Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 14, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | HLM | |
Entity Registrant Name | HILLMAN COMPANIES INC | |
Entity Central Index Key | 1,029,831 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 5,000 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 5,443 | $ 11,385 |
Accounts receivable, net of allowances of $849 ($601 - 2015) | 81,849 | 73,581 |
Inventories, net | 230,527 | 243,683 |
Deferred income taxes, net | 0 | 13,881 |
Other current assets | 11,720 | 10,541 |
Total current assets | 329,539 | 353,071 |
Property and equipment, net of accumulated depreciation of $67,407 ($43,074 - 2015) | 115,922 | 110,392 |
Goodwill | 616,578 | 615,515 |
Other intangibles, net of accumulated amortization of $85,302 ($56,782 - 2015) | 726,321 | 753,483 |
Other assets | 11,937 | 12,538 |
Total assets | 1,800,297 | 1,844,999 |
Current liabilities: | ||
Accounts payable | 70,697 | 65,008 |
Current portion of senior term loans | 5,500 | 5,500 |
Current portion of capitalized lease and other obligations | 158 | 217 |
Accrued expenses: | ||
Salaries and wages | 9,459 | 5,408 |
Pricing allowances | 4,595 | 7,216 |
Income and other taxes | 3,470 | 2,982 |
Interest | 4,517 | 9,843 |
Other accrued expenses | 9,451 | 8,548 |
Total current liabilities | 107,847 | 104,722 |
Long-term Debt | 974,274 | 1,004,819 |
Deferred income taxes, net | 242,427 | 259,213 |
Other non-current liabilities | 7,881 | 7,701 |
Total liabilities | 1,332,429 | 1,376,455 |
Commitments and contingencies (Note 5) | ||
Stockholders’ Equity: | ||
Preferred stock, $.01 par, 5,000 shares authorized, none issued or outstanding at September 30, 2016 and December 31, 2015 | 0 | 0 |
Common stock, $.01 par, 5,000 shares authorized, issued and outstanding at September 30, 2016 and December 31, 2015 | 0 | 0 |
Additional paid-in capital | 547,445 | 545,754 |
Accumulated deficit | (48,555) | (42,020) |
Accumulated other comprehensive loss | (31,022) | (35,190) |
Total stockholders’ equity | 467,868 | 468,544 |
Total liabilities and stockholders’ equity | $ 1,800,297 | $ 1,844,999 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
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 |
Allowance for Doubtful Accounts Receivable | $ 849 | $ 601 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | 67,407 | 43,074 |
Less: Accumulated amortization | $ 85,302 | $ 56,782 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Net sales | $ 211,528 | $ 209,933 | $ 628,032 | $ 607,447 |
Cost of sales (exclusive of depreciation and amortization shown separately below) | 111,039 | 113,840 | 336,095 | 336,175 |
Selling, general and administrative expenses | 68,142 | 65,877 | 200,517 | 192,172 |
Business Combination, Acquisition Related Costs | 0 | 0 | 0 | 257 |
Depreciation | 7,974 | 7,611 | 24,394 | 22,119 |
Amortization | 9,481 | 9,488 | 28,435 | 28,523 |
Management fees to related party | 148 | 156 | 420 | 462 |
Other (income) expense | (1,026) | 2,528 | (575) | 3,040 |
Income from operations | 15,770 | 10,433 | 38,746 | 24,699 |
Interest expense, net | 12,671 | 12,603 | 38,580 | 37,847 |
Interest expense on junior subordinated debentures | 3,152 | 3,152 | 9,456 | 9,457 |
Investment income on trust common securities | (95) | (95) | (284) | (284) |
Income (loss) before income taxes | 42 | (5,227) | (9,006) | (22,321) |
Income tax expense (benefit) | 479 | (5,187) | (2,471) | (7,873) |
Net loss | (437) | (40) | (6,535) | (14,448) |
Net loss from above | (437) | (40) | (6,535) | (14,448) |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustments | (1,726) | (6,385) | 4,168 | (17,270) |
Total other comprehensive (loss) income | (1,726) | (6,385) | 4,168 | (17,270) |
Comprehensive loss | $ (2,163) | $ (6,425) | $ (2,367) | $ (31,718) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (6,535) | $ (14,448) |
Adjustments to reconcile net loss to net cash provided by (used for) operating activities: | ||
Depreciation and amortization | 52,829 | 50,642 |
Loss (gain) on sale of property and equipment | 4 | (551) |
Deferred income taxes | (3,157) | (8,459) |
Share-based Compensation | 1,691 | 680 |
Gain (Loss) on Disposition of Assets | 832 | 0 |
Other Non Cash Interest And Change In Value Of Interest Rate Swap | 150 | 2,528 |
Deferred financing and original issue discount amortization | 1,979 | 2,046 |
Changes in operating items: | ||
Accounts receivable | (8,672) | (24,889) |
Inventories | 16,034 | (56,100) |
Other assets | (2,674) | (1,512) |
Accounts payable | 6,682 | 11,954 |
Other accrued liabilities | (3,287) | 1,529 |
Other items, net | (273) | (507) |
Net cash provided by (used for) operating activities | 55,603 | (37,087) |
Cash flows from investing activities: | ||
Payments for (Proceeds from) Productive Assets | 0 | 2,230 |
Capital expenditures | (29,402) | (20,962) |
Net cash used for investing activities | (29,402) | (18,732) |
Cash flows from financing activities: | ||
Repayments of senior term loans | (4,125) | (4,125) |
Borrowings on revolving credit loans | 16,000 | 53,000 |
Repayments of Lines of Credit | (44,000) | (2,000) |
Principal payments under capitalized lease obligations | (198) | (127) |
Proceeds from Stock Options Exercised | 0 | (400) |
Purchase of Holdco stock from a former member of management | 0 | (540) |
Net cash (used for) provided by financing activities | (32,323) | 46,608 |
Effect of exchange rate changes on cash | 180 | (589) |
Net (decrease) in cash and cash equivalents | (5,942) | (9,800) |
Cash and cash equivalents at beginning of period | 11,385 | 18,485 |
Supplemental disclosure of cash flow information: | ||
Interest paid on junior subordinated debentures | 9,172 | 10,193 |
Interest paid | 42,016 | 41,662 |
Income taxes paid | $ 489 | $ 1,059 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited financial statements include the condensed consolidated accounts of The Hillman Companies, Inc. (“Hillman Companies”) and its wholly-owned subsidiaries (collectively “Hillman” or the “Company”). All significant intercompany balances and transactions have been eliminated. 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. Management believes that the unaudited condensed consolidated financial statements include all adjustments (consisting only of normal recurring accruals and adjustments) necessary for a fair presentation. Operating results for the nine months ended September 30, 2016 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 31, 2015 . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
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 31, 2015 . Use of Estimates in the Preparation of Financial Statements: The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 period. Actual results may differ from these estimates. Reclassifications: Certain amounts in the prior year financial statements were reclassified to conform to the current year’s presentation. These reclassifications had no impact on the prior periods' net income (loss), cash flows, or stockholders' equity. As a result of implementation of Accounting Standards Update ("ASU") No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) during the first quarter of 2016, the Company reclassified deferred financing fees from non-current assets to long term liabilities. The reclassification reduced deferred financing fees and long term liabilities by approximately $16,900 and $19,400 as of September 30, 2016 and December 31, 2015, respectively. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The update outlines a five-step model and related application guidance, which replaces most existing revenue recognition guidance. In August 2015, the FASB issued ASU 2015-14 which deferred the effective date by one year making the guidance effective for us in the fiscal year ending December 31, 2018, and for interim periods within that year. The amendments can be applied retrospectively to each prior reporting period or retrospectively with the cumulative effect of initially applying this standard recognized at the date of initial application. Early adoption is permitted as of the original effective date. The Company is currently assessing the transition method and impact of implementing this guidance on its Condensed Consolidated Financial Statements. 3. Recent Accounting Pronouncements (continued): In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customer. This guidance amends the principal-versus-agent implementation guidance and illustrations in ASU 2014-09. This ASU clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. Therefore, for contracts involving more than one specified good or service, the entity may be the principal for one or more specified goods or services and the agent for others. This ASU has the same effective date as the new revenue standard, ASU 2014-09, and entities are required to adopt this ASU by using the same transition method used to adopt the new revenue standard. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. This ASU clarifies the implementation guidance on identifying performance obligations and licensing on the previously issued ASU 2014-09, Revenue from Contracts with Customers. In May 2016, the FASB issued ASU 2016-11, Revenue Recognition ( Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting. ASU 2016-11 rescinds several SEC Staff Announcements that are codified in Topic 605, including, among other items, guidance relating to accounting for shipping and handling fees and freight services. In May 2016, the FASB also issued ASU 2016-12, which provided narrow scope improvements and practical expedients related to ASU 2014-09, Revenue from Contracts with Customers. The improvements address completed contracts and contract modifications at transition, noncash consideration, the presentation of sales taxes and other taxes collected from customers, and assessment of collectability when determining whether a transaction represents a valid contract. ASU 2016-10, ASU 2016-11, and ASU 2016-12 are effective for the fiscal year ending December 31, 2018, and for interim periods within that year. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that year. ASU 2016-10, ASU 2016-11 and ASU 2016-12 can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is currently assessing the transition method and impact of implementing this guidance on its Condensed Consolidated Financial Statements. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The Company has adopted this standard in the first quarter of 2016. As a result of adopting this guidance, the Company recorded a reduction to deferred financing fees and a corresponding reduction to long term liabilities of approximately $16,900 and $19,400 as of September 30, 2016 and December 31, 2015 , respectively. There was no impact on Condensed Consolidated Statement of Comprehensive Loss or Cash Flows as a result of the adoption of this guidance. In November 2015, the FASB issued the ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes . The intent is to simplify the presentation of deferred income taxes. The amendments in the update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this update apply to all entities that present a classified statement of financial position. For public business entities, the amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier adoption is permitted for all entities as of the beginning of an interim or annual reporting period. The Company has elected early adoption of this standard in the first quarter of 2016. There was no impact on Condensed Consolidated Statement of Comprehensive Loss or Cash Flows as a result of the adoption of this guidance. Prior periods were not retrospectively adjusted. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The amendments in this update require lessees, among other things, to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. The new guidance will be effective for public business entities for annual periods beginning after December 15, 2018, and interim periods therein. Early adoption will be permitted for all entities. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. The Company is currently evaluating the impact of implementing this guidance on its Condensed Consolidated Financial Statements. 3. Recent Accounting Pronouncements (continued): In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting . This ASU affects entities that issue share-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for share-based payment award transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and forfeiture rate calculations. This ASU will become effective for the Company on January 1, 2017. Early adoption is permitted in any interim or annual period. The Company has elected early adoption of this standard in the first quarter of 2016. There was no impact on Condensed Consolidated Statement of Comprehensive Loss or Cash Flows as a result of the adoption of this guidance. Prior periods were not retrospectively adjusted. 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. In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). The update amends the guidance in Accounting Standards Codification 230, Statement of Cash Flows, and clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows with the objective of reducing the existing diversity in practice related to eight specific cash flow issues. The amendments in this update are effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU 2016-15 to have a material impact on its Condensed Consolidated Financial Statements. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill amounts by reporting unit are summarized as follows: Goodwill at Acquisitions Dispositions Other (1) Goodwill at December 31, 2015 September 30, 2016 United States, excluding All Points $ 580,420 $ — $ — $ — $ 580,420 All Points 3,360 — — — 3,360 Canada 27,530 — — 1,518 29,048 Mexico 4,205 — — (455 ) 3,750 Australia — — — — — Total $ 615,515 $ — $ — $ 1,063 $ 616,578 (1) These amounts relate to adjustments resulting from fluctuations in foreign currency exchange rates. 4. Goodwill and Other Intangible Assets (continued): Other intangibles, net, as of September 30, 2016 and December 31, 2015 consist of the following: Estimated Useful Life (Years) September 30, 2016 December 31, 2015 Customer relationships 20 $ 688,590 $ 687,530 Trademarks - All Others Indefinite 85,479 85,227 Trademarks - TagWorks 5 300 300 KeyWorks license 7 4,444 4,431 Patents 7-12 32,810 32,777 Intangible assets, gross 811,623 810,265 Less: Accumulated amortization 85,302 56,782 Other intangibles, net $ 726,321 $ 753,483 The amortization expense for amortizable assets including the adjustments resulting from fluctuations in foreign currency exchange rates was $9,481 and $9,488 for the three months ended September 30, 2016 and 2015 , respectively. The amortization expense for amortizable assets including the adjustments resulting from fluctuations in foreign currency exchange rates was $28,435 and $28,523 for the nine months ended September 30, 2016 and 2015 , respectively. The Company tests goodwill and indefinite-lived intangible assets and for impairment annually. Impairment is also tested when events or changes in circumstances indicate that the assets’ carrying values may be greater than their fair values. During the nine months ended September 30, 2016 and 2015 , the Company did not adjust goodwill or intangible assets to their fair values as a result of any impairment analyses. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | he Company self-insures our 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 $40,000 . 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 the liability of approximately $1,527 recorded for such risks is adequate as of September 30, 2016 . As of September 30, 2016 , the Company has provided certain vendors and insurers letters of credit aggregating $5,559 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 $200 per participant. Aggregate coverage is maintained for annual group health insurance claims in excess of 125% of expected claims. 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 claims data and certain actuarial assumptions. The Company believes the liability of approximately $1,500 recorded for such risks is adequate as of September 30, 2016 . 5. Commitments and Contingencies (continued): On October 1, 2013, The Hillman Group, Inc. ("Hillman Group") filed a complaint against Minute Key Inc., a manufacturer of fully-automatic, self-service key duplication kiosks, in the United States District Court for the Southern District of Ohio (Western Division), seeking a declaratory judgment of non-infringement and invalidity of a U.S. patent issued to Minute Key Inc. on September 10, 2013. Hillman Group's filing against Minute Key Inc. was in response to a letter dated September 10, 2013 in which Minute Key Inc. alleged that Hillman Group's FastKey™ product infringes the newly-issued patent. On October 23, 2013, Minute Key Inc. filed an answer and counterclaim against the Hillman Group alleging patent infringement. Minute Key Inc. also requested that the court dismiss the Hillman Group's complaint, enter judgment against the Hillman Group that the Company is willfully and deliberately infringing the patent, grant a permanent injunction, and award unspecified monetary damages to Minute Key Inc. Minute Key Inc. later filed two motions on March 17, 2014 seeking to voluntarily withdraw its counterclaim alleging infringement by Hillman Group and also to dismiss Hillman Group's complaint for non-infringement and invalidity. Shortly after an April 23, 2014 court-ordered mediation, Minute Key Inc. provided Hillman Group with a covenant promising not to sue for infringement of two of its patents against any existing Hillman Group product, including the FastKey™ and Key Express™ products. Hillman Group filed a motion on May 9, 2014 seeking to add additional claims to the case against Minute Key Inc. under Federal and Ohio state unfair competition statutes. These claims relate to Minute Key Inc.'s business conduct during competition with Hillman Group over a mutual client. In an August 15, 2014 order, the court granted Minute Key Inc.'s March 17, 2014 motions to dismiss the claims relating to patent infringement and also granted Hillman Group's May 9, 2014 motion to add its unfair competition claims. Hillman Group formally amended its complaint to add the unfair competition claims on September 4, 2014, and Minute Key Inc. answered on September 29, 2014 without filing any counterclaims. Minute Key Inc. filed a motion on October 1, 2014 to move the case from Cincinnati to either the District of Colorado or the Western District of Arkansas. The court denied that motion on February 3, 2015. It is not yet possible to assess the impact, if any, that the lawsuit will have on the Company. As a result of the Minute Key Inc. covenant not to sue, however, the Company's FastKey™ and Key Express™ products no longer face any threat of patent infringement liability from two of Minute Key Inc.'s patents. The scope of the lawsuit changed from a bilateral dispute over patent infringement to a lawsuit solely about Minute Key Inc.'s business conduct. Minute Key Inc. filed a motion for summary judgment on February 8, 2016. The court denied that motion on July 8, 2016. Following the denial of Minute Key Inc.’s summary judgment motion, a jury trial was held between August 24, 2016 and September 6, 2016. The jury returned a verdict in Hillman Group’s favor on September 6, 2016 finding that Minute Key Inc.’s actions violated the Federal Lanham Act and the Ohio Deceptive Trade Practices Act. Following this verdict against Minute Key Inc., Hillman Group has filed post-trial motions for recovery of its costs, attorney fees, pre-and post-judgment interest, and an injunction. Minute Key Inc. filed a post-trial motion to set aside the jury verdict. All post-trial motions are pending before the court. 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. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | he 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 $148 and $156 for the three months ended September 30, 2016 and 2015 , respectively. The Company has recorded aggregate management fee charges and expenses from CCMP and the Oak Hill Funds of $420 and $462 for the nine months ended September 30, 2016 and 2015 , respectively. Gregory Mann and Gabrielle Mann are employed by the All Points Industries, Inc. ("All Points") subsidiary of Hillman. All Points leases an industrial warehouse and office facility from companies under the control of the Manns. The Company has recorded rental expense for the lease of this facility on an arm’s length basis. The rental expense for the lease of this facility was $82 and $83 for the three months ended September 30, 2016 and 2015 , respectively. The rental expense for the lease of this facility was $246 and $247 for the nine months ended September 30, 2016 and 2015 , respectively. The Hillman Group Canada ULC 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 is employed by The Hillman Group Canada ULC, 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 Company has recorded rental expense for the three leases on an arm's length basis. The rental expense for the three leases was $158 and $157 for the three months ended September 30, 2016 and 2015 , respectively. The rental expense for the three leases was $468 and $490 for the nine months ended September 30, 2016 and 2015 , respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
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. Under ASC 740, companies should not apply the estimated annual effective tax rate to interim financial results if the estimated annual effective tax rate is not reliably predictable. In this situation, the interim tax rate should be based on the actual year-to-date results. For the three and nine month periods ended September 30, 2016 , reliable projections of the Company’s annual effective tax rate were difficult to determine, producing significant variations in the customary relationship between income tax expense and pre-tax book income. As such, the Company recorded income taxes for the period based on actual year-to-date results. In the three and nine month periods ended September 30, 2015 , the Company applied an estimated annual effective tax rate to the interim period pre-tax (loss) / income to calculate the income tax (benefit) / provision. For the three and nine months ended September 30, 2016 , the effective income tax rates were 1,140.5% and 27.4% respectively. The Company recorded a tax provision / (benefit) for the three and nine month periods ended September 30, 2016 of $479 and $(2,471) respectively. The effective income tax rate differed from the federal statutory tax rate in the three month period ended September 30, 2016 primarily due to certain non-deductible expenses for tax in relationship to the income reported for the third quarter. In addition, due to the cumulative loss recognized in previous years and in the current year in Australia, any tax benefit recorded is offset by the valuation allowance recorded against the subsidiary's loss. While the tax benefit is offset by the valuation allowance, the loss decreases total income utilized in calculating the effective rate during the three months ended September 30, 2016 . The effective income tax rate differed from the federal statutory tax rate in the three and nine months ended September 30, 2016 due in part to a tax benefit recorded in the current period from the reconciliation of a prior year’s tax return to the amount reported for tax provision purposes. The effective income tax rate differed from the federal statutory rate in the three and nine months ended September 30, 2016 also due in part to a valuation reserve recorded to offset the deferred tax assets of a foreign subsidiary. The remaining differences between the federal statutory rate and the effective tax rate in the three and nine months ended September 30, 2016 were primarily due to state and foreign income taxes. The effective income tax rates were 99.2% and 35.3% for the three and nine month periods ended September 30, 2015 , respectively. The Company recorded a tax (benefit) for the three and nine months ended September 30, 2015 of $(5,187) and $(7,873) respectively. The effective income tax rate differed from the federal statutory rate in the three and nine months ended September 30, 2015 primarily due to a change in the projected financial statement earnings for the year which decreased the estimated annual effective tax rate used to compute the interim period income tax (benefit) in accordance with the accounting guidance established for computing income taxes in interim periods. The effective income tax rate also differed from the federal statutory rate in the three and nine months ended September 30, 2015 due in part to a valuation reserve recorded to offset the deferred tax assets of a foreign subsidiary. The remaining differences between the federal statutory rate and the effective tax rate in the three and nine months ended September 30, 2015 were primarily due to state and foreign income taxes. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | The following table summarizes the Company’s debt: September 30, 2016 December 31, 2015 Revolving loans $ — $ 28,000 Senior term loan, due 2020 537,625 541,750 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 leases & other obligations 339 527 976,668 1,008,981 (Add) unamortized premium on 11.6% Junior Subordinated Debentures 20,212 21,003 (Subtract) current portion of long term debt and capital leases (5,658 ) (5,717 ) (Subtract) deferred financing fees (16,948 ) (19,448 ) Total long term debt, net $ 974,274 $ 1,004,819 As of September 30, 2016 , there was $537,625 outstanding under the Company’s term loan. The interest rate on the term loan was 4.5% at September 30, 2016 . As of September 30, 2016 , the Company had no outstanding borrowings under its revolving credit facility, except for $5,559 of letters of credit. The Company has approximately $64,441 of available borrowings under the revolving credit facility 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 10 - Fair Value Measurements . |
Derivatives and Hedging
Derivatives and Hedging | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging | e 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 September 3, 2014 , the Company entered into two forward Interest Rate Swap Agreement (the “2014 Swaps”) with three -year terms for notional amounts of $90,000 and $40,000 . The forward start date of the 2014 Swaps was October 1, 2015 and the termination date is September 30, 2018 . The 2014 Swaps fix the interest rate at 2.2% plus the applicable interest rate margin of 3.5% for an effective rate of 5.7% . The total fair value of the interest rate swaps was $(2,714) as of September 30, 2016 and was reported on the condensed consolidated balance sheet in other non-current liabilities with an increase in other expense recorded in the statement of comprehensive loss for the unfavorable change of $150 in fair value since December 31, 2015 . The total fair value of the interest rate swaps was $(2,564) as of December 31, 2015 and was reported on the condensed consolidated balance sheet in other non-current liabilities. The Company recorded an increase in other expense recorded in the statement of comprehensive loss for the unfavorable change of $2,528 in fair value in the nine months ended September 31, 2015. The Company's interest rate swap agreements did 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. 9. Derivatives and Hedging (continued): Foreign Currency Forward Contracts - During 2014, the Company entered into multiple foreign currency forward contracts (the “2014 FX Contracts”) with maturity dates ranging from March 2014 to December 2015 . The 2014 FX Contracts fixed the Canadian to U.S. dollar forward exchange rate at points ranging from 1.0680 to 1.1740 . The purpose of the 2014 FX Contracts was to manage the Company's exposure to fluctuations in the exchange rate of the Canadian dollar. During 2015, the Company entered into multiple foreign currency forward contracts (the “2015 FX Contracts”) with maturity dates ranging from February 2015 to December 2016 . The 2015 FX Contracts fixed the Canadian to U.S. dollar forward exchange rate at points ranging from 1.1384 to 1.3831 . The purpose of the 2015 FX Contracts is to manage the Company's exposure to fluctuations in the exchange rate of the Canadian dollar. During 2016, the Company entered into multiple foreign currency forward contracts (the “2016 FX Contracts”) with maturity dates ranging from April 2016 to April 2017 . The 2016 FX Contracts fixed the Canadian to U.S. dollar forward exchange rate at points ranging from 1.2536 to 1.3458 . The purpose of the 2016 FX 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$32,804 and C$37,886 as of September 30, 2016 and December 31, 2015 , respectively. The total fair value of the outstanding FX Contracts was $60 and $1,695 as of September 30, 2016 and December 31, 2015 , respectively, and was reported on the condensed consolidated balance sheets in other current (liabilities) and assets, respectively. An increase in other expense of $1,950 was recorded in the statement of comprehensive loss for the unfavorable change in fair value from December 31, 2015 . The Company's FX Contracts did 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 10 - Fair Value Measurements . |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | e 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: 10. Fair Value Measurements (continued): As of September 30, 2016 Level 1 Level 2 Level 3 Total Trading securities $ 1,687 $ — $ — $ 1,687 Interest rate swaps — (2,714 ) — (2,714 ) Foreign exchange forward contracts — 60 — 60 As of December 31, 2015 Level 1 Level 2 Level 3 Total Trading securities $ 2,021 $ — $ — $ 2,021 Interest rate swaps — (2,564 ) — (2,564 ) Foreign exchange forward contracts — 1,695 — 1,695 The fair value of the Company's fixed rate senior notes and junior subordinated debentures as of September 30, 2016 and December 31, 2015 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 30, 2016 December 31, 2015 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value 6.375% Senior Notes $ 323,610 $ 303,188 $ 322,777 $ 271,425 Junior Subordinated Debentures 128,916 141,771 129,707 131,691 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 30, 2016 and December 31, 2015 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 30, 2016 and December 31, 2015 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. Additional information with respect to the derivative instruments is included in Note 9 - Derivatives and Hedging . Additional information with respect to the Company’s fixed rate senior notes and junior subordinated debentures is included in Note 8 - Long Term Debt . |
Transaction, Acquisition, and I
Transaction, Acquisition, and Integration Expenses | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Transaction, Acquisition, and Integration Expenses | The Company did not have transaction related expenses during the three and nine months ended September 30, 2016 . In the three and nine months ended September 30, 2015 , the Company incurred $0 and $257 , respectively, in transaction expenses related to the merger of CCMP and the Oak Hill Funds. Additional information on the merger can be found in the Notes to the Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2015 . |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | e 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 five reportable segments as of September 30, 2016 : The United States, excluding All Points, All Points, Canada, Mexico, and Australia. The United States segment, excluding All Points, and the Canada segment are considered material by the Company’s management as of September 30, 2016 . In the three months ended September 30, 2016 , the Company decided to exit the Australia market following the loss of a key customer and recorded charges of $832 related to the write-off of inventory and other assets in the three and nine months ended September 30, 2016 . The Company evaluates the performance of its segments based on revenue and income from operations, and does not include segment assets or nonoperating income/expense items for management reporting purposes. The table below presents revenues and income (loss) from operations for our reportable segments for the three and nine months ended September 30, 2016 and 2015 . Three Months Ended September 30, Nine Months Ended 2016 2015 2016 2015 Revenues United States, excluding All Points $ 171,266 $ 167,260 $ 506,491 $ 479,202 All Points 4,945 5,116 14,395 15,857 Canada 33,313 35,645 101,612 106,194 Mexico 1,810 1,646 5,035 5,201 Australia 194 266 499 993 Total revenues $ 211,528 $ 209,933 $ 628,032 $ 607,447 Segment income (loss) from operations United States, excluding All Points $ 15,270 $ 12,672 $ 35,705 $ 25,628 All Points 265 465 1,189 1,280 Canada 1,035 (2,191 ) 2,798 (1,400 ) Mexico 17 (38 ) (170 ) 225 Australia (817 ) (475 ) (776 ) (1,034 ) Total income from operations $ 15,770 $ 10,433 $ 38,746 $ 24,699 |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
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 accounting principles generally accepted in the United States 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 period. Actual results may differ from these estimates. |
Recent Accounting Pronouncements | In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The update outlines a five-step model and related application guidance, which replaces most existing revenue recognition guidance. In August 2015, the FASB issued ASU 2015-14 which deferred the effective date by one year making the guidance effective for us in the fiscal year ending December 31, 2018, and for interim periods within that year. The amendments can be applied retrospectively to each prior reporting period or retrospectively with the cumulative effect of initially applying this standard recognized at the date of initial application. Early adoption is permitted as of the original effective date. The Company is currently assessing the transition method and impact of implementing this guidance on its Condensed Consolidated Financial Statements. 3. Recent Accounting Pronouncements (continued): In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customer. This guidance amends the principal-versus-agent implementation guidance and illustrations in ASU 2014-09. This ASU clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. Therefore, for contracts involving more than one specified good or service, the entity may be the principal for one or more specified goods or services and the agent for others. This ASU has the same effective date as the new revenue standard, ASU 2014-09, and entities are required to adopt this ASU by using the same transition method used to adopt the new revenue standard. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. This ASU clarifies the implementation guidance on identifying performance obligations and licensing on the previously issued ASU 2014-09, Revenue from Contracts with Customers. In May 2016, the FASB issued ASU 2016-11, Revenue Recognition ( Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting. ASU 2016-11 rescinds several SEC Staff Announcements that are codified in Topic 605, including, among other items, guidance relating to accounting for shipping and handling fees and freight services. In May 2016, the FASB also issued ASU 2016-12, which provided narrow scope improvements and practical expedients related to ASU 2014-09, Revenue from Contracts with Customers. The improvements address completed contracts and contract modifications at transition, noncash consideration, the presentation of sales taxes and other taxes collected from customers, and assessment of collectability when determining whether a transaction represents a valid contract. ASU 2016-10, ASU 2016-11, and ASU 2016-12 are effective for the fiscal year ending December 31, 2018, and for interim periods within that year. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that year. ASU 2016-10, ASU 2016-11 and ASU 2016-12 can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is currently assessing the transition method and impact of implementing this guidance on its Condensed Consolidated Financial Statements. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The Company has adopted this standard in the first quarter of 2016. As a result of adopting this guidance, the Company recorded a reduction to deferred financing fees and a corresponding reduction to long term liabilities of approximately $16,900 and $19,400 as of September 30, 2016 and December 31, 2015 , respectively. There was no impact on Condensed Consolidated Statement of Comprehensive Loss or Cash Flows as a result of the adoption of this guidance. In November 2015, the FASB issued the ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes . The intent is to simplify the presentation of deferred income taxes. The amendments in the update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this update apply to all entities that present a classified statement of financial position. For public business entities, the amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier adoption is permitted for all entities as of the beginning of an interim or annual reporting period. The Company has elected early adoption of this standard in the first quarter of 2016. There was no impact on Condensed Consolidated Statement of Comprehensive Loss or Cash Flows as a result of the adoption of this guidance. Prior periods were not retrospectively adjusted. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The amendments in this update require lessees, among other things, to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. The new guidance will be effective for public business entities for annual periods beginning after December 15, 2018, and interim periods therein. Early adoption will be permitted for all entities. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. The Company is currently evaluating the impact of implementing this guidance on its Condensed Consolidated Financial Statements. 3. Recent Accounting Pronouncements (continued): In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting . This ASU affects entities that issue share-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for share-based payment award transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and forfeiture rate calculations. This ASU will become effective for the Company on January 1, 2017. Early adoption is permitted in any interim or annual period. The Company has elected early adoption of this standard in the first quarter of 2016. There was no impact on Condensed Consolidated Statement of Comprehensive Loss or Cash Flows as a result of the adoption of this guidance. Prior periods were not retrospectively adjusted. 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. In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). The update amends the guidance in Accounting Standards Codification 230, Statement of Cash Flows, and clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows with the objective of reducing the existing diversity in practice related to eight specific cash flow issues. The amendments in this update are effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU 2016-15 to have a material impact on its Condensed Consolidated Financial Statements. |
Comparability of Prior Year Financial Data, Policy [Policy Text Block] | Reclassifications: Certain amounts in the prior year financial statements were reclassified to conform to the current year’s presentation. These reclassifications had no impact on the prior periods' net income (loss), cash flows, or stockholders' equity. As a result of implementation of Accounting Standards Update ("ASU") No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) during the first quarter of 2016, the Company reclassified deferred financing fees from non-current assets to long term liabilities. The reclassification reduced deferred financing fees and long term liabilities by approximately $16,900 and $19,400 as of September 30, 2016 and December 31, 2015, respectively. |
Reclassification, Policy [Policy Text Block] | Reclassifications: Certain amounts in the prior year financial statements were reclassified to conform to the current year’s presentation. These reclassifications had no impact on the prior periods' net income (loss), cash flows, or stockholders' equity. As a result of implementation of Accounting Standards Update ("ASU") No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) during the first quarter of 2016, the Company reclassified deferred financing fees from non-current assets to long term liabilities. The reclassification reduced deferred financing fees and long term liabilities by approximately $16,900 and $19,400 as of September 30, 2016 and December 31, 2015, respectively. |
Goodwill and Other Intangible19
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill Amounts by Reporting Unit | Goodwill amounts by reporting unit are summarized as follows: Goodwill at Acquisitions Dispositions Other (1) Goodwill at December 31, 2015 September 30, 2016 United States, excluding All Points $ 580,420 $ — $ — $ — $ 580,420 All Points 3,360 — — — 3,360 Canada 27,530 — — 1,518 29,048 Mexico 4,205 — — (455 ) 3,750 Australia — — — — — Total $ 615,515 $ — $ — $ 1,063 $ 616,578 (1) These amounts relate to adjustments resulting from fluctuations in foreign currency exchange rates. |
Components of Other Intangibles, Net | Other intangibles, net, as of September 30, 2016 and December 31, 2015 consist of the following: Estimated Useful Life (Years) September 30, 2016 December 31, 2015 Customer relationships 20 $ 688,590 $ 687,530 Trademarks - All Others Indefinite 85,479 85,227 Trademarks - TagWorks 5 300 300 KeyWorks license 7 4,444 4,431 Patents 7-12 32,810 32,777 Intangible assets, gross 811,623 810,265 Less: Accumulated amortization 85,302 56,782 Other intangibles, net $ 726,321 $ 753,483 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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: 10. Fair Value Measurements (continued): As of September 30, 2016 Level 1 Level 2 Level 3 Total Trading securities $ 1,687 $ — $ — $ 1,687 Interest rate swaps — (2,714 ) — (2,714 ) Foreign exchange forward contracts — 60 — 60 As of December 31, 2015 Level 1 Level 2 Level 3 Total Trading securities $ 2,021 $ — $ — $ 2,021 Interest rate swaps — (2,564 ) — (2,564 ) Foreign exchange forward contracts — 1,695 — 1,695 |
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 30, 2016 and December 31, 2015 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 30, 2016 December 31, 2015 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value 6.375% Senior Notes $ 323,610 $ 303,188 $ 322,777 $ 271,425 Junior Subordinated Debentures 128,916 141,771 129,707 131,691 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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 three and nine months ended September 30, 2016 and 2015 . Three Months Ended September 30, Nine Months Ended 2016 2015 2016 2015 Revenues United States, excluding All Points $ 171,266 $ 167,260 $ 506,491 $ 479,202 All Points 4,945 5,116 14,395 15,857 Canada 33,313 35,645 101,612 106,194 Mexico 1,810 1,646 5,035 5,201 Australia 194 266 499 993 Total revenues $ 211,528 $ 209,933 $ 628,032 $ 607,447 Segment income (loss) from operations United States, excluding All Points $ 15,270 $ 12,672 $ 35,705 $ 25,628 All Points 265 465 1,189 1,280 Canada 1,035 (2,191 ) 2,798 (1,400 ) Mexico 17 (38 ) (170 ) 225 Australia (817 ) (475 ) (776 ) (1,034 ) Total income from operations $ 15,770 $ 10,433 $ 38,746 $ 24,699 |
Assets and Cash Equivalents |
Summary of Significant Accoun22
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Summary Of Significant Accounting Policies [Line Items] | ||
Reclassifications [Text Block] | Reclassifications: Certain amounts in the prior year financial statements were reclassified to conform to the current year’s presentation. These reclassifications had no impact on the prior periods' net income (loss), cash flows, or stockholders' equity. As a result of implementation of Accounting Standards Update ("ASU") No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) during the first quarter of 2016, the Company reclassified deferred financing fees from non-current assets to long term liabilities. The reclassification reduced deferred financing fees and long term liabilities by approximately $16,900 and $19,400 as of September 30, 2016 and December 31, 2015, respectively. | |
Long-term Debt [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Deferred Finance Costs, Net | $ (16,948) | $ (19,448) |
New Accounting Pronouncement, Early Adoption, Effect [Member] | Long-term Debt [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Deferred Finance Costs, Net | $ (16,900) | $ (19,400) |
Recent Accounting Pronounceme23
Recent Accounting Pronouncements (Details) - Long-term Debt [Member] - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Item Effected [Line Items] | ||
Deferred Finance Costs, Net | $ 16,948 | $ 19,448 |
New Accounting Pronouncement, Early Adoption, Effect [Member] | ||
Item Effected [Line Items] | ||
Deferred Finance Costs, Net | $ 16,900 | $ 19,400 |
Goodwill and Other Intangible24
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill, impairment charges | $ 0 | ||||
Impairment of indefinite-lived intangibles | $ 0 | ||||
Accumulated amortization including foreign subsidiaries | $ 85,302,000 | 85,302,000 | $ 56,782,000 | ||
Amortization expense including adjustments from fluctuations in foreign currency exchange rates | $ 9,481,000 | $ 9,488,000 | $ 28,435,000 | $ 28,523,000 |
Goodwill and Other Intangible25
Goodwill and Other Intangible Assets - Summary of Goodwill Amounts by Reporting Unit (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, Beginning balance | $ 615,515 |
Acquisitions | 0 |
Dispositions | 0 |
Other | 1,063 |
Goodwill, Ending balance | 616,578 |
United States excluding All Points Segment [Member] | |
Goodwill [Roll Forward] | |
Goodwill, Beginning balance | 580,420 |
Acquisitions | 0 |
Dispositions | 0 |
Other | 0 |
Goodwill, Ending balance | 580,420 |
All Points Segment [Member] | |
Goodwill [Roll Forward] | |
Goodwill, Beginning balance | 3,360 |
Acquisitions | 0 |
Dispositions | 0 |
Other | 0 |
Goodwill, Ending balance | 3,360 |
Canada [Member] | |
Goodwill [Roll Forward] | |
Goodwill, Beginning balance | 27,530 |
Acquisitions | 0 |
Dispositions | 0 |
Other | 1,518 |
Goodwill, Ending balance | 29,048 |
Mexico [Member] | |
Goodwill [Roll Forward] | |
Goodwill, Beginning balance | 4,205 |
Acquisitions | 0 |
Dispositions | 0 |
Other | (455) |
Goodwill, Ending balance | 3,750 |
Australia [Member] | |
Goodwill [Roll Forward] | |
Goodwill, Beginning balance | 0 |
Acquisitions | 0 |
Dispositions | 0 |
Other | 0 |
Goodwill, Ending balance | $ 0 |
Goodwill and Other Intangible26
Goodwill and Other Intangible Assets - Components of Other Intangibles, Net (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Finite Lived And Indefinite Lived Intangible Assets Gross | $ 811,623 | $ 811,623 | $ 810,265 | ||
Less: Accumulated amortization | 85,302 | 85,302 | 56,782 | ||
Other intangibles, net | 726,321 | 726,321 | 753,483 | ||
Amortization | 9,481 | $ 9,488 | $ 28,435 | $ 28,523 | |
Trademarks - All Others [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Useful Life | Indefinite | ||||
Indefinite Intangible assets, gross | 85,479 | $ 85,479 | 85,227 | ||
Customer Relationships [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Useful Life | 20 years | ||||
Finite-lived intangible assets, gross | 688,590 | $ 688,590 | 687,530 | ||
Trademarks - TagWorks [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Useful Life | 5 years | ||||
Finite-lived intangible assets, gross | 300 | $ 300 | 300 | ||
KeyWorks License [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Useful Life | 7 years | ||||
Finite-lived intangible assets, gross | 4,444 | $ 4,444 | 4,431 | ||
Patents [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived intangible assets, gross | $ 32,810 | $ 32,810 | $ 32,777 | ||
Patents [Member] | Minimum [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Useful Life | 7 years | ||||
Patents [Member] | Maximum [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Useful Life | 12 years |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($)patent | |
Loss Contingencies [Line Items] | |
Losses up to per occurrence related to product liability, automotive, workers' compensation and general liability | $ 250 |
Liability recorded for such risk insurance reserves | 1,527 |
Aggregate vendors and insurers letters of credit related to product purchases and insurance coverage of product liability, workers' compensation and general liability | 5,559 |
Group health claims up to annual stop loss limit per participant | $ 200 |
Annual group health insurance claims in excess of expected claims | 125.00% |
Liability recorded for such group health insurance reserves | $ 1,500 |
Patent Infringement from Minute Key Inc. [Member] | |
Loss Contingencies [Line Items] | |
Number of patents found not infringed | patent | 2 |
Maximum [Member] | |
Loss Contingencies [Line Items] | |
Occurrences in excess for purchased catastrophic coverage | $ 40,000 |
Minimum [Member] | |
Loss Contingencies [Line Items] | |
Occurrences in excess for purchased catastrophic coverage | $ 250 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) $ in Thousands | Feb. 19, 2013LeaseProperty | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) |
Capital Leased Assets [Line Items] | |||||
Management fee charges and expenses | $ 148 | $ 156 | $ 420 | $ 462 | |
Oak Hill Funds and CCMP [Member] | |||||
Capital Leased Assets [Line Items] | |||||
Management fee charges and expenses | 148 | 156 | 420 | 462 | |
Companies Controlled by Manns [Member] | |||||
Capital Leased Assets [Line Items] | |||||
Rental expense for the leases | 82 | 83 | 246 | 247 | |
Richard Paulin [Member] | Hillman Group Canada ULC [Member] | |||||
Capital Leased Assets [Line Items] | |||||
Rental expense for the leases | $ 158 | $ 157 | $ 468 | $ 490 | |
Richard Paulin [Member] | |||||
Capital Leased Assets [Line Items] | |||||
Number of leases | Lease | 3 | ||||
Number of properties leased | Property | 5 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rates | 1140.50% | 99.20% | 27.40% | 35.30% |
Income tax expense (benefit) | $ 479 | $ (5,187) | $ (2,471) | $ (7,873) |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Long-term Debt | $ 974,274 | $ 1,004,819 |
Loan outstanding amount | 5,559 | |
6.375% Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount of senior notes | $ 330,000 | 330,000 |
Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Adjusted interest rate | 4.50% | |
Long-term Debt [Member] | ||
Debt Instrument [Line Items] | ||
Deferred Finance Costs, Net | $ 16,948 | 19,448 |
Long-term Debt [Member] | New Accounting Pronouncement, Early Adoption, Effect [Member] | ||
Debt Instrument [Line Items] | ||
Deferred Finance Costs, Net | 16,900 | 19,400 |
Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 537,625 | $ 541,750 |
Long-Term Debt Long Term Debt (
Long-Term Debt Long Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Long-term Debt | $ 974,274 | $ 1,004,819 |
Capital Lease Obligations | 339 | 527 |
Debt, Long-term and Short-term, Combined Amount | 976,668 | 1,008,981 |
Long-term Debt, Current Maturities | (5,658) | (5,717) |
Long-term Debt [Member] | ||
Debt Issuance Costs, Net | (16,948) | (19,448) |
6.375% Senior Notes [Member] | ||
Principal amount of senior notes | 330,000 | 330,000 |
Junior Subordinated Debentures - Preferred [Domain] | ||
Trust Preferred Security At Face Value | 105,443 | 105,443 |
Trust Preferred Securities - Common [Domain] | ||
Trust Preferred Security At Face Value | 3,261 | 3,261 |
Revolving Credit Facility [Member] | ||
Line of Credit Facility, Remaining Borrowing Capacity | 64,441 | |
Long-term Line of Credit | 0 | 28,000 |
Term Loan [Member] | ||
Long-term Debt | 537,625 | 541,750 |
Junior Subordinated Debentures - Preferred [Domain] | ||
Debt Instrument, Unamortized Premium | $ 20,212 | $ 21,003 |
Derivatives and Hedging - Addit
Derivatives and Hedging - Additional Information (Detail) $ in Thousands | Sep. 03, 2014USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014 |
Derivative [Line Items] | ||||
Fair value interest rate swaps | $ (2,714) | $ (2,564) | ||
Unfavorable change in fair value | $ (150) | (2,528) | ||
2014 Swap No. 1 [Member] | ||||
Derivative [Line Items] | ||||
Term of derivative instrument | 3 years | |||
Notional amount of derivative instrument | $ 90,000 | |||
Effective date of agreement | Sep. 3, 2014 | |||
Termination date of derivative | Sep. 30, 2018 | |||
Fixed interest rate of Swap Agreement | 2.20% | |||
Derivative, Basis Spread on Variable Rate | 3.50% | |||
Derivative, Variable Interest Rate | 5.70% | |||
2014 Swap No. 2 [Member] | ||||
Derivative [Line Items] | ||||
Notional amount of derivative instrument | $ 40,000 | |||
2014 FX Contracts [Member] | Minimum [Member] | ||||
Derivative [Line Items] | ||||
Forward exchange rate | 1.0680 | |||
2014 FX Contracts [Member] | Maximum [Member] | ||||
Derivative [Line Items] | ||||
Forward exchange rate | 1.1740 | |||
2015 FX Contracts [Member] | ||||
Derivative [Line Items] | ||||
Notional amount of derivative instrument | $ 32,804 | $ 37,886 | ||
2015 FX Contracts [Member] | Minimum [Member] | ||||
Derivative [Line Items] | ||||
Forward exchange rate | 1.1384 | |||
2015 FX Contracts [Member] | Maximum [Member] | ||||
Derivative [Line Items] | ||||
Forward exchange rate | 1.3831 | |||
2016 FX Contracts [Domain] | Minimum [Member] | ||||
Derivative [Line Items] | ||||
Forward exchange rate | 1.2536 | |||
2016 FX Contracts [Domain] | Maximum [Member] | ||||
Derivative [Line Items] | ||||
Forward exchange rate | 1.3458 | |||
Foreign Exchange Forward Contract [Member] | ||||
Derivative [Line Items] | ||||
Fair value of derivative asset | $ 60 | $ 1,695 | ||
Increase in other income | $ 1,950 |
Fair Value Measurements - Measu
Fair Value Measurements - Measurement of Assets and Liabilities at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps | $ 2,714 | $ 2,564 |
Fair Value Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted Investments | 1,687 | 2,021 |
Interest rate swaps | 2,714 | 2,564 |
Foreign exchange forward contracts | (60) | |
Foreign exchange forward contracts | 1,695 | |
Fair Value Measurements, Recurring [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted Investments | 1,687 | 2,021 |
Interest rate swaps | 0 | 0 |
Foreign exchange forward contracts | 0 | |
Foreign exchange forward contracts | 0 | |
Fair Value Measurements, Recurring [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted Investments | 0 | 0 |
Interest rate swaps | 2,714 | 2,564 |
Foreign exchange forward contracts | (60) | |
Foreign exchange forward contracts | 1,695 | |
Fair Value Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted Investments | 0 | 0 |
Interest rate swaps | 0 | 0 |
Foreign exchange forward contracts | $ 0 | |
Foreign exchange forward contracts | $ 0 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Company's Fixed Rate Senior Notes and Junior Subordinated Debentures (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
6.375% Senior Notes [Member] | Estimated Fair Value [Member] | ||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||
Debt | $ 303,188 | $ 271,425 |
6.375% Senior Notes [Member] | Carrying Amount [Member] | ||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||
Debt | 323,610 | 322,777 |
Junior Subordinated Debentures [Member] | Estimated Fair Value [Member] | ||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||
Debt | 141,771 | 131,691 |
Junior Subordinated Debentures [Member] | Carrying Amount [Member] | ||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||
Debt | $ 128,916 | $ 129,707 |
Transaction, Acquisition, and35
Transaction, Acquisition, and Integration Expenses - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Acquisition and integration costs | $ 0 | $ 0 | $ 0 | $ 257 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2016Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 5 |
Segment Reporting - Revenues an
Segment Reporting - Revenues and Income from Operations for Reportable Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Sales Information [Line Items] | |||||
Goodwill | $ 616,578 | $ 616,578 | $ 615,515 | ||
Revenues | |||||
Total revenues | 211,528 | $ 209,933 | 628,032 | $ 607,447 | |
Segment income (loss) from operations | |||||
Total income from operations | 15,770 | 10,433 | 38,746 | 24,699 | |
United States excluding All Points Segment [Member] | |||||
Sales Information [Line Items] | |||||
Goodwill | 580,420 | 580,420 | 580,420 | ||
Revenues | |||||
Total revenues | 171,266 | 167,260 | 506,491 | 479,202 | |
Segment income (loss) from operations | |||||
Total income from operations | 15,270 | 12,672 | 35,705 | 25,628 | |
All Points Segment [Member] | |||||
Sales Information [Line Items] | |||||
Goodwill | 3,360 | 3,360 | 3,360 | ||
Revenues | |||||
Total revenues | 4,945 | 5,116 | 14,395 | 15,857 | |
Segment income (loss) from operations | |||||
Total income from operations | 265 | 465 | 1,189 | 1,280 | |
Canada [Member] | |||||
Sales Information [Line Items] | |||||
Goodwill | 29,048 | 29,048 | 27,530 | ||
Revenues | |||||
Total revenues | 33,313 | 35,645 | 101,612 | 106,194 | |
Segment income (loss) from operations | |||||
Total income from operations | 1,035 | (2,191) | 2,798 | (1,400) | |
Mexico [Member] | |||||
Sales Information [Line Items] | |||||
Goodwill | 3,750 | 3,750 | 4,205 | ||
Revenues | |||||
Total revenues | 1,810 | 1,646 | 5,035 | 5,201 | |
Segment income (loss) from operations | |||||
Total income from operations | 17 | (38) | (170) | 225 | |
Australia [Member] | |||||
Sales Information [Line Items] | |||||
Goodwill | 0 | 0 | $ 0 | ||
Revenues | |||||
Total revenues | 194 | 266 | 499 | 993 | |
Segment income (loss) from operations | |||||
Total income from operations | $ (817) | $ (475) | $ (776) | $ (1,034) |