
Long Lived Assets | Long Lived Assets: |
Recent Accounting Pronouncements | In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). Subsequently, in July 2018 the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements and ASU 2018-10, Codification Improvements to Topic 842, Leases . Effective December 30, 2018, the Company adopted the comprehensive new lease standard issued by the FASB. The most significant impact was the recognition of right-of-use ("ROU") assets and liabilities for operating leases and finance leases applicable to lessees. The Company elected to utilize the transition guidance within the new standard which allows the Company to carry forward its historical lease classification(s). Operating and finance lease ROU assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement date. As the implicit rate is not determinable in most of the Company’s leases, management uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The Company elected to not separate lease and non-lease components for all classes of underlying assets in which it is the lessee and made an accounting policy election to not account for leases within an initial term of 12 months or less on the Condensed Consolidated Balance Sheet. The expected lease terms include options to extend or terminate the lease when it is reasonably certain the Company will exercise such option. Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term. As of December 30, 2018 , Company recorded an Operating ROU Asset of $72,785 and a Finance ROU Asset of $672 within our Condensed Consolidated Balance Sheet. Short-term and long-term operating lease liabilities were recorded as $12,040 and $63,291 , respectively. Short-term and long-term finance lease liabilities were determined to be $436 and $477 respectively. The adoption of this guidance did not have an impact on net income. During the thirteen weeks ended September 28, 2019 the Company corrected its method for determining the incremental borrowing rate. This correction resulted in an immaterial correction to the Company’s opening operating lease liability at December 30, 2018 and the interest on lease liabilities in the thirteen and thirty-nine weeks ended September 28, 2019 . See Note 11 - Leases of the Notes to the Condensed Consolidated Financial Statement for full lease disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses . The ASU sets forth a “current expected credit loss” (CECL) model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently assessing the impact of the adoption of this ASU on its Condensed Consolidated Financial Statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue | The following table displays our disaggregated revenue by product category. Thirteen weeks ended September 28, 2019 Fastening Solutions Home and Access Solutions Consumer Connected Solutions Personal Protective Solutions Total Revenue United States 125,603 68,732 28,938 56,557 279,830 Canada 25,544 6,987 557 1,621 34,709 Other 1,634 186 — 918 2,738 Consolidated 152,781 75,905 29,495 59,096 317,277 Thirteen weeks ended September 29, 2018 Fastening Home and Access Solutions Consumer Connected Solutions Personal Protective Solutions Total Revenue United States 114,334 67,055 23,061 — 204,450 Canada 29,229 8,003 190 — 37,422 Other 1,721 246 — — 1,967 Consolidated 145,284 75,304 23,251 — 243,839 Thirty-nine weeks ended September 28, 2019 Fastening Home and Access Solutions Consumer Connected Solutions Personal Protective Solutions Total Revenue United States 353,290 199,482 84,625 178,952 816,349 Canada 80,350 18,881 1,351 4,045 104,627 Other 5,494 657 — 2,437 8,588 Consolidated 439,134 219,020 85,976 185,434 929,564 Thirty-nine weeks ended September 29, 2018 Fastening Home and Access Solutions Consumer Connected Solutions Personal Protective Solutions Total Revenue United States 334,363 192,587 54,288 — 581,238 Canada 89,561 20,818 195 — 110,574 Other 5,068 708 — — 5,776 Consolidated 428,992 214,113 54,483 — 697,588 |
Acquisitions Acquisition (Table
Acquisitions Acquisition (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table reconciles the final fair value of the acquired assets and assumed liabilities (net of purchase price accounting adjustments) to the total purchase price of the MinuteKey acquisition: Cash $ 1,791 Inventory 3,952 Other current assets 766 Property and equipment 29,888 Goodwill 59,237 Customer relationships 50,000 Technology 19,000 Trade names 5,400 Other non-current assets 16 Total assets acquired 170,050 Less: Liabilities assumed (13,761 ) Total purchase price $ 156,289 Cash $ 2,507 Accounts receivable 40,828 Inventory 40,216 Other current assets 1,623 Property and equipment 3,703 Goodwill 130,863 Customer relationships 189,000 Trade names 21,000 Other non-current assets 159 Total assets acquired 429,899 Less: Liabilities assumed (81,065 ) Total purchase price $ 348,834 |
Business Acquisition, Pro Forma Information | The following table provides unaudited pro forma results of the combined entities of Hillman and Big Time Products, had the acquisition occurred at the beginning of fiscal 2018: Thirteen weeks ended September 29, 2018 Thirty-nine weeks ended September 29, 2018 Net revenues 297,334 862,975 Net loss (10,550 ) (39,892 ) |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill Amounts by Operating Segment | Goodwill amounts by operating segment are summarized as follows: Goodwill at Acquisitions (1) Dispositions Adjustments (2) Other (3) Goodwill at December 29, 2018 September 28, 2019 United States $ 772,213 $ 9,382 $ — $ 4,488 $ — $ 786,083 Canada 27,938 — — — 820 28,758 Other 3,696 — — — (3 ) 3,693 Total $ 803,847 $ 9,382 $ — $ 4,488 $ 817 $ 818,534 (1) See Note 4 - Acquisitions of the Notes to condensed consolidated financial statements for additional information regarding the acquisition of Resharp in 2019. (2) These amounts relate to opening balance sheet adjustments resulting from the acquisitions of MinuteKey and Big Time Products. These adjustments were primarily related to $2,087 increase in inventory reserve and a $1,106 increase in assumed liabilities for Big Time, as well as a $633 increase in assumed liabilities for MinuteKey. These acquisitions were |
Schedule of Finite-Lived Intangible Assets | Other intangibles, net, as of September 28, 2019 and December 29, 2018 consist of the following: Estimated September 28, 2019 December 29, 2018 Customer relationships 13-20 $ 940,727 $ 939,880 Trademarks - Indefinite Indefinite 85,406 85,228 Trademarks - Other 5-15 26,700 26,700 Technology and patents 7-12 60,955 55,394 Intangible assets, gross 1,113,788 1,107,202 Less: Accumulated amortization 217,105 176,677 Other intangibles, net $ 896,683 $ 930,525 |
Schedule of Indefinite-Lived Intangible Assets | Other intangibles, net, as of September 28, 2019 and December 29, 2018 consist of the following: Estimated September 28, 2019 December 29, 2018 Customer relationships 13-20 $ 940,727 $ 939,880 Trademarks - Indefinite Indefinite 85,406 85,228 Trademarks - Other 5-15 26,700 26,700 Technology and patents 7-12 60,955 55,394 Intangible assets, gross 1,113,788 1,107,202 Less: Accumulated amortization 217,105 176,677 Other intangibles, net $ 896,683 $ 930,525 |
Restructuring Restructuring (Ta
Restructuring Restructuring (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | : Thirteen Weeks Ended Thirteen Weeks Ended Thirty-nine Weeks Ended Thirty-nine Weeks Ended Facility consolidation (1) Labor expense $ 451 $ 243 $ 962 $ 334 Inventory valuation adjustments 446 — 446 — Consulting and legal fees 57 87 173 242 Other 626 6 1,302 11 Exit of certain lines of business (2) Inventory valuation adjustments 285 1,152 294 1,152 Loss (gain) on disposal of assets (61 ) 796 (458 ) 796 Severance — 239 — 239 Other 70 — 392 — Total $ 1,874 $ 2,523 $ 3,111 $ 2,774 (1) Facility consolidation includes labor expense related to organizing inventory and equipment in preparation for the facility consolation, consulting and legal fees related to the project, and other expenses. These expenses were included in SG&A on the Condensed Consolidated Statement of Comprehensive Loss. (2) As part of the restructuring, the Company is exiting a manufacturing business line. Related charges included gains and losses on disposals of assets, and other expenses, which were included other income and expense, and SG&A on the Condensed Consolidated Statement of Comprehensive Loss, respectively. |
Schedule of Restructuring Reserve by Type of Cost | The following represents the roll forward of restructuring reserves for the current period: Balance at December 29, 2018 Impact to Earnings Cash Paid Balance at September 28, 2019 Severance and related $ 1,537 — (1,033 ) $ 504 |
Long-Term Debt Long Term Debt (
Long-Term Debt Long Term Debt (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table summarizes the Company’s debt: September 28, 2019 December 29, 2018 Revolving loans $ 103,000 $ 108,200 Senior term loan, due 2025 1,050,306 1,058,263 6.375% Senior Notes, due 2022 330,000 330,000 11.6% Junior Subordinated Debentures - Preferred 105,443 105,443 Junior Subordinated Debentures - Common 3,261 3,261 Capital & finance leases 2,276 1,213 1,594,286 1,606,380 (Add) unamortized premium on 11.6% Junior Subordinated Debentures 16,466 17,498 (Subtract) unamortized discount on Senior term loan (8,419 ) (9,558 ) (Subtract) current portion of long term debt, capital leases and finance leases (11,284 ) (10,985 ) (Subtract) deferred financing fees (14,852 ) (17,251 ) Total long term debt, net $ 1,576,197 $ 1,586,084 |
Leases Leases (Tables)
Leases Leases (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Leases [Abstract] | |
Lease, Cost | Supplemental cash flow information related to our operating leases was as follows for the thirty-nine weeks ended September 28, 2019 : Thirty-nine Weeks Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflow from operating leases $ 13,872 Operating cash outflow from finance leases 66 Financing cash outflow from finance leases 484 The components of operating and finance lease cost for the thirteen and thirty-nine weeks ended September 28, 2019 were as follows: Thirteen Weeks Ended Thirty-nine Weeks Ended Operating lease cost $ 5,101 $ 14,399 Short term lease costs 668 2,644 Variable lease costs 720 1,795 Finance lease cost: Amortization of right of use assets 190 425 Interest on lease liabilities 35 78 September 28, 2019 : Operating Leases (1) Finance Leases Weighted average remaining lease term 8.00 3.71 Weighted average discount rate 7.80 % 6.53 % (1) Upon adoption of the new lease standard, discount rates used for existing operating leases were established on December 30, 2018. |
Assets and Liabilities, Lessee | Supplemental balance sheet information related to the Company's finance leases as of September 28, 2019 : September 28, 2019 Finance lease assets, net, included in property plant and equipment $ 2,075 Current portion of long-term debt 675 Long-term debt, less current portion 1,601 Total principal payable on finance leases 2,276 |
Lessee, Operating Lease, Liability Maturity | Maturities of our lease liabilities for all operating and finance leases are as follows as of September 28, 2019 : Operating Leases Finance Leases Less than one year $ 17,582 $ 799 1 to 2 years 15,703 699 2 to 3 years 13,557 478 3 to 4 years 11,442 376 4 to 5 years 10,529 208 After 5 years 44,060 — Total future minimum rental commitments 112,873 2,560 Less - amounts representing interest (30,100 ) (284 ) Present value of lease liabilities $ 82,773 $ 2,276 |
Lessee, Financing Lease, Liability Maturity | Maturities of our lease liabilities for all operating and finance leases are as follows as of September 28, 2019 : Operating Leases Finance Leases Less than one year $ 17,582 $ 799 1 to 2 years 15,703 699 2 to 3 years 13,557 478 3 to 4 years 11,442 376 4 to 5 years 10,529 208 After 5 years 44,060 — Total future minimum rental commitments 112,873 2,560 Less - amounts representing interest (30,100 ) (284 ) Present value of lease liabilities $ 82,773 $ 2,276 |
Schedule of Future Minimum Rental Payments for Operating Leases | As of December 29, 2018 , minimum lease payments under non-cancellable operating leases by period were expected to be as follows: Operating Leases Less than one year $ 17,326 1 to 2 years 14,736 2 to 3 years 13,305 3 to 4 years 12,012 4 to 5 years 9,541 After 5 years 16,664 Total future minimum rental commitments 83,584 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Measurement of Assets and Liabilities at Fair Value on Recurring Basis | The following tables set forth the Company’s financial assets and liabilities that were measured at fair value on a recurring basis during the period, by level, within the fair value hierarchy: As of September 28, 2019 Level 1 Level 2 Level 3 Total Trading securities $ 1,716 $ — $ — $ 1,716 Interest rate swaps — (4,201 ) — (4,201 ) Foreign exchange forward contracts — 5 — 5 Contingent consideration payable — — (18,100 ) (18,100 ) As of December 29, 2018 Level 1 Level 2 Level 3 Total Trading securities $ 1,905 $ — $ — $ 1,905 Interest rate swaps — (984 ) — (984 ) Foreign exchange forward contracts — (152 ) — (152 ) |
Fair Value of Company's Fixed Rate Senior Notes and Junior Subordinated Debentures | The fair value of the Company's fixed rate senior notes and junior subordinated debentures as of September 28, 2019 and December 29, 2018 were determined by utilizing current trading prices obtained from indicative market data. As a result, the fair value measurements of the Company's senior term notes and debentures are considered to be Level 2. September 28, 2019 December 29, 2018 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value 6.375% Senior Notes $ 326,944 $ 308,550 $ 326,110 $ 267,300 Junior Subordinated Debentures 125,170 149,827 126,202 130,636 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Segment Reporting [Abstract] | |
Revenues and Income from Operations for Reportable Segments | The table below presents revenues and income (loss) from operations for our reportable segments for the thirteen and thirty-nine weeks ended September 28, 2019 and thirteen and thirty-nine weeks ended September 29, 2018 . Thirteen Weeks Ended Thirteen Weeks Ended Thirty-nine Weeks Ended Thirty-nine Weeks Ended Revenues United States $ 279,830 $ 204,450 $ 816,349 $ 581,238 Canada 34,709 37,422 104,627 110,574 All Other 2,738 1,967 8,588 5,776 Total revenues $ 317,277 $ 243,839 $ 929,564 $ 697,588 Segment income (loss) from operations United States $ 11,578 $ 7,842 $ 18,876 $ 28,775 Canada (1,853 ) (1,514 ) (963 ) (1,671 ) All Other 228 319 851 613 Total income from operations $ 9,953 $ 6,647 $ 18,764 $ 27,717 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 317,277 | $ 243,839 | $ 929,564 | $ 697,588 |
Fastening Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 152,781 | 145,284 | 439,134 | 428,992 |
Home and Access Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 75,905 | 75,304 | 219,020 | 214,113 |
Consumer Connected Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 29,495 | 23,251 | 85,976 | 54,483 |
Personal Protective Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 59,096 | 0 | 185,434 | 0 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 279,830 | 204,450 | 816,349 | 581,238 |
United States | Fastening Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 125,603 | 114,334 | 353,290 | 334,363 |
United States | Home and Access Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 68,732 | 67,055 | 199,482 | 192,587 |
United States | Consumer Connected Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 28,938 | 23,061 | 84,625 | 54,288 |
United States | Personal Protective Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 56,557 | 0 | 178,952 | 0 |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 34,709 | 37,422 | 104,627 | 110,574 |
Canada | Fastening Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 25,544 | 29,229 | 80,350 | 89,561 |
Canada | Home and Access Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 6,987 | 8,003 | 18,881 | 20,818 |
Canada | Consumer Connected Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 557 | 190 | 1,351 | 195 |
Canada | Personal Protective Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,621 | 0 | 4,045 | 0 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 2,738 | 1,967 | 8,588 | 5,776 |
Other | Fastening Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,634 | 1,721 | 5,494 | 5,068 |
Other | Home and Access Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 186 | 246 | 657 | 708 |
Other | Consumer Connected Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Other | Personal Protective Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 918 | $ 0 | $ 2,437 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 28, 2019 | Sep. 28, 2019 | Sep. 29, 2018 | |
Accounting Policies [Abstract] | |||
Asset impairment | $ 96 | $ 6,896 | $ 832 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements - Narrative (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 30, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right of use assets | $ 79,946 | |
Finance lease, right of use assets | 2,075 | |
Current portion of operating lease liabilities | 11,668 | |
Operating lease, liability, noncurrent | 71,105 | |
Finance lease, liability, current | 675 | |
Finance lease, liability, noncurrent | $ 1,601 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right of use assets | $ 72,785 | |
Finance lease, right of use assets | 672 | |
Current portion of operating lease liabilities | 12,040 | |
Operating lease, liability, noncurrent | 63,291 | |
Finance lease, liability, current | 436 | |
Finance lease, liability, noncurrent | $ 477 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | Aug. 16, 2019 | Jul. 01, 2019 | Oct. 01, 2018 | Aug. 10, 2018 | |
Business Acquisition [Line Items] | ||||||||
Net sales | $ 317,277 | $ 243,839 | $ 929,564 | $ 697,588 | ||||
Total income from operations | 9,953 | $ 6,647 | 18,764 | $ 27,717 | ||||
Business Combination, Contingent Consideration, Liability | 18,100 | 18,100 | ||||||
Minute Key Inc. [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Total purchase price | $ (156,289) | |||||||
Net sales | 15,689 | 41,011 | ||||||
Total income from operations | 206 | (2,355) | ||||||
Big Time Products | ||||||||
Business Acquisition [Line Items] | ||||||||
Total purchase price | $ (348,834) | |||||||
Net sales | 59,092 | 185,432 | ||||||
Total income from operations | 4,548 | 16,843 | ||||||
Resharp | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Contingent Consideration, Liability | $ 18,100 | $ 18,100 | $ 18,100 | |||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 25,000 | |||||||
West Coast Washers [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Total purchase price | $ (3,135) |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Sep. 28, 2019 | Aug. 16, 2019 | Dec. 29, 2018 | Oct. 01, 2018 | Aug. 10, 2018 | |
Business Acquisition [Line Items] | |||||
Goodwill | $ 818,534 | $ 803,847 | |||
Business Combination, Contingent Consideration, Liability | 18,100 | ||||
Resharp | |||||
Business Acquisition [Line Items] | |||||
Property and equipment | $ 218 | ||||
Goodwill | 9,382 | ||||
Total assets acquired | 21,100 | ||||
Liabilities assumed | (18,100) | ||||
Business Combination, Contingent Consideration, Liability | 18,100 | 18,100 | |||
Payments to Acquire Businesses, Gross | $ 3,000 | ||||
Big Time Products | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 2,507 | ||||
Accounts receivable | 40,828 | ||||
Inventory | 40,216 | ||||
Other current assets | 1,623 | ||||
Property and equipment | 3,703 | ||||
Goodwill | 130,863 | ||||
Other non-current assets | 159 | ||||
Total assets acquired | 429,899 | ||||
Liabilities assumed | (81,065) | ||||
Total purchase price | 348,834 | ||||
Minute Key Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 1,791 | ||||
Inventory | 3,952 | ||||
Other current assets | 766 | ||||
Property and equipment | 29,888 | ||||
Goodwill | 59,237 | ||||
Other non-current assets | 16 | ||||
Total assets acquired | 170,050 | ||||
Liabilities assumed | (13,761) | ||||
Total purchase price | 156,289 | ||||
Customer relationships | Big Time Products | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 189,000 | ||||
Customer relationships | Minute Key Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 50,000 | ||||
Technology and patents | Resharp | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 11,500 | ||||
Technology and patents | Minute Key Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 19,000 | ||||
Trade names | Big Time Products | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 21,000 | ||||
Trade names | Minute Key Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 5,400 |
Acquisitions - Pro Forma Inform
Acquisitions - Pro Forma Information (Details) - Hillman Products And Big Time Products [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 29, 2018 | Sep. 29, 2018 | |
Business Acquisition [Line Items] | ||
Net revenues | $ 297,334 | $ 862,975 |
Net loss | $ (10,550) | $ (39,892) |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Summary of Goodwill Amounts by Operating Segment (Detail) $ in Thousands | 9 Months Ended |
Sep. 28, 2019USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 803,847 |
Acquisitions(1) | 9,382 |
Dispositions | 0 |
Goodwill, Purchase Accounting Adjustments | 4,488 |
Other | 817 |
Ending balance | 818,534 |
United States | |
Goodwill [Roll Forward] | |
Beginning balance | 772,213 |
Acquisitions(1) | 9,382 |
Dispositions | 0 |
Goodwill, Purchase Accounting Adjustments | 4,488 |
Other | 0 |
Ending balance | 786,083 |
Canada | |
Goodwill [Roll Forward] | |
Beginning balance | 27,938 |
Acquisitions(1) | 0 |
Dispositions | 0 |
Goodwill, Purchase Accounting Adjustments | 0 |
Other | 820 |
Ending balance | 28,758 |
Other | |
Goodwill [Roll Forward] | |
Beginning balance | 3,696 |
Acquisitions(1) | 0 |
Dispositions | 0 |
Goodwill, Purchase Accounting Adjustments | 0 |
Other | (3) |
Ending balance | $ 3,693 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Components of Other Intangibles, Net (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Dec. 29, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 1,113,788 | $ 1,107,202 |
Less: Accumulated amortization | 217,105 | 176,677 |
Other intangibles, net | 896,683 | 930,525 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite Intangible assets, gross | 85,406 | 85,228 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 940,727 | 939,880 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (Years) | 13 years | |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (Years) | 20 years | |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 26,700 | 26,700 |
Trademarks | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (Years) | 5 years | |
Trademarks | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (Years) | 15 years | |
Technology and patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 60,955 | $ 55,394 |
Technology and patents | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (Years) | 7 years | |
Technology and patents | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (Years) | 12 years |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 14,665,000 | $ 10,437,000 | $ 44,114,000 | $ 29,872,000 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Asset impairment | $ 96,000 | 6,896,000 | 832,000 | |
Disposed by Sale | FastKey | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Asset impairment | $ 0 | $ 2,125,000 | $ 0 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets Acquisition (Details) | 9 Months Ended |
Sep. 28, 2019USD ($) | |
Goodwill, Purchase Accounting Adjustments | $ 4,488,000 |
Inventory Valuation and Obsolescence [Member] | Big Time Products | |
Goodwill, Purchase Accounting Adjustments | 2,087 |
Liabilities, Total [Member] | Big Time Products | |
Goodwill, Purchase Accounting Adjustments | 1,106 |
Liabilities, Total [Member] | Minute Key Inc. [Member] | |
Goodwill, Purchase Accounting Adjustments | $ 633 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Dec. 30, 2017 | |
Loss Contingencies [Line Items] | |||||
Losses up to per occurrence related to product liability, automotive, workers' compensation and general liability | $ 250,000 | ||||
Letters of credit, outstanding | 11,736,000 | ||||
Maximum | |||||
Loss Contingencies [Line Items] | |||||
Occurrences in excess for purchased catastrophic coverage | 60,000,000 | ||||
Minimum | |||||
Loss Contingencies [Line Items] | |||||
Occurrences in excess for purchased catastrophic coverage | 250,000 | ||||
Insurance Claims | |||||
Loss Contingencies [Line Items] | |||||
Liability recorded for such risk insurance reserves | 1,968,000 | ||||
Group Health Insurance Claims | |||||
Loss Contingencies [Line Items] | |||||
Losses up to per occurrence related to product liability, automotive, workers' compensation and general liability | 250,000 | ||||
Liability recorded for such risk insurance reserves | $ 2,162,000 | ||||
Anti-dumping duties | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency accrual | $ 2,146,000 | $ 6,274,000 | |||
Loss contingency, (income) in period | $ 0 | $ (4,128,000) |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Related Party Transaction [Line Items] | ||||
Related party expenses | $ 140 | $ 134 | $ 396 | $ 396 |
Proceeds from sale of Holdco stock | 750 | 750 | 0 | |
Dividend to Holdco | 3,780 | 0 | $ 3,780 | |
Shares of Holdco Stock Repurchased | 4,200 | |||
Industrial Warehouse and Office Facility Lease Agreement - Manns | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Related party expenses | 87 | 87 | 262 | $ 262 |
Industrial Warehouse, Manufacturing Plan and Office Facilities Lease Agreement - Hillman Group Canada ULC | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Related party expenses | $ 163 | $ 164 | $ 486 | $ 501 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rates | 20.60% | 12.80% | 2.60% | (6.70%) |
Income tax (benefit) expense | $ (3,775) | $ (1,565) | $ (1,844) | $ 2,182 |
Restructuring - Summary of Cost
Restructuring - Summary of Costs Incurred (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Total | $ 1,874 | $ 2,523 | $ 3,111 | $ 2,774 |
Facility Consolidation | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Labor expense | 451 | 243 | 962 | 334 |
Consulting and legal fees | 57 | 87 | 173 | 242 |
Other | 626 | 6 | 1,302 | 11 |
Inventory valuation adjustments | 446 | 0 | 446 | 0 |
Exit of certain lines of business | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other | 70 | 0 | 392 | 0 |
Inventory valuation adjustments | 285 | 1,152 | 294 | 1,152 |
Loss (gain) on disposal of assets | (61) | 796 | (458) | 796 |
Severance Costs | $ 0 | $ 239 | $ 0 | $ 239 |
Restructuring - Restructuring R
Restructuring - Restructuring Reserve (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | Dec. 29, 2018 | |
Restructuring Reserve [Roll Forward] | |||||
Impact to Earnings | $ 1,874 | $ 2,523 | $ 3,111 | $ 2,774 | |
Severance and related | |||||
Restructuring Reserve [Roll Forward] | |||||
Beginning balance | 504 | 504 | $ 1,537 | ||
Impact to Earnings | 0 | ||||
Cash Paid | (1,033) | ||||
Ending balance | $ 504 | $ 504 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Detail) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Debt Instrument [Line Items] | ||
Letters of credit, outstanding | $ 11,736 | |
Senior term loan, due 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 1,050,306 | $ 1,058,263 |
Revolving loans | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 103,000 | $ 108,200 |
Remaining borrowing capacity | $ 35,264 |
Long-Term Debt - Summary of Lon
Long-Term Debt - Summary of Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Debt Instrument [Line Items] | ||
Capital & finance leases | $ 2,276 | $ 1,213 |
Long-term debt, capital and finance leases | 1,594,286 | 1,606,380 |
(Add) unamortized premium on 11.6% Junior Subordinated Debentures | 16,466 | 17,498 |
(Subtract) unamortized discount on Senior term loan | 8,419 | 9,558 |
(Subtract) current portion of long term debt, capital leases and finance leases | (11,284) | (10,985) |
(Subtract) deferred financing fees | 14,852 | 17,251 |
Long-term debt | 1,576,197 | 1,586,084 |
Revolving loans | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 103,000 | 108,200 |
Senior term loan, due 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 1,050,306 | 1,058,263 |
6.375% Senior Notes, due 2022 | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated rate | 6.375% | |
Long-term debt, gross | $ 330,000 | 330,000 |
11.6% Junior Subordinated Debentures - Preferred | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated rate | 11.60% | |
Long-term debt, gross | $ 105,443 | 105,443 |
Junior Subordinated Debentures - Common | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 3,261 | $ 3,261 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 28, 2019 | Sep. 28, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 5,101 | $ 14,399 |
Short term lease costs | 668 | 2,644 |
Variable lease costs | 720 | 1,795 |
Amortization of right of use assets | 190 | 425 |
Interest on lease liabilities | $ 35 | $ 78 |
Leases - Lease Maturities (Deta
Leases - Lease Maturities (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Operating Leases | ||
Less than one year | $ 17,582 | |
1 to 2 years | 15,703 | |
2 to 3 years | 13,557 | |
3 to 4 years | 11,442 | |
4 to 5 years | 10,529 | |
After 5 years | 44,060 | |
Total future minimum rental commitments | 112,873 | |
Less - amounts representing interest | (30,100) | |
Present value of lease liabilities | 82,773 | |
Finance Leases | ||
Less than one year | 799 | |
1 to 2 years | 699 | |
2 to 3 years | 478 | |
3 to 4 years | 376 | |
4 to 5 years | 208 | |
After 5 years | 0 | |
Total future minimum rental commitments | 2,560 | |
Less - amounts representing interest | (284) | |
Present value of lease liabilities | $ 2,276 | $ 1,213 |
Operating Leases | ||
Less than one year | 17,326 | |
1 to 2 years | 14,736 | |
2 to 3 years | 13,305 | |
3 to 4 years | 12,012 | |
4 to 5 years | 9,541 | |
After 5 years | 16,664 | |
Total future minimum rental commitments | $ 83,584 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Leases [Abstract] | ||||
Rent expense | $ 6,489 | $ 4,730 | $ 18,838 | $ 13,554 |
Leases - Weighted Average Assum
Leases - Weighted Average Assumptions (Details) | Sep. 28, 2019 |
Leases [Abstract] | |
Operating leases, weighted average remaining term | 8 years |
Finance lease, weighted average remaining term | 3 years 8 months 15 days |
Operating lease, weighted average discount rate | 7.80% |
Finance lease, weighted average discount rate | 6.53% |
Leases - Finance Lease Balance
Leases - Finance Lease Balance Sheet Locations (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Leases [Abstract] | ||
Finance lease, right of use assets | $ 2,075 | |
Current portion of long-term debt | 675 | |
Long-term debt, less current portion | 1,601 | |
Total principal payable on finance leases | $ 2,276 | $ 1,213 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Thousands | 9 Months Ended |
Sep. 28, 2019USD ($) | |
Leases [Abstract] | |
Operating cash outflow from operating leases | $ 13,872 |
Operating cash outflow from finance leases | 66 |
Financing cash outflow from finance leases | $ 484 |
Derivatives and Hedging - Narra
Derivatives and Hedging - Narrative (Details) $ in Thousands, $ in Thousands | Nov. 08, 2018USD ($) | Jan. 08, 2018USD ($) | Sep. 28, 2019USD ($) | Sep. 28, 2019CAD ($) | Dec. 29, 2018USD ($) | Dec. 29, 2018CAD ($) |
Interest Rate Swap Agreement - 2018 Swap 1 | ||||||
Derivative [Line Items] | ||||||
Term of derivative instrument | 3 years | |||||
Interest Rate Swap Agreement - 2018 Swap 2 | ||||||
Derivative [Line Items] | ||||||
Term of derivative instrument | 3 years | |||||
Not Designated as Hedging Instrument | Interest rate swaps | ||||||
Derivative [Line Items] | ||||||
Gain (loss) on change in fair value | $ 3,217 | |||||
Not Designated as Hedging Instrument | Interest Rate Swap Agreement - 2018 Swap 1 | ||||||
Derivative [Line Items] | ||||||
Derivative, Notional Amount | $ 90,000 | |||||
Fixed interest rate | 2.30% | 2.30% | ||||
Basis spread on variable rate | 4.00% | |||||
Variable interest rate | 6.30% | 6.30% | ||||
Not Designated as Hedging Instrument | Interest Rate Swap Agreement - 2018 Swap 2 | ||||||
Derivative [Line Items] | ||||||
Derivative, Notional Amount | $ 60,000 | |||||
Fixed interest rate | 2.10% | 2.10% | ||||
Basis spread on variable rate | 4.00% | |||||
Variable interest rate | 6.10% | 6.10% | ||||
Not Designated as Hedging Instrument | Foreign exchange forward contracts | ||||||
Derivative [Line Items] | ||||||
Derivative, Notional Amount | $ 5,999 | $ 5,790 | ||||
Derivative liability | $ 152 | |||||
Gain (loss) on change in fair value | $ 13 | |||||
Derivative asset | 5 | |||||
Other Current Liabilities [Member] | ||||||
Derivative [Line Items] | ||||||
Business Combination, Contingent Consideration, Liability, Current | (2,275) | |||||
Other noncurrent liabilities | ||||||
Derivative [Line Items] | ||||||
Business Combination, Contingent Consideration, Liability, Noncurrent | (15,825) | |||||
Other noncurrent liabilities | Not Designated as Hedging Instrument | Interest rate swaps | ||||||
Derivative [Line Items] | ||||||
Derivative liability | $ (4,201) | |||||
Other noncurrent liabilities | Not Designated as Hedging Instrument | Interest Rate Swap Agreement - 2018 Swap 2 | ||||||
Derivative [Line Items] | ||||||
Derivative liability | (1,378) | |||||
Other noncurrent assets | Not Designated as Hedging Instrument | Interest Rate Swap Agreement - 2018 Swap 1 | ||||||
Derivative [Line Items] | ||||||
Derivative asset | $ 394 |
Fair Value Measurements - Measu
Fair Value Measurements - Measurement of Assets and Liabilities at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Business Combination, Contingent Consideration, Liability | $ (18,100) | |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Business Combination, Contingent Consideration, Liability | 0 | |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Business Combination, Contingent Consideration, Liability | 0 | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Business Combination, Contingent Consideration, Liability | (18,100) | |
Fair Value Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | 1,716 | $ 1,905 |
Fair Value Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | 1,716 | 1,905 |
Fair Value Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | 0 | 0 |
Fair Value Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | 0 | 0 |
Interest rate swaps | Fair Value Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | (4,201) | (984) |
Interest rate swaps | Fair Value Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Interest rate swaps | Fair Value Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | (4,201) | (984) |
Interest rate swaps | Fair Value Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Foreign exchange forward contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | (152) | |
Derivative asset | 5 | |
Foreign exchange forward contracts | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | |
Derivative asset | 0 | |
Foreign exchange forward contracts | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | (152) | |
Derivative asset | 5 | |
Foreign exchange forward contracts | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ 0 | |
Derivative asset | $ 0 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Company's Fixed Rate Senior Notes and Junior Subordinated Debentures (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
6.375% Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, stated rate | 6.375% | |
6.375% Senior Notes | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | $ 326,944 | $ 326,110 |
6.375% Senior Notes | Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | 308,550 | 267,300 |
Junior Subordinated Debentures | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | 125,170 | 126,202 |
Junior Subordinated Debentures | Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | $ 149,827 | $ 130,636 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 9 Months Ended |
Sep. 28, 2019Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Reporting - Revenues an
Segment Reporting - Revenues and Income from Operations for Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Revenues | ||||
Net sales | $ 317,277 | $ 243,839 | $ 929,564 | $ 697,588 |
Segment income (loss) from operations | ||||
Total income from operations | 9,953 | 6,647 | 18,764 | 27,717 |
United States | ||||
Revenues | ||||
Net sales | 279,830 | 204,450 | 816,349 | 581,238 |
Segment income (loss) from operations | ||||
Total income from operations | 11,578 | 7,842 | 18,876 | 28,775 |
Canada | ||||
Revenues | ||||
Net sales | 34,709 | 37,422 | 104,627 | 110,574 |
Segment income (loss) from operations | ||||
Total income from operations | (1,853) | (1,514) | (963) | (1,671) |
Other | ||||
Revenues | ||||
Net sales | 2,738 | 1,967 | 8,588 | 5,776 |
Segment income (loss) from operations | ||||
Total income from operations | $ 228 | $ 319 | $ 851 | $ 613 |
Uncategorized Items - hillman10
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (7,852,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (7,852,000) |