Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |
Dec. 31, 2013 | 7-May-15 | |
Document and Entity Information | ||
Entity Registrant Name | Colt Defense LLC | |
Entity Central Index Key | 1508677 | |
Document Type | 10-K/A | |
Document Period End Date | 31-Dec-13 | |
Amendment Flag | TRUE | |
Amendment Description | Amendment No. 2 - Response to the United States Securities and Exchange Commission (the "SEC") comments on our Form 10-K and Form 10-K/A #1 for the fiscal year ended December 31, 2013 (filed May 7, 2015) In this amendment # 2 to our Annual Report on Form 10-K for the year ended December 31, 2013 (Form 10-K/A #2) we are responding to the SEC comments on our 2013 Form 10-K for the fiscal year ended December 31, 2013 filed March 20, 2014 and our 2013 Form 10-K/A #1 for the fiscal year ended December 31, 2013 to (i) include certifications under Section 906 of the Sarbanes-Oxley Act and (ii) update our certifications under Section 302 of the Sarbanes-Oxley Act to include internal control over financial reporting language in the introductory portion of paragraph 4 as well as paragraph 4(b). These amendments do not require any changes to the financial statements for the fiscal year -ended December 31, 2013, as restated, other than the addition of Note 20 "Subsequent Events". In connection with our response to the SEC comments and the refiling of our Form 10-K/A #2 we have included language in Note 20 "Subsequent Events" with respect to our current liquidity position and ability to continue as a going concern and other recent events. As a result of our current liquidity position, our independent public registered accounting firm has updated its previously issued audit report to include a "going concern" explanatory paragraph. In addition to the changes noted above, we have revised our disclosure in Part II, Item 8: Financial Statements and Supplemental Data, Note 2. "Summary of Significant Accounting Policies - Self Funded Worker's Compensation", with respect to our liability for estimated premiums and incurred losses under our deductible policies as of December 31, 2013 from $408 ($ in thousands) to $214 ($ in thousands) as previously revised in our September 2014 form 10-Q filed on November 25, 2014. | |
Current Fiscal Year End Date | -19 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | Yes | |
Entity Current Reporting Status | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Public Float | $0 | |
Entity Common Stock, Shares Outstanding | 0 | |
Document Fiscal Year Focus | 2013 | |
Document Fiscal Period Focus | FY |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, unless otherwise specified | ||||
Current assets: | ||||
Cash and cash equivalents | $12,594 | $42,373 | $38,236 | $61,444 |
Restricted cash | 771 | 777 | ||
Accounts receivable, net | 22,482 | 22,944 | ||
Inventories | 66,674 | 40,561 | ||
Deferred tax assets | 954 | 185 | ||
Other current assets | 5,962 | 3,166 | ||
Total current assets | 109,437 | 110,006 | ||
Property and equipment, net | 30,733 | 22,134 | ||
Goodwill | 51,225 | 14,947 | 14,713 | |
Trademarks | 50,100 | |||
Intangible assets with finite lives, net | 13,415 | 6,037 | ||
Deferred financing costs | 7,742 | 7,642 | 9,312 | |
Long-term restricted cash | 572 | 810 | ||
Other assets | 1,510 | 1,588 | ||
Total assets | 264,734 | 163,164 | ||
Current liabilities: | ||||
Line of credit | 7,083 | 6 | ||
Accounts payable | 14,038 | 13,055 | ||
Accrued expenses | 22,158 | 20,315 | ||
Pension and retirement liabilities - current portion | 1,085 | 626 | ||
Customer advances and deferred revenue | 19,467 | 10,002 | ||
Long-term debt current portion | 5,000 | |||
Accrued distributions to members | 670 | |||
Total current liabilities | 69,501 | 44,004 | ||
Long term debt | 289,817 | 247,567 | ||
Pension and retirement liabilities | 21,670 | 20,261 | ||
Long- term deferred tax liability | 18,715 | 1,515 | ||
Long-term distributions to members | 2,277 | |||
Other long-term liabilities | 2,230 | 908 | ||
Total long-term liabilities | 334,709 | 270,251 | ||
Total liabilities | 404,210 | 314,255 | ||
Commitments and contingencies (Notes 7 and 13) | ||||
Deficit: | ||||
Accumulated deficit | -130,136 | -137,249 | ||
Accumulated other comprehensive loss | -9,340 | -13,842 | -13,130 | -7,484 |
Total deficit | -139,476 | -151,091 | ||
Total liabilities and deficit | $264,734 | $163,164 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Jun. 30, 2013 | Sep. 29, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Consolidated Statements of Operations | |||||||||||||
Net sales | $69,792 | $73,030 | $64,212 | $63,849 | $67,371 | $56,555 | $45,837 | $43,853 | $128,061 | $201,165 | $270,883 | $213,616 | $208,816 |
Cost of sales | 47,683 | 58,487 | 45,830 | 45,112 | 90,942 | 149,642 | 197,112 | 162,622 | 143,851 | ||||
Gross profit | 22,109 | 14,543 | 18,382 | 18,737 | 18,221 | 16,310 | 8,720 | 7,743 | 37,119 | 51,523 | 73,771 | 50,994 | 64,965 |
Operating expenses: | |||||||||||||
Selling and commissions | 4,064 | 3,452 | 3,095 | 6,547 | 10,398 | 14,142 | 13,117 | 13,780 | |||||
Research and development | 1,714 | 1,481 | 820 | 2,301 | 4,015 | 6,126 | 4,747 | 5,578 | |||||
General and administrative | 3,896 | 3,015 | 3,730 | 6,745 | 10,641 | 15,289 | 14,285 | 13,098 | |||||
Total selling and commissions, research and development, general and administrative | 9,674 | 7,948 | 7,645 | 15,593 | 25,054 | 35,557 | 32,149 | 32,456 | |||||
Business development | -132 | 463 | 169 | 75 | 746 | 100 | 35 | 244 | 707 | 575 | 881 | 504 | |
Certain transaction costs (Note 3) | 461 | 416 | 416 | 877 | 1,147 | ||||||||
Restructuring costs (Note 4) | 631 | 631 | 782 | ||||||||||
Gain on effective settlement of contract (Note 3) | -15,264 | -15,264 | -15,264 | ||||||||||
Total operating expenses | -4,035 | 8,533 | 7,720 | 16,253 | 12,005 | 22,797 | 33,030 | 32,960 | |||||
Operating income | 18,578 | 9,849 | 11,017 | 20,866 | 39,518 | 50,974 | 17,964 | 32,005 | |||||
Other (income)/expense: | |||||||||||||
Interest expense | 7,623 | 6,069 | 5,994 | 12,063 | 19,686 | 27,687 | 24,579 | 24,010 | |||||
Debt prepayment expense | 295 | ||||||||||||
Other (income)/expense, net | 306 | -685 | -787 | -1,472 | -1,092 | -1,216 | -1,572 | -459 | |||||
Total other expenses, net | 7,929 | 5,384 | 5,207 | 10,591 | 18,594 | 26,471 | 23,007 | 23,846 | |||||
Income (loss) before provision for income taxes | 10,649 | 4,465 | 5,810 | 10,275 | 20,924 | 24,503 | -5,043 | 8,159 | |||||
Income tax expense | -208 | 78 | 681 | 759 | 551 | 1,636 | 1,815 | 3,171 | |||||
Net income (loss) | $10,857 | $4,387 | $5,129 | $9,516 | $20,373 | $22,867 | ($6,858) | $4,988 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2013 | Sep. 29, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Consolidated Statements of Comprehensive Income (Loss) | ||||||||
Net income (loss) | $10,857 | $4,387 | $5,129 | $9,516 | $20,373 | $22,867 | ($6,858) | $4,988 |
Foreign currency translation adjustment: | ||||||||
Foreign currency translation gains (losses) | -1,889 | 517 | -444 | |||||
Pension and postretirement benefit liabilities: | ||||||||
Other comprehensive income (loss) arising during the period | 5,890 | -2,322 | -5,765 | |||||
Reclassification adjustment for unrecognized prior service costs and unrecognized loss included in net income (loss) | 501 | 1,093 | 563 | |||||
Total | 6,391 | -1,229 | -5,202 | |||||
Comprehensive income (loss) | $27,369 | ($7,570) | ($658) |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Operating Activities | |||
Net income (loss) | $22,867 | ($6,858) | $4,988 |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 6,359 | 5,696 | 5,476 |
Amortization of financing fees | 2,020 | 1,653 | 1,498 |
Amortization of debt discount | 793 | 381 | 348 |
Gain on effective settlement of contract | -15,264 | ||
Pension curtailment expense | 1,325 | ||
Deferred income taxes | 29 | 39 | -271 |
Loss (gain) on sale/disposal of fixed assets | 205 | 4 | -12 |
Debt prepayment expense | 295 | ||
Amortization of deferred revenue | -127 | -79 | -125 |
Common unit compensation expense | 27 | 17 | |
Changes in operating assets and liabilities, net of acquisition: | |||
Accounts receivable | 3,484 | 7,829 | -15,761 |
Inventories | -19,126 | -4,158 | -4,765 |
Prepaid expense and other current assets | -904 | -919 | 405 |
Accounts payable and accrued expense | -4,674 | 5,201 | 8,001 |
Accrued pension and retirement liabilities | -1,099 | -172 | -622 |
Customer advances and deferred income | 8,186 | 2,001 | -46 |
Other | 261 | 463 | -104 |
Net cash provided by (used in) operating activities | 3,037 | 12,423 | -695 |
Investing Activities | |||
Purchase of property and equipment | -8,598 | -4,410 | -5,600 |
Proceeds from sale/disposal of property | 66 | 12 | |
Business acquisition, net of cash acquired and reinvested Merger consideration | -59,488 | ||
Change in restricted cash | 244 | 464 | -1,380 |
Net cash used in investing activities | -67,842 | -3,880 | -6,968 |
Financing Activities | |||
Debt issuance costs | -2,120 | -1,636 | |
Proceeds from the issuance of long-term debt | 47,707 | ||
Repayment of long-term debt | -1,250 | ||
Line of credit advances | 10,083 | 6 | |
Line of credit repayments | -3,006 | ||
Purchase of common units | -14,000 | ||
Proceeds from the issuance of common units, net of reinvested consideration proceeds | 5,000 | ||
Capital lease obligation payments | -393 | -1,148 | -1,229 |
Distributions paid to members | -6,370 | -3,343 | -12,889 |
Net cash provided by (used in) financing activities | 35,651 | -4,485 | -15,754 |
Effect of exchange rates on cash and cash equivalents | -625 | 79 | 209 |
Change in cash and cash equivalents | -29,779 | 4,137 | -23,208 |
Cash and cash equivalents, beginning of period | 42,373 | 38,236 | 61,444 |
Cash and cash equivalents, end of period | 12,594 | 42,373 | 38,236 |
Supplemental Disclosure of Cash Flow Information | |||
Cash paid for interest | 24,808 | 22,198 | 22,075 |
Cash paid for income taxes | 1,466 | 3,207 | 2,574 |
Non-cash consideration for sale of equipment | 75 | ||
Accrued purchases of fixed assets | 134 | 516 | 364 |
Accrued distributions to members | $2,947 | $3,343 |
Consolidated_Statements_of_Cha1
Consolidated Statements of Changes in Deficit (USD $) | Total | Member Units | Accumulated Members' Deficit | Accumulated Other Comprehensive Loss |
In Thousands, except Share data, unless otherwise specified | USD ($) | USD ($) | USD ($) | |
Balance at Dec. 31, 2010 | ($141,398) | ($133,914) | ($7,484) | |
Balance (in shares) at Dec. 31, 2010 | 132,174 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Distributions to members | -626 | -626 | ||
State of Connecticut members' withholding | -152 | -152 | ||
Net income | 4,988 | 4,988 | ||
Other comprehensive (loss)/income: | ||||
Pension and postretirement health liabilities | -5,202 | -5,202 | ||
Foreign currency translation | -444 | -444 | ||
Comprehensive income (loss) | -658 | |||
Balance at Dec. 31, 2011 | -142,834 | -129,704 | -13,130 | |
Balance (in shares) at Dec. 31, 2011 | 132,174 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Common unit expense | 17 | 17 | ||
State of Connecticut members' withholding | -704 | -704 | ||
Net income | -6,858 | -6,858 | ||
Other comprehensive (loss)/income: | ||||
Pension and postretirement health liabilities | -1,229 | -1,229 | ||
Foreign currency translation | 517 | 517 | ||
Comprehensive income (loss) | -7,570 | |||
Balance at Dec. 31, 2012 | -151,091 | -137,249 | -13,842 | |
Balance (in shares) at Dec. 31, 2012 | 132,174 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Common unit expense | 27 | 27 | ||
Distributions to members | -9,317 | -9,317 | ||
State of Connecticut members' withholding | -408 | -408 | ||
Write off of prepaid license | -1,056 | -1,056 | ||
Repurchase of common units | -14,000 | -14,000 | ||
Repurchase of common units (in shares) | -31,166 | |||
Sale of common units | 9,000 | 9,000 | ||
Sale of common units (in shares) | 31,166 | |||
Net income | 22,867 | 22,867 | ||
Other comprehensive (loss)/income: | ||||
Pension and postretirement health liabilities | 6,391 | 6,391 | ||
Foreign currency translation | -1,889 | -1,889 | ||
Comprehensive income (loss) | 27,369 | |||
Balance at Dec. 31, 2013 | ($139,476) | ($130,136) | ($9,340) | |
Balance (in shares) at Dec. 31, 2013 | 132,174 |
Nature_of_Business
Nature of Business | 12 Months Ended |
Dec. 31, 2013 | |
Nature of Business | |
Nature of Business | 1. Nature of Business |
Colt is one of the world’s oldest and most renowned designers, developers and manufacturers of firearms for military, personal defense and recreational purposes. The Company’s founder, Samuel Colt, patented the first commercially successful revolving cylinder firearm in 1836 and, in 1847, began supplying U.S. and international military customers with firearms that have set the standards of their era. Today, the Company’s end customers encompass every segment of the worldwide firearms market, including U.S., Canadian and foreign military forces, global law enforcement and security agencies, consumers seeking personal protection, the hunting and sporting community and collectors. | |
At December 31, 2013, Colt Defense LLC (the “Company”, a limited liability corporation), owned 100% of Colt Finance Corp., New Colt Holding Corp. (a C corporation) and Colt Defense Technical Services LLC (“CDTS”). New Colt Holding Corp. (“New Colt”) owned 100% of Colt’s Manufacturing Company LLC, the commercial operating entity, and Colt Defense LLC and CDTS collectively own 100% of Colt International Coöperatief U.A. (a Dutch cooperatief) which owns 100% of Colt Canada (a Canadian corporation). | |
Effective as of January 1, 2014, Colt effected a legal entity restructuring whereby Colt Defense and New Colt, see Note 3, “Acquisition”, contributed their assets and operations to Colt’s Manufacturing. This contribution created a combined operating entity for the Company’s U.S. based operations. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | |||||||||||||||||||
Restatement of Previously Issued Consolidated Financial Statements | ||||||||||||||||||||
The Company is restating its previously issued consolidated financial statements and related disclosures for the year ended December 31, 2013 (the “Restated Period”). The Company is revising its unaudited interim financial information for the first three quarters in the fiscal year ended December 31, 2013, the fourth quarter and year ended December 31, 2012 and the year ended December 31, 2011, (the “Revised Periods”). | ||||||||||||||||||||
The restatement is the result of the Company’s correction of a financial statement error attributable to the lack of recognition of the impact of a contract modification related to the M240 machine gun program (the “M240 Program”) for the U.S. Government in the Company’s fourth quarter 2013 results. In conjunction with the correction of the M240 Program error other previously recorded out-of-period errors which were immaterial to the consolidated financial statements individually or in the aggregate prior to the discovery of the M240 Program error were also adjusted to be reflected in the proper period along with the reclassification of business development expenses from other (income) / expense to operating income. | ||||||||||||||||||||
The Company assessed the impact of the M240 Program error, including the impact of previously unrecorded immaterial out-of-period adjustments and the reclassification of business development expenses from other (income)/expense to operating income on its prior interim and annual consolidated financial statements and concluded that the combined impact of these errors was material to the fourth quarter and year-ended consolidated financial statements as of December 31, 2013. Accordingly, the Company is restating the fourth quarter of 2013 and the year then ended. See Note 13, “Commitments and Contingencies”, for the impact on the Company’s 2013 fourth quarter results. The Company determined the combined impact of these adjustments was not material to the first three quarters in the fiscal year ended December 31, 2013, the fourth quarter and year-ended consolidated financial statements as of December 31, 2012 and the year ended December 31, 2011. Accordingly, the Company revised the above mentioned periods consolidated financial statements. | ||||||||||||||||||||
The aggregate impact of correcting the error related to the M240 Program, correcting previously recorded immaterial out-of-period adjustments and the reclassification of business development expenses for the years ended December 31, 2013, 2012 and 2011, on the Company’s consolidated statements of operations and on its consolidated balance sheets was as follows: | ||||||||||||||||||||
Adjustments to | ||||||||||||||||||||
Previously Reported Income | ||||||||||||||||||||
Statement - Income / (Expense) | ||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||
For the years ended | 2013 | 2012 | 2011 | |||||||||||||||||
Net sales | $ | (7,065 | )(a) | $ | 262 | — | ||||||||||||||
Cost of sales | (4,129 | )(b) | — | — | ||||||||||||||||
Gross profit | (2,936 | )(c) | 262 | — | ||||||||||||||||
Business development | (575 | )(d) | (881 | )(d) | (504 | )(d) | ||||||||||||||
Operating income | (3,501 | )(e) | (619 | )(f) | (504 | )(d) | ||||||||||||||
Other (income) / expense | (575 | )(d) | (881 | )(d) | (504 | )(d) | ||||||||||||||
Income tax | (59 | ) | 65 | — | ||||||||||||||||
Net income (loss) | (2,867 | )(g) | 197 | — | ||||||||||||||||
(a) Primarily as a result of a ($6,820) reduction in revenue related to a M240 Program contract modification, see Note 13, “Commitments and Contingencies”. | ||||||||||||||||||||
(b) Primarily as a result of a ($4,132) reduction in cost of sales related to a M240 Program contract obligation expense, see Note 13, “Commitments and Contingencies”. | ||||||||||||||||||||
(c) Primarily as a result of a ($6,820) reduction in revenue related to a M240 Program contract modification and a ($4,132) reduction in cost of sales related to a M240 Program contract obligation expense, see Note 13, “Commitments and Contingencies”. | ||||||||||||||||||||
(d) Reclassification of transaction costs incurred in connection with contemplated merger and acquisition activities from other (income)/expense to business development. | ||||||||||||||||||||
(e) Primarily as a result of the ($6,820) reduction in revenue related to a M240 Program contact modification, the ($4,132) reduction in cost of sales related to a M240 Program contract obligation expense and a $575 reclassification of business development costs from other(income)/expense to business development. | ||||||||||||||||||||
(f) Primarily as the result of the reclassification of $881 of costs incurred in connection with contemplated merger and acquisition activities from other(income)/expense to business development and an adjustment to Colt Canada net sales of $262 related to the timing of recognition of certain sales. | ||||||||||||||||||||
(g) Primarily as a result of the M240 Program contract modification and contract obligation expense. | ||||||||||||||||||||
Adjustments to | ||||||||||||||||||||
Previously Reported Balance | ||||||||||||||||||||
Sheet - Increase / (Decrease) | ||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||
For the years ended | 2013 | 2012 | 2011 | |||||||||||||||||
Accounts receivable | $ | 1 | $ | 261 | — | |||||||||||||||
Other current assets | (2 | ) | (65 | ) | — | |||||||||||||||
Accrued expenses | (4,133 | )(a) | — | — | ||||||||||||||||
Customer advances and deferred revenue | 6,820 | (b) | — | — | ||||||||||||||||
Accumulated deficit | (2,670 | )(c) | 197 | — | ||||||||||||||||
Accumulated other comprehensive loss | (18 | ) | (1 | ) | — | |||||||||||||||
(a) Primarily related to the reduction in accrued expenses associated with the ($4,132) reduction in cost of sales related to a M240 Program contract obligation expense, see Note 13, “Commitments and Contingencies”. | ||||||||||||||||||||
(b) As a result of recording a ($6,820) reduction in revenue related to a M240 Program contract modification, see Note 13, “Commitments and Contingencies.” | ||||||||||||||||||||
(c) Primarily as a result of the M240 Program contract modification and contract obligation expense. | ||||||||||||||||||||
The correction of the error related to the M240 Program in the Company’s consolidated statements of changes in cash flows for the year ended December 31, 2013 resulted in a $2.7 million decrease in Net income (loss) and a net $2.7 million increase in operating liabilities and didn’t impact previously recorded cash provided by operating activities. | ||||||||||||||||||||
The Company corrected certain other out of period errors which were not material to the consolidated financial statements individually or in aggregate prior to the discovery of the M240 Program error by reflecting them in the proper period. Correction of these out-of-period adjustments had the combined effect on the consolidated statements of operations of increasing (decreasing) net income in the four quarters of fiscal 2013 by $59, $229, ($288) and ($179), respectively and increasing net income in the fourth quarter of fiscal 2012 by $197. The largest contributors to these out-of-period adjustments relate to the timing of the recognition of certain sales transactions and customer discounts along with the timing of recognition of certain inventory and pension related expenses. | ||||||||||||||||||||
The aggregate impact of correcting previously unrecorded immaterial out-of-period adjustments and the reclassification of business development expenses for the first three quarters of fiscal 2013 on the Company’s consolidated statements of operations was as follows: | ||||||||||||||||||||
Adjustments to | ||||||||||||||||||||
Previously Reported Income | ||||||||||||||||||||
Statement - Income / (Expense) | ||||||||||||||||||||
March 31, | June 30, | September 29, | ||||||||||||||||||
For the quarter ended | 2013 | 2013 | 2013 | |||||||||||||||||
Net sales | $ | — | $ | (23 | ) | $ | (208 | ) | ||||||||||||
Cost of sales | 14 | 65 | (168 | ) | ||||||||||||||||
Gross profit | (14 | ) | (88 | ) | (40 | ) | ||||||||||||||
Selling and commissions | (79 | ) | (130 | ) | 221 | |||||||||||||||
Research and development | 1 | 1 | 4 | |||||||||||||||||
General and administrative | 5 | (222 | ) | 10 | ||||||||||||||||
Business development | (75 | ) | (169 | ) | (463 | ) | ||||||||||||||
Operating income | (16 | ) | 94 | (738 | )(a) | |||||||||||||||
Other (income) / expense | (75 | ) | (192 | ) | (440 | ) | ||||||||||||||
Income tax | — | 57 | (10 | ) | ||||||||||||||||
Net income (loss) | 59 | 229 | (288 | ) | ||||||||||||||||
(a) Primarily as a result of the reclassification of costs incurred in connection with contemplated merger and acquisition activities from other (income)/expense to business development and the timing of recognition of certain professional fee accruals. | ||||||||||||||||||||
Comparison of restated financial statements to financial statements as previously reported | ||||||||||||||||||||
The following tables compare the Company’s previously reported consolidated balance sheet as of December 31, 2013 and 2012, and the previously reported consolidated statements of operations for the year ended December 31, 2013, 2012 and 2011, and the previously reported statements of comprehensive income (loss), changes in cash flows and changes in deficit for the years ended December 31, 2013 and 2012 to the corresponding financial statements for the Restated Period and the Revised Periods, as applicable. | ||||||||||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Balance Sheet | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
As Restated | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 12,594 | $ | — | $ | 12,594 | ||||||||||||||
Restricted cash | 771 | — | 771 | |||||||||||||||||
Accounts receivable, net | 22,481 | 1 | 22,482 | |||||||||||||||||
Inventories | 66,674 | — | 66,674 | |||||||||||||||||
Deferred tax assets | 954 | — | 954 | |||||||||||||||||
Other current assets | 5,964 | (2 | ) | 5,962 | ||||||||||||||||
Total current assets | 109,438 | (1 | ) | 109,437 | ||||||||||||||||
Property and equipment, net | 30,733 | — | 30,733 | |||||||||||||||||
Goodwill | 51,225 | — | 51,225 | |||||||||||||||||
Trademarks | 50,100 | — | 50,100 | |||||||||||||||||
Intangible assets with finite lives, net | 13,415 | — | 13,415 | |||||||||||||||||
Deferred financing costs | 7,742 | — | 7,742 | |||||||||||||||||
Long-term restricted cash | 572 | — | 572 | |||||||||||||||||
Other assets | 1,510 | — | 1,510 | |||||||||||||||||
Total assets | $ | 264,735 | $ | (1 | ) | $ | 264,734 | |||||||||||||
LIABILITIES AND DEFICIT | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Line of credit | $ | 7,083 | $ | — | 7,083 | |||||||||||||||
Accounts payable | 14,038 | — | 14,038 | |||||||||||||||||
Accrued expenses | 26,291 | (4,133 | ) | 22,158 | ||||||||||||||||
Pension and retirement liabilities - current portion | 1,085 | — | 1,085 | |||||||||||||||||
Customer advances and deferred revenue | 12,647 | 6,820 | 19,467 | |||||||||||||||||
Long-term debt current portion | 5,000 | — | 5,000 | |||||||||||||||||
Accrued distributions to members | 670 | — | 670 | |||||||||||||||||
Total current liabilities | 66,814 | 2,687 | 69,501 | |||||||||||||||||
Long term debt | 289,817 | — | 289,817 | |||||||||||||||||
Pension and retirement liabilities | 21,670 | — | 21,670 | |||||||||||||||||
Long-term deferred tax liability | 18,715 | — | 18,715 | |||||||||||||||||
Long-term distributions to members | 2,277 | — | 2,277 | |||||||||||||||||
Other long-term liabilities | 2,230 | — | 2,230 | |||||||||||||||||
Total long-term liabilities | 334,709 | — | 334,709 | |||||||||||||||||
Total liabilities | 401,523 | 2,687 | 404,210 | |||||||||||||||||
Deficit: | ||||||||||||||||||||
Accumulated deficit | (127,466 | ) | (2,670 | ) | (130,136 | ) | ||||||||||||||
Accumulated other comprehensive loss | (9,322 | ) | (18 | ) | (9,340 | ) | ||||||||||||||
Total deficit | (136,788 | ) | (2,688 | ) | (139,476 | ) | ||||||||||||||
Total liabilities and debt | $ | 264,735 | $ | (1 | ) | $ | 264,734 | |||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Balance Sheet | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
As Revised | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 42,373 | $ | — | $ | 42,373 | ||||||||||||||
Restricted cash | 777 | — | 777 | |||||||||||||||||
Accounts receivable, net | 22,683 | 261 | 22,944 | |||||||||||||||||
Inventories | 40,561 | — | 40,561 | |||||||||||||||||
Deferred tax assets | 185 | — | 185 | |||||||||||||||||
Other current assets | 3,231 | (65 | ) | 3,166 | ||||||||||||||||
Total current assets | 109,810 | 196 | 110,006 | |||||||||||||||||
Property and equipment, net | 22,134 | — | 22,134 | |||||||||||||||||
Goodwill | 14,947 | — | 14,947 | |||||||||||||||||
Trademarks | — | — | — | |||||||||||||||||
Intangible assets with finite lives, net | 6,037 | — | 6,037 | |||||||||||||||||
Deferred financing costs | 7,642 | — | 7,642 | |||||||||||||||||
Long-term restricted cash | 810 | — | 810 | |||||||||||||||||
Other assets | 1,588 | — | 1,588 | |||||||||||||||||
Total assets | $ | 162,968 | $ | 196 | $ | 163,164 | ||||||||||||||
LIABILITIES AND DEFICIT | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Line of credit | $ | 6 | $ | — | 6 | |||||||||||||||
Accounts payable | 13,055 | — | 13,055 | |||||||||||||||||
Accrued expenses | 20,315 | — | 20,315 | |||||||||||||||||
Pension and retirement liabilities - current portion | 626 | — | 626 | |||||||||||||||||
Customer advances and deferred revenue | 10,002 | — | 10,002 | |||||||||||||||||
Long-term debt current portion | — | — | — | |||||||||||||||||
Accrued distributions to members | — | — | — | |||||||||||||||||
Total current liabilities | 44,004 | — | 44,004 | |||||||||||||||||
Long term debt | 247,567 | — | 247,567 | |||||||||||||||||
Pension and retirement liabilities | 20,261 | — | 20,261 | |||||||||||||||||
Long-term deferred tax liability | 1,515 | — | 1,515 | |||||||||||||||||
Long-term distributions to members | — | — | — | |||||||||||||||||
Other long-term liabilities | 908 | — | 908 | |||||||||||||||||
Total long-term liabilities | 270,251 | — | 270,251 | |||||||||||||||||
Total liabilities | 314,255 | — | 314,255 | |||||||||||||||||
Deficit: | ||||||||||||||||||||
Accumulated deficit | (137,446 | ) | 197 | (137,249 | ) | |||||||||||||||
Accumulated other comprehensive loss | (13,841 | ) | (1 | ) | (13,842 | ) | ||||||||||||||
Total deficit | (151,287 | ) | 196 | (151,091 | ) | |||||||||||||||
Total liabilities and deficit | $ | 162,968 | $ | 196 | $ | 163,164 | ||||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
As Restated | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Net sales | $ | 277,948 | $ | (7,065 | ) | $ | 270,883 | |||||||||||||
Cost of sales | 201,241 | (4,129 | ) | 197,112 | ||||||||||||||||
Gross profit | 76,707 | (2,936 | ) | 73,771 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 14,143 | (1 | ) | 14,142 | ||||||||||||||||
Research and development | 6,127 | (1 | ) | 6,126 | ||||||||||||||||
General and administrative | 15,297 | (8 | ) | 15,289 | ||||||||||||||||
35,567 | (10 | ) | 35,557 | |||||||||||||||||
Business development | — | 575 | 575 | |||||||||||||||||
Certain transaction costs (Note 3) | 1,147 | — | 1,147 | |||||||||||||||||
Restructuring costs (Note 4) | 782 | — | 782 | |||||||||||||||||
Gain on effective settlement of contract (Note 3) | (15,264 | ) | — | (15,264 | ) | |||||||||||||||
Total operating expenses | 22,232 | 565 | 22,797 | |||||||||||||||||
Operating income | 54,475 | (3,501 | ) | 50,974 | ||||||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 27,687 | — | 27,687 | |||||||||||||||||
Debt prepayment expense | — | — | — | |||||||||||||||||
Other (income)/expense, net | (641 | ) | (575 | ) | (1,216 | ) | ||||||||||||||
Total other expenses, net | 27,046 | (575 | ) | 26,471 | ||||||||||||||||
Income (loss) before provision for income taxes | 27,429 | (2,926 | ) | 24,503 | ||||||||||||||||
Income tax expense | 1,695 | (59 | ) | 1,636 | ||||||||||||||||
Net income (loss) | $ | 25,734 | $ | (2,867 | ) | $ | 22,867 | |||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
As Revised | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Net sales | $ | 213,354 | $ | 262 | $ | 213,616 | ||||||||||||||
Cost of sales | 162,622 | — | 162,622 | |||||||||||||||||
Gross profit | 50,732 | 262 | 50,994 | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 13,117 | — | 13,117 | |||||||||||||||||
Research and development | 4,747 | — | 4,747 | |||||||||||||||||
General and administrative | 14,285 | — | 14,285 | |||||||||||||||||
32,149 | — | 32,149 | ||||||||||||||||||
Business development | — | 881 | 881 | |||||||||||||||||
Certain transaction costs (Note 3) | — | — | — | |||||||||||||||||
Restructuring costs (Note 4) | — | — | — | |||||||||||||||||
Gain on effective settlement of contract (Note 3) | — | — | — | |||||||||||||||||
Total operating expenses | 32,149 | 881 | 33,030 | |||||||||||||||||
Operating income | 18,583 | (619 | ) | 17,964 | ||||||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 24,579 | — | 24,579 | |||||||||||||||||
Debt prepayment expense | — | — | — | |||||||||||||||||
Other (income)/expense, net | (691 | ) | (881 | ) | (1,572 | ) | ||||||||||||||
Total other expenses, net | 23,888 | (881 | ) | 23,007 | ||||||||||||||||
Income (loss) before provision for income taxes | (5,305 | ) | 262 | (5,043 | ) | |||||||||||||||
Income tax expense | 1,750 | 65 | 1,815 | |||||||||||||||||
Net income (loss) | $ | (7,055 | ) | $ | 197 | $ | (6,858 | ) | ||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2011 | ||||||||||||||||||||
As Revised | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Net sales | $ | 208,816 | $ | — | $ | 208,816 | ||||||||||||||
Cost of sales | 143,851 | — | 143,851 | |||||||||||||||||
Gross profit | 64,965 | — | 64,965 | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 13,780 | — | 13,780 | |||||||||||||||||
Research and development | 5,578 | — | 5,578 | |||||||||||||||||
General and administrative | 13,098 | — | 13,098 | |||||||||||||||||
32,456 | — | 32,456 | ||||||||||||||||||
Business development | — | 504 | 504 | |||||||||||||||||
Certain transaction costs (Note 3) | — | — | — | |||||||||||||||||
Restructuring costs (Note 4) | — | — | — | |||||||||||||||||
Gain on effective settlement of contract (Note 3) | — | — | — | |||||||||||||||||
Total operating expenses | 32,456 | 504 | 32,960 | |||||||||||||||||
Operating income | 32,509 | (504 | ) | 32,005 | ||||||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 24,010 | — | 24,010 | |||||||||||||||||
Debt prepayment expense | 295 | — | 295 | |||||||||||||||||
Other (income)/expense, net | 45 | (504 | ) | (459 | ) | |||||||||||||||
Total other expenses, net | 24,350 | (504 | ) | 23,846 | ||||||||||||||||
Income (loss) before provision for income taxes | 8,159 | — | 8,159 | |||||||||||||||||
Income tax expense | 3,171 | — | 3,171 | |||||||||||||||||
Net income (loss) | $ | 4,988 | $ | — | $ | 4,988 | ||||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statements of Comprehensive Income (Loss) | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
As Restated | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Net income (loss) | $ | 25,734 | $ | (2,867 | ) | $ | 22,867 | |||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||
Foreign currency translation adjustment: | ||||||||||||||||||||
Foreign currency translation gains (losses) | (1,872 | ) | (17 | ) | (1,889 | ) | ||||||||||||||
Pension and postretirement benefit liabilities: | ||||||||||||||||||||
Other comprehensive income (loss) arising during the period | 5,890 | — | 5,890 | |||||||||||||||||
Reclassification adjustment for unrecognized prior service costs and unrecognized loss included in net income (loss) | 501 | — | 501 | |||||||||||||||||
6,391 | — | 6,391 | ||||||||||||||||||
Comprehensive income (loss) | $ | 30,253 | $ | (2,884 | ) | $ | 27,369 | |||||||||||||
December 31, 2012 | ||||||||||||||||||||
As Revised | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Net income (loss) | $ | (7,055 | ) | $ | 197 | $ | (6,858 | ) | ||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||
Foreign currency translation adjustment: | ||||||||||||||||||||
Foreign currency translation gains (losses) | 518 | (1 | ) | 517 | ||||||||||||||||
Pension and postretirement benefit liabilities: | ||||||||||||||||||||
Other comprehensive income (loss) arising during the period | (2,322 | ) | — | (2,322 | ) | |||||||||||||||
Reclassification adjustment for unrecognized prior service costs and unrecognized loss included in net income (loss) | 1,093 | — | 1,093 | |||||||||||||||||
(1,229 | ) | — | (1,229 | ) | ||||||||||||||||
Comprehensive income (loss) | $ | (7,766 | ) | $ | 196 | $ | (7,570 | ) | ||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Changes in Cash Flows | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
As Restated | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net income (loss) | $ | 25,734 | $ | (2,867 | ) | $ | 22,867 | |||||||||||||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization | 6,359 | — | 6,359 | |||||||||||||||||
Amortization of financing fees | 2,020 | — | 2,020 | |||||||||||||||||
Amortization of debt discount | 793 | — | 793 | |||||||||||||||||
Gain on effective settlement of contract | (15,264 | ) | — | (15,264 | ) | |||||||||||||||
Pension curtailment expense | — | — | — | |||||||||||||||||
Deferred income taxes | 29 | — | 29 | |||||||||||||||||
Loss (gain) on sale/disposal of fixed assets | 205 | — | 205 | |||||||||||||||||
Debt prepayment expense | — | — | — | |||||||||||||||||
Amortization of deferred revenue | (127 | ) | — | (127 | ) | |||||||||||||||
Common unit compensation expense | 27 | — | 27 | |||||||||||||||||
Changes in operating assets and liabilities, net of acquisition: | ||||||||||||||||||||
Accounts receivable | 3,222 | 262 | 3,484 | |||||||||||||||||
Inventories | (19,126 | ) | — | (19,126 | ) | |||||||||||||||
Prepaid expense and other current assets | (839 | ) | (65 | ) | (904 | ) | ||||||||||||||
Accounts payable and accrued expense | (542 | ) | (4,132 | ) | (4,674 | ) | ||||||||||||||
Accrued pension and retirement liabilities | (1,099 | ) | — | (1,099 | ) | |||||||||||||||
Customer advances and deferred income | 1,366 | 6,820 | 8,186 | |||||||||||||||||
Other | 260 | 1 | 261 | |||||||||||||||||
Net cash provided by (used in) operating activities | 3,018 | 19 | 3,037 | |||||||||||||||||
Investing Activities | ||||||||||||||||||||
Purchase of property and equipment | (8,598 | ) | — | (8,598 | ) | |||||||||||||||
Proceeds from sale/disposal of property | — | — | — | |||||||||||||||||
Business acquisition, net of cash acquired and reinvested Merger consideration | (59,488 | ) | — | (59,488 | ) | |||||||||||||||
Change in restricted cash | 244 | — | 244 | |||||||||||||||||
Net cash used in investing activities | (67,842 | ) | — | (67,842 | ) | |||||||||||||||
Financing Activities | ||||||||||||||||||||
Debt issuance costs | (2,120 | ) | — | (2,120 | ) | |||||||||||||||
Proceeds from the issuance of long-term debt | 47,707 | — | 47,707 | |||||||||||||||||
Repayment of long-term debt | (1,250 | ) | — | (1,250 | ) | |||||||||||||||
Line of credit advances | 10,083 | — | 10,083 | |||||||||||||||||
Line of credit repayments | (3,006 | ) | — | (3,006 | ) | |||||||||||||||
Purchase of common units | (14,000 | ) | — | (14,000 | ) | |||||||||||||||
Proceeds from the issuance of common units, net of reinvested consideration proceeds | 5,000 | — | 5,000 | |||||||||||||||||
Capital lease obligation payments | (393 | ) | — | (393 | ) | |||||||||||||||
Distributions paid to members | (6,370 | ) | — | (6,370 | ) | |||||||||||||||
Net cash provided by (used in) financing activities | 35,651 | — | 35,651 | |||||||||||||||||
Effect of exchange rates on cash and cash equivalents | (606 | ) | (19 | ) | (625 | ) | ||||||||||||||
Change in cash and cash equivalents | (29,779 | ) | — | (29,779 | ) | |||||||||||||||
Cash and cash equivalents, beginning of period | 42,373 | — | 42,373 | |||||||||||||||||
Cash and cash equivalents, end of period | $ | 12,594 | $ | — | $ | 12,594 | ||||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Changes in Cash Flows | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
As Revised | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net income (loss) | $ | (7,055 | ) | $ | 197 | $ | (6,858 | ) | ||||||||||||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization | 5,696 | — | 5,696 | |||||||||||||||||
Amortization of financing fees | 1,653 | — | 1,653 | |||||||||||||||||
Amortization of debt discount | 381 | — | 381 | |||||||||||||||||
Gain on effective settlement of contract | — | — | — | |||||||||||||||||
Pension curtailment expense | 1,325 | — | 1,325 | |||||||||||||||||
Deferred income taxes | 39 | — | 39 | |||||||||||||||||
Loss (gain) on sale/disposal of fixed assets | 4 | — | 4 | |||||||||||||||||
Debt prepayment expense | — | — | — | |||||||||||||||||
Amortization of deferred revenue | (79 | ) | — | (79 | ) | |||||||||||||||
Common unit compensation expense | 17 | — | 17 | |||||||||||||||||
Changes in operating assets and liabilities, net of acquisition: | ||||||||||||||||||||
Accounts receivable | 8,091 | (262 | ) | 7,829 | ||||||||||||||||
Inventories | (4,158 | ) | — | (4,158 | ) | |||||||||||||||
Prepaid expense and other current assets | (984 | ) | 65 | (919 | ) | |||||||||||||||
Accounts payable and accrued expense | 5,201 | — | 5,201 | |||||||||||||||||
Accrued pension and retirement liabilities | (172 | ) | — | (172 | ) | |||||||||||||||
Customer advances and deferred income | 2,001 | — | 2,001 | |||||||||||||||||
Other | 463 | — | 463 | |||||||||||||||||
Net cash provided by (used in) operating activities | 12,423 | — | 12,423 | |||||||||||||||||
Investing Activities | ||||||||||||||||||||
Purchase of property and equipment | (4,410 | ) | — | (4,410 | ) | |||||||||||||||
Proceeds from sale/disposal of property | 66 | — | 66 | |||||||||||||||||
Business acquisition, net of cash acquired and reinvested Merger consideration | — | — | — | |||||||||||||||||
Change in restricted cash | 464 | — | 464 | |||||||||||||||||
Net cash used in investing activities | (3,880 | ) | — | (3,880 | ) | |||||||||||||||
Financing Activities | ||||||||||||||||||||
Debt issuance costs | — | — | — | |||||||||||||||||
Proceeds from the issuance of long-term debt | — | — | — | |||||||||||||||||
Repayment of long-term debt | — | — | — | |||||||||||||||||
Line of credit advances | 6 | — | 6 | |||||||||||||||||
Line of credit repayments | — | — | — | |||||||||||||||||
Purchase of common units | — | — | — | |||||||||||||||||
Proceeds from the issuance of common units, net of reinvested consideration proceeds | — | — | — | |||||||||||||||||
Capital lease obligation payments | (1,148 | ) | — | (1,148 | ) | |||||||||||||||
Distributions paid to members | (3,343 | ) | — | (3,343 | ) | |||||||||||||||
Net cash provided by (used in) financing activities | (4,485 | ) | — | (4,485 | ) | |||||||||||||||
Effect of exchange rates on cash and cash equivalents | 79 | — | 79 | |||||||||||||||||
Change in cash and cash equivalents | 4,137 | — | 4,137 | |||||||||||||||||
Cash and cash equivalents, beginning of period | 38,236 | — | 38,236 | |||||||||||||||||
Cash and cash equivalents, end of period | $ | 42,373 | $ | — | $ | 42,373 | ||||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statements of Changes in Deficit | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
Accumulated Members’ | Accumulated Other | |||||||||||||||||||
Deficit | Comprehensive Loss | Total Changes in Deficit | ||||||||||||||||||
As Restated | As Restated | As Restated | ||||||||||||||||||
As | in this Annual | As | in this Annual | As | in this Annual | |||||||||||||||
Member | Previously | Report on | Previously | Report on | Previously | Report on | ||||||||||||||
Units | Reported | Form 10-K/A | Reported | Form 10-K/A | Reported | Form 10-K/A | ||||||||||||||
Balance, December 31, 2011 | 132,174 | (129,704 | ) | (129,704 | ) | (13,130 | ) | (13,130 | ) | (142,834 | ) | (142,834 | ) | |||||||
Common unit expense | — | 17 | 17 | — | — | 17 | 17 | |||||||||||||
Distribution to members | — | — | — | — | — | — | — | |||||||||||||
State of Connecticut members’ withholding | — | (704 | ) | (704 | ) | — | — | (704 | ) | (704 | ) | |||||||||
Net income | — | (7,055 | ) | (6,858 | ) | — | — | (7,055 | ) | (6,858 | ) | |||||||||
Other comprehensive (loss)/ income: | ||||||||||||||||||||
Pension and postretirement health liabilities | — | — | — | (1,229 | ) | (1,229 | ) | (1,229 | ) | (1,229 | ) | |||||||||
Foreign currency translation | — | — | — | 518 | 517 | 518 | 517 | |||||||||||||
Comprehensive loss | — | — | — | — | (7,766 | ) | (7,570 | ) | ||||||||||||
Balance, December 31, 2012 (As Revised) | 132,174 | (137,446 | ) | (137,249 | ) | (13,841 | ) | (13,842 | ) | (151,287 | ) | (151,091 | ) | |||||||
Common unit expense | — | 27 | 27 | — | — | 27 | 27 | |||||||||||||
Distribution to members | — | (9,317 | ) | (9,317 | ) | — | — | (9,317 | ) | (9,317 | ) | |||||||||
State of Connecticut members’ withholding | — | (408 | ) | (408 | ) | — | — | (408 | ) | (408 | ) | |||||||||
Write off of prepaid license | — | (1,056 | ) | (1,056 | ) | — | — | (1,056 | ) | (1,056 | ) | |||||||||
Repurchase of common units | (31,166 | ) | (14,000 | ) | (14,000 | ) | — | — | (14,000 | ) | (14,000 | ) | ||||||||
Sale of common units | 31,166 | 9,000 | 9,000 | — | — | 9,000 | 9,000 | |||||||||||||
Net income | — | 25,734 | 22,867 | — | — | 25,734 | 22,867 | |||||||||||||
Other comprehensive (loss)/ income: | ||||||||||||||||||||
Pension and postretirement health liabilities | — | — | — | 6,391 | 6,391 | 6,391 | 6,391 | |||||||||||||
Foreign currency translation | — | — | — | (1,872 | ) | (1,889 | ) | (1,872 | ) | (1,889 | ) | |||||||||
Comprehensive income | — | — | — | — | — | 30,253 | 27,369 | |||||||||||||
Balance, December 31, 2013 (As Restated) | 132,174 | (127,466 | ) | (130,136 | ) | (9,322 | ) | (9,340 | ) | (136,788 | ) | (139,476 | ) | |||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
Three months ended March 31, 2013 (unaudited) | ||||||||||||||||||||
As Revised | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Net sales | $ | 63,849 | $ | — | $ | 63,849 | ||||||||||||||
Cost of sales | 45,098 | 14 | 45,112 | |||||||||||||||||
Gross profit | 18,751 | (14 | ) | 18,737 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 3,174 | (79 | ) | 3,095 | ||||||||||||||||
Research and development | 819 | 1 | 820 | |||||||||||||||||
General and administrative | 3,725 | 5 | 3,730 | |||||||||||||||||
7,718 | (73 | ) | 7,645 | |||||||||||||||||
Business development | — | 75 | 75 | |||||||||||||||||
Certain transaction costs (Note 3) | — | — | — | |||||||||||||||||
Restructuring costs (Note 4) | — | — | — | |||||||||||||||||
Gain on effective settlement of contract (Note 3) | — | — | — | |||||||||||||||||
Total operating expenses | 7,718 | 2 | 7,720 | |||||||||||||||||
Operating income | 11,033 | (16 | ) | 11,017 | ||||||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 5,994 | — | 5,994 | |||||||||||||||||
Other (income)/expense, net | (712 | ) | (75 | ) | (787 | ) | ||||||||||||||
Total other expenses, net | 5,282 | (75 | ) | 5,207 | ||||||||||||||||
Income (loss) before provision for income taxes | 5,751 | 59 | 5,810 | |||||||||||||||||
Income tax expense | 681 | — | 681 | |||||||||||||||||
Net income (loss) | $ | 5,070 | $ | 59 | $ | 5,129 | ||||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
Three months ended June 30, 2013 (unaudited) | Six months ended June 30, 2013 (unaudited) | |||||||||||||||||||
As Revised | As Revised | |||||||||||||||||||
As | in this Annual | As | in this Annual | |||||||||||||||||
Previously | Report on | Previously | Report on | |||||||||||||||||
Reported | Adjustments | Form 10-K/A | Reported | Adjustments | Form 10-K/A | |||||||||||||||
Net sales | $ | 64,235 | $ | (23 | ) | $ | 64,212 | $ | 128,084 | $ | (23 | ) | $ | 128,061 | ||||||
Cost of sales | 45,765 | 65 | 45,830 | 90,863 | 79 | 90,942 | ||||||||||||||
Gross profit | 18,470 | (88 | ) | 18,382 | 37,221 | (102 | ) | 37,119 | ||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 3,582 | (130 | ) | 3,452 | 6,756 | (209 | ) | 6,547 | ||||||||||||
Research and development | 1,480 | 1 | 1,481 | 2,299 | 2 | 2,301 | ||||||||||||||
General and administrative | 3,237 | (222 | ) | 3,015 | 6,962 | (217 | ) | 6,745 | ||||||||||||
8,299 | (351 | ) | 7,948 | 16,017 | (424 | ) | 15,593 | |||||||||||||
Business development | — | 169 | 169 | — | 244 | 244 | ||||||||||||||
Certain transaction costs (Note 3) | 416 | — | 416 | 416 | — | 416 | ||||||||||||||
Restructuring costs (Note 4) | — | — | — | — | — | — | ||||||||||||||
Gain on effective settlement of contract (Note 3) | — | — | — | — | — | — | ||||||||||||||
Total operating expenses | 8,715 | (182 | ) | 8,533 | 16,433 | (180 | ) | 16,253 | ||||||||||||
Operating income | 9,755 | 94 | 9,849 | 20,788 | 78 | 20,866 | ||||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 6,069 | — | 6,069 | 12,063 | — | 12,063 | ||||||||||||||
Other (income)/expense, net | (493 | ) | (192 | ) | (685 | ) | (1,205 | ) | (267 | ) | (1,472 | ) | ||||||||
Total other expenses, net | 5,576 | (192 | ) | 5,384 | 10,858 | (267 | ) | 10,591 | ||||||||||||
Income (loss) before provision for income taxes | 4,179 | 286 | 4,465 | 9,930 | 345 | 10,275 | ||||||||||||||
Income tax expense | 21 | 57 | 78 | 702 | 57 | 759 | ||||||||||||||
Net income (loss) | $ | 4,158 | $ | 229 | $ | 4,387 | $ | 9,228 | $ | 288 | $ | 9,516 | ||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
Three months ended September 29, 2013 (unaudited) | Nine months ended September 29, 2013 (unaudited) | |||||||||||||||||||
As Revised | As Revised | |||||||||||||||||||
As | in this Annual | As | in this Annual | |||||||||||||||||
Previously | Report on | Previously | Report on | |||||||||||||||||
Reported | Adjustments | Form 10-K/A | Reported | Adjustments | Form 10-K/A | |||||||||||||||
Net sales | $ | 73,238 | $ | (208 | ) | $ | 73,030 | $ | 201,396 | $ | (231 | ) | $ | 201,165 | ||||||
Cost of sales | 58,655 | (168 | ) | 58,487 | 149,731 | (89 | ) | 149,642 | ||||||||||||
Gross profit | 14,583 | (40 | ) | 14,543 | 51,665 | (142 | ) | 51,523 | ||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 3,843 | 221 | 4,064 | 10,386 | 12 | 10,398 | ||||||||||||||
Research and development | 1,710 | 4 | 1,714 | 4,009 | 6 | 4,015 | ||||||||||||||
General and administrative | 3,886 | 10 | 3,896 | 10,848 | (207 | ) | 10,641 | |||||||||||||
9,439 | 235 | 9,674 | 25,243 | (189 | ) | 25,054 | ||||||||||||||
Business development | — | 463 | 463 | — | 707 | 707 | ||||||||||||||
Certain transaction costs (Note 3) | 461 | — | 461 | 877 | — | 877 | ||||||||||||||
Restructuring costs (Note 4) | 631 | — | 631 | 631 | — | 631 | ||||||||||||||
Gain on effective settlement of contract (Note 3) | (15,264 | ) | — | (15,264 | ) | (15,264 | ) | — | (15,264 | ) | ||||||||||
Total operating expenses | (4,733 | ) | 698 | (4,035 | ) | 11,487 | 518 | 12,005 | ||||||||||||
Operating income | 19,316 | (738 | ) | 18,578 | 40,178 | (660 | ) | 39,518 | ||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 7,623 | — | 7,623 | 19,686 | — | 19,686 | ||||||||||||||
Other (income)/expense, net | 746 | (440 | ) | 306 | (385 | ) | (707 | ) | (1,092 | ) | ||||||||||
Total other expenses, net | 8,369 | (440 | ) | 7,929 | 19,301 | (707 | ) | 18,594 | ||||||||||||
Income (loss) before provision for income taxes | 10,947 | (298 | ) | 10,649 | 20,877 | 47 | 20,924 | |||||||||||||
Income tax expense | (198 | ) | (10 | ) | (208 | ) | 504 | 47 | 551 | |||||||||||
Net income (loss) | $ | 11,145 | $ | (288 | ) | $ | 10,857 | $ | 20,373 | $ | — | $ | 20,373 | |||||||
Basis of Accounting and Consolidation | ||||||||||||||||||||
The accompanying consolidated financial statements of Colt Defense LLC (“Colt Defense”) and Colt Finance Corp. (collectively, the “Company”) are prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The Company’s consolidated financial statements include the accounts of Colt Defense LLC and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. | ||||||||||||||||||||
On July 12, 2013, the Company acquired 100% ownership of New Colt. The results of New Colt have been included in the consolidated financial statements from the Merger Date. | ||||||||||||||||||||
Use of Estimates | ||||||||||||||||||||
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s significant estimates include estimates used to determine the fair value of assets acquired and liabilities assumed related to the acquisition of New Colt (see Note 3, “Acquisition”) and accruals for contract obligation expense (see Note 13, “Commitments and Contingencies”), excess and obsolete inventory, income tax expense, deferred tax asset valuation, medical claims payable, and worker’s compensation expense. Actual results could differ materially from those estimates. | ||||||||||||||||||||
Cash and Cash Equivalents | ||||||||||||||||||||
Cash and cash equivalents consists of cash and short-term, highly liquid investments with original maturities of three months or less at the date of purchase. | ||||||||||||||||||||
Restricted Cash | ||||||||||||||||||||
Restricted cash at December 31, 2013 and 2012 consists of funds deposited to secure standby letters of credit primarily for performance guarantees related to the Company’s international business. | ||||||||||||||||||||
Revenue | ||||||||||||||||||||
The Company recognizes revenue when evidence of an arrangement exists, delivery of the product or service has occurred and title and risk of loss have passed to the customer, the sales price is fixed or determinable, and collectability of the resulting receivable is reasonably assured. For certain “bill and hold” sales to the U.S. and Canadian governments, such sales and related accounts receivable are recognized upon inspection and acceptance of the firearms, including title transfer, by a government official and after the Company places the accepted firearms in a government approved location at the Company’s premises where they are held waiting shipping instructions. The sales value of such bill and hold sales where the shipments were still located at the Company’s premises at December 31, 2013, 2012 and 2011 were $805, $0, and $6,840, respectively. | ||||||||||||||||||||
The Company accounts for revenues and earnings under two long-term government contracts/programs with interrelated multiple elements (procurement of parts, manufacturing and refurbishment services) using concepts of proportionate performance. These contracts effect reported results for all periods presented. The Company estimates the total profit on each contract as the difference between the total estimated revenue and total estimated cost of the contract and recognize that profit over the remaining life of the contract using an output measure (the ratio of rifles completed to the total number of rifles to be refurbished under the contract). The Company computes an earnings rate for each contract, including general and administrative expense, to determine operating earnings. The Company reviews the earnings rate quarterly to assess revisions in contract values and estimated costs at completion. Any changes in earnings rates and recognized contract to date earnings resulting from these assessments are made in the period the revisions are identified. Contract costs include production costs, related overhead and allocated general and administrative costs. Amounts billed and collected on this contract in excess of revenue recorded are reflected as customer advances and deferred revenue in the Company’s consolidated balance sheets. | ||||||||||||||||||||
Anticipated contract losses are charged to operations as soon as they are identified. Anticipated losses cover all costs allocable to the contracts, including certain general and administrative expenses. If a contract is cancelled by the government for its convenience, the Company can make a claim against the customer for fair compensation for worked performed plus costs of settling and paying claims by terminated subcontractors, other settlement expenses and a reasonable profit on costs incurred. When the Company has a customer claim, revenue arising from the claims process is either recognized as revenue or as an offset against a potential loss only when the amount of the claim can be estimated reliably and its realization is probable. The Company had no claims recorded at any year-end presented. | ||||||||||||||||||||
Prior to the Merger, Colt Defense generated an immaterial amount of royalty income, which it included in other income in its consolidated statements of operations. As a result of the Merger, the Company now generates a higher amount of royalty income on a quarterly basis and has therefore determined that royalty income should now be recorded as net sales in the Consolidated Statements of Operations. For comparability, the Company has reclassified royalty income of $26 for the year ended December 31, 2012 and $6 for the year ended December 31, 2011, respectively, from other income to net sales. | ||||||||||||||||||||
The Company recognizes trademark licensing revenue for individual licensees based on historical experience and expected cash receipts from licensees. Licensing revenue consists of minimum royalties and/or a percentage of a licensee’s sales on licensed products. Under most of the Company’s current licensing agreements, royalties are payable in arrears on a calendar quarter basis. | ||||||||||||||||||||
Accounts Receivable and Credit Policies | ||||||||||||||||||||
Credit is extended based on an evaluation of each customer’s financial condition. Generally, collateral is not required, other than in connection with some foreign sales. If the circumstances warrant, the Company requires foreign customers to provide either a documentary letter of credit or prepayment. | ||||||||||||||||||||
Credit losses are provided for, primarily by using specific identification. Once a customer is identified as high risk based on the payment history and creditworthiness, the Company will provide an allowance for the estimated uncollectible portion. Accounts are considered past due based on the original invoice date. Write-offs of uncollectible accounts receivable occur when all reasonable collection efforts have been made. Neither provisions for credit losses nor write-offs were material for any period presented. The Company’s trade receivable allowance for doubtful accounts at December 31, 2013 was $78 and at December 31, 2012 was $0. | ||||||||||||||||||||
The following table presents the activity for the allowance for doubtful accounts: | ||||||||||||||||||||
Total | ||||||||||||||||||||
Balance at December 31, 2011 | $ | 1 | ||||||||||||||||||
Provision for doubtful accounts | 1 | |||||||||||||||||||
Write-offs | (2 | ) | ||||||||||||||||||
Balance at December 31, 2012 | — | |||||||||||||||||||
Provision for doubtful accounts | 78 | |||||||||||||||||||
Write-offs | — | |||||||||||||||||||
Balance at December 31, 2013 | $ | 78 | ||||||||||||||||||
Accounts receivable represent amounts billed and currently due from customers. There were no material amounts that were not expected to be collected within one year from the balance sheet date. | ||||||||||||||||||||
Inventories | ||||||||||||||||||||
Inventories are stated at the lower of cost, determined using the first-in, first-out method, or market. Cost includes materials, labor and manufacturing overhead related to the purchase and production of inventories. The Company reviews market value based on historical usage and estimates of future demand. Based on these reviews, inventory write-downs are recorded, as necessary, to reflect estimated obsolescence, excess quantities and declines in market value. | ||||||||||||||||||||
Property and Equipment | ||||||||||||||||||||
Property and equipment are recorded at cost. Depreciation of building and equipment (including assets recorded under capital leases) and amortization of leasehold improvements are computed using the straight-line method over the estimated useful life of the assets, or for leasehold improvements, over the remaining life of the lease term if shorter. Depreciation and amortization of property and equipment for the years ended December 31, 2013, 2012 and 2011 was $4,606, $4,891, and $4,633, respectively. The Company did not enter into any capital leases during 2013 or 2012. | ||||||||||||||||||||
Expenditures that improve or extend the lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. | ||||||||||||||||||||
The fair value of the property and equipment acquired as a result of the Merger are allocated to machinery and equipment, furniture, fixtures and leasehold improvements and construction in process in the amounts of $4,420, $30 and $732, respectively. | ||||||||||||||||||||
Property and equipment consists of: | ||||||||||||||||||||
December 31, | Estimated | |||||||||||||||||||
2013 | 2012 | Useful Life | ||||||||||||||||||
Land | $ | 338 | $ | 362 | — | |||||||||||||||
Building | 2,653 | 2,718 | 33 | |||||||||||||||||
Machinery and equipment | 47,476 | 37,749 | 10-Jul | |||||||||||||||||
Furniture, fixtures and leasehold improvements | 7,081 | 6,378 | 5-Mar | |||||||||||||||||
57,548 | 47,207 | |||||||||||||||||||
Less accumulated depreciation and amortization | (32,152 | ) | (28,162 | ) | ||||||||||||||||
25,396 | 19,045 | |||||||||||||||||||
Construction in process | 5,337 | 3,089 | ||||||||||||||||||
Property and equipment, net | $ | 30,733 | $ | 22,134 | ||||||||||||||||
Goodwill | ||||||||||||||||||||
Goodwill is tested for impairment annually as of the beginning of the Company’s fourth fiscal quarter, or when events or circumstances indicate that its value may have declined. Impairment exists when the carrying amount of goodwill exceeds its fair market value. Management estimates the fair value of each reporting unit primarily using the income approach. Specifically the discounted cash flow (“DCF”) model was utilized for the valuation of each reporting unit. Management develops cash flow forecasts based on existing firm orders, expected future orders, contracts with suppliers, labor agreements and general market conditions. The Company discounts the cash flow forecasts using the weighted-average cost of capital method at the date of evaluation. The Company also calculates the fair value of its reporting units using the market approach in order to corroborate our DCF model results. These methodologies used in the current year are consistent with those used in the prior year. | ||||||||||||||||||||
Subsequent to December 2013, the Company has seen a decrease in the demand for commercial rifles when compared to 2013 and if this trend continues it may result in future impairment. In addition, since December 2012 there has been a sharp increase in political and public support for new “gun control” laws and regulations in the United States. Some proposed legislation introduced in the U.S. Congress would ban or restrict the sale of substantially all of the Company’s rifles, in their current configurations, into the commercial market throughout the United States. Similar legislation has been enacted in several states. The Company considers the adverse changes in its business climate to be a triggering event as of December 31, 2012. Therefore, in addition to the Company’s annual goodwill impairment testing, it also performed a sensitivity analysis to determine the impact that a material decrease in Commercial and Law Enforcement rifle sales would have on its valuation. As of December 31, 2013 and December 31, 2012, the fair value of its reporting units was in excess of carrying value for all scenarios that were tested. | ||||||||||||||||||||
There was no impairment of goodwill during 2013, 2012 or 2011. Changes in the carrying amount of goodwill are as follows: | ||||||||||||||||||||
Total | ||||||||||||||||||||
Balance at December 31, 2011 | $ | 14,713 | ||||||||||||||||||
Effect of foreign currency translation | 234 | |||||||||||||||||||
Balance at December 31, 2012 | 14,947 | |||||||||||||||||||
Goodwill acquired | 36,974 | |||||||||||||||||||
Effect of foreign currency translation | (696 | ) | ||||||||||||||||||
Balance at December 31, 2013 | $ | 51,225 | ||||||||||||||||||
As of December 31, 2013 and 2012, there was an accumulated impairment of $1,245 on the gross book value of $52,470 and $16,192, respectively. | ||||||||||||||||||||
Trademarks | ||||||||||||||||||||
In connection with the Merger, the Company recorded an indefinite-lived intangible asset of $50,100 for the Colt brand and related trademarks. | ||||||||||||||||||||
The Company, with the assistance of a third party valuation firm, valued the Colt brand and related trademarks by comparing the value of the royalty rate inherent in the prepaid license fee to the current market rate for such a license based upon both the value of the Colt brand and related trademarks in both the defense and the commercial marketplace utilizing a relief from royalty methodology. | ||||||||||||||||||||
Intangible Assets | ||||||||||||||||||||
The Company reviews long-lived assets, including intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Impairment losses, where identified, are determined as the excess of the carrying value over the estimated fair value of the long-lived asset. The Company assesses the recoverability of the carrying value of assets held for use based on a review of projected undiscounted cash flows. When long-lived assets are reclassified to “held for sale”, The Company compares the asset’s carrying amount to its estimated fair value less cost to sell to evaluate impairment. No long-lived assets have been reclassified to held for sale for any period presented. | ||||||||||||||||||||
In connection with the Merger, the Company recorded finite-lived intangible assets of $9,340 which includes $5,240 of existing license agreements which represents the estimated fair value of New Colt license agreements for licensing the Colt trademarks to various third parties, $2,970 of developed technology which represents the estimated fair value of designs, trade secrets, materials, specifications and other proprietary intellectual property included in the technical data packages and related manufacturing processes and know-how and $1,130 of backlog which represents the estimated fair value of unfilled contractual orders from customers. The weighted average useful lives of the acquired assets were 6 years, 20 years and 3 years, respectively. | ||||||||||||||||||||
The net carrying value of the Company’s intangible assets with finite lives follows: | ||||||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||
Gross | Estimated | |||||||||||||||||||
Carrying | Accumulated | Useful | ||||||||||||||||||
Amount | Amortization | Net | Life | |||||||||||||||||
Customer relationship | ||||||||||||||||||||
Canadian Government | $ | 2,369 | $ | (678 | ) | $ | 1,691 | 30 | ||||||||||||
Customer relationships other | 6,160 | (4,077 | ) | 2,083 | 20 | |||||||||||||||
License agreements | 5,240 | (805 | ) | 4,435 | 6 | |||||||||||||||
Backlog | 1,722 | (604 | ) | 1,118 | 3 | |||||||||||||||
Technology-based intangibles | 6,580 | (2,492 | ) | 4,088 | 15 - 20 | |||||||||||||||
$ | 22,071 | $ | (8,656 | ) | $ | 13,415 | ||||||||||||||
As of December 31, 2012 | ||||||||||||||||||||
Gross | Estimated | |||||||||||||||||||
Carrying | Accumulated | Useful | ||||||||||||||||||
Amount | Amortization | Net | Life | |||||||||||||||||
Customer relationship | ||||||||||||||||||||
Canadian Government | $ | 2,533 | $ | (640 | ) | $ | 1,893 | 30 | ||||||||||||
Customer relationships other | 6,586 | (3,970 | ) | 2,616 | 20 | |||||||||||||||
Backlog | 633 | (633 | ) | — | — | |||||||||||||||
Technology-based intangibles | 3,610 | (2,082 | ) | 1,528 | 15 | |||||||||||||||
$ | 13,362 | $ | (7,325 | ) | $ | 6,037 | ||||||||||||||
Amortization expense for these intangible assets for the years ended December 31, 2013, 2012 and 2011 was $1,670, $704, and $742, respectively, and was included in cost of sales and selling expense in the Consolidated Statements of Operations. The Company expects to record annual amortization expense of $3,271, $2,785, $1,927, $1,187 and $873 for 2014, 2015, 2016, 2017 and 2018, respectively. Intangibles are amortized using proportionate use methods. | ||||||||||||||||||||
Prepaid License Fee | ||||||||||||||||||||
Prior to the acquisition of New Colt (see Note 3, “Acquisition”), the Company had fully paid for and received a twenty year license from New Colt for the limited use of certain Colt trade names with an expiration date of December 31, 2023. The prepaid license could be extended beyond December 31, 2023 for successive five-year periods. The Company was amortizing this paid-up license ratably over the 20 year term. | ||||||||||||||||||||
Immediately prior to the Merger, the prepaid license fee balance of $1,056 was written off. This was part of the settlement of a pre-existing relationship with New Colt related to Colt Defense’s license agreement. In prior years, the prepaid license fee was being amortized over its initial 20-year term. Amortization expense was $101 per year in 2012 and 2011. | ||||||||||||||||||||
Warranty Costs | ||||||||||||||||||||
The Company generally sells its military products with a one-year warranty and records the estimated costs of such product warranties at the time the sale is recorded. For direct foreign sales, posting a warranty bond for periods ranging from one to five years is occasionally required. The Company’s estimated warranty costs are based upon actual past experience, its current production environment as well as specific and identifiable warranty. As of December 31, 2013 and 2012, the balance of the Company’s warranty reserve was $464 and $167, respectively. | ||||||||||||||||||||
Self-Funded Medical Plan | ||||||||||||||||||||
The Company maintains a self-funded employee group medical plan under which the liability is limited by individual and aggregate stop loss insurance coverage. Included in accrued expense in the accompanying consolidated balance sheets is a liability for reported claims outstanding, as well as an estimate of incurred but unreported claims, based on the Company’s best estimate of the ultimate cost not covered by stop loss insurance. The actual amount of the claims could differ from the estimated liability recorded of $823 and $1,396 at December 31, 2013 and 2012, respectively. | ||||||||||||||||||||
Self- Funded Worker’s Compensation | ||||||||||||||||||||
As of December 31, 2013, the Company self-insures its domestic worker’s compensation by a deductible program that incorporates an aggregate stop loss. Colt’s liability for estimated premiums and incurred losses under this policy has been actuarially determined and was $214 as of December 31, 2013 and $308 as of December 31, 2012. The Company revised its disclosure with respect to the Company’s liability for estimated premiums and incurred losses under the Company’s deductible policies as of December 31, 2013 from $408 to $214. The Company does not consider the revision of this disclosure material. | ||||||||||||||||||||
Accrued Expenses | ||||||||||||||||||||
Accrued expenses consisted of: | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
(As Restated) | ||||||||||||||||||||
Accrued compensation and benefits | $ | 7,154 | $ | 5,770 | ||||||||||||||||
Accrued contract obligation expense | 1,194 | — | ||||||||||||||||||
Accrued federal, excise and other taxes | 4,902 | 5,293 | ||||||||||||||||||
Accrued interest | 2,879 | 3,230 | ||||||||||||||||||
Accrued commissions | 929 | 1,229 | ||||||||||||||||||
Other accrued expenses | 5,100 | 4,793 | ||||||||||||||||||
$ | 22,158 | $ | 20,315 | |||||||||||||||||
Advertising Costs | ||||||||||||||||||||
Advertising costs primarily consisting of print, television and electronic media, trade shows and samples. The Company expenses advertising expenses as incurred. Advertising expense was $2,626 in 2013, $2,406 in 2012 and $1,760 in 2011. Prior period amounts have been reclassified to conform to the current year presentation. | ||||||||||||||||||||
Research and Development Costs | ||||||||||||||||||||
Research and development costs consist primarily of compensation and benefits and experimental work materials for the Company’s employees who are responsible for the development and enhancement of new and existing products. Research and development costs incurred to develop new products and to enhance existing products, which are not specifically covered by contracts, and those costs related to the Company’s share of research and development activity in connection with cost-sharing arrangements, are charged to expense as incurred. Research and development expenses were $6,126 in 2013, $4,747 in 2012, and $5,578 in 2011. | ||||||||||||||||||||
Research and development costs incurred under contracts with customers are included as a contract cost and reported as a component of cost of sales when revenue from such contracts is recognized. Government research and development support, not associated with specific contracts, is recorded as a reduction to cost of sales in the period earned. | ||||||||||||||||||||
Common Unit Compensation Expense | ||||||||||||||||||||
The Company uses the Black-Scholes option pricing model to estimate the fair value of all unit-based compensation awards on the date of grant. The fair value of each time-based award is expensed on a straight-line basis over the requisite service period. For performance-based awards, compensation expense is recognized when it is probable that the performance conditions will be met. | ||||||||||||||||||||
Foreign Currency Translation | ||||||||||||||||||||
The functional currency for the Company’s Canadian operation is the Canadian dollar. The Company translates the balance sheet accounts of its Canadian operation at the end-of-period exchange rates and its income statement accounts at the average exchange rates for each month. The resulting foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income or loss, which is included in members’ deficit. | ||||||||||||||||||||
The Company’s Canadian operation is subject to foreign currency exchange rate risk relating to receipts from customers, payments to suppliers and some intercompany transactions in currencies other than the Canadian dollar. As a matter of policy, the Company does not engage in interest rate or currency speculation and, therefore, the Company has no derivative financial instruments to hedge this exposure. In the Company’s consolidated statements of operations, it had foreign currency gains of $197 in 2013, $155 for 2012 and a foreign currency loss of $294 for 2011. | ||||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||
The fair value of an asset or liability is the amount at which the instrument could be exchanged or settled in a current transaction between willing parties where neither is compelled to buy or sell. The carrying values for cash, accounts receivable, accounts payable, accrued expenses and other current assets and liabilities approximate their fair values due to their short maturities. The carrying value of the Company’s long-term debt of $294,817 and $247,567 at December 31, 2013 and 2012, respectively, was recorded at amortized cost. The estimated fair value of long-term debt was approximately $262,775 and $161,250 at December 31, 2013 and 2012, respectively. The Fair value of the Senior Notes was based on quoted market prices, which are Level 1 inputs and the fair value of the term loan was based on Level 3 inputs. | ||||||||||||||||||||
Fair value is 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 inputs used to measure fair value fall into the following hierarchy. | ||||||||||||||||||||
Level 1: | Unadjusted quoted prices in active markets for identical assets or liabilities. | |||||||||||||||||||
Level 2: | Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability. | |||||||||||||||||||
Level 3: | Unobservable inputs for the asset or liability. | |||||||||||||||||||
During 2013 and 2012, the Company did not have any financial assets and liabilities reported at fair value and measured on a recurring basis or any significant non-recurring measurements of nonfinancial assets and nonfinancial liabilities. Therefore, Colt did not have any transfers of assets and liabilities between Level 1 and Level 2 of the fair value measurement hierarchy during the years ended December 31, 2013 and 2012. | ||||||||||||||||||||
Retirement Benefits | ||||||||||||||||||||
The Company has pension and other postretirement benefit costs and obligations which are dependent on various assumptions. The Company’s major assumptions relate primarily to discount rates, long-term return on plan assets and medical cost trend rates. The Company bases the discount rate assumption on current investment yields of high quality fixed income investments during the retirement benefits maturity period. Long-term return on plan assets is determined based on historical portfolio results and management’s expectation of the future economic environment, as well as target asset allocations. | ||||||||||||||||||||
The Company’s medical cost trend assumptions are developed based on historical cost data, the near-term outlook, an assessment of likely long-term trends and the cap limiting the Company’s required contributions. Actual results that differ from the Company’s assumptions are accumulated and are amortized generally over the estimated future working life of the plan participants. | ||||||||||||||||||||
Income Taxes | ||||||||||||||||||||
The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax basis of assets and liabilities using enacted tax rates in effect for years in which the temporary differences are expected to reverse. The Company provides a valuation allowance when it is more likely than not that deferred tax assets will not be realized. The Company recognizes the benefit of an uncertain tax position that has been taken or it expects to take on income tax returns if such tax position is more likely than not to be sustained. | ||||||||||||||||||||
The Company follows the authoritative guidance regarding accounting for uncertainty in income taxes, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These unrecognized tax benefits relate primarily to issues common among multinational corporations in the Company’s industry. The Company applies a variety of methodologies in making these estimates which include studies performed by independent economists, advice from industry and subject experts, evaluation of public actions taken by the Internal Revenue Service and other taxing authorities, as well as the Company’s own industry experience. The Company provides estimates for unrecognized tax benefits which may be subject to material adjustments until matters are resolved with taxing authorities or statutes expire. If the Company’s estimates are not representative of actual outcomes, its results of operations could be materially impacted. | ||||||||||||||||||||
The Company continues to maintain a valuation allowance against certain deferred tax assets where realization is not certain. It periodically evaluate the likelihood of the realization of deferred tax assets and reduce the carrying amount of these deferred tax assets by a valuation allowance to the extent we believe a portion will not be realized. The Company considers many factors when assessing the likelihood of future realization of deferred tax assets, including the Company’s recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income, carryforward periods available to us for tax reporting purposes, various income tax strategies and other relevant factors. Significant judgment is required in making this assessment and, to the extent future expectations change, we would assess the recoverability of the Company’s deferred tax assets at that time. If we determine that the deferred tax assets are not realizable in a future period, we would record material adjustments to income tax expense in that period. | ||||||||||||||||||||
Recent Accounting Pronouncements | ||||||||||||||||||||
Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists - In July 2013, the FASB issued ASU 2013-11 to provide guidance on the presentation of unrecognized tax benefits. ASU 2013-11 requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows: to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. ASU 2013-11 is effective for interim and annual periods beginning after December 15, 2013 with earlier adoption permitted. ASU 2013-11 should be applied prospectively with retroactive application permitted. The Company is currently evaluating the impact of the Company’s pending adoption of ASU 2013-11 on its consolidated financial statements | ||||||||||||||||||||
Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income - In February 2013, the Financial Accounting Standards Board (“FASB”) issued ASU 2013-02, which requires disclosure of significant amounts reclassified out of accumulated other comprehensive income by component and their corresponding effect on the respective line items of net income. This guidance is effective for the Company beginning in the first quarter of 2013. The adoption of ASU 2013-02 only impacted disclosure requirements and did not have any effect on the Company’s operating results or its financial condition. |
Acquisition
Acquisition | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Acquisition | ||||||||
Acquisition | 3. Acquisition | |||||||
On July 12, 2013 (the “Merger Date”), the Company acquired 100% ownership (the “Merger”) of New Colt, a privately-held company, which is a world leader in the design, development and manufacture of pistols and revolvers. New Colt’s 2012 sales were approximately $130,000, of which approximately $83,000 arose from the resale of Colt Defense manufactured rifles into the commercial market. As a result of the Merger, the two manufacturers of Colt-branded firearms were consolidated into a single enterprise providing Colt Defense direct access to the commercial market for Colt Defense’s rifles and carbines, ownership of the Colt brand name and other related trademarks, and the technology and production facilities for the full line of Colt handguns. | ||||||||
Prior to determining the purchase price allocation of the Merger consideration, Colt Defense recorded the effective settlement of a pre-existing relationship with New Colt related to Colt Defense’s license agreement (the “License”) with New Colt for the use of certain Colt trademarks. As a result of the effective settlement of the pre-existing relationship, Colt Defense recorded a gain of $15,264 (“Settlement Gain”), which equals the calculated gain of $16,320 reduced by the write-off of Colt Defense’s prepaid license balance of $1,056. A third-party valuation firm assisted management’s calculation of the gain by comparing the value of the royalty rate in the License to the current market rate for such a license. | ||||||||
The Company acquired New Colt for an aggregate purchase price of $82,543, which included the Settlement Gain of $15,264. The cash portion of the purchase price was funded by the proceeds from a new $50,000 senior secured term loan (“Term Loan”), cash on hand and $9,000 of consideration from the issuance and sale of the Company’s common units, of which $5,000 was paid in cash and $4,000 was related to Merger consideration reinvested by certain New Colt investors into Colt Defense. | ||||||||
During the year ended December 31, 2013, the Company incurred $1,147 of transaction-related costs. These costs include due diligence, legal expenses and other transaction-related costs to complete the Merger. These costs have been recognized in the Company’s Consolidated Statements of Operations as operating expenses. | ||||||||
The operating results for New Colt have been included in the Consolidated Statements of Operations since the Merger Date. The Company reported $29.1 million of incremental net sales and $1.7 million of operating loss from New Colt, inclusive of $1.6 million of purchase accounting adjustments, for the period from the Merger Date through December 31, 2013. | ||||||||
The following table summarizes the fair values of the assets acquired and the liabilities assumed at the Merger Date: | ||||||||
Cash and cash equivalents | $ | 3,791 | ||||||
Accounts receivable | 3,318 | |||||||
Inventories | 7,585 | |||||||
Property and equipment | 5,182 | |||||||
Other assets | 3,090 | |||||||
Intangible assets with finite lives | 9,340 | |||||||
Trademarks | 50,100 | |||||||
Goodwill | 36,974 | |||||||
Total assets acquired | 119,380 | |||||||
Accounts payable and accrued expenses | 8,808 | |||||||
Customer advances and deferred revenue | 1,832 | |||||||
Capital lease obligations | 393 | |||||||
Pension and retirement liabilities | 9,357 | |||||||
Deferred tax liabilities | 16,447 | |||||||
Total liabilities assumed | 36,837 | |||||||
Net assets acquired | $ | 82,543 | ||||||
The Company believes that this information is a reasonable estimate of the fair values of assets acquired and liabilities assumed. | ||||||||
The Company, with the assistance of a third party valuation firm, valued the Colt brand and related trademarks by comparing the value of the royalty rate inherent in the prepaid license fee to the current market rate for such a license based upon both the value of the Colt brand and related trademarks in both the defense and commercial marketplace utilizing a relief from royalty methodology. | ||||||||
The Company, with the assistance of a third party valuation firm, determined the fair value of the finite-lived intangible assets which includes $5,240 of existing license agreements, valued based on a discounted cash flow approach, represents the estimated fair value of New Colt license agreements for licensing the Colt trademarks to various third parties, $2,970 of developed technology, valued based on a relief from royalty method, represents the estimated fair value of designs, trade secrets, materials, specifications and other proprietary intellectual property included in the technical data packages and related manufacturing processes and know-how and $1,130 of backlog, valued based on an excess earnings method, represents the estimated fair value of unfilled contractual orders from customers. The weighted average useful lives of the acquired assets were 6 years, 20 years, and 3 years respectively. In addition, the Company, with the assistance of a third party valuation firm, valued the Colt brand and related trade marks by comparing the value of the royalty rate inherent in the license (see Note 2,”Summary of Significant Accounting Policies”) to the current market rate for such a license based upon both the value of the Colt brand and related trade marks in both the defense and the commercial marketplace utilizing a relief from royalty methodology. | ||||||||
Deferred income taxes arise from temporary differences between tax and financial statement recognition of revenue and expense. In evaluating the Company’s ability to recover the deferred tax assets acquired through the acquisition of New Colt, the Company considered all available positive and negative evidence, including scheduled reversals of deferred tax assets and liabilities, projected future taxable income, tax-planning strategies and results of recent operations. In projecting future taxable income for New Colt, the Company began with historical results adjusted to include the $50,000 Term Loan (see Note 6, “Notes Payable and Long-term Debt”) and related interest expense, incorporated assumptions including the amount of future state and federal pre-tax operating income, the reversal of temporary differences and the implementation of feasible and prudent tax-planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates the Company is using to manage the underlying business. Based on the analysis performed the Company believes, as of the acquisition date, that it is more likely than not that the benefit from New Colt’s deferred tax assets will not be realized. In recognition of this risk, the Company provided a valuation allowance against New Colt’s deferred tax assets as part of the Company’s purchase accounting adjustments. | ||||||||
Goodwill is the excess of the purchase price of an acquired business over the fair value of net assets acquired. Goodwill will not be amortized but instead will be tested for impairment at least annually or more frequently if indicators of impairment arise. The $36,974 of goodwill is not deductible for federal income tax purposes. | ||||||||
The following table reflects the unaudited pro forma operating results of the Company for years ended December 31, 2013 and December 31, 2012, respectively, which give effect to the Merger with New Colt as if it had occurred on January 1, 2012. The pro forma results are based on assumptions that the Company believes are reasonable under the circumstances. The pro forma results are not necessarily indicative of the operating results that would have occurred had the Merger been effective January 1, 2012, nor are they intended to be indicative of results that may occur in the future. The underlying pro forma information includes historical financial results of the Company and New Colt adjusted for certain items including depreciation and amortization expense associated with the assets acquired, the Company’s expense related to financing arrangements and the elimination of intercompany transactions. The pro forma information does not include the effects of any synergies or cost reduction initiatives related to the Merger. | ||||||||
Unaudited Pro Forma | ||||||||
Years Ended | ||||||||
December 31, | December 31, | |||||||
2013 | 2012 | |||||||
(As Restated) | (As Revised) | |||||||
Net sales | $ | 309,556 | $ | 267,714 | ||||
Net income (loss) | 17,474 | (4,590 | ) | |||||
Pro forma earnings during the years ended December 31, 2013 and December 31, 2012, respectively, were adjusted for items such as the Settlement Gain, transaction related costs, interest on the Company’s $50,000 Term Loan and amortization expense related to finite-lived intangible assets. Pro forma earnings for the year ended December 31, 2013 were adjusted to exclude the $15,264 Settlement Gain, include $2,467 of additional interest expense, include $1,409 of additional expense related to the amortization of finite-lived intangible assets and exclude $2,530 of transaction related costs $1,147 incurred by the Company and $1,383 incurred by New Colt. Pro forma earnings for the year ended December 31, 2012 were adjusted to include the $15,264 Settlement Gain, include $6,879 of interest expense, include $2,347 of expense related to the amortization of finite-lived intangible assets and include $2,530 of transaction related costs. |
Restructuring_Costs
Restructuring Costs | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Restructuring Costs | |||||
Restructuring Costs | 4. Restructuring Costs | ||||
During the year ended December 31, 2013, the Company recorded tax restructuring costs of $1,118 for restructuring actions that were initiated as a result of the Merger with New Colt. Of these costs, $336 is being reimbursed from an escrow established at the time of the Merger and $782 was recorded in operating expenses. The costs consist of severance, continuation of benefits and other compensation-related expenses. These actions, which have been completed, resulted in a workforce reduction of 10 salaried employees. No specific plans for significant other actions have been finalized at this time. | |||||
The following table summarizes the accrual balances and utilization for this restructuring action: | |||||
Restructuring accruals at December 31, 2012 | $ | — | |||
Accrued restructuring liability | 1,118 | ||||
Utilization | (412 | ) | |||
Balance at December 31, 2013 | $ | 706 | |||
Restructuring accruals are included in accounts payable, accrued expenses and other long-term liabilities on the Consolidated Balance Sheet. |
Inventories
Inventories | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Inventories | ||||||||
Inventories | 5. Inventories | |||||||
The following table sets forth a summary of inventories, net of reserves for the lower of cost or market: | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Raw materials | $ | 43,469 | $ | 29,177 | ||||
Work in process | 9,476 | 7,829 | ||||||
Finished products | 13,729 | 3,555 | ||||||
$ | 66,674 | $ | 40,561 |
Notes_Payable_and_LongTerm_Deb
Notes Payable and Long-Term Debt | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Notes Payable and Long-Term Debt | ||||||||||||||
Notes Payable and Long-Term Debt | 6. Notes Payable and Long-Term Debt | |||||||||||||
Credit Agreement | ||||||||||||||
On September 29, 2011, the Company entered into a credit agreement (“Credit Agreement”) with Wells Fargo Capital Finance, LLC. Under the terms of the Credit Agreement, senior secured revolving loans are available up to $50,000, inclusive of $20,000 available for letters of credit. Revolving loans are subject to, among other things, the borrowing base, which is calculated monthly based on specified percentages of eligible accounts receivable and inventory and specified values of fixed assets. Under the Credit Agreement, the Company’s obligations are secured by a first-priority security interest in substantially all of its assets (other than intellectual property), including accounts receivable, inventory and certain other collateral, and a second-priority security interest in the Company’s intellectual property. The Credit Agreement matures on September 28, 2016. | ||||||||||||||
Borrowings under the Credit Agreement bear interest at a variable rate based on the London Inter-Bank Offer Rate (“LIBOR”), the Canadian Banker’s Acceptance Rate or the lender’s prime rate, as defined in the Credit Agreement, plus a spread. The interest rate spread on borrowing varies based on both the rate option selected and Colt’s quarterly average excess availability under the Credit Agreement. There is an unused line fee ranging from .375% to .50% per annum, payable quarterly on the unused portion under the facility and a $40 annual servicing fee. | ||||||||||||||
The Credit Agreement limits the Company’s ability to incur additional indebtedness, make investments or certain payments, pay dividends (other than for the payment of taxes to Colt Defense’s members) and merge, acquire or sell assets. In addition, certain covenants would be triggered if excess availability were to fall below the specified level, including a fixed charge coverage ratio requirement. Excess availability is determined as the lesser of the Company’s borrowing base or $50,000, reduced by outstanding obligations under the credit agreement and trade payables that are more than 60 days past due. Furthermore, if excess availability falls below $11,000 or an event of default occurs, the lender may assume control over the Company’s cash until such event of default is cured or waived or the excess availability exceeds such amount for 60 consecutive days. The Credit Agreement contains customary events of default. As of December 31, 2013 and December 31, 2012, the Company was in compliance with all covenants and restrictions. | ||||||||||||||
As of December 31, 2013, there was a $7,083 line advance and $3,486 of letters of credit outstanding under the Credit Agreement. As of December 31, 2012, there was a $6 line of credit advance and $1,715 of letters of credit outstanding under the Credit Agreement. | ||||||||||||||
On March 22, 2013, the Company entered into Amendment No. 2 to the Credit Agreement, whereby, among other things, the lenders under the Credit Agreement consented to the transaction pursuant to the Unit Repurchase Agreement. For additional information about this transaction, see “Note 10 Colt Defense LLC Accumulated Deficit.” | ||||||||||||||
On June 19, 2013, Colt Defense entered into Amendment No. 3 to the Credit Agreement, which permitted the formation of Colt International Coöperatief U.A. (“Dutch Holdings”) and the contribution of all the issued and outstanding equity interests issued by Colt Canada Corporation (“Colt Canada”) to Dutch Holdings so that Colt Canada would become a wholly-owned subsidiary of Dutch Holdings, and permitting Dutch Holdings to become a guarantor under the Credit Agreement. | ||||||||||||||
On July 12, 2013, Colt Defense entered into Amendment No. 4 to the Credit Agreement, which allowed New Colt to become a guarantor and Colt’s Manufacturing Company LLC (“Colt’s Manufacturing”) to become a borrower under the Credit Agreement in connection with the Merger. | ||||||||||||||
Term Loan | ||||||||||||||
On July 12, 2013, in connection with the Merger, the Company entered into the Term Loan, which matures on November 15, 2016. The Term Loan bears interest at a variable rate of 9.75% plus the greater of the 3-month LIBOR rate or 1%. Interest is payable quarterly in arrears on the first day of the subsequent calendar quarter. Under the Term Loan, the Company’s obligations are secured by a first priority security interest in the Company’s intellectual property and a second priority security interest in substantially all other assets. The $50,000 Term Loan was issued at a discount of $2,293, which represents the lenders fees and legal expenses. The Company also incurred $2,120 in financing fees. The discount and the financing fees are being amortized as additional interest expense over the life of the indebtedness. Principal repayments, which are due quarterly on the last day of each calendar quarter, are as follows: | ||||||||||||||
Amount | ||||||||||||||
2014 | $ | 5,000 | ||||||||||||
2015 | 7,500 | |||||||||||||
2016 | 36,250 | |||||||||||||
Total | $ | 48,750 | ||||||||||||
The Term Loan agreement contains financial covenants including a minimum EBITDA threshold, a fixed charge coverage ratio and a maximum secured leverage ratio, each as defined by the Term Loan agreement. In addition, the Company cannot exceed specified levels of capital expenditures. All financial covenants, with limited exceptions, are calculated on a rolling 4-quarter basis based on financial results for the current and three preceding fiscal quarters. The Company was in compliance with its debt covenants as of December 31, 2013 and monitors its future compliance based on current and anticipated financial results. | ||||||||||||||
The Term Loan agreement also contains non-financial covenants and other restrictions that limit the Company’s ability to incur additional indebtedness, make investments or certain payments, pay dividends (other than for the payment of taxes to Colt Defense’s members) and merge, acquire or sell assets. | ||||||||||||||
Senior Notes | ||||||||||||||
On November 10, 2009, Colt Defense LLC (Parent) and Colt Finance Corp, a 100%-owned finance subsidiary, jointly and severally co-issued $250,000 of unsecured senior notes (“Senior Notes”). The Senior Notes bear interest at 8.75% and mature November 15, 2017. Interest is payable semi-annually in arrears on May 15 and November 15, commencing on May 15, 2010. The Company issued the Senior Notes at a discount of $3,522 from their principal value. This discount will be amortized as additional interest expense over the life of the indebtedness. No principal repayments are required until maturity. | ||||||||||||||
The Senior Notes do not have any financial covenants that require the Company to maintain compliance with any financial ratios or measurements on a periodic basis. The Senior Notes do contain non-financial covenants that, among other things, limit Colt’s ability to incur additional indebtedness, enter into certain mergers or consolidations, incur certain liens and engage in certain transactions with Colt’s affiliates. In addition, the Indenture restricts the Company’s ability to pay dividends or make other Restricted Payments (as defined in the Indenture) to its members, subject to certain exceptions. Such restrictions are not expected to affect Colt’s ability to meet its cash obligations for the next 12 months. The Indenture does not restrict the ability to pay dividends or provide loans to the Parent or the net assets of Colt’s subsidiaries, inclusive of the co-issuer, Colt Finance Corp. Additionally, the Senior Notes contain certain cross default provisions with other indebtedness if such indebtedness in default aggregates to $20,000 or more. | ||||||||||||||
Previously, the Senior Notes were not guaranteed by any of Colt’s subsidiaries. On June 19, 2013, the Company entered into a supplement to the Indenture by which Dutch Holdings, Colt Canada and Colt Defense Technical Services LLC (“CDTS”) became new subsidiary guarantors to the Senior Notes. As such, each agreed to jointly and severally guarantee the obligations under the Indenture. | ||||||||||||||
On July 12, 2013, the Company entered into a supplement to the Indenture, by which New Colt and Colt’s Manufacturing became parties to the Indenture and each agreed to jointly and severally guarantee the obligations under the Indenture. | ||||||||||||||
Debt Balances | ||||||||||||||
Outstanding debt balances at December 31, 2013 and 2012 were as follows: | ||||||||||||||
Credit | Senior | Term | ||||||||||||
Agreement | Notes | Loan | Total | |||||||||||
Balance at December 31, 2011 | $ | — | $ | 250,000 | $ | — | $ | 250,000 | ||||||
Unamortized discount | — | (2,814 | ) | — | (2,814 | ) | ||||||||
Net debt at December 31, 2011 | — | 247,186 | — | 247,186 | ||||||||||
Line of credit advances | 6 | — | — | 6 | ||||||||||
Amortization of discount (a) | — | 381 | — | 381 | ||||||||||
Net debt at December 31, 2012 | 6 | 247,567 | — | 247,573 | ||||||||||
Line of credit advances | 10,083 | — | — | 10,083 | ||||||||||
Line of credit repayments | (3,006 | ) | — | — | (3,006 | ) | ||||||||
Original issue | — | — | 50,000 | 50,000 | ||||||||||
Debt discount | — | — | (2,293 | ) | (2,293 | ) | ||||||||
Principal payments | — | — | (1,250 | ) | (1,250 | ) | ||||||||
Amortization of discount (a) | — | 417 | 376 | 793 | ||||||||||
Net debt at December 31, 2013 | 7,083 | 247,984 | 46,833 | 301,900 | ||||||||||
Less: current portion | (7,083 | ) | — | (5,000 | ) | (12,083 | ) | |||||||
Long-term debt at December 31, 2013 | $ | — | $ | 247,984 | $ | 41,833 | $ | 289,817 | ||||||
(a) | Interest expense for 2013 and 2012 includes $793 and $381, respectively, of amortization of original issue discount of the Senior Notes and Term Loan. | |||||||||||||
Deferred Financing Costs | ||||||||||||||
When the Company incurs costs associated with financing arrangements, it defers the costs and amortizes them to interest expense over the term of the related debt. In 2013, the Company incurred $2,120 of financing costs for the Term Loan. In 2011, the Company incurred $1,653 of financing costs when it entered into the Credit Agreement, of which $1,636 was paid in 2011. The remaining $17 of accrued financing costs was subsequently reversed in 2012. Amortization of deferred financing costs for years ended December 31, 2013, 2012 and 2011 were $2,020, $1,653, and $1,498, respectively. | ||||||||||||||
A summary of deferred financing fee activity follows: | ||||||||||||||
Total | ||||||||||||||
Balance at December 31, 2011 | $ | 9,312 | ||||||||||||
Amortization of deferred financing costs | (1,653 | ) | ||||||||||||
Financing fees paid and accrued | (17 | ) | ||||||||||||
Balance at December 31, 2012 | $ | 7,642 | ||||||||||||
Amortization of deferred financing costs | (2,020 | ) | ||||||||||||
Financing fees paid and accrued | 2,120 | |||||||||||||
Balance at December 31, 2013 | $ | 7,742 | ||||||||||||
Debt Prepayment Expense | ||||||||||||||
If a financing arrangement is terminated early, the Company will expense any unamortized financing costs to debt prepayment expense at the time of termination. Total debt prepayment expense, which was included in the Consolidated Statements of Operations, related to the above debt refinancing activities and amendments was $295 in 2011. There were no debt prepayments in 2012 or 2013. |
Lease_Obligations
Lease Obligations | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Lease Obligations | |||||
Lease Obligations | 7. Lease Obligations | ||||
At the time of the Merger, New Colt had $393 of capital lease obligations and $1,216 of operating leases outstanding. During the third quarter of 2013, Colt Defense elected to repay these leases in full. As a result, the Company incurred $287 of lease buyout expense and recorded $1,002 of machinery and equipment at fair value related to the payoff of the operating leases. | |||||
Future minimum lease payments under non-cancelable leases with a remaining term of greater than one year at December 31, 2013 are as follows: | |||||
Operating | |||||
Leases | |||||
2014 | $ | 1,282 | |||
2015 | 910 | ||||
2016 | 158 | ||||
2017 | 117 | ||||
2018 | 108 | ||||
Thereafter | 459 | ||||
Total minimum lease payments | $ | 3,034 | |||
As of December 31, 2013 and December 31, 2012, the Company did not have any assets subject to capital leases. | |||||
In addition to the operating lease for the West Hartford facilities, the Company also has an operating lease for a Florida facility and operating lease contracts for office equipment and vehicles as of December 31, 2013. Rent expense under the operating leases was $1,167, $1,048, and $1,095 in 2013, 2012 and 2011, respectively. Rent expense is net of rental income of $186 in 2013 (up to the Merger Date), $192 in 2012, and $161 in 2011 for the portion of the West Hartford facility subleased to New Colt. Subsequent to the Merger Date, rental expense continued to be charged from Colt Defense to New Colt but is accounted for as intercompany revenue and expense and is therefore, eliminated. The intercompany rent is not included in the total rent expense. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income Taxes | |||||||||||
Income Taxes | 8. Income Taxes | ||||||||||
Colt Defense is a limited liability company organized under the laws of Delaware. Colt Defense is treated as a partnership for federal and state income tax purposes and is not subject to U.S. federal or state income taxes. Consequently, all taxable income (loss) of Colt Defense is reported to its members for inclusion in their respective income tax returns. The limited liability agreement of Colt Defense requires distributions to the members in any year in which there is U.S. taxable income. The member’s distribution is equal to the product of the highest combined marginal federal, state, or local income tax rate applicable to any member and the highest taxable income allocated to any one unit, to the extent that the Governing Board determines that sufficient funds are available. | |||||||||||
Colt Defense and CDTS, a wholly owned subsidiary, collectively own 100% of Colt International Coöperatief U.A. (“Colt International”). Colt International owns 100% of Colt Canada, a Canadian C corporation. The income (loss) of Colt Canada is subject to entity level Canadian federal and provincial taxes. Colt Canada declared and paid dividends to Colt International in 2013. Under the terms of the treaty between Canada and The Netherlands, Colt Canada is required to withhold taxes on the dividends at a rate of 5%. | |||||||||||
As a result of the Merger effective July 12, 2013, Colt Defense owns 100% of New Colt, a C corporation organized under the laws of Delaware. New Colt is taxed as a corporation for U.S. federal and state income tax purposes. | |||||||||||
The components of income (loss) before provision for income taxes are as follows: | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
United States | $ | 18,912 | $ | (11,923 | ) | $ | (4,559 | ) | |||
Foreign | 5,591 | 6,880 | 12,718 | ||||||||
Total | $ | 24,503 | $ | (5,043 | ) | $ | 8,159 | ||||
The components of the expense (benefit) for income tax purposes are as follows: | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Current: | |||||||||||
Federal | $ | — | $ | — | $ | — | |||||
State | — | — | — | ||||||||
Foreign | 1,607 | 1,776 | 3,442 | ||||||||
Total current | 1,607 | 1,776 | 3,442 | ||||||||
Deferred and other: | |||||||||||
Federal | — | — | — | ||||||||
State | — | — | — | ||||||||
Foreign | 29 | 39 | (271 | ) | |||||||
Total deferred and other: | 29 | 39 | (271 | ) | |||||||
Total tax expense | $ | 1,636 | $ | 1,815 | $ | 3,171 | |||||
The components of deferred tax assets and liabilities consist of: | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Current tax assets: | |||||||||||
Accounts receivable reserves | $ | 74 | $ | — | |||||||
Inventory reserves | 865 | — | |||||||||
Accrued insurance | 250 | — | |||||||||
Accrued payroll | 150 | — | |||||||||
Accrued warranties | 125 | 40 | |||||||||
Other accrued expenses | 316 | 145 | |||||||||
Less: valuation allowance | (826 | ) | — | ||||||||
Total current deferred tax assets | $ | 954 | $ | 185 | |||||||
Long-term tax assets (liabilities): | |||||||||||
Pension & post retirement obligations | $ | 2,913 | $ | — | |||||||
Net operating loss carry forwards | 3,943 | — | |||||||||
Federal AMT credits | 888 | — | |||||||||
Fixed assets | (1,545 | ) | (388 | ) | |||||||
Intangible assets | (21,263 | ) | (1,127 | ) | |||||||
Other long-term assets | 450 | — | |||||||||
Less: valuation allowance | (4,101 | ) | — | ||||||||
Total long-term deferred tax liabilities | $ | (18,715 | ) | $ | (1,515 | ) | |||||
Net long-term deferred tax liabilities | $ | (17,761 | ) | $ | (1,330 | ) | |||||
New Colt has net operating loss (“NOL”) carry forwards of $21,828 for U.S. federal purposes and $3,350 for U.S. state purposes. Included in the federal NOL are NOL’s of $9,699 which the Company does not expect to be able to utilize as a result of a Section 382 NOL limitation due to a change in ownership of New Colt that occurred in 2007. These operating loss carry forwards expire at various dates from 2014 through 2033. New Colt has federal alternative minimum credits of $888. These tax credits do not have an expiration date. The Company’s income tax expense, deferred tax assets and liabilities reflect the Company’s best assessment of estimated future taxes to be paid. The Company is subject to income taxes in both the United States and foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense. | |||||||||||
Excluding the indefinite lived intangible assets for goodwill and trademarks, New Colt is in a net deferred tax asset position as of December 31, 2013. Deferred income taxes arise from temporary differences between tax and financial statement recognition of revenue and expense. In evaluating the Company’s ability to recover the deferred tax assets acquired through the acquisition of New Colt, the Company considered all available positive and negative evidence, including scheduled reversals of deferred tax assets and liabilities, projected future taxable income, tax-planning strategies and results of recent operations. In projecting future taxable income for New Colt, the Company began with historical results adjusted to include the $50,000 Term Loan (see Note 6, “Notes Payable and Long-Term Debt”) and related interest expense, incorporated assumptions including the amount of future state and federal pre-tax operating income, the reversal of temporary differences and the implementation of feasible and prudent tax-planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates the Company is using to manage the underlying business. Based on the analysis performed the Company believes, as of December 31, 2013, that it is more likely than not that the benefit from New Colt’s deferred tax assets will not be realized. In recognition of this risk, the Company provided a valuation allowance against New Colt’s deferred tax assets as of December 31, 2013. | |||||||||||
Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. The Company is not aware of any such changes that would have a material effect on the Company’s results of operations, cash flows, or financial position. | |||||||||||
The effective income tax provision (benefit) was different than the statutory federal and state income tax rates as follows: | |||||||||||
2013 | 2012 | 2011 | |||||||||
Expected Tax Rate | 34 | % | 34 | % | 34 | % | |||||
Meals and Entertainment | 0.05 | (0.21 | ) | 0.12 | |||||||
Pass Through Taxation (Zero Rate) | (26.44 | ) | (80.39 | ) | 19 | ||||||
Other Non-Deductible Items | 0.02 | (0.03 | ) | 0.01 | |||||||
Tax credits | (1.09 | ) | 5.12 | (4.51 | ) | ||||||
Tax Rate Differentials | (2.06 | ) | 12.28 | (11.69 | ) | ||||||
Withholding Tax | 2.12 | (6.54 | ) | 3.73 | |||||||
Valuation Allowance | 0.17 | 0 | 0 | ||||||||
Other Adjustments | (0.09 | ) | (0.23 | ) | (1.79 | ) | |||||
Effective Tax Rate | 6.68 | % | (36.00 | )% | 38.87 | % | |||||
In accordance with the provisions of ASC Topic 740, an uncertain income tax position will not be recognized in the financial statements unless it is more-likely-than-not to be sustained. As of December 31, 2013, the Company had $198 of uncertain tax position liabilities related to its domestic U.S operations. At December 31, 2012, the Company had no reserves for any uncertain tax positions. | |||||||||||
A summary of the Company’s uncertain tax positions is as follows: | |||||||||||
2013 | |||||||||||
Balance as of December 12, 2012 | $ | — | |||||||||
Add New Colt’s uncertain tax position as of July 12, 2013 | 198 | ||||||||||
Additions based on tax provisions related to the current year | — | ||||||||||
Additions for tax provisions of prior years | — | ||||||||||
Reductions for tax provisions of prior years | — | ||||||||||
Balance as of December 31, 2013 | $ | 198 | |||||||||
The Company expects that $0 of the uncertain tax position will reverse in the next twelve months. The Company classifies interest and penalties on uncertain tax positions as additional income taxes. The Company has $0 current uncertain tax positions and has not accrued any interest or penalties related to the uncertain tax positions. | |||||||||||
The Company does not have pending federal, state or foreign tax audits for the periods that are open under the statute of limitations. Colt Canada’s federal and Ontario income tax years open to audit are 2009 through 2012 and 2008 through 2012 respectively. New Colt’s federal and state income tax years open to audit are 2010 through 2012. | |||||||||||
In September 2013, the U.S. Department of the Treasury and the Internal Revenue Service released final regulations related to the acquisition, production, or improvement of tangible personal property as well as rules for materials and supplies. Compliance with the regulations will be required for companies’ federal income tax years beginning on or after January 1, 2014. The Company is currently assessing these rules and the impacts to the financial statements, if any. |
Pension_Savings_and_Postretire
Pension, Savings and Postretirement Benefits | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Pension, Savings and Postretirement Benefits | ||||||||||||||||||||
Pension, Savings and Postretirement Benefits | 9. Pension, Savings and Postretirement Benefits | |||||||||||||||||||
As a result of the Merger, the Company had four noncontributory, domestic defined benefit pension plans (“Plans”) that covered substantially all eligible salaried and hourly U.S. employees. The bargaining unit Plans were combined on January 1, 2014 and the salaried Plans were combined on January 1, 2014. | ||||||||||||||||||||
Pension expense for the New Colt plans is included in the amounts below from the Merger Date. | ||||||||||||||||||||
The Company also provides certain postretirement health care coverage to retired U.S. employees who were subject to its collective bargaining agreement when they were employees. The cost of these postretirement benefits is determined actuarially and is recognized in the Company’s consolidated financial statements during the employees’ active working career. In connection with the Company’s collective bargaining agreement, it has capped certain retirees to approximately $250 (not in thousands) per employee, per month. | ||||||||||||||||||||
The Company recognizes the projected liability for its pension benefits and postretirement health care coverage in excess of plan assets. Obligations for both pension and postretirement plans are measured as of the Company’s December 31 year end. | ||||||||||||||||||||
Postretirement health care expense for the New Colt plan is included in the amounts below from the Merger Date. | ||||||||||||||||||||
Disclosures related to the pension plans and the postretirement health care coverage follows: | ||||||||||||||||||||
Postretirement | ||||||||||||||||||||
Pension Plans | Healthcare Coverage | |||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||
Projected benefit obligation (“PBO”) at beginning of year | $ | 29,168 | $ | 25,590 | $ | 14,091 | $ | 12,524 | ||||||||||||
New Colt plans PBO at Merger Date | 9,131 | — | 8,077 | — | ||||||||||||||||
Service cost | 315 | 455 | 549 | 256 | ||||||||||||||||
Interest cost | 1,296 | 1,141 | 658 | 527 | ||||||||||||||||
Plan amendments | — | 951 | — | — | ||||||||||||||||
Actuarial (gain) loss | (2,175 | ) | 1,766 | (1,583 | ) | 1,286 | ||||||||||||||
Benefits paid and expenses | (1,540 | ) | (735 | ) | (717 | ) | (502 | ) | ||||||||||||
Projected benefit obligation at end of year | 36,195 | 29,168 | 21,075 | 14,091 | ||||||||||||||||
Fair value of plan assets at beginning of year | 22,372 | 19,609 | — | — | ||||||||||||||||
Fair value of plan assets at Merger Date | 7,841 | — | — | — | ||||||||||||||||
Employer contributions | 1,740 | 1,500 | 717 | 502 | ||||||||||||||||
Actual return on plan assets | 4,102 | 1,998 | — | — | ||||||||||||||||
Benefits paid and expenses | (1,540 | ) | (735 | ) | (717 | ) | (502 | ) | ||||||||||||
Fair value of plan assets at end of year | 34,515 | 22,372 | — | — | ||||||||||||||||
Funded status at end of year | $ | (1,680 | ) | $ | (6,796 | ) | $ | (21,075 | ) | $ | (14,091 | ) | ||||||||
The components of the unfunded benefit obligations of the hourly and salaried defined benefit plans follow: | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Hourly | Salaried | Hourly | Salaried | |||||||||||||||||
Plans | Plans | Total | Plan | Plan | Total | |||||||||||||||
Projected benefit obligation | $ | 26,328 | $ | 9,867 | $ | 36,195 | $ | 20,474 | $ | 8,694 | $ | 29,168 | ||||||||
Fair value of plan assets | 24,607 | 9,908 | 34,515 | 15,602 | 6,770 | 22,372 | ||||||||||||||
Funded status | $ | (1,721 | ) | $ | 41 | $ | (1,680 | ) | $ | (4,872 | ) | $ | (1,924 | ) | $ | (6,796 | ) | |||
Effective December 31, 2012, the pension benefits under the two hourly defined benefit plans were frozen. The benefits under the two salaried defined benefit plans have been frozen since December 31, 2008. Accordingly, participants retain the pension benefits that have already accrued. However, no additional benefits have accrued since the effective date of the freeze. | ||||||||||||||||||||
The components of cost recognized in the Company’s statement of operations for its pension plans are as follows: | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Service cost | $ | 315 | $ | 455 | $ | 287 | ||||||||||||||
Interest cost | 1,296 | 1,141 | 1,090 | |||||||||||||||||
Expected return on assets | (1,970 | ) | (1,641 | ) | (1,549 | ) | ||||||||||||||
Curtailment of hourly plan | — | 1,325 | — | |||||||||||||||||
Amortization of unrecognized prior service costs | — | 244 | 170 | |||||||||||||||||
Amortization of unrecognized loss | 429 | 813 | 495 | |||||||||||||||||
Net periodic cost | $ | 70 | $ | 2,337 | $ | 493 | ||||||||||||||
The components of cost recognized in the Company’s statement of operations for the Company’s postretirement health cost coverage are as follows: | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Service cost | $ | 549 | $ | 256 | $ | 179 | ||||||||||||||
Interest cost | 658 | 527 | 573 | |||||||||||||||||
Amortization of unrecognized prior service costs | (172 | ) | (172 | ) | (172 | ) | ||||||||||||||
Amortization of unrecognized loss | 244 | 208 | 70 | |||||||||||||||||
Net periodic cost | $ | 1,279 | $ | 819 | $ | 650 | ||||||||||||||
The components of cost recognized in other comprehensive loss for the Company’s pension and postretirement health plans are as follows: | ||||||||||||||||||||
Post | ||||||||||||||||||||
Pension | Retirement | |||||||||||||||||||
Plans | Health | Total | ||||||||||||||||||
Balance at December 31, 2011 | $ | (13,095 | ) | $ | (2,250 | ) | $ | (15,345 | ) | |||||||||||
Recognized in other comprehensive loss | 22 | (1,251 | ) | (1,229 | ) | |||||||||||||||
Balance at December 31, 2012 | (13,073 | ) | (3,501 | ) | (16,574 | ) | ||||||||||||||
Recognized in other comprehensive loss | 4,736 | 1,655 | 6,391 | |||||||||||||||||
Balance at December 31, 2013 | $ | (8,337 | ) | $ | (1,846 | ) | $ | (10,183 | ) | |||||||||||
The estimated amount that will be amortized from accumulated other comprehensive loss into net periodic cost in 2014 is as follows: | ||||||||||||||||||||
Post | ||||||||||||||||||||
Pension | Retirement | |||||||||||||||||||
Plans | Health | |||||||||||||||||||
Prior service cost/(gain) | $ | — | $ | (172 | ) | |||||||||||||||
Actuarial loss | 264 | 97 | ||||||||||||||||||
Total | $ | 264 | $ | (75 | ) | |||||||||||||||
Weighted-average assumptions used in determining the year-end benefit obligation are as follows: | ||||||||||||||||||||
Hourly | Salaried | Postretirement | ||||||||||||||||||
Pension Plans (a)(b) | Pension Plans (a)(c) | Healthcare | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||
Discount rate | 4.50 | % | 3.75 | % | 4.75 | % | 4.00 | % | 4.50 | % | 3.50 | % | ||||||||
Expected return on plan assets | 7.00 | % | 7.50 | % | 7.00 | % | 7.50 | % | N/A | N/A | ||||||||||
(a) | After the Merger in 2013, and through December 31, 2013, there were two hourly pension plans and two salaried pension plans. | |||||||||||||||||||
(b) | Effective January 1, 2014, the Colt Defense LLC Bargaining Unit Employees’ Pension Plan merged with the Colt’s Manufacturing Company LLC Bargaining Unit Employees’ Pension Plan. The merged plan retained the name of “Colt’s Manufacturing Company LLC Bargaining Unit Employees’ Pension Plan.” | |||||||||||||||||||
(c) | Effective January 1, 2014, the Colt Defense LLC Salaried Retirement Income Plan merged with the Colt’s Manufacturing Company LLC Salaried Retirement Income Plan. The merged plan was renamed “Colt Retirement Defined Benefit Plan.” | |||||||||||||||||||
Weighted-average assumptions used to determine net periodic cost for the years ended December 31 are as follows: | ||||||||||||||||||||
Hourly Pension Plans (a) | Salaried Pension Plans (a) | |||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||||
Discount rate | 3.75 | % | 4.25 | % | 5.50 | % | 4.00 | % | 4.50 | % | 5.50 | % | ||||||||
Expected return on plan assets | 7.50 | % | 8.00 | % | 8.00 | % | 7.50 | % | 8.00 | % | 8.00 | % | ||||||||
Postretirement Health | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Discount rate | 3.50 | % | 4.25 | % | 5.50 | % | ||||||||||||||
Expected return on plan assets | N/A | N/A | N/A | |||||||||||||||||
(a) | After the Merger in 2013, and through December 31, 2013, there were two hourly pension plans and two salaried pension plans. | |||||||||||||||||||
Defined Benefit Plans | ||||||||||||||||||||
The long-term rate of return on pension plan assets represents the average rate of earnings expected over the long term on the assets invested to provide for anticipated future benefit payment obligations. The Company used a building block approach to develop the long-term return on plan assets assumption. The rates of return in excess of inflation were considered separately for equity securities, debt securities and other assets. The excess returns were weighted by the representative target allocation and added along with an appropriate rate of inflation to develop the overall expected long-term return on pension plan assets. | ||||||||||||||||||||
The Company has developed an investment strategy for the Plans that emphasizes total return; that is, the aggregate return from capital appreciation and dividend and interest income. The primary objective of the investment management for the Plans’ assets is the emphasis on consistent growth; specifically, growth in a manner that protects the Plans’ assets from excessive volatility in market value from year to year. The investment policy also takes into consideration the benefit obligations, including expected timing of distributions. | ||||||||||||||||||||
The primary objective for the Plans is to provide long-term capital appreciation through investment in equity and debt securities. The Company selects professional money managers whose investment policies are consistent with its investment strategy and monitors their performance against appropriate benchmarks. The Plans do not own an interest in the Company and there are no significant transactions between it and the Plans. | ||||||||||||||||||||
The Company’s overall investment strategy is to achieve a mix of approximately 50% equity securities, 45% fixed income securities and 5% cash equivalents. This target allocation has not changed from the prior year. | ||||||||||||||||||||
The Company re-balances its portfolio periodically to realign the actual asset allocation with its target allocation. The percentage allocation to each asset class may vary depending upon market conditions. The Plans’ assets are stated at fair market value. The fair value of the Plans’ assets by asset category and level was as follows: | ||||||||||||||||||||
Fair Value Measurements at | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Allocation | ||||||||||||||||||||
Total | Percent | Level 1 | Level 2 | Level 3 | ||||||||||||||||
Equity mutual funds | $ | 19,903 | 58 | % | $ | 19,903 | $ | — | $ | — | ||||||||||
Fixed income mutual funds | 9,431 | 27 | % | 9,431 | — | — | ||||||||||||||
Money market funds | 446 | 1 | % | 446 | — | — | ||||||||||||||
Stable value | 4,735 | 14 | % | — | 4,735 | — | ||||||||||||||
$ | 34,515 | 100 | % | $ | 29,780 | $ | 4,735 | $ | — | |||||||||||
Fair Value Measurements at | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Allocation | ||||||||||||||||||||
Total | Percent | Level 1 | Level 2 | Level 3 | ||||||||||||||||
Equity mutual funds | $ | 11,344 | 51 | % | $ | 11,344 | $ | — | $ | — | ||||||||||
Fixed income mutual funds | 7,193 | 32 | % | 7,193 | — | — | ||||||||||||||
Money market funds | 644 | 3 | % | 644 | — | — | ||||||||||||||
Stable value | 3,191 | 14 | % | — | 3,191 | — | ||||||||||||||
$ | 22,372 | 100 | % | $ | 19,181 | $ | 3,191 | $ | — | |||||||||||
The Company adopted the provisions of the Financial Accounting Standards Boards Accounting Standards Codification 820-10 which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The Company has determined that the Plan contains Level 1 and Level 2 assets. The valuation of the Level 1 assets was based on quoted fund prices at the close of market on December 31, 2013 and 2012. The valuation of the Level 2 assets was based on inputs, other than quoted prices in active markets that are either directly or indirectly observable for the assets. | ||||||||||||||||||||
The Company anticipates making pension contributions of approximately $1,750 to the plans in 2014. | ||||||||||||||||||||
The following benefit payments, which reflect future service as appropriate, are expected to be paid. The benefit payments are based on the same assumptions used to measure the Company’s benefit obligation at the end of 2013. | ||||||||||||||||||||
Post | ||||||||||||||||||||
Pension | Retirement | |||||||||||||||||||
Years ending | Plans | Health | ||||||||||||||||||
2014 | $ | 1,931 | $ | 1,085 | ||||||||||||||||
2015 | 1,937 | 1,147 | ||||||||||||||||||
2016 | 1,994 | 1,208 | ||||||||||||||||||
2017 | 2,039 | 1,264 | ||||||||||||||||||
2018 | 2,077 | 1,310 | ||||||||||||||||||
2019-2023 | 11,164 | 7,031 | ||||||||||||||||||
Defined Contribution Plans | ||||||||||||||||||||
At December 31, 2013, the Company had two domestic contributory savings plans under Section 401(k) of the Internal Revenue Code covering substantially all U.S. employees. In January 2014, the Company combined the two plans. The merged plan was renamed the Colt Retirement Savings Plan (the “401(k) Plan”). | ||||||||||||||||||||
The 401(k) Plan allows participants to make voluntary contributions of up to 15% of their annual compensation, on a pretax basis, subject to IRS limitations. During 2012, employees represented by the collective bargaining agreement who were hired after April 1, 2012 were eligible for the employer match for up to 3% of their salaries, subject to eligibility rules. Effective January 1, 2013, all employees represented by the collective bargaining agreement were eligible for the employer match for up to 3% of their salaries. For all other employees, Colt matches 50% of their elective deferrals up to the first 6% of eligible deferred compensation. The Company’s match expense was $793, $310, and $272 for 2013, 2012 and 2011, respectively. | ||||||||||||||||||||
The Company has a defined contribution pension plan for its employees in Canada whereby the employees can make voluntary contributions up to 2.5% of their gross earnings. This plan requires employer matching. There is a 700 hours worked eligibility requirement. There is no vesting period. The Company also has a profit sharing plan for its employees in Canada, which provides for a contribution calculated at up to 7% of the net adjusted operating earnings, minus the employer contributions to the pension plan. The funds are distributed proportionately based on years of service and annual remuneration. The Company’s Canadian operation incurred expenses related to these plans of $429, $603, and $1,020 in 2013, 2012 and 2011, respectively. |
Colt_Defense_LLC_Accumulated_D
Colt Defense LLC Accumulated Deficit | 12 Months Ended |
Dec. 31, 2013 | |
Colt Defense LLC Accumulated Deficit | |
Colt Defense LLC Accumulated Deficit | 10. Colt Defense LLC Accumulated Deficit |
The Company’s authorized capitalization consists of 1,000,000 common units, which include 18,878 nonvoting Class B common units, and 250,000 preferred units. Common units issued and outstanding as of December 31, 2013 and 2012 were 132,174. No preferred units have been issued. | |
On March 22, 2013, Colt Defense purchased 31,165.589 common units (“Unit Repurchase”) from Blackstone Mezzanine Partners II-A L.P. and Blackstone Mezzanine Holdings II USS L.P. (collectively, “Blackstone Funds”) (representing 100% of the Colt Defense common membership units held by the Blackstone Funds) for an aggregate purchase price of $14.0 million pursuant to an equity purchase agreement, dated as of March 22, 2013 (“Unit Repurchase Agreement”), by and among Colt Defense and the Blackstone Funds. In accordance with the Unit Repurchase Agreement, upon consummation of the Unit Repurchase, the Blackstone Funds delivered the certificates representing the common units held by the Blackstone Funds to Colt Defense for cancellation, and the rights of the Blackstone Funds under the Amended and Restated LLC Agreement, including appointment rights with respect to Colt Defense’s Governing Board, were terminated. The Unit Repurchase Agreement provided customary releases and indemnities for Colt Defense and the Blackstone Funds and provides that, upon certain events occurring prior to September 22, 2013, including an acquisition of Colt Defense, a purchase by Colt Defense of common units from any of its existing members or a cash distribution (other than a tax distribution) by Colt Defense to its members, the Company would have been required to pay additional amounts to the Blackstone Funds if the per unit purchase price in such subsequent transaction exceeds the per unit purchase price paid to the Blackstone Funds. | |
On July 12, 2013, the Company issued and sold 31,165.589 of Colt Defense common units to Colt Defense Holding III L.P., an affiliate of Sciens Management, for $9.0 million. The Company used the $9.0 million, together with the proceeds from the Term Loan and cash on hand, to fund the Merger and pay related fees and expenses. | |
During 2013, Colt made $6.4 million of tax distributions to its members and had $2.9 million of tax distributions accrued as of December 31, 2013. Based on the distribution limitations associated with the Company’s Term Loan, $2.2 million of the 2013 accrual has been classified as a long term liability. | |
Colt Defense Employee Plan Holding Corp (“E-Plan Holding”) is wholly owned by the Colt Defense LLC Profit Sharing Plan (“PSP”). The PSP was converted from an employee stock ownership plan to a profit sharing plan effective January 1, 2009. The Company has no obligation to make any future contributions to E-Plan Holding or the PSP. Common units of 372 were purchased during 2013. No common units were purchased during 2012 or 2011. At December 31, 2013, E-Plan Holding owns 1,576 of its outstanding units. |
Common_Unit_Compensation
Common Unit Compensation | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Common Unit Compensation | |||||||
Common Unit Compensation | 11. Common Unit Compensation | ||||||
On March 1, 2012, the Governing Board approved the Colt Defense Long Term Incentive Plan (the “Plan”). The purpose of the Plan is to advance the interests of Colt Defense and its equity holders by providing a means to attract, retain and motivate key employees, advisors and members of the Governing Board. Awards under the Plan may consist of options, restricted units, restricted phantom units, performance units or other unit-based awards. A total of 18,878 Class B common units have been reserved for issuance in connection with awards under the Plan. | |||||||
Under the Plan, the exercise price of option awards is set at the grant date and may not be less than the fair market value per unit on that date. The term of each option is ten years from the grant date. The vesting periods, which vary by grant, may be time based, performance based or a combination thereof. Compensation expense equal to the grant date fair value is generally recognized over the period during which the employee is required to provide service in exchange for the award or as the performance obligation is met. Fair value was estimated on the date of grant using the Black-Scholes valuation method. | |||||||
In 2013, options were granted for 5,300 common units at a weighted-average exercise price of $288.78 (not in thousands). In March 2012, options were granted for 11,325 common units at a weighted-average exercise price of $100.00 (not in thousands). Common unit compensation expense, which is included in general and administrative expense in the Company’s Consolidated Statements of Operations, was $27 in 2013 and $17 in 2012, respectively. The Company did not record any common unit compensation expense in 2011. | |||||||
The following table summarizes information about the Company’s common unit option awards during 2012 and 2013: | |||||||
Number of Units | Weighted- | ||||||
Average | |||||||
Exercise Price | |||||||
Outstanding, December 31, 2011 | — | $ | — | ||||
Granted | 11,325 | 100 | |||||
Exercised | — | — | |||||
Forfeited/Cancelled | — | — | |||||
Outstanding, December 31, 2012 | 11,325 | 100 | |||||
Granted | 5,300 | 288.78 | |||||
Exercised | — | — | |||||
Forfeited/Cancelled | (8,271 | ) | 113.69 | ||||
Outstanding, December 31, 2013 | 8,354 | 206.21 | |||||
Transactions_with_Related_Part
Transactions with Related Parties | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Transactions with Related Parties | |||||||||||
Transactions with Related Parties | 12. Transactions with Related Parties | ||||||||||
In July 2007, Colt Defense entered into a financial advisory agreement with Sciens Management LLC (“Sciens Management”), which through its affiliates, may be deemed to beneficially own a substantial portion of Colt Defense’s limited liability interests and whose managing member is also a member of Colt Defense’s Governing Board. Under the terms of the agreement, the Company pays Sciens Management an aggregate annual retainer of $350. In July 2013, Colt Defense entered into a consulting services agreement (“Consulting Agreement”) with Sciens Institutional Services LLC (“Sciens Institutional”), an affiliate of Sciens Management. Affiliates of Sciens Institutional beneficially owns a substantial portion of Colt Defense’s limited liability interests and Sciens Institutional’s managing member is a member of Colt Defense’s Governing Board. Under the terms of the Consulting Agreement, Sciens Institutional provides consulting services to Colt Defense for an aggregate annual fee of $650, payable quarterly in advance. | |||||||||||
The costs for the services provided and the related expenses under the agreements with Sciens Institutional and Sciens Management were $686, $356, and $450 for the years ended December 31, 2013, 2012, and 2011, respectively, and they are recorded within general and administrative expenses in the Consolidated Statements of Operations. | |||||||||||
In July 2013, Colt’s Manufacturing entered into a services agreement (“Archives Agreement”) with Colt Archive Properties LLC (“Archives Properties”), one of the owners of which is a member of Colt Defense’s Governing Board and affiliates of which may be deemed to beneficially own a substantial portion of Colt Defense’s limited liability interests. Under the Archives Agreement, Colt’s Manufacturing agreed to provide designated employees to provide services to Archive Properties for an initial annual fee of $241, payable quarterly in arrears. The Company records revenue related to archive services as net sales and costs associated with providing archive services in cost of sales. | |||||||||||
The Company leases its West Hartford facility from NPA Hartford LLC, a related party, for the Company’s corporate headquarters and primary manufacturing facility. The lease expires on October 25, 2015. For the year ended December 31, 2013, the rent expense under this lease was $642. | |||||||||||
In addition, Colt Security LLC, a wholly owned subsidiary of Colt Defense Employee Plan Holding Corp., provides security guard services to Colt. | |||||||||||
Prior to the Merger in 2013, and for the full years of 2012 and 2011, transactions by Colt Defense with New Colt were as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Net sales to New Colt | $ | 44,773 | $ | 73,292 | $ | 11,746 | |||||
Purchases from New Colt | 1,891 | — | — | ||||||||
Administration and service fees | 920 | 1,098 | 430 | ||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Commitments and Contingencies | |||||||||||||||||
Commitments and Contingencies | 13. Commitments and Contingencies | ||||||||||||||||
A summary of standby letters of credit issued principally in connection with performance and warranty bonds established for the benefit of certain international customers is as follows: | |||||||||||||||||
As of December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Standby letters of credit secured by restricted cash | $ | 1,185 | $ | 1,253 | |||||||||||||
Standby letters of credit secured by Credit Agreement | 3,486 | 1,715 | |||||||||||||||
Guarantees of standby letters of credit established by a sales agent on behalf of Colt | 74 | 702 | |||||||||||||||
At December 31, 2013 and 2012, the Company had unconditional purchase obligations related to capital expenditures for machinery and equipment of $892 and $2,357, respectively. | |||||||||||||||||
The Company also had certain industrial cooperation agreements, which stipulate its commitments to provide offsetting business to certain countries that have purchased Colt’s products. Colt generally settles its offset purchase commitments under industrial cooperation agreements through offsetting business and/or cooperating with other contractors on their spending during the related period. Additionally, the Company identifies future purchases and other satisfaction plans for the remainder of the offset purchase commitment period and should there be a projected net purchase commitment after such consideration, the Company accrues the estimated cost to settle the offset purchase commitment. | |||||||||||||||||
The Company’s remaining gross offset purchase commitment is the total amount of offset purchase commitments reduced for claims submitted and approved by the governing agencies. At December 31, 2013 and 2012, the remaining gross offset purchase commitments totaled $64,131 and $68,180, respectively. The Company has evaluated its settlement of its remaining gross offset purchase commitments through probable planned spending and other probable satisfaction plans to determine its net offset purchase commitment. The Company has accrued $1,639 and $1,804 as of December 31, 2013 and 2012, respectively, based on its estimated cost of settling the remaining net offset purchase commitment. | |||||||||||||||||
In the third quarter of 2013, the Company and the US Government agreed to retrofit previously delivered M240 machine guns for a gun part not meeting technical specifications. | |||||||||||||||||
The following table summarizes the impact of this retrofit on the M240 Program contract modification and contract obligation expense activity included in the Company’s consolidated statement of operations: | |||||||||||||||||
As Originally Reported | Adjustments | As Restated | |||||||||||||||
For the nine | For the three | For the three | |||||||||||||||
months ended | months ended | For the year-ended | months ended | ||||||||||||||
September 29, | December 31, | December 31, | M240 Program | December 31, | |||||||||||||
2013 | 2013 | 2013 | Error | 2013 | |||||||||||||
M240 Program - contract modification | $ | — | $ | — | $ | — | $ | (6,820 | ) | $ | (6,820 | ) | |||||
Impact to Total Net Sales | — | — | — | (6,820 | ) | (6,820 | ) | ||||||||||
Cost of Sales | — | — | — | 3,381 | 3,381 | ||||||||||||
Contract obligation expense | 7,041 | 472 | 7,513 | (7,513 | ) | — | |||||||||||
Impact to Total Cost of Sales | 7,041 | 472 | 7,513 | (4,132 | ) | 3,381 | |||||||||||
Impact to Gross Profit | $ | (7,041 | ) | $ | (472 | ) | $ | (7,513 | ) | $ | (2,688 | ) | $ | (10,201 | ) | ||
During the third quarter and fourth quarter of 2013 the Company recorded M240 contract obligation expenses of $7,041 and $472, respectively, related to the M240 Program for an aggregate contract obligation expense of $7,513. Subsequent to year-end the Company entered into a M240 contract modification with the U.S. Government which resulted in the Company recording a $6,820 M240 Program contact modification, a reduction in net sales, and a $4,132 M240 Program contract obligation expense, a reduction in cost of sales, for an aggregate reduction in gross profit of $2,688 (the “M240 Program Error”). Inclusive of the impact of the M240 Program Error, the Company recorded a $6,820 M240 Program contract modification and a $3,381 M240 Program contract obligation expense for an aggregate reduction in gross profit of $10,201 for the year ended December 31, 2013, as restated, related to the Company’s M240 Program. | |||||||||||||||||
The $6,820 M240 Program contract modification was recorded as a reduction in net sales. The contract price reduction allowed for the U.S. Government to apply previously committed funding to the procurement of third party parts, to be utilized in the Company’s retrofit of previously delivered M240 machine guns. The M240 Program - contract modification will result in a reduction of future cash proceeds from the sale of new M240 machine guns and therefore is included in customer advances and deferred revenue on the Company’s consolidated balance sheet as of December 31, 2013. The customer advance and the deferred liability are classified as current liabilities based on the Company’s best estimate of when new M240 machine guns, impacted by the M240 Program contract modification will be delivered. The M240 Program contract obligation expense of $3,381 relates to the estimated costs to retrofit previously delivered M240 machine guns, exclusive of the parts being supplied by the U.S. Government. As of December 31, 2013 $1,194 was included in accrued expenses, a current liability on the Company’s consolidated balance sheet, related to the Company’s M240 Program contract obligation expense based on the Company’s best estimate of when the expenses will be incurred. The M240 Program contact obligation expense was based on the Company’s best estimate of costs to satisfy the contract obligation given a range of possible outcomes. The Company believes the actual costs to satisfy this obligation could vary from this estimate. The Company did not incur a comparable expense in the prior year. | |||||||||||||||||
The Company is involved in various legal claims and disputes in the ordinary course of its business. The Company accrues for such liabilities when it is both (i) probable that a loss has occurred and (ii) the amount of the loss can be reasonably estimated in accordance with ASC 450, Contingencies. Management evaluates, on a quarterly basis, developments affecting various legal claims and disputes that could cause an increase or decrease in the amount of the liability that has been previously accrued. At this time, management does not anticipate any such loss would have a material adverse impact on the Company’s consolidated financial position, results of operations or cash flows. During 2012, the Company settled a matter for $625. | |||||||||||||||||
During 2013, there were no material tax examinations. During 2012, the Company was examined by a tax authority. Pursuant to the Company’s limited liability company agreement, in the event of an audit, it is obligated, on behalf of its members, for any settlement related expenses. During the first quarter of 2013, the Company reached an agreement with the tax authority and paid the settlement amount of $1,000. The amount was expensed in 2012. | |||||||||||||||||
In 2011, New Colt entered into an agreement with Osceola County in Florida to lease a 16,000 square foot facility in Kissimmee, Florida. This facility was renovated by the County at their cost and the building was made available for occupancy during 2012. The State of Florida contributed $250 of funds to the County to assist with the cost of the renovations. The Company is responsible for making a minimum capital investment of $2.5 million, of which $181 had been made through December 31, 2013. The Company entered into a twelve year lease of the Florida facility. There are no lease payments due during the initial five years of the lease and the annual cost of the lease will be $108 per year with the lease expiring on January 15, 2023. The lease expense is being accounted for on a straight-line basis, with an annual charge of $78 being incurred over the term of the lease. At December 31, 2013, deferred lease expense was $36. In connection with these agreements as amended, the Company was expected to hire a minimum number of employees commencing in 2013. As of December 31, 2013, the Company had not occupied the Florida facility and had not hired any employees. | |||||||||||||||||
Segment_Information
Segment Information | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Segment Information | |||||||||||
Segment Information | 14. Segment Information | ||||||||||
As a result of the Merger (see “Note 3 Acquisition”), the two manufacturers of Colt firearms were consolidated into a single enterprise providing the Company with direct access to the commercial market for Colt rifles and carbines, ownership of the Colt brand name and other related trademarks and the technology and production facilities for the full line of Colt handguns. As of December 31, 2013, the Company’s operations are conducted through two segments, the firearms and spares/other. These operating segments have similar characteristics and have been aggregated into the Company’s only reportable segments. The firearms segment designs, develops, and manufactures firearms for domestic and international military and law enforcement markets as well as the domestic and international commercial markets. | |||||||||||
Adjusted EBITDA consists of income (loss) from continuing operations before interest, income taxes depreciation and amortization and other expenses as noted below. Management uses Adjusted EBITDA to evaluate the financial performance of and make operating decisions. See the footnotes that follow the reconciliation table below for additional information regarding the adjustments made to arrive at Adjusted EBITDA. | |||||||||||
Colt Defense LLC | |||||||||||
Restated Adjusted EBITDA | |||||||||||
December 31, 2013 | |||||||||||
The following table represents a reconciliation of net income (loss) to Adjusted EBITDA: | |||||||||||
2013 | 2012 | 2011 | |||||||||
(As Restated) | (As Revised) | ||||||||||
Net income (loss) | $ | 22,867 | $ | (6,858 | ) | $ | 4,988 | ||||
Income tax (benefit) expense | 1,636 | 1,815 | 3,171 | ||||||||
Depreciation and amortization (i) | 6,359 | 5,696 | 5,476 | ||||||||
Interest expense | 27,687 | 24,579 | 24,010 | ||||||||
Sciens fees and expenses (ii) | 686 | 356 | 450 | ||||||||
Pension curtailment expense (iii) | — | 1,325 | — | ||||||||
Business development costs (iv) | 575 | 881 | 504 | ||||||||
Transaction costs (v) | 1,147 | — | — | ||||||||
Restructuring costs (vi) | 782 | — | — | ||||||||
Gain on effective settlement of contract (vii) | (15,264 | ) | — | — | |||||||
Lease buyout expense (viii) | 287 | — | — | ||||||||
M240 Program - contract modification and obligation expense (ix) | 10,201 | — | — | ||||||||
Other (income) expenses, net (x) | (562 | ) | (474 | ) | 266 | ||||||
Adjusted EBITDA | $ | 56,401 | $ | 27,320 | $ | 38,865 | |||||
(i) | Includes depreciation and amortization of intangible assets. | ||||||||||
(ii) | Includes fees and expenses pursuant to the agreements with Sciens Management and Sciens International. | ||||||||||
(iii) | Non-cash expense associated with the curtailment of pension plans. | ||||||||||
(iv) | Primarily outside professional service fees associated with strategic initiatives. | ||||||||||
(v) | Non-recurring costs associated with the Merger. | ||||||||||
(vi) | Non-recurring costs associated with restructuring initiatives undertaken as a result of the Merger. | ||||||||||
(vii) | Gain from the settlement of the pre-existing License agreement between Colt Defense and New Colt. | ||||||||||
(viii) | Expense associated with the early retirement of capital and operating leases. | ||||||||||
(ix) | M240 Program contract modification and contract obligation expense, see Note 13, “Commitments and Contingencies” | ||||||||||
(x) | Includes income and/or expenses such as foreign currency exchange gains or losses and other less significant charges not related to on-going operations. | ||||||||||
Product Information | |||||||||||
The following table shows net sales for the year ended December 31, 2013 and December 31, 2012 by product category ($ in thousands). The table includes the results of New Colt from July 12, 2013, the acquisition date, through December 31, 2013. After intercompany sales eliminations, the New Colt acquisition provided $29.1 million of incremental sales for the year ended December 31, 2013. | |||||||||||
For the Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(As Restated) | (As Revised) | ||||||||||
Long guns | $ | 194,634 | $ | 159,528 | $ | 125,141 | |||||
Hand guns | 30,052 | 1,260 | — | ||||||||
Spares and other | 46,197 | 52,828 | 83,675 | ||||||||
Total | $ | 270,883 | $ | 213,616 | $ | 208,816 | |||||
Geographical Information | |||||||||||
Geographic external revenues are attributed to the geographic regions based on the customer’s location of origin. The Company’s net sales in the United States include revenues that arise from sales to the U.S. Government under its FMS, which involves product that is resold by the U.S. Government to foreign governments and generally shipped directly to the foreign government by the Company. | |||||||||||
The table below presents total net sales for specific geographic regions: | |||||||||||
2013 | 2012 | 2011 | |||||||||
(As Restated) | (As Revised) | ||||||||||
United States | $ | 158,311 | $ | 111,878 | $ | 89,544 | |||||
Asia/Pacific | 64,959 | 45,866 | 26,762 | ||||||||
Canada | 28,130 | 30,244 | 26,064 | ||||||||
Europe | 9,255 | 16,501 | 34,908 | ||||||||
Middle East/Asia | 3,065 | 3,675 | 26,188 | ||||||||
Latin America/Caribbean | 7,163 | 5,452 | 5,350 | ||||||||
$ | 270,883 | $ | 213,616 | $ | 208,816 | ||||||
Long-lived assets are net fixed assets attributable to specific geographic regions: | |||||||||||
2013 | 2012 | ||||||||||
United States | $ | 25,745 | $ | 17,272 | |||||||
Canada | 4,988 | 4,862 | |||||||||
$ | 30,733 | $ | 22,134 | ||||||||
Major Customer Information | |||||||||||
In 2013, two direct foreign customers accounted for 23% and 10% of restated net sales, respectively. In 2012, two direct foreign customers accounted for 21% and 10% of net sales, respectively. In 2011, sales to a direct foreign customer represented 11% of the Company’s net sales. | |||||||||||
In 2013, one domestic distributor accounted for 11% of restated net sales. Sales to New Colt (prior to the Merger in 2013) accounted for 16% of net sales in 2013, 34% in 2012 and did not exceed 10% in 2011. | |||||||||||
Sales to the U.S. government represented 7% of restated net sales in 2013, 11% of net sales in 2012, and 31% in 2011. | |||||||||||
Concentration_of_Risk
Concentration of Risk | 12 Months Ended |
Dec. 31, 2013 | |
Concentration of Risk | |
Concentration of Risk | 15. Concentration of Risk |
Accounts Receivable | |
Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of accounts receivable. At December 31, 2013, the two largest individual trade receivable balances accounted for 28% and 18% of total accounts receivable. At December 31, 2012, the two largest individual trade receivable balances accounted for 55% and 25% of total accounts receivable. | |
Labor | |
The United Automobile, Aerospace & Agricultural Implements Workers of America (the “Union”) represents Colt’s West Hartford work force pursuant to a collective bargaining agreement that expires March 31, 2014. The Union represents approximately 72% of Colt’s U.S. workforce. |
Other_LongTerm_Liabilities
Other Long-Term Liabilities | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Other Long-Term Liabilities | ||||||||
Other Long-Term Liabilities | 16. Other Long-Term Liabilities | |||||||
Other long-term liabilities consist of the following: | ||||||||
As of December 31, | ||||||||
2013 | 2012 | |||||||
Deferred revenue | $ | 778 | $ | 905 | ||||
Royalty payable | 1,125 | — | ||||||
Other | 327 | 3 | ||||||
$ | 2,230 | $ | 908 |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Accumulated Other Comprehensive Loss | ||||||||||||||
Accumulated Other Comprehensive Loss | 17. Accumulated Other Comprehensive Loss | |||||||||||||
The components of accumulated other comprehensive loss follow: | ||||||||||||||
Unrecognized | Foreign | |||||||||||||
Prior Service | Unrecognized | Currency | ||||||||||||
Cost | Loss | Translation | Total | |||||||||||
Balance, December 31, 2010 | $ | 380 | $ | (10,523 | ) | $ | 2,659 | $ | (7,484 | ) | ||||
Other comprehensive income before reclassifications | — | (5,765 | ) | — | (5,765 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income | (2 | ) | 565 | — | 563 | |||||||||
Currency translation | — | — | (444 | ) | (444 | ) | ||||||||
Net current period other comprehensive income | (2 | ) | (5,200 | ) | (444 | ) | (5,646 | ) | ||||||
Balance, December 31, 2011 | 378 | (15,723 | ) | 2,215 | (13,130 | ) | ||||||||
Other comprehensive income before reclassifications | 375 | (2,697 | ) | — | (2,322 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income | 72 | 1,021 | — | 1,093 | ||||||||||
Currency translation | — | — | 517 | 517 | ||||||||||
Net current period other comprehensive income | 447 | (1,676 | ) | 517 | (712 | ) | ||||||||
Balance, December 31, 2012 (As Revised) | 825 | (17,399 | ) | 2,732 | (13,842 | ) | ||||||||
Other comprehensive income before reclassifications | — | 5,890 | — | 5,890 | ||||||||||
Amounts reclassified from accumulated other comprehensive income | (172 | ) | 673 | 501 | ||||||||||
Currency translation | — | — | (1,889 | ) | (1,889 | ) | ||||||||
Net current period other comprehensive income | (172 | ) | 6,563 | (1,889 | ) | 4,502 | ||||||||
Balance, December 31, 2013 (As Restated) | $ | 653 | $ | (10,836 | ) | $ | 843 | (9,340 | ) | |||||
Quarterly_Operating_Results_Un
Quarterly Operating Results (Unaudited) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Quarterly Operating Results (Unaudited) | ||||||||||||||
Quarterly Operating Results (Unaudited) | 18. Quarterly Operating Results (Unaudited) | |||||||||||||
For the Year Ended December 31, 2013 | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
(As Revised) | (As Revised) | (As Revised) | (As Restated) | |||||||||||
Statement of operations data: | ||||||||||||||
Net sales | $ | 63,849 | $ | 64,212 | $ | 73,030 | $ | 69,792 | ||||||
Cost of sales | 45,112 | 45,830 | 58,487 | 47,683 | ||||||||||
Gross profit | 18,737 | 18,382 | 14,543 | 22,109 | ||||||||||
Business development | 75 | 169 | 463 | (132 | ) | |||||||||
Transaction and restructuring costs | — | 416 | 1,092 | 421 | ||||||||||
Gain on effective settlement of contract | — | — | (15,264 | ) | — | |||||||||
Net income | 5,129 | 4,387 | 10,857 | 2,494 | ||||||||||
During the third quarter of 2013 the Company recorded a M240 Program contract obligation expense, included in cost of sales, of $7.0 million. The M240 Program contract obligation expense relates to estimated costs to retrofit M240 machine guns previously delivered as well as costs associated with changes in product design and production process. During the fourth quarter, as restated, the Company recorded a M240 Program contract modification, a reduction in net sales of ($6.8) million, which allowed for the U.S. Government to apply previously committed funding to the procurement of third party parts, to be utilized in the Company’s retrofit of previously delivered M240 machine guns as well as a reduction in M240 Program contract obligation expense of ($3.7) million. The aggregate reduction in gross profit associated with the M240 Program contract modification and contract obligation expense was $10.2 million. See Note 13, “Commitments and Contingencies” for further information. | ||||||||||||||
For the year ended December 31, 2013, the Company recorded $1.1 million of certain transaction costs related to its acquisition of New Colt on July 12, 2013. This was primarily for legal fees related to the Merger. For additional information about this transaction, see “Note 3 Acquisition.” | ||||||||||||||
For the year ended December 31, 2013, the Company recorded $0.8 million of expense related to a restructuring action that was initiated and completed during the third quarter as result of its acquisition of New Colt on July 12, 2013. For additional information about this transaction, see “Note 4 Restructuring Costs.” | ||||||||||||||
Immediately prior to the Merger, the Company recorded the effective settlement of a pre-existing relationship with New Colt related to its license agreement (the “License”) with New Colt for the use of certain Colt trademarks. As a result of the effective settlement of the pre-existing relationship, the Company recorded a gain of $15,264 (“Settlement Gain”), which equals the calculated gain of $16,320 reduced by the write-off of Colt Defense’s prepaid license balance of $1,056. | ||||||||||||||
For the Year Ended December 31, 2012 | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
(As Revised) | ||||||||||||||
Statement of operations data: | ||||||||||||||
Net sales | $ | 43,853 | $ | 45,837 | $ | 56,555 | $ | 67,371 | ||||||
Gross profit | 7,743 | 8,720 | 16,310 | 18,221 | ||||||||||
Business development | 35 | — | 100 | 746 | ||||||||||
Net income (loss) | (7,088 | ) | (6,237 | ) | 2,894 | 3,573 | ||||||||
Supplemental_Condensed_Consoli
Supplemental Condensed Consolidating Financial Statement Information | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Supplemental Condensed Consolidating Financial Statement Information | ||||||||||||||||||||
Supplemental Condensed Consolidating Financial Statement Information | 19. Supplemental Condensed Consolidating Financial Statement Information | |||||||||||||||||||
On November 10, 2009, Colt Defense LLC and Colt Finance Corp., the Company’s 100% owned subsidiary, jointly and severally co-issued and guaranteed the Senior Notes. On June 19, 2013, the Company entered into a supplement to the Indenture by which Colt International Coöperatief U.A. (“Dutch Holdings”), Colt Canada and Colt Defense Technical Services LLC became new subsidiary guarantors of the Senior Notes. As such, each agreed to jointly and severally guarantee the obligations under the Indenture. Therefore, the Senior Notes were fully and unconditionally guaranteed, on a joint and several basis by Colt Defense LLC and all of its subsidiaries as of December 31, 2013. | ||||||||||||||||||||
Condensed consolidating financial statement information for Colt Defense and its 100% owned guarantor subsidiaries as of December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012, and 2011, respectively, is as follows: | ||||||||||||||||||||
The Company is restating its previously issued consolidated financial statements and related disclosures for the year ended December 31, 2013. The Company is revising its unaudited interim financial information for the first three quarters in the fiscal year ended December 31, 2013, the fourth quarter and year ended December 31, 2012 and the year ended December 31, 2011. The restatement is the result of the Company’s correction of a financial statement error attributable to the lack of recognition of the impact of a contract modification related to the M240 Program for the U.S. Government in the Company’s fourth quarter 2013 results. In conjunction with the correction of the M240 Program error, other previously recorded out-of-period errors which were immaterial to the consolidated financial statements individually, or in the aggregate, prior to the discovery of the M240 Program error, were also adjusted to be reflected in the proper period along with the reclassification of business development expenses from other (income) / expense to operating income (see Note 2, “Summary of Significant Accounting Policies”). The impact of the above mentioned restatement and revisions are reflected in the guarantor’s condensed consolidating balance sheets for the periods ended December 31, 2013 and 2012 and Condensed Consolidating Statement of Income, Condensed Consolidating Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011. | ||||||||||||||||||||
Condensed Consolidating Balance Sheet | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
(As Restated) | ||||||||||||||||||||
Colt | Colt | Total | Total Non- | Consolidating | ||||||||||||||||
Defense | Finance | Guarantor | Guarantor | /Eliminating | ||||||||||||||||
LLC | Corp | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 2,899 | $ | — | $ | 9,695 | $ | — | $ | — | $ | 12,594 | ||||||||
Restricted cash | 771 | — | — | — | — | 771 | ||||||||||||||
Accounts receivable, net | 11,764 | — | 10,718 | — | — | 22,482 | ||||||||||||||
Inventories | 50,834 | — | 15,840 | — | — | 66,674 | ||||||||||||||
Other current assets | 32,536 | — | 4,192 | — | (29,812 | ) | 6,916 | |||||||||||||
Total current assets | 98,804 | — | 40,445 | — | (29,812 | ) | 109,437 | |||||||||||||
Property and equipment, net | 19,674 | — | 11,059 | — | — | 30,733 | ||||||||||||||
Investment in subsidiaries | 37,058 | — | — | — | (37,058 | ) | — | |||||||||||||
Goodwill | 4,175 | — | 47,050 | — | — | 51,225 | ||||||||||||||
Trademarks | — | — | 50,100 | — | — | 50,100 | ||||||||||||||
Intangible assets with finite lives, net | 1,327 | — | 12,088 | — | — | 13,415 | ||||||||||||||
Deferred financing costs | 5,987 | — | 1,755 | — | — | 7,742 | ||||||||||||||
Long-term restricted cash | 572 | — | — | — | — | 572 | ||||||||||||||
Other assets | 391 | — | 1,119 | — | — | 1,510 | ||||||||||||||
Total assets | $ | 167,988 | $ | — | $ | 163,616 | $ | — | $ | (66,870 | ) | $ | 264,734 | |||||||
LIABILITIES AND DEFICIT | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Line of credit | $ | 7,083 | $ | — | $ | — | $ | — | $ | — | $ | 7,083 | ||||||||
Accounts payable | 9,070 | — | 34,780 | — | (29,812 | ) | 14,038 | |||||||||||||
Accrued expenses | 16,274 | — | 6,554 | — | — | 22,828 | ||||||||||||||
Pension and retirement liabilities - current portion | 618 | — | 467 | — | — | 1,085 | ||||||||||||||
Customer advances and deferred revenue | 9,553 | — | 9,914 | — | — | 19,467 | ||||||||||||||
Long-term debt current portion | — | — | 5,000 | — | — | 5,000 | ||||||||||||||
Total current liabilities | 42,598 | — | 56,715 | — | (29,812 | ) | 69,501 | |||||||||||||
Long term debt | 247,984 | — | 41,833 | — | — | 289,817 | ||||||||||||||
Pension and retirement liabilities | 13,718 | — | 7,952 | — | — | 21,670 | ||||||||||||||
Other long-term liabilities | 3,164 | — | 20,058 | — | — | 23,222 | ||||||||||||||
Total long-term liabilities | 264,866 | — | 69,843 | — | — | 334,709 | ||||||||||||||
Total liabilities | 307,464 | — | 126,558 | — | (29,812 | ) | 404,210 | |||||||||||||
Commitments and contingencies (Notes 7 & 11) | ||||||||||||||||||||
Deficit: | ||||||||||||||||||||
Total (deficit) equity | (139,476 | ) | — | 37,058 | — | (37,058 | ) | (139,476 | ) | |||||||||||
Total liabilities and debt | $ | 167,988 | $ | — | $ | 163,616 | $ | — | $ | (66,870 | ) | $ | 264,734 | |||||||
Condensed Consolidating Balance Sheet | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
(As Revised) | ||||||||||||||||||||
Colt | Colt | Total | Total Non- | Consolidating | ||||||||||||||||
Defense | Finance | Guarantor | Guarantor | /Eliminating | ||||||||||||||||
LLC | Corp | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 33,647 | $ | — | $ | 8,726 | $ | — | $ | — | $ | 42,373 | ||||||||
Restricted cash | 777 | — | — | — | — | 777 | ||||||||||||||
Accounts receivable, net | 15,243 | — | 7,701 | — | — | 22,944 | ||||||||||||||
Inventories | 30,338 | — | 10,223 | — | — | 40,561 | ||||||||||||||
Other current assets | 3,936 | — | 1,743 | — | (2,328 | ) | 3,351 | |||||||||||||
Total current assets | 83,941 | — | 28,393 | — | (2,328 | ) | 110,006 | |||||||||||||
Property and equipment, net | 17,272 | — | 4,862 | — | — | 22,134 | ||||||||||||||
Investment in subsidiaries | 27,849 | — | — | — | (27,849 | ) | — | |||||||||||||
Goodwill | 4,175 | — | 10,772 | — | — | 14,947 | ||||||||||||||
Intangible assets with finite lives, net | 1,528 | — | 4,509 | — | — | 6,037 | ||||||||||||||
Deferred financing costs | 7,642 | — | — | — | — | 7,642 | ||||||||||||||
Long-term restricted cash | 810 | — | — | — | — | 810 | ||||||||||||||
Other assets | 1,588 | — | — | — | — | 1,588 | ||||||||||||||
Total assets | $ | 144,805 | $ | ` | $ | 48,536 | $ | — | $ | (30,177 | ) | $ | 163,164 | |||||||
LIABILITIES AND DEFICIT | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Line of credit | $ | 6 | $ | — | $ | — | $ | — | $ | — | $ | 6 | ||||||||
Accounts payable | 9,691 | — | 5,692 | — | (2,328 | ) | 13,055 | |||||||||||||
Accrued expenses | 16,289 | — | 4,026 | — | — | 20,315 | ||||||||||||||
Pension and retirement liabilities - current portion | 626 | — | — | — | — | 626 | ||||||||||||||
Customer advances and deferred revenue | 744 | — | 9,258 | — | — | 10,002 | ||||||||||||||
Total current liabilities | 27,356 | — | 18,976 | — | (2,328 | ) | 44,004 | |||||||||||||
Long term debt | 247,567 | — | — | — | — | 247,567 | ||||||||||||||
Pension and retirement liabilities | 20,261 | — | — | — | — | 20,261 | ||||||||||||||
Other long-term liabilities | 908 | — | 1,515 | — | — | 2,423 | ||||||||||||||
Total long-term liabilities | 268,736 | — | 1,515 | — | — | 270,251 | ||||||||||||||
Total liabilities | 296,092 | — | 20,491 | — | (2,328 | ) | 314,255 | |||||||||||||
Commitments and contingencies (Notes 7 & 11) | ||||||||||||||||||||
Deficit: | ||||||||||||||||||||
Total (deficit) equity | (151,287 | ) | — | 28,045 | — | (27,849 | ) | (151,091 | ) | |||||||||||
Total liabilities and debt | $ | 144,805 | $ | — | $ | 48,536 | $ | — | $ | (30,177 | ) | $ | 163,164 | |||||||
Condensed Consolidating Statement of Income | ||||||||||||||||||||
For the Year Ended December 31, 2013 | ||||||||||||||||||||
(As Restated) | ||||||||||||||||||||
Colt | Colt | Total | Total Non- | Consolidating | ||||||||||||||||
Defense | Finance | Guarantor | Guarantor | /Eliminating | ||||||||||||||||
LLC | Corp | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
Net sales | $ | 206,115 | $ | — | $ | 114,959 | $ | — | $ | (50,191 | ) | $ | 270,883 | |||||||
Cost of sales | 152,766 | — | 93,843 | — | (49,497 | ) | 197,112 | |||||||||||||
Gross Profit | 53,349 | — | 21,116 | — | (694 | ) | 73,771 | |||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 10,799 | — | 3,343 | — | — | 14,142 | ||||||||||||||
Research and development | 2,452 | — | 3,674 | — | — | 6,126 | ||||||||||||||
General and administrative | 11,125 | — | 4,546 | — | (382 | ) | 15,289 | |||||||||||||
Business development | 575 | — | — | — | — | 575 | ||||||||||||||
Certain transaction costs | — | — | 1,147 | — | — | 1,147 | ||||||||||||||
Restructuring costs | 479 | — | 303 | — | — | 782 | ||||||||||||||
Gain on effective settlement of contract | (15,264 | ) | — | — | — | — | (15,264 | ) | ||||||||||||
Total operating expenses | 10,166 | — | 13,013 | — | (382 | ) | 22,797 | |||||||||||||
Operating income (loss) | 43,183 | — | 8,103 | — | (312 | ) | 50,974 | |||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 24,294 | — | 3,393 | — | — | 27,687 | ||||||||||||||
Other (income)/expense, net | (1,722 | ) | — | 412 | — | 94 | (1,216 | ) | ||||||||||||
Total other expenses, net | 22,572 | — | 3,805 | — | 94 | 26,471 | ||||||||||||||
Income (loss) before provision for income taxes | 20,611 | — | 4,298 | — | (406 | ) | 24,503 | |||||||||||||
Income tax expense | 183 | — | 1,453 | — | — | 1,636 | ||||||||||||||
Equity in income from operations of consolidated subsidiaries | 2,618 | — | — | — | (2,618 | ) | — | |||||||||||||
Net income (loss) | $ | 23,046 | $ | — | $ | 2,845 | $ | — | $ | (3,024 | ) | $ | 22,867 | |||||||
Comprehensive income (loss) | $ | 27,565 | $ | — | $ | 1,732 | $ | — | $ | (1,928 | ) | $ | 27,369 | |||||||
Condensed Consolidating Statement of Income | ||||||||||||||||||||
For the Year Ended December 31, 2012 | ||||||||||||||||||||
(As Revised) | ||||||||||||||||||||
Colt | Colt | Total | Total Non- | Consolidating | ||||||||||||||||
Defense | Finance | Guarantor | Guarantor | /Eliminating | ||||||||||||||||
LLC | Corp | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
Net sales | $ | 169,050 | $ | — | $ | 45,377 | $ | — | $ | (811 | ) | $ | 213,616 | |||||||
Cost of sales | 133,371 | — | 29,776 | — | (525 | ) | 162,622 | |||||||||||||
Gross Profit | 35,679 | — | 15,601 | — | (286 | ) | 50,994 | |||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 10,766 | — | 2,351 | — | — | 13,117 | ||||||||||||||
Research and development | 2,497 | — | 2,250 | — | — | 4,747 | ||||||||||||||
General and administrative | 10,985 | — | 3,300 | — | — | 14,285 | ||||||||||||||
Business development | 881 | — | — | — | — | 881 | ||||||||||||||
Total operating expenses | 25,129 | — | 7,901 | — | — | 33,030 | ||||||||||||||
Operating income (loss) | 10,550 | — | 7,700 | — | (286 | ) | 17,964 | |||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 24,502 | — | 77 | — | — | 24,579 | ||||||||||||||
Other (income)/expense, net | (2,315 | ) | — | 743 | — | — | (1,572 | ) | ||||||||||||
Total other expenses, net | 22,187 | — | 820 | — | — | 23,007 | ||||||||||||||
Income (loss) before provision for income taxes | (11,637 | ) | — | 6,880 | — | (286 | ) | (5,043 | ) | |||||||||||
Income tax expense | 330 | — | 1,485 | — | — | 1,815 | ||||||||||||||
Equity in income from operations of consolidated subsidiaries | 4,912 | — | — | — | (4,912 | ) | — | |||||||||||||
Net income (loss) | $ | (7,055 | ) | $ | — | $ | 5,395 | $ | — | $ | (5,198 | ) | $ | (6,858 | ) | |||||
Comprehensive income (loss) | $ | (7,766 | ) | $ | — | $ | 5,912 | $ | — | $ | (5,716 | ) | $ | (7,570 | ) | |||||
Condensed Consolidating Statement of Income | ||||||||||||||||||||
For the Year Ended December 31, 2011 | ||||||||||||||||||||
(As Revised) | ||||||||||||||||||||
Colt | Colt | Total | Total Non- | Consolidating | ||||||||||||||||
Defense | Finance | Guarantor | Guarantor | /Eliminating | ||||||||||||||||
LLC | Corp | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
Net sales | $ | 148,711 | $ | — | $ | 60,769 | $ | — | $ | (664 | ) | $ | 208,816 | |||||||
Cost of sales | 106,707 | — | 37,808 | — | (664 | ) | 143,851 | |||||||||||||
Gross Profit | 42,004 | — | 22,961 | — | — | 64,965 | ||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 10,959 | — | 2,821 | — | — | 13,780 | ||||||||||||||
Research and development | 2,654 | — | 2,924 | — | — | 5,578 | ||||||||||||||
General and administrative | 10,116 | — | 2,982 | — | — | 13,098 | ||||||||||||||
Business development | 504 | — | — | — | — | 504 | ||||||||||||||
Total operating expenses | 24,233 | — | 8,727 | — | — | 32,960 | ||||||||||||||
Operating income (loss) | 17,771 | — | 14,234 | — | — | 32,005 | ||||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 23,991 | — | 19 | — | — | 24,010 | ||||||||||||||
Other (income)/expense, net | (3,700 | ) | — | 1,497 | — | 2,039 | (164 | ) | ||||||||||||
Total other expenses, net | 20,291 | — | 1,516 | — | 2,039 | 23,846 | ||||||||||||||
Income (loss) before provision for income taxes | (2,520 | ) | — | 12,718 | — | (2,039 | ) | 8,159 | ||||||||||||
Income tax expense | 304 | — | 2,867 | — | — | 3,171 | ||||||||||||||
Equity in income from operations of consolidated subsidiaries | 7,812 | — | — | — | (7,812 | ) | — | |||||||||||||
Net income (loss) | $ | 4,988 | $ | — | $ | 9,851 | $ | — | $ | (9,851 | ) | $ | 4,988 | |||||||
Comprehensive income (loss) | $ | (658 | ) | $ | — | $ | 9,407 | $ | — | $ | (9,407 | ) | $ | (658 | ) | |||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Condensed Consolidating Statements of Cash Flows | ||||||||||||||||||||
(As Restated) | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Colt | Colt | Total | Total Non- | Consolidating | ||||||||||||||||
Defense | Finance | Guarantor | Guarantor | /Eliminating | ||||||||||||||||
LLC | Corp | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
Operating Activities | ||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 5,254 | $ | — | $ | (2,217 | ) | $ | — | $ | — | $ | 3,037 | |||||||
Investing Activities | ||||||||||||||||||||
Purchase of property and equipment | (6,385 | ) | — | (2,213 | ) | — | — | (8,598 | ) | |||||||||||
Business acquisition, net of cash acquired and reinvested Merger consideration | (59,488 | ) | — | — | — | — | (59,488 | ) | ||||||||||||
Investment in subsidiary | (13,924 | ) | — | 13,924 | — | — | — | |||||||||||||
Change in restricted cash | 244 | — | — | — | — | 244 | ||||||||||||||
Net cash (used in) provided by investing activities | (79,553 | ) | — | 11,711 | — | — | (67,842 | ) | ||||||||||||
Financing Activities | ||||||||||||||||||||
Debt issuance costs | (2,120 | ) | — | — | — | — | (2,120 | ) | ||||||||||||
Proceeds from the issuance of long-term debt | 47,707 | — | — | — | — | 47,707 | ||||||||||||||
Term loan and note repayments | — | — | (1,250 | ) | — | — | (1,250 | ) | ||||||||||||
Line of credit advances/repayments, net | 7,077 | — | — | — | — | 7,077 | ||||||||||||||
Capital lease obligation payments | — | — | (393 | ) | — | — | (393 | ) | ||||||||||||
Purchase of common units | (14,000 | ) | — | — | — | — | (14,000 | ) | ||||||||||||
Proceeds from the issuance of common units, net of reinvested consideration proceeds | 5,000 | — | — | — | — | 5,000 | ||||||||||||||
Distribution from subsidiary | 6,257 | — | (6,257 | ) | — | — | — | |||||||||||||
Distributions to Members’ | (6,370 | ) | — | — | — | — | (6,370 | ) | ||||||||||||
Net cash provided by (used in) financing activities | 43,551 | — | (7,900 | ) | — | — | 35,651 | |||||||||||||
Effect of exchange rates on cash and cash equivalents | — | — | (625 | ) | — | — | (625 | ) | ||||||||||||
Change in cash and cash equivalents | (30,748 | ) | — | 969 | — | — | (29,779 | ) | ||||||||||||
Cash and cash equivalents, beginning of period | 33,647 | — | 8,726 | — | — | 42,373 | ||||||||||||||
Cash and cash equivalents, end of period | $ | 2,899 | $ | — | $ | 9,695 | $ | — | $ | — | $ | 12,594 | ||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Condensed Consolidating Statements of Cash Flows | ||||||||||||||||||||
(As Revised) | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
As Restated | ||||||||||||||||||||
Colt | Colt | Total | Total Non- | Consolidating | ||||||||||||||||
Defense | Finance | Guarantor | Guarantor | /Eliminating | ||||||||||||||||
LLC | Corp | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
Operating Activities | ||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 9,503 | $ | — | $ | 2,920 | $ | — | $ | — | $ | 12,423 | ||||||||
Investing Activities | ||||||||||||||||||||
Purchase of property and equipment | (3,481 | ) | — | (929 | ) | — | — | (4,410 | ) | |||||||||||
Proceeds from sale of property | — | — | 66 | — | — | 66 | ||||||||||||||
Change in restricted cash | 464 | — | — | — | — | 464 | ||||||||||||||
Net cash (used in) provided by investing activities | (3,017 | ) | — | (863 | ) | — | — | (3,880 | ) | |||||||||||
Financing Activities | ||||||||||||||||||||
Revolver advances | 6 | — | — | — | — | 6 | ||||||||||||||
Capital lease obligation payments | (1,148 | ) | — | — | — | — | (1,148 | ) | ||||||||||||
Distributions to Members’ | (3,343 | ) | — | — | — | — | (3,343 | ) | ||||||||||||
Net cash provided by (used in) financing activities | (4,485 | ) | — | — | — | — | (4,485 | ) | ||||||||||||
Effect of exchange rates on cash and cash equivalents | — | — | 79 | — | — | 79 | ||||||||||||||
Change in cash and cash equivalents | 2,001 | — | 2,136 | — | — | 4,137 | ||||||||||||||
Cash and cash equivalents, beginning of period | 31,646 | — | 6,590 | — | — | 38,236 | ||||||||||||||
Cash and cash equivalents, end of period | $ | 33,647 | $ | — | $ | 8,726 | $ | — | $ | — | $ | 42,373 | ||||||||
Condensed Consolidating Statements of Cash Flows | ||||||||||||||||||||
For the Year Ended December 31, 2011 | ||||||||||||||||||||
Colt | Colt | Total | Total Non- | Consolidating | Consolidated | |||||||||||||||
Defense | Finance | Guarantor | guarantor | /Eliminating | ||||||||||||||||
LLC | Corp. | Subsidiaries | Subsidiaries | Adjustments | ||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net cash provided by operating activities | $ | (16,222 | ) | $ | — | $ | 17,566 | $ | — | $ | (2,039 | ) | $ | (695 | ) | |||||
Investing Activities | ||||||||||||||||||||
Purchases of property and equipment | (4,009 | ) | — | (1,591 | ) | — | — | (5,600 | ) | |||||||||||
Proceeds from sale of property | 12 | — | — | — | — | 12 | ||||||||||||||
Change in restricted cash | (1,380 | ) | — | — | — | — | (1,380 | ) | ||||||||||||
Net cash used in investing activities | (5,377 | ) | — | (1,591 | ) | — | — | (6,968 | ) | |||||||||||
Financing Activities | ||||||||||||||||||||
Debt issuance costs | (1,636 | ) | — | — | — | — | (1,636 | ) | ||||||||||||
Capital lease obligation payments | (1,229 | ) | — | — | — | — | (1,229 | ) | ||||||||||||
Colt Canada distribution of share capital | 15,373 | (17,412 | ) | — | 2,039 | — | ||||||||||||||
Distributions to members | (12,889 | ) | — | — | — | — | (12,889 | ) | ||||||||||||
Net cash used in financing activities | (381 | ) | — | (17,412 | ) | — | 2,039 | (15,754 | ) | |||||||||||
Effects of exchange rates of cash | — | — | 209 | — | — | 209 | ||||||||||||||
Change in cash and cash equivalents | (21,980 | ) | — | (1,228 | ) | — | — | (23,208 | ) | |||||||||||
Cash and cash equivalents, beginning of period | 53,626 | — | 7,818 | — | — | 61,444 | ||||||||||||||
Cash and cash equivalents, end of period | $ | 31,646 | $ | — | $ | 6,590 | $ | — | $ | — | $ | 38,236 | ||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events | |
Subsequent Events | 20. Subsequent Events |
2014 Legal Entity Restructuring | |
Effective January 1, 2014, Colt effected a legal entity restructuring whereby Colt Defense and New Colt (see Note 3, “Acquisition”) contributed their assets and operations to Colt’s Manufacturing. This contribution created a combined operating entity for the Company’s domestic operations. | |
Effective January 1, 2014, the Colt Defense LLC Bargaining Unit Employees’ Pension Plan merged with the Colt’s Manufacturing Company LLC Bargaining Unit Employees’ Pension Plan. The merged plan retained the name of “Colt’s Manufacturing Company LLC Bargaining Unit Employees’ Pension Plan.” | |
Effective January 1, 2014, the Colt Defense LLC Salaried Retirement Income Plan merged with the Colt’s Manufacturing Company LLC Salaried Retirement Income Plan. The merged plan was renamed “Colt Retirement Defined Benefit Plan.” | |
Effective January 1, 2014, the Colt Defense LLC 401(k) Savings Plan merged with the Colt’s Manufacturing Company LLC 401(k) Plan. The merged plan was renamed “Colt Retirement Savings Plan.” | |
Going Concern Uncertainty Disclosure | |
The Company’s financial statements are presented in this report on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has experienced liquidity challenges as a result of several business trends including the continued decline in market demand for the Company’s commercial modern sporting rifle (“MSR”), declines in demand for the Company’s commercial handguns and delays in anticipated timing of U.S. Government and certain international sales. These business trends will continue to adversely impact the Company’s operations. These factors have materially affected the Company’s liquidity, including its ability to repay existing indebtedness as it becomes due and to meet other current obligations, including, as discussed below, the probability that the Company will not be able to make its May 15, 2015 Senior Notes interest payment. This factor raises substantial doubt about the Company’s ability to continue as a going concern. | |
The Company is not in compliance under the Indenture governing its Senior Notes because it has not yet filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2014. In the event that the Company receives a notice from the trustee under the Indenture governing our Senior Notes or holders of at least 25% of the aggregate principal amount of its Senior Notes and does not cure such non-compliance within 60 days from the receipt of such notice, the principal and accrued and unpaid interest on its outstanding Senior Notes may be accelerated. As of May 7, 2015 the Company has not received such notice. The Company is otherwise in compliance with financial and other covenants contained in its existing debt agreements, but it may not be able to maintain compliance with such financial and other covenants in the future. | |
Management’s plan to mitigate the business risk associated with the Company’s increased liquidity challenges include: (i) seeking revenue growth across all sales channels, (ii) executing initiatives designed to optimize the Company’s performance and reduce costs, (iii) managing inventory levels for positive cash flow, (iv) working closely with U.S. Government regulators to obtain timely approval of international sales and (v) seeking ways to restructure the Company’s unsecured debt to reduce overall debt service costs. In conjunction with the Company’s plan to restructure its unsecured debt, the Company announced on April 16, 2015 that it has commenced an exchange offer for its Senior Notes. See “Restructuring Transaction” below. | |
Refinancing of $70 Million Senior Secured Term Loan | |
On November 17, 2014, the Company entered into a $70.0 million senior secured term loan facility with Wilmington Savings Fund Society, FSB, as agent, and Morgan Stanley Senior Funding Inc., as lender, (the “MS Term Loan”) which replaced the Company’s former Term Loan agreement (see Note 6 “Notes Payable and Long-Term Debt — Term Loan”) and provided the Company a net amount of $4.1 million of additional liquidity. The $70 million of proceeds from the MS Term Loan were disbursed as follows: $53.0 million for repayment of the Company’s former Term Loan principal, interest and premium, $10.9 million for its Senior Notes interest payment paid on November 17, 2014, $2.0 million for fees and expenses associated with the MS Term Loan and $4.1 million of net proceeds remitted to the Company for additional liquidity. The MS Term Loan (i) does not contain financial covenants or amortization provisions similar to those provisions in the Company’s former Term Loan agreement; (ii) provides for the accrual of interest on an 8% cash and 2% payment-in-kind basis; and (iii) will mature no later than August 15, 2018 subject to the satisfaction of certain conditions. The former Term Loan agreement did not permit pre-payment at such time and thus, the Company agreed with the former Term Loan lenders to pay a premium of $4.3 million in addition to the outstanding principal and accrued interest balances. | |
The lenders under the Company’s former Credit Agreement also agreed to amendments to the Credit Agreement (see Note 6 “Notes Payable and Long-Term Debt”) necessary for the Company to enter into the MS Term Loan. These amendments included, among other things, (i) reducing the senior secured revolving loans available from $50.0 million to $33.0 million and (ii) incorporating a minimum $7.5 million excess availability threshold for borrowings. The former Credit Agreement also contained customary events of default including, but not limited to, no material litigation or defaults under material contracts and no material adverse change. In connection with any borrowing requests, management must certify, among other things, to no default or event of default. | |
The MS Term Loan also contained a covenant requiring the Company to deliver audited financial statements within 90 days following each fiscal year, together with an audit opinion that does not contain a “going concern” explanatory paragraph. The Company entered into Amendment No. 1 to the MS Term Loan on December 16, 2014 waiving the requirement that the consolidated financial statements for the year ended December 31, 2013 does not contain an audit opinion that contains a “going concern” or like qualification or exception in connection with the filing of this 2013 Form 10-K/A. | |
Refinancing of $33 Million Senior Secured Term Loan Facility | |
On February 9, 2015, the Company entered into a credit agreement (“Cortland Credit Agreement”) dated as of February 9, 2015 with Cortland Capital Market Services LLC (“Cortland”) as agent, and certain lenders party thereto from time to time. The Cortland Credit Agreement provides for a term loan of $33.0 million, which includes the arrangement of certain cash collateralized letters of credit in an aggregate face amount of up to $7.0 million. Under the Cortland Credit Agreement, the Company’s obligations are secured by a first-priority security interest in substantially all of its assets (other than intellectual property), including accounts receivable, inventory and certain other collateral, and a second-priority security interest in its intellectual property. The Cortland Credit Agreement provides for the accrual of interest at a fixed rate of 10% per annum and matures August 15, 2018. The Cortland Credit Agreement limits the Company’s ability to incur additional indebtedness, make certain investments or restricted payments, pay dividends (other than for member distributions to support member LLC-related taxes) and merge, acquire or sell assets. The Cortland Credit Agreement requires the Company to comply with financial covenants which primarily relate to maintaining a minimum amount of collateral (measured as the sum of cash and cash equivalents, inventory and accounts receivable, each as determined in accordance with the Cortland Credit Agreement) and a minimum amount of inventory. As of the date of this form 10-K/A, the Company is in compliance with the minimum collateral and minimum inventory covenants. | |
The Cortland Credit Agreement also contains customary events of default including, but not limited to, no material litigation or defaults under material contracts and no material adverse change. | |
The $33.0 million of proceeds from the Cortland Credit Agreement were disbursed as follows: $12.1 million were used to repay all amounts outstanding under the Company’s former Credit Agreement dated as of September 29, 2011 with Wells Fargo Capital Finance, LLC, $5.3 million for cash collateral for certain letters of credit, $2.4 million to pay fees incurred in connection with the consummation of the Cortland Credit Agreement and the termination of the former Credit Agreement and $13.2 million for additional liquidity and for general working capital purposes. | |
The former Credit Agreement and all commitments to lend thereunder were terminated on February 9, 2015. At that time, the Company had approximately $4.8 million of outstanding letters of credit under the former Credit Agreement. Approximately $5.3 million of proceeds from the Cortland Credit Agreement were utilized to collateralize letters of credit arranged by Cortland, which backed the outstanding letters of credit under the former Credit Agreement and the availability of cash collateralized letters of credit under the Cortland Credit Agreement was reduced to approximately $1.7 million. | |
The lenders under the Company’s existing MS Term Loan dated as of November 17, 2014 agreed to amendments to the MS Term Loan necessary for the Company to enter into the Cortland Credit Agreement. Such amendments were effective on February 9, 2015. | |
Restructuring Transaction | |
On April 14, 2015, the Company commenced an exchange offer (the “Exchange Offer”) and consent solicitation of its Senior Notes and a solicitation of acceptances to a prepackaged plan of reorganization (the “Prepackaged Plan”). | |
The Exchange Offer will offer the Company’s 10.0% Junior Priority Senior Secured Notes due 2023 (the “New Notes”) and related guarantees for any and all outstanding Senior Notes. Holders of the Senior Notes will be offered New Notes in the amount of $300, plus accrued and unpaid interest, per $1,000 principal amount of Senior Notes (not in thousands). In addition, holders of the Senior Notes who validly tender their Senior Notes and validly vote to accept the Prepackaged Plan prior to midnight, New York City time, on May 11th, 2015, will receive an additional consent payment of $50 per $1,000 principal amount of Senior Notes (not in thousands). The New Notes will mature on November 15, 2023. Interest on the New Notes will accrue from the issue date of the New Notes at the rate of 10.00% per annum in cash. | |
The closing of the Exchange Offer is conditioned upon, among other things, the valid tender of no less than 98% of the aggregate principal amount of Senior Notes. In the event that the conditions to the Exchange Offer are not satisfied and such conditions are not waived by the Company, the Company would need to determine whether it would be more advantageous to file petitions under Chapter 11 of the Bankruptcy Code to consummate the Prepackaged Plan. Therefore, the Company and its subsidiaries are simultaneously soliciting holders of the Senior Notes to approve the Prepackaged Plan as an alternative to the Exchange Offer. If the restructuring is accomplished through the Prepackaged Plan, 100% of the Senior Notes, plus accrued and unpaid interest, will be cancelled and holders of the Senior Notes will receive their pro rata share of the New Notes. The Company and its subsidiaries, however, have not made any affirmative decision to proceed with any bankruptcy filing at this time. | |
Consummation of the Prepackaged Plan through an in-court restructuring would have principally the same effect as if 100% of the holders of Senior Notes had tendered their Senior Notes in the Exchange Offer, except a consent payment, if any, will only be payable upon successful completion of the Exchange Offer. To obtain requisite acceptance of the Prepackaged Plan by virtue of the Bankruptcy Code’s plan confirmation requirements, holders of the Senior Notes representing at least two-thirds in amount and more than one half in number of those who actually vote must accept the Prepackaged Plan. | |
If the Exchange Offer or the Prepackaged Plan is not consummated for any reason, the Company may need to seek relief under the Bankruptcy Code without the benefit of a plan of reorganization that has been pre-approved by its creditors. The Company believes that seeking relief under the Bankruptcy Code, other than in connection with the Prepackaged Plan, could materially and adversely affect the relationships between the Company and its existing and potential customers, employees, partners and other stakeholders and subject it to other direct and indirect adverse consequences. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||||
Restatement of Previously Issued Consolidated Financial Statements | Restatement of Previously Issued Consolidated Financial Statements | |||||||||||||||||||
The Company is restating its previously issued consolidated financial statements and related disclosures for the year ended December 31, 2013 (the “Restated Period”). The Company is revising its unaudited interim financial information for the first three quarters in the fiscal year ended December 31, 2013, the fourth quarter and year ended December 31, 2012 and the year ended December 31, 2011, (the “Revised Periods”). | ||||||||||||||||||||
The restatement is the result of the Company’s correction of a financial statement error attributable to the lack of recognition of the impact of a contract modification related to the M240 machine gun program (the “M240 Program”) for the U.S. Government in the Company’s fourth quarter 2013 results. In conjunction with the correction of the M240 Program error other previously recorded out-of-period errors which were immaterial to the consolidated financial statements individually or in the aggregate prior to the discovery of the M240 Program error were also adjusted to be reflected in the proper period along with the reclassification of business development expenses from other (income) / expense to operating income. | ||||||||||||||||||||
The Company assessed the impact of the M240 Program error, including the impact of previously unrecorded immaterial out-of-period adjustments and the reclassification of business development expenses from other (income)/expense to operating income on its prior interim and annual consolidated financial statements and concluded that the combined impact of these errors was material to the fourth quarter and year-ended consolidated financial statements as of December 31, 2013. Accordingly, the Company is restating the fourth quarter of 2013 and the year then ended. See Note 13, “Commitments and Contingencies”, for the impact on the Company’s 2013 fourth quarter results. The Company determined the combined impact of these adjustments was not material to the first three quarters in the fiscal year ended December 31, 2013, the fourth quarter and year-ended consolidated financial statements as of December 31, 2012 and the year ended December 31, 2011. Accordingly, the Company revised the above mentioned periods consolidated financial statements. | ||||||||||||||||||||
The aggregate impact of correcting the error related to the M240 Program, correcting previously recorded immaterial out-of-period adjustments and the reclassification of business development expenses for the years ended December 31, 2013, 2012 and 2011, on the Company’s consolidated statements of operations and on its consolidated balance sheets was as follows: | ||||||||||||||||||||
Adjustments to | ||||||||||||||||||||
Previously Reported Income | ||||||||||||||||||||
Statement - Income / (Expense) | ||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||
For the years ended | 2013 | 2012 | 2011 | |||||||||||||||||
Net sales | $ | (7,065 | )(a) | $ | 262 | — | ||||||||||||||
Cost of sales | (4,129 | )(b) | — | — | ||||||||||||||||
Gross profit | (2,936 | )(c) | 262 | — | ||||||||||||||||
Business development | (575 | )(d) | (881 | )(d) | (504 | )(d) | ||||||||||||||
Operating income | (3,501 | )(e) | (619 | )(f) | (504 | )(d) | ||||||||||||||
Other (income) / expense | (575 | )(d) | (881 | )(d) | (504 | )(d) | ||||||||||||||
Income tax | (59 | ) | 65 | — | ||||||||||||||||
Net income (loss) | (2,867 | )(g) | 197 | — | ||||||||||||||||
(a) Primarily as a result of a ($6,820) reduction in revenue related to a M240 Program contract modification, see Note 13, “Commitments and Contingencies”. | ||||||||||||||||||||
(b) Primarily as a result of a ($4,132) reduction in cost of sales related to a M240 Program contract obligation expense, see Note 13, “Commitments and Contingencies”. | ||||||||||||||||||||
(c) Primarily as a result of a ($6,820) reduction in revenue related to a M240 Program contract modification and a ($4,132) reduction in cost of sales related to a M240 Program contract obligation expense, see Note 13, “Commitments and Contingencies”. | ||||||||||||||||||||
(d) Reclassification of transaction costs incurred in connection with contemplated merger and acquisition activities from other (income)/expense to business development. | ||||||||||||||||||||
(e) Primarily as a result of the ($6,820) reduction in revenue related to a M240 Program contact modification, the ($4,132) reduction in cost of sales related to a M240 Program contract obligation expense and a $575 reclassification of business development costs from other(income)/expense to business development. | ||||||||||||||||||||
(f) Primarily as the result of the reclassification of $881 of costs incurred in connection with contemplated merger and acquisition activities from other(income)/expense to business development and an adjustment to Colt Canada net sales of $262 related to the timing of recognition of certain sales. | ||||||||||||||||||||
(g) Primarily as a result of the M240 Program contract modification and contract obligation expense. | ||||||||||||||||||||
Adjustments to | ||||||||||||||||||||
Previously Reported Balance | ||||||||||||||||||||
Sheet - Increase / (Decrease) | ||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||
For the years ended | 2013 | 2012 | 2011 | |||||||||||||||||
Accounts receivable | $ | 1 | $ | 261 | — | |||||||||||||||
Other current assets | (2 | ) | (65 | ) | — | |||||||||||||||
Accrued expenses | (4,133 | )(a) | — | — | ||||||||||||||||
Customer advances and deferred revenue | 6,820 | (b) | — | — | ||||||||||||||||
Accumulated deficit | (2,670 | )(c) | 197 | — | ||||||||||||||||
Accumulated other comprehensive loss | (18 | ) | (1 | ) | — | |||||||||||||||
(a) Primarily related to the reduction in accrued expenses associated with the ($4,132) reduction in cost of sales related to a M240 Program contract obligation expense, see Note 13, “Commitments and Contingencies”. | ||||||||||||||||||||
(b) As a result of recording a ($6,820) reduction in revenue related to a M240 Program contract modification, see Note 13, “Commitments and Contingencies.” | ||||||||||||||||||||
(c) Primarily as a result of the M240 Program contract modification and contract obligation expense. | ||||||||||||||||||||
The correction of the error related to the M240 Program in the Company’s consolidated statements of changes in cash flows for the year ended December 31, 2013 resulted in a $2.7 million decrease in Net income (loss) and a net $2.7 million increase in operating liabilities and didn’t impact previously recorded cash provided by operating activities. | ||||||||||||||||||||
The Company corrected certain other out of period errors which were not material to the consolidated financial statements individually or in aggregate prior to the discovery of the M240 Program error by reflecting them in the proper period. Correction of these out-of-period adjustments had the combined effect on the consolidated statements of operations of increasing (decreasing) net income in the four quarters of fiscal 2013 by $59, $229, ($288) and ($179), respectively and increasing net income in the fourth quarter of fiscal 2012 by $197. The largest contributors to these out-of-period adjustments relate to the timing of the recognition of certain sales transactions and customer discounts along with the timing of recognition of certain inventory and pension related expenses. | ||||||||||||||||||||
The aggregate impact of correcting previously unrecorded immaterial out-of-period adjustments and the reclassification of business development expenses for the first three quarters of fiscal 2013 on the Company’s consolidated statements of operations was as follows: | ||||||||||||||||||||
Adjustments to | ||||||||||||||||||||
Previously Reported Income | ||||||||||||||||||||
Statement - Income / (Expense) | ||||||||||||||||||||
March 31, | June 30, | September 29, | ||||||||||||||||||
For the quarter ended | 2013 | 2013 | 2013 | |||||||||||||||||
Net sales | $ | — | $ | (23 | ) | $ | (208 | ) | ||||||||||||
Cost of sales | 14 | 65 | (168 | ) | ||||||||||||||||
Gross profit | (14 | ) | (88 | ) | (40 | ) | ||||||||||||||
Selling and commissions | (79 | ) | (130 | ) | 221 | |||||||||||||||
Research and development | 1 | 1 | 4 | |||||||||||||||||
General and administrative | 5 | (222 | ) | 10 | ||||||||||||||||
Business development | (75 | ) | (169 | ) | (463 | ) | ||||||||||||||
Operating income | (16 | ) | 94 | (738 | )(a) | |||||||||||||||
Other (income) / expense | (75 | ) | (192 | ) | (440 | ) | ||||||||||||||
Income tax | — | 57 | (10 | ) | ||||||||||||||||
Net income (loss) | 59 | 229 | (288 | ) | ||||||||||||||||
(a) Primarily as a result of the reclassification of costs incurred in connection with contemplated merger and acquisition activities from other (income)/expense to business development and the timing of recognition of certain professional fee accruals. | ||||||||||||||||||||
Comparison of restated financial statements to financial statements as previously reported | ||||||||||||||||||||
The following tables compare the Company’s previously reported consolidated balance sheet as of December 31, 2013 and 2012, and the previously reported consolidated statements of operations for the year ended December 31, 2013, 2012 and 2011, and the previously reported statements of comprehensive income (loss), changes in cash flows and changes in deficit for the years ended December 31, 2013 and 2012 to the corresponding financial statements for the Restated Period and the Revised Periods, as applicable. | ||||||||||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Balance Sheet | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
As Restated | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 12,594 | $ | — | $ | 12,594 | ||||||||||||||
Restricted cash | 771 | — | 771 | |||||||||||||||||
Accounts receivable, net | 22,481 | 1 | 22,482 | |||||||||||||||||
Inventories | 66,674 | — | 66,674 | |||||||||||||||||
Deferred tax assets | 954 | — | 954 | |||||||||||||||||
Other current assets | 5,964 | (2 | ) | 5,962 | ||||||||||||||||
Total current assets | 109,438 | (1 | ) | 109,437 | ||||||||||||||||
Property and equipment, net | 30,733 | — | 30,733 | |||||||||||||||||
Goodwill | 51,225 | — | 51,225 | |||||||||||||||||
Trademarks | 50,100 | — | 50,100 | |||||||||||||||||
Intangible assets with finite lives, net | 13,415 | — | 13,415 | |||||||||||||||||
Deferred financing costs | 7,742 | — | 7,742 | |||||||||||||||||
Long-term restricted cash | 572 | — | 572 | |||||||||||||||||
Other assets | 1,510 | — | 1,510 | |||||||||||||||||
Total assets | $ | 264,735 | $ | (1 | ) | $ | 264,734 | |||||||||||||
LIABILITIES AND DEFICIT | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Line of credit | $ | 7,083 | $ | — | 7,083 | |||||||||||||||
Accounts payable | 14,038 | — | 14,038 | |||||||||||||||||
Accrued expenses | 26,291 | (4,133 | ) | 22,158 | ||||||||||||||||
Pension and retirement liabilities - current portion | 1,085 | — | 1,085 | |||||||||||||||||
Customer advances and deferred revenue | 12,647 | 6,820 | 19,467 | |||||||||||||||||
Long-term debt current portion | 5,000 | — | 5,000 | |||||||||||||||||
Accrued distributions to members | 670 | — | 670 | |||||||||||||||||
Total current liabilities | 66,814 | 2,687 | 69,501 | |||||||||||||||||
Long term debt | 289,817 | — | 289,817 | |||||||||||||||||
Pension and retirement liabilities | 21,670 | — | 21,670 | |||||||||||||||||
Long-term deferred tax liability | 18,715 | — | 18,715 | |||||||||||||||||
Long-term distributions to members | 2,277 | — | 2,277 | |||||||||||||||||
Other long-term liabilities | 2,230 | — | 2,230 | |||||||||||||||||
Total long-term liabilities | 334,709 | — | 334,709 | |||||||||||||||||
Total liabilities | 401,523 | 2,687 | 404,210 | |||||||||||||||||
Deficit: | ||||||||||||||||||||
Accumulated deficit | (127,466 | ) | (2,670 | ) | (130,136 | ) | ||||||||||||||
Accumulated other comprehensive loss | (9,322 | ) | (18 | ) | (9,340 | ) | ||||||||||||||
Total deficit | (136,788 | ) | (2,688 | ) | (139,476 | ) | ||||||||||||||
Total liabilities and debt | $ | 264,735 | $ | (1 | ) | $ | 264,734 | |||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Balance Sheet | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
As Revised | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 42,373 | $ | — | $ | 42,373 | ||||||||||||||
Restricted cash | 777 | — | 777 | |||||||||||||||||
Accounts receivable, net | 22,683 | 261 | 22,944 | |||||||||||||||||
Inventories | 40,561 | — | 40,561 | |||||||||||||||||
Deferred tax assets | 185 | — | 185 | |||||||||||||||||
Other current assets | 3,231 | (65 | ) | 3,166 | ||||||||||||||||
Total current assets | 109,810 | 196 | 110,006 | |||||||||||||||||
Property and equipment, net | 22,134 | — | 22,134 | |||||||||||||||||
Goodwill | 14,947 | — | 14,947 | |||||||||||||||||
Trademarks | — | — | — | |||||||||||||||||
Intangible assets with finite lives, net | 6,037 | — | 6,037 | |||||||||||||||||
Deferred financing costs | 7,642 | — | 7,642 | |||||||||||||||||
Long-term restricted cash | 810 | — | 810 | |||||||||||||||||
Other assets | 1,588 | — | 1,588 | |||||||||||||||||
Total assets | $ | 162,968 | $ | 196 | $ | 163,164 | ||||||||||||||
LIABILITIES AND DEFICIT | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Line of credit | $ | 6 | $ | — | 6 | |||||||||||||||
Accounts payable | 13,055 | — | 13,055 | |||||||||||||||||
Accrued expenses | 20,315 | — | 20,315 | |||||||||||||||||
Pension and retirement liabilities - current portion | 626 | — | 626 | |||||||||||||||||
Customer advances and deferred revenue | 10,002 | — | 10,002 | |||||||||||||||||
Long-term debt current portion | — | — | — | |||||||||||||||||
Accrued distributions to members | — | — | — | |||||||||||||||||
Total current liabilities | 44,004 | — | 44,004 | |||||||||||||||||
Long term debt | 247,567 | — | 247,567 | |||||||||||||||||
Pension and retirement liabilities | 20,261 | — | 20,261 | |||||||||||||||||
Long-term deferred tax liability | 1,515 | — | 1,515 | |||||||||||||||||
Long-term distributions to members | — | — | — | |||||||||||||||||
Other long-term liabilities | 908 | — | 908 | |||||||||||||||||
Total long-term liabilities | 270,251 | — | 270,251 | |||||||||||||||||
Total liabilities | 314,255 | — | 314,255 | |||||||||||||||||
Deficit: | ||||||||||||||||||||
Accumulated deficit | (137,446 | ) | 197 | (137,249 | ) | |||||||||||||||
Accumulated other comprehensive loss | (13,841 | ) | (1 | ) | (13,842 | ) | ||||||||||||||
Total deficit | (151,287 | ) | 196 | (151,091 | ) | |||||||||||||||
Total liabilities and deficit | $ | 162,968 | $ | 196 | $ | 163,164 | ||||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
As Restated | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Net sales | $ | 277,948 | $ | (7,065 | ) | $ | 270,883 | |||||||||||||
Cost of sales | 201,241 | (4,129 | ) | 197,112 | ||||||||||||||||
Gross profit | 76,707 | (2,936 | ) | 73,771 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 14,143 | (1 | ) | 14,142 | ||||||||||||||||
Research and development | 6,127 | (1 | ) | 6,126 | ||||||||||||||||
General and administrative | 15,297 | (8 | ) | 15,289 | ||||||||||||||||
35,567 | (10 | ) | 35,557 | |||||||||||||||||
Business development | — | 575 | 575 | |||||||||||||||||
Certain transaction costs (Note 3) | 1,147 | — | 1,147 | |||||||||||||||||
Restructuring costs (Note 4) | 782 | — | 782 | |||||||||||||||||
Gain on effective settlement of contract (Note 3) | (15,264 | ) | — | (15,264 | ) | |||||||||||||||
Total operating expenses | 22,232 | 565 | 22,797 | |||||||||||||||||
Operating income | 54,475 | (3,501 | ) | 50,974 | ||||||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 27,687 | — | 27,687 | |||||||||||||||||
Debt prepayment expense | — | — | — | |||||||||||||||||
Other (income)/expense, net | (641 | ) | (575 | ) | (1,216 | ) | ||||||||||||||
Total other expenses, net | 27,046 | (575 | ) | 26,471 | ||||||||||||||||
Income (loss) before provision for income taxes | 27,429 | (2,926 | ) | 24,503 | ||||||||||||||||
Income tax expense | 1,695 | (59 | ) | 1,636 | ||||||||||||||||
Net income (loss) | $ | 25,734 | $ | (2,867 | ) | $ | 22,867 | |||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
As Revised | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Net sales | $ | 213,354 | $ | 262 | $ | 213,616 | ||||||||||||||
Cost of sales | 162,622 | — | 162,622 | |||||||||||||||||
Gross profit | 50,732 | 262 | 50,994 | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 13,117 | — | 13,117 | |||||||||||||||||
Research and development | 4,747 | — | 4,747 | |||||||||||||||||
General and administrative | 14,285 | — | 14,285 | |||||||||||||||||
32,149 | — | 32,149 | ||||||||||||||||||
Business development | — | 881 | 881 | |||||||||||||||||
Certain transaction costs (Note 3) | — | — | — | |||||||||||||||||
Restructuring costs (Note 4) | — | — | — | |||||||||||||||||
Gain on effective settlement of contract (Note 3) | — | — | — | |||||||||||||||||
Total operating expenses | 32,149 | 881 | 33,030 | |||||||||||||||||
Operating income | 18,583 | (619 | ) | 17,964 | ||||||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 24,579 | — | 24,579 | |||||||||||||||||
Debt prepayment expense | — | — | — | |||||||||||||||||
Other (income)/expense, net | (691 | ) | (881 | ) | (1,572 | ) | ||||||||||||||
Total other expenses, net | 23,888 | (881 | ) | 23,007 | ||||||||||||||||
Income (loss) before provision for income taxes | (5,305 | ) | 262 | (5,043 | ) | |||||||||||||||
Income tax expense | 1,750 | 65 | 1,815 | |||||||||||||||||
Net income (loss) | $ | (7,055 | ) | $ | 197 | $ | (6,858 | ) | ||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2011 | ||||||||||||||||||||
As Revised | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Net sales | $ | 208,816 | $ | — | $ | 208,816 | ||||||||||||||
Cost of sales | 143,851 | — | 143,851 | |||||||||||||||||
Gross profit | 64,965 | — | 64,965 | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 13,780 | — | 13,780 | |||||||||||||||||
Research and development | 5,578 | — | 5,578 | |||||||||||||||||
General and administrative | 13,098 | — | 13,098 | |||||||||||||||||
32,456 | — | 32,456 | ||||||||||||||||||
Business development | — | 504 | 504 | |||||||||||||||||
Certain transaction costs (Note 3) | — | — | — | |||||||||||||||||
Restructuring costs (Note 4) | — | — | — | |||||||||||||||||
Gain on effective settlement of contract (Note 3) | — | — | — | |||||||||||||||||
Total operating expenses | 32,456 | 504 | 32,960 | |||||||||||||||||
Operating income | 32,509 | (504 | ) | 32,005 | ||||||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 24,010 | — | 24,010 | |||||||||||||||||
Debt prepayment expense | 295 | — | 295 | |||||||||||||||||
Other (income)/expense, net | 45 | (504 | ) | (459 | ) | |||||||||||||||
Total other expenses, net | 24,350 | (504 | ) | 23,846 | ||||||||||||||||
Income (loss) before provision for income taxes | 8,159 | — | 8,159 | |||||||||||||||||
Income tax expense | 3,171 | — | 3,171 | |||||||||||||||||
Net income (loss) | $ | 4,988 | $ | — | $ | 4,988 | ||||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statements of Comprehensive Income (Loss) | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
As Restated | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Net income (loss) | $ | 25,734 | $ | (2,867 | ) | $ | 22,867 | |||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||
Foreign currency translation adjustment: | ||||||||||||||||||||
Foreign currency translation gains (losses) | (1,872 | ) | (17 | ) | (1,889 | ) | ||||||||||||||
Pension and postretirement benefit liabilities: | ||||||||||||||||||||
Other comprehensive income (loss) arising during the period | 5,890 | — | 5,890 | |||||||||||||||||
Reclassification adjustment for unrecognized prior service costs and unrecognized loss included in net income (loss) | 501 | — | 501 | |||||||||||||||||
6,391 | — | 6,391 | ||||||||||||||||||
Comprehensive income (loss) | $ | 30,253 | $ | (2,884 | ) | $ | 27,369 | |||||||||||||
December 31, 2012 | ||||||||||||||||||||
As Revised | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Net income (loss) | $ | (7,055 | ) | $ | 197 | $ | (6,858 | ) | ||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||
Foreign currency translation adjustment: | ||||||||||||||||||||
Foreign currency translation gains (losses) | 518 | (1 | ) | 517 | ||||||||||||||||
Pension and postretirement benefit liabilities: | ||||||||||||||||||||
Other comprehensive income (loss) arising during the period | (2,322 | ) | — | (2,322 | ) | |||||||||||||||
Reclassification adjustment for unrecognized prior service costs and unrecognized loss included in net income (loss) | 1,093 | — | 1,093 | |||||||||||||||||
(1,229 | ) | — | (1,229 | ) | ||||||||||||||||
Comprehensive income (loss) | $ | (7,766 | ) | $ | 196 | $ | (7,570 | ) | ||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Changes in Cash Flows | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
As Restated | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net income (loss) | $ | 25,734 | $ | (2,867 | ) | $ | 22,867 | |||||||||||||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization | 6,359 | — | 6,359 | |||||||||||||||||
Amortization of financing fees | 2,020 | — | 2,020 | |||||||||||||||||
Amortization of debt discount | 793 | — | 793 | |||||||||||||||||
Gain on effective settlement of contract | (15,264 | ) | — | (15,264 | ) | |||||||||||||||
Pension curtailment expense | — | — | — | |||||||||||||||||
Deferred income taxes | 29 | — | 29 | |||||||||||||||||
Loss (gain) on sale/disposal of fixed assets | 205 | — | 205 | |||||||||||||||||
Debt prepayment expense | — | — | — | |||||||||||||||||
Amortization of deferred revenue | (127 | ) | — | (127 | ) | |||||||||||||||
Common unit compensation expense | 27 | — | 27 | |||||||||||||||||
Changes in operating assets and liabilities, net of acquisition: | ||||||||||||||||||||
Accounts receivable | 3,222 | 262 | 3,484 | |||||||||||||||||
Inventories | (19,126 | ) | — | (19,126 | ) | |||||||||||||||
Prepaid expense and other current assets | (839 | ) | (65 | ) | (904 | ) | ||||||||||||||
Accounts payable and accrued expense | (542 | ) | (4,132 | ) | (4,674 | ) | ||||||||||||||
Accrued pension and retirement liabilities | (1,099 | ) | — | (1,099 | ) | |||||||||||||||
Customer advances and deferred income | 1,366 | 6,820 | 8,186 | |||||||||||||||||
Other | 260 | 1 | 261 | |||||||||||||||||
Net cash provided by (used in) operating activities | 3,018 | 19 | 3,037 | |||||||||||||||||
Investing Activities | ||||||||||||||||||||
Purchase of property and equipment | (8,598 | ) | — | (8,598 | ) | |||||||||||||||
Proceeds from sale/disposal of property | — | — | — | |||||||||||||||||
Business acquisition, net of cash acquired and reinvested Merger consideration | (59,488 | ) | — | (59,488 | ) | |||||||||||||||
Change in restricted cash | 244 | — | 244 | |||||||||||||||||
Net cash used in investing activities | (67,842 | ) | — | (67,842 | ) | |||||||||||||||
Financing Activities | ||||||||||||||||||||
Debt issuance costs | (2,120 | ) | — | (2,120 | ) | |||||||||||||||
Proceeds from the issuance of long-term debt | 47,707 | — | 47,707 | |||||||||||||||||
Repayment of long-term debt | (1,250 | ) | — | (1,250 | ) | |||||||||||||||
Line of credit advances | 10,083 | — | 10,083 | |||||||||||||||||
Line of credit repayments | (3,006 | ) | — | (3,006 | ) | |||||||||||||||
Purchase of common units | (14,000 | ) | — | (14,000 | ) | |||||||||||||||
Proceeds from the issuance of common units, net of reinvested consideration proceeds | 5,000 | — | 5,000 | |||||||||||||||||
Capital lease obligation payments | (393 | ) | — | (393 | ) | |||||||||||||||
Distributions paid to members | (6,370 | ) | — | (6,370 | ) | |||||||||||||||
Net cash provided by (used in) financing activities | 35,651 | — | 35,651 | |||||||||||||||||
Effect of exchange rates on cash and cash equivalents | (606 | ) | (19 | ) | (625 | ) | ||||||||||||||
Change in cash and cash equivalents | (29,779 | ) | — | (29,779 | ) | |||||||||||||||
Cash and cash equivalents, beginning of period | 42,373 | — | 42,373 | |||||||||||||||||
Cash and cash equivalents, end of period | $ | 12,594 | $ | — | $ | 12,594 | ||||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Changes in Cash Flows | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
As Revised | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net income (loss) | $ | (7,055 | ) | $ | 197 | $ | (6,858 | ) | ||||||||||||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization | 5,696 | — | 5,696 | |||||||||||||||||
Amortization of financing fees | 1,653 | — | 1,653 | |||||||||||||||||
Amortization of debt discount | 381 | — | 381 | |||||||||||||||||
Gain on effective settlement of contract | — | — | — | |||||||||||||||||
Pension curtailment expense | 1,325 | — | 1,325 | |||||||||||||||||
Deferred income taxes | 39 | — | 39 | |||||||||||||||||
Loss (gain) on sale/disposal of fixed assets | 4 | — | 4 | |||||||||||||||||
Debt prepayment expense | — | — | — | |||||||||||||||||
Amortization of deferred revenue | (79 | ) | — | (79 | ) | |||||||||||||||
Common unit compensation expense | 17 | — | 17 | |||||||||||||||||
Changes in operating assets and liabilities, net of acquisition: | ||||||||||||||||||||
Accounts receivable | 8,091 | (262 | ) | 7,829 | ||||||||||||||||
Inventories | (4,158 | ) | — | (4,158 | ) | |||||||||||||||
Prepaid expense and other current assets | (984 | ) | 65 | (919 | ) | |||||||||||||||
Accounts payable and accrued expense | 5,201 | — | 5,201 | |||||||||||||||||
Accrued pension and retirement liabilities | (172 | ) | — | (172 | ) | |||||||||||||||
Customer advances and deferred income | 2,001 | — | 2,001 | |||||||||||||||||
Other | 463 | — | 463 | |||||||||||||||||
Net cash provided by (used in) operating activities | 12,423 | — | 12,423 | |||||||||||||||||
Investing Activities | ||||||||||||||||||||
Purchase of property and equipment | (4,410 | ) | — | (4,410 | ) | |||||||||||||||
Proceeds from sale/disposal of property | 66 | — | 66 | |||||||||||||||||
Business acquisition, net of cash acquired and reinvested Merger consideration | — | — | — | |||||||||||||||||
Change in restricted cash | 464 | — | 464 | |||||||||||||||||
Net cash used in investing activities | (3,880 | ) | — | (3,880 | ) | |||||||||||||||
Financing Activities | ||||||||||||||||||||
Debt issuance costs | — | — | — | |||||||||||||||||
Proceeds from the issuance of long-term debt | — | — | — | |||||||||||||||||
Repayment of long-term debt | — | — | — | |||||||||||||||||
Line of credit advances | 6 | — | 6 | |||||||||||||||||
Line of credit repayments | — | — | — | |||||||||||||||||
Purchase of common units | — | — | — | |||||||||||||||||
Proceeds from the issuance of common units, net of reinvested consideration proceeds | — | — | — | |||||||||||||||||
Capital lease obligation payments | (1,148 | ) | — | (1,148 | ) | |||||||||||||||
Distributions paid to members | (3,343 | ) | — | (3,343 | ) | |||||||||||||||
Net cash provided by (used in) financing activities | (4,485 | ) | — | (4,485 | ) | |||||||||||||||
Effect of exchange rates on cash and cash equivalents | 79 | — | 79 | |||||||||||||||||
Change in cash and cash equivalents | 4,137 | — | 4,137 | |||||||||||||||||
Cash and cash equivalents, beginning of period | 38,236 | — | 38,236 | |||||||||||||||||
Cash and cash equivalents, end of period | $ | 42,373 | $ | — | $ | 42,373 | ||||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statements of Changes in Deficit | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
Accumulated Members’ | Accumulated Other | |||||||||||||||||||
Deficit | Comprehensive Loss | Total Changes in Deficit | ||||||||||||||||||
As Restated | As Restated | As Restated | ||||||||||||||||||
As | in this Annual | As | in this Annual | As | in this Annual | |||||||||||||||
Member | Previously | Report on | Previously | Report on | Previously | Report on | ||||||||||||||
Units | Reported | Form 10-K/A | Reported | Form 10-K/A | Reported | Form 10-K/A | ||||||||||||||
Balance, December 31, 2011 | 132,174 | (129,704 | ) | (129,704 | ) | (13,130 | ) | (13,130 | ) | (142,834 | ) | (142,834 | ) | |||||||
Common unit expense | — | 17 | 17 | — | — | 17 | 17 | |||||||||||||
Distribution to members | — | — | — | — | — | — | — | |||||||||||||
State of Connecticut members’ withholding | — | (704 | ) | (704 | ) | — | — | (704 | ) | (704 | ) | |||||||||
Net income | — | (7,055 | ) | (6,858 | ) | — | — | (7,055 | ) | (6,858 | ) | |||||||||
Other comprehensive (loss)/ income: | ||||||||||||||||||||
Pension and postretirement health liabilities | — | — | — | (1,229 | ) | (1,229 | ) | (1,229 | ) | (1,229 | ) | |||||||||
Foreign currency translation | — | — | — | 518 | 517 | 518 | 517 | |||||||||||||
Comprehensive loss | — | — | — | — | (7,766 | ) | (7,570 | ) | ||||||||||||
Balance, December 31, 2012 (As Revised) | 132,174 | (137,446 | ) | (137,249 | ) | (13,841 | ) | (13,842 | ) | (151,287 | ) | (151,091 | ) | |||||||
Common unit expense | — | 27 | 27 | — | — | 27 | 27 | |||||||||||||
Distribution to members | — | (9,317 | ) | (9,317 | ) | — | — | (9,317 | ) | (9,317 | ) | |||||||||
State of Connecticut members’ withholding | — | (408 | ) | (408 | ) | — | — | (408 | ) | (408 | ) | |||||||||
Write off of prepaid license | — | (1,056 | ) | (1,056 | ) | — | — | (1,056 | ) | (1,056 | ) | |||||||||
Repurchase of common units | (31,166 | ) | (14,000 | ) | (14,000 | ) | — | — | (14,000 | ) | (14,000 | ) | ||||||||
Sale of common units | 31,166 | 9,000 | 9,000 | — | — | 9,000 | 9,000 | |||||||||||||
Net income | — | 25,734 | 22,867 | — | — | 25,734 | 22,867 | |||||||||||||
Other comprehensive (loss)/ income: | ||||||||||||||||||||
Pension and postretirement health liabilities | — | — | — | 6,391 | 6,391 | 6,391 | 6,391 | |||||||||||||
Foreign currency translation | — | — | — | (1,872 | ) | (1,889 | ) | (1,872 | ) | (1,889 | ) | |||||||||
Comprehensive income | — | — | — | — | — | 30,253 | 27,369 | |||||||||||||
Balance, December 31, 2013 (As Restated) | 132,174 | (127,466 | ) | (130,136 | ) | (9,322 | ) | (9,340 | ) | (136,788 | ) | (139,476 | ) | |||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
Three months ended March 31, 2013 (unaudited) | ||||||||||||||||||||
As Revised | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Net sales | $ | 63,849 | $ | — | $ | 63,849 | ||||||||||||||
Cost of sales | 45,098 | 14 | 45,112 | |||||||||||||||||
Gross profit | 18,751 | (14 | ) | 18,737 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 3,174 | (79 | ) | 3,095 | ||||||||||||||||
Research and development | 819 | 1 | 820 | |||||||||||||||||
General and administrative | 3,725 | 5 | 3,730 | |||||||||||||||||
7,718 | (73 | ) | 7,645 | |||||||||||||||||
Business development | — | 75 | 75 | |||||||||||||||||
Certain transaction costs (Note 3) | — | — | — | |||||||||||||||||
Restructuring costs (Note 4) | — | — | — | |||||||||||||||||
Gain on effective settlement of contract (Note 3) | — | — | — | |||||||||||||||||
Total operating expenses | 7,718 | 2 | 7,720 | |||||||||||||||||
Operating income | 11,033 | (16 | ) | 11,017 | ||||||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 5,994 | — | 5,994 | |||||||||||||||||
Other (income)/expense, net | (712 | ) | (75 | ) | (787 | ) | ||||||||||||||
Total other expenses, net | 5,282 | (75 | ) | 5,207 | ||||||||||||||||
Income (loss) before provision for income taxes | 5,751 | 59 | 5,810 | |||||||||||||||||
Income tax expense | 681 | — | 681 | |||||||||||||||||
Net income (loss) | $ | 5,070 | $ | 59 | $ | 5,129 | ||||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
Three months ended June 30, 2013 (unaudited) | Six months ended June 30, 2013 (unaudited) | |||||||||||||||||||
As Revised | As Revised | |||||||||||||||||||
As | in this Annual | As | in this Annual | |||||||||||||||||
Previously | Report on | Previously | Report on | |||||||||||||||||
Reported | Adjustments | Form 10-K/A | Reported | Adjustments | Form 10-K/A | |||||||||||||||
Net sales | $ | 64,235 | $ | (23 | ) | $ | 64,212 | $ | 128,084 | $ | (23 | ) | $ | 128,061 | ||||||
Cost of sales | 45,765 | 65 | 45,830 | 90,863 | 79 | 90,942 | ||||||||||||||
Gross profit | 18,470 | (88 | ) | 18,382 | 37,221 | (102 | ) | 37,119 | ||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 3,582 | (130 | ) | 3,452 | 6,756 | (209 | ) | 6,547 | ||||||||||||
Research and development | 1,480 | 1 | 1,481 | 2,299 | 2 | 2,301 | ||||||||||||||
General and administrative | 3,237 | (222 | ) | 3,015 | 6,962 | (217 | ) | 6,745 | ||||||||||||
8,299 | (351 | ) | 7,948 | 16,017 | (424 | ) | 15,593 | |||||||||||||
Business development | — | 169 | 169 | — | 244 | 244 | ||||||||||||||
Certain transaction costs (Note 3) | 416 | — | 416 | 416 | — | 416 | ||||||||||||||
Restructuring costs (Note 4) | — | — | — | — | — | — | ||||||||||||||
Gain on effective settlement of contract (Note 3) | — | — | — | — | — | — | ||||||||||||||
Total operating expenses | 8,715 | (182 | ) | 8,533 | 16,433 | (180 | ) | 16,253 | ||||||||||||
Operating income | 9,755 | 94 | 9,849 | 20,788 | 78 | 20,866 | ||||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 6,069 | — | 6,069 | 12,063 | — | 12,063 | ||||||||||||||
Other (income)/expense, net | (493 | ) | (192 | ) | (685 | ) | (1,205 | ) | (267 | ) | (1,472 | ) | ||||||||
Total other expenses, net | 5,576 | (192 | ) | 5,384 | 10,858 | (267 | ) | 10,591 | ||||||||||||
Income (loss) before provision for income taxes | 4,179 | 286 | 4,465 | 9,930 | 345 | 10,275 | ||||||||||||||
Income tax expense | 21 | 57 | 78 | 702 | 57 | 759 | ||||||||||||||
Net income (loss) | $ | 4,158 | $ | 229 | $ | 4,387 | $ | 9,228 | $ | 288 | $ | 9,516 | ||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
Three months ended September 29, 2013 (unaudited) | Nine months ended September 29, 2013 (unaudited) | |||||||||||||||||||
As Revised | As Revised | |||||||||||||||||||
As | in this Annual | As | in this Annual | |||||||||||||||||
Previously | Report on | Previously | Report on | |||||||||||||||||
Reported | Adjustments | Form 10-K/A | Reported | Adjustments | Form 10-K/A | |||||||||||||||
Net sales | $ | 73,238 | $ | (208 | ) | $ | 73,030 | $ | 201,396 | $ | (231 | ) | $ | 201,165 | ||||||
Cost of sales | 58,655 | (168 | ) | 58,487 | 149,731 | (89 | ) | 149,642 | ||||||||||||
Gross profit | 14,583 | (40 | ) | 14,543 | 51,665 | (142 | ) | 51,523 | ||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 3,843 | 221 | 4,064 | 10,386 | 12 | 10,398 | ||||||||||||||
Research and development | 1,710 | 4 | 1,714 | 4,009 | 6 | 4,015 | ||||||||||||||
General and administrative | 3,886 | 10 | 3,896 | 10,848 | (207 | ) | 10,641 | |||||||||||||
9,439 | 235 | 9,674 | 25,243 | (189 | ) | 25,054 | ||||||||||||||
Business development | — | 463 | 463 | — | 707 | 707 | ||||||||||||||
Certain transaction costs (Note 3) | 461 | — | 461 | 877 | — | 877 | ||||||||||||||
Restructuring costs (Note 4) | 631 | — | 631 | 631 | — | 631 | ||||||||||||||
Gain on effective settlement of contract (Note 3) | (15,264 | ) | — | (15,264 | ) | (15,264 | ) | — | (15,264 | ) | ||||||||||
Total operating expenses | (4,733 | ) | 698 | (4,035 | ) | 11,487 | 518 | 12,005 | ||||||||||||
Operating income | 19,316 | (738 | ) | 18,578 | 40,178 | (660 | ) | 39,518 | ||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 7,623 | — | 7,623 | 19,686 | — | 19,686 | ||||||||||||||
Other (income)/expense, net | 746 | (440 | ) | 306 | (385 | ) | (707 | ) | (1,092 | ) | ||||||||||
Total other expenses, net | 8,369 | (440 | ) | 7,929 | 19,301 | (707 | ) | 18,594 | ||||||||||||
Income (loss) before provision for income taxes | 10,947 | (298 | ) | 10,649 | 20,877 | 47 | 20,924 | |||||||||||||
Income tax expense | (198 | ) | (10 | ) | (208 | ) | 504 | 47 | 551 | |||||||||||
Net income (loss) | $ | 11,145 | $ | (288 | ) | $ | 10,857 | $ | 20,373 | $ | — | $ | 20,373 | |||||||
Basis of Accounting and Consolidation | Basis of Accounting and Consolidation | |||||||||||||||||||
The accompanying consolidated financial statements of Colt Defense LLC (“Colt Defense”) and Colt Finance Corp. (collectively, the “Company”) are prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The Company’s consolidated financial statements include the accounts of Colt Defense LLC and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. | ||||||||||||||||||||
On July 12, 2013, the Company acquired 100% ownership of New Colt. The results of New Colt have been included in the consolidated financial statements from the Merger Date. | ||||||||||||||||||||
Use of Estimates | Use of Estimates | |||||||||||||||||||
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s significant estimates include estimates used to determine the fair value of assets acquired and liabilities assumed related to the acquisition of New Colt (see Note 3, “Acquisition”) and accruals for contract obligation expense (see Note 13, “Commitments and Contingencies”), excess and obsolete inventory, income tax expense, deferred tax asset valuation, medical claims payable, and worker’s compensation expense. Actual results could differ materially from those estimates. | ||||||||||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | |||||||||||||||||||
Cash and cash equivalents consists of cash and short-term, highly liquid investments with original maturities of three months or less at the date of purchase. | ||||||||||||||||||||
Restricted Cash | Restricted Cash | |||||||||||||||||||
Restricted cash at December 31, 2013 and 2012 consists of funds deposited to secure standby letters of credit primarily for performance guarantees related to the Company’s international business. | ||||||||||||||||||||
Revenue | Revenue | |||||||||||||||||||
The Company recognizes revenue when evidence of an arrangement exists, delivery of the product or service has occurred and title and risk of loss have passed to the customer, the sales price is fixed or determinable, and collectability of the resulting receivable is reasonably assured. For certain “bill and hold” sales to the U.S. and Canadian governments, such sales and related accounts receivable are recognized upon inspection and acceptance of the firearms, including title transfer, by a government official and after the Company places the accepted firearms in a government approved location at the Company’s premises where they are held waiting shipping instructions. The sales value of such bill and hold sales where the shipments were still located at the Company’s premises at December 31, 2013, 2012 and 2011 were $805, $0, and $6,840, respectively. | ||||||||||||||||||||
The Company accounts for revenues and earnings under two long-term government contracts/programs with interrelated multiple elements (procurement of parts, manufacturing and refurbishment services) using concepts of proportionate performance. These contracts effect reported results for all periods presented. The Company estimates the total profit on each contract as the difference between the total estimated revenue and total estimated cost of the contract and recognize that profit over the remaining life of the contract using an output measure (the ratio of rifles completed to the total number of rifles to be refurbished under the contract). The Company computes an earnings rate for each contract, including general and administrative expense, to determine operating earnings. The Company reviews the earnings rate quarterly to assess revisions in contract values and estimated costs at completion. Any changes in earnings rates and recognized contract to date earnings resulting from these assessments are made in the period the revisions are identified. Contract costs include production costs, related overhead and allocated general and administrative costs. Amounts billed and collected on this contract in excess of revenue recorded are reflected as customer advances and deferred revenue in the Company’s consolidated balance sheets. | ||||||||||||||||||||
Anticipated contract losses are charged to operations as soon as they are identified. Anticipated losses cover all costs allocable to the contracts, including certain general and administrative expenses. If a contract is cancelled by the government for its convenience, the Company can make a claim against the customer for fair compensation for worked performed plus costs of settling and paying claims by terminated subcontractors, other settlement expenses and a reasonable profit on costs incurred. When the Company has a customer claim, revenue arising from the claims process is either recognized as revenue or as an offset against a potential loss only when the amount of the claim can be estimated reliably and its realization is probable. The Company had no claims recorded at any year-end presented. | ||||||||||||||||||||
Prior to the Merger, Colt Defense generated an immaterial amount of royalty income, which it included in other income in its consolidated statements of operations. As a result of the Merger, the Company now generates a higher amount of royalty income on a quarterly basis and has therefore determined that royalty income should now be recorded as net sales in the Consolidated Statements of Operations. For comparability, the Company has reclassified royalty income of $26 for the year ended December 31, 2012 and $6 for the year ended December 31, 2011, respectively, from other income to net sales. | ||||||||||||||||||||
The Company recognizes trademark licensing revenue for individual licensees based on historical experience and expected cash receipts from licensees. Licensing revenue consists of minimum royalties and/or a percentage of a licensee’s sales on licensed products. Under most of the Company’s current licensing agreements, royalties are payable in arrears on a calendar quarter basis. | ||||||||||||||||||||
Accounts Receivable and Credit Policies | Accounts Receivable and Credit Policies | |||||||||||||||||||
Credit is extended based on an evaluation of each customer’s financial condition. Generally, collateral is not required, other than in connection with some foreign sales. If the circumstances warrant, the Company requires foreign customers to provide either a documentary letter of credit or prepayment. | ||||||||||||||||||||
Credit losses are provided for, primarily by using specific identification. Once a customer is identified as high risk based on the payment history and creditworthiness, the Company will provide an allowance for the estimated uncollectible portion. Accounts are considered past due based on the original invoice date. Write-offs of uncollectible accounts receivable occur when all reasonable collection efforts have been made. Neither provisions for credit losses nor write-offs were material for any period presented. The Company’s trade receivable allowance for doubtful accounts at December 31, 2013 was $78 and at December 31, 2012 was $0. | ||||||||||||||||||||
The following table presents the activity for the allowance for doubtful accounts: | ||||||||||||||||||||
Total | ||||||||||||||||||||
Balance at December 31, 2011 | $ | 1 | ||||||||||||||||||
Provision for doubtful accounts | 1 | |||||||||||||||||||
Write-offs | (2 | ) | ||||||||||||||||||
Balance at December 31, 2012 | — | |||||||||||||||||||
Provision for doubtful accounts | 78 | |||||||||||||||||||
Write-offs | — | |||||||||||||||||||
Balance at December 31, 2013 | $ | 78 | ||||||||||||||||||
Accounts receivable represent amounts billed and currently due from customers. There were no material amounts that were not expected to be collected within one year from the balance sheet date. | ||||||||||||||||||||
Inventories | Inventories | |||||||||||||||||||
Inventories are stated at the lower of cost, determined using the first-in, first-out method, or market. Cost includes materials, labor and manufacturing overhead related to the purchase and production of inventories. The Company reviews market value based on historical usage and estimates of future demand. Based on these reviews, inventory write-downs are recorded, as necessary, to reflect estimated obsolescence, excess quantities and declines in market value. | ||||||||||||||||||||
Property and Equipment | Property and Equipment | |||||||||||||||||||
Property and equipment are recorded at cost. Depreciation of building and equipment (including assets recorded under capital leases) and amortization of leasehold improvements are computed using the straight-line method over the estimated useful life of the assets, or for leasehold improvements, over the remaining life of the lease term if shorter. Depreciation and amortization of property and equipment for the years ended December 31, 2013, 2012 and 2011 was $4,606, $4,891, and $4,633, respectively. The Company did not enter into any capital leases during 2013 or 2012. | ||||||||||||||||||||
Expenditures that improve or extend the lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. | ||||||||||||||||||||
The fair value of the property and equipment acquired as a result of the Merger are allocated to machinery and equipment, furniture, fixtures and leasehold improvements and construction in process in the amounts of $4,420, $30 and $732, respectively. | ||||||||||||||||||||
Property and equipment consists of: | ||||||||||||||||||||
December 31, | Estimated | |||||||||||||||||||
2013 | 2012 | Useful Life | ||||||||||||||||||
Land | $ | 338 | $ | 362 | — | |||||||||||||||
Building | 2,653 | 2,718 | 33 | |||||||||||||||||
Machinery and equipment | 47,476 | 37,749 | 10-Jul | |||||||||||||||||
Furniture, fixtures and leasehold improvements | 7,081 | 6,378 | 5-Mar | |||||||||||||||||
57,548 | 47,207 | |||||||||||||||||||
Less accumulated depreciation and amortization | (32,152 | ) | (28,162 | ) | ||||||||||||||||
25,396 | 19,045 | |||||||||||||||||||
Construction in process | 5,337 | 3,089 | ||||||||||||||||||
Property and equipment, net | $ | 30,733 | $ | 22,134 | ||||||||||||||||
Goodwill | Goodwill | |||||||||||||||||||
Goodwill is tested for impairment annually as of the beginning of the Company’s fourth fiscal quarter, or when events or circumstances indicate that its value may have declined. Impairment exists when the carrying amount of goodwill exceeds its fair market value. Management estimates the fair value of each reporting unit primarily using the income approach. Specifically the discounted cash flow (“DCF”) model was utilized for the valuation of each reporting unit. Management develops cash flow forecasts based on existing firm orders, expected future orders, contracts with suppliers, labor agreements and general market conditions. The Company discounts the cash flow forecasts using the weighted-average cost of capital method at the date of evaluation. The Company also calculates the fair value of its reporting units using the market approach in order to corroborate our DCF model results. These methodologies used in the current year are consistent with those used in the prior year. | ||||||||||||||||||||
Subsequent to December 2013, the Company has seen a decrease in the demand for commercial rifles when compared to 2013 and if this trend continues it may result in future impairment. In addition, since December 2012 there has been a sharp increase in political and public support for new “gun control” laws and regulations in the United States. Some proposed legislation introduced in the U.S. Congress would ban or restrict the sale of substantially all of the Company’s rifles, in their current configurations, into the commercial market throughout the United States. Similar legislation has been enacted in several states. The Company considers the adverse changes in its business climate to be a triggering event as of December 31, 2012. Therefore, in addition to the Company’s annual goodwill impairment testing, it also performed a sensitivity analysis to determine the impact that a material decrease in Commercial and Law Enforcement rifle sales would have on its valuation. As of December 31, 2013 and December 31, 2012, the fair value of its reporting units was in excess of carrying value for all scenarios that were tested. | ||||||||||||||||||||
There was no impairment of goodwill during 2013, 2012 or 2011. Changes in the carrying amount of goodwill are as follows: | ||||||||||||||||||||
Total | ||||||||||||||||||||
Balance at December 31, 2011 | $ | 14,713 | ||||||||||||||||||
Effect of foreign currency translation | 234 | |||||||||||||||||||
Balance at December 31, 2012 | 14,947 | |||||||||||||||||||
Goodwill acquired | 36,974 | |||||||||||||||||||
Effect of foreign currency translation | (696 | ) | ||||||||||||||||||
Balance at December 31, 2013 | $ | 51,225 | ||||||||||||||||||
As of December 31, 2013 and 2012, there was an accumulated impairment of $1,245 on the gross book value of $52,470 and $16,192, respectively. | ||||||||||||||||||||
Trademarks | Trademarks | |||||||||||||||||||
In connection with the Merger, the Company recorded an indefinite-lived intangible asset of $50,100 for the Colt brand and related trademarks. | ||||||||||||||||||||
The Company, with the assistance of a third party valuation firm, valued the Colt brand and related trademarks by comparing the value of the royalty rate inherent in the prepaid license fee to the current market rate for such a license based upon both the value of the Colt brand and related trademarks in both the defense and the commercial marketplace utilizing a relief from royalty methodology. | ||||||||||||||||||||
Intangible Assets | Intangible Assets | |||||||||||||||||||
The Company reviews long-lived assets, including intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Impairment losses, where identified, are determined as the excess of the carrying value over the estimated fair value of the long-lived asset. The Company assesses the recoverability of the carrying value of assets held for use based on a review of projected undiscounted cash flows. When long-lived assets are reclassified to “held for sale”, The Company compares the asset’s carrying amount to its estimated fair value less cost to sell to evaluate impairment. No long-lived assets have been reclassified to held for sale for any period presented. | ||||||||||||||||||||
In connection with the Merger, the Company recorded finite-lived intangible assets of $9,340 which includes $5,240 of existing license agreements which represents the estimated fair value of New Colt license agreements for licensing the Colt trademarks to various third parties, $2,970 of developed technology which represents the estimated fair value of designs, trade secrets, materials, specifications and other proprietary intellectual property included in the technical data packages and related manufacturing processes and know-how and $1,130 of backlog which represents the estimated fair value of unfilled contractual orders from customers. The weighted average useful lives of the acquired assets were 6 years, 20 years and 3 years, respectively. | ||||||||||||||||||||
The net carrying value of the Company’s intangible assets with finite lives follows: | ||||||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||
Gross | Estimated | |||||||||||||||||||
Carrying | Accumulated | Useful | ||||||||||||||||||
Amount | Amortization | Net | Life | |||||||||||||||||
Customer relationship | ||||||||||||||||||||
Canadian Government | $ | 2,369 | $ | (678 | ) | $ | 1,691 | 30 | ||||||||||||
Customer relationships other | 6,160 | (4,077 | ) | 2,083 | 20 | |||||||||||||||
License agreements | 5,240 | (805 | ) | 4,435 | 6 | |||||||||||||||
Backlog | 1,722 | (604 | ) | 1,118 | 3 | |||||||||||||||
Technology-based intangibles | 6,580 | (2,492 | ) | 4,088 | 15 - 20 | |||||||||||||||
$ | 22,071 | $ | (8,656 | ) | $ | 13,415 | ||||||||||||||
As of December 31, 2012 | ||||||||||||||||||||
Gross | Estimated | |||||||||||||||||||
Carrying | Accumulated | Useful | ||||||||||||||||||
Amount | Amortization | Net | Life | |||||||||||||||||
Customer relationship | ||||||||||||||||||||
Canadian Government | $ | 2,533 | $ | (640 | ) | $ | 1,893 | 30 | ||||||||||||
Customer relationships other | 6,586 | (3,970 | ) | 2,616 | 20 | |||||||||||||||
Backlog | 633 | (633 | ) | — | — | |||||||||||||||
Technology-based intangibles | 3,610 | (2,082 | ) | 1,528 | 15 | |||||||||||||||
$ | 13,362 | $ | (7,325 | ) | $ | 6,037 | ||||||||||||||
Amortization expense for these intangible assets for the years ended December 31, 2013, 2012 and 2011 was $1,670, $704, and $742, respectively, and was included in cost of sales and selling expense in the Consolidated Statements of Operations. The Company expects to record annual amortization expense of $3,271, $2,785, $1,927, $1,187 and $873 for 2014, 2015, 2016, 2017 and 2018, respectively. Intangibles are amortized using proportionate use methods. | ||||||||||||||||||||
Prepaid License Fee | Prepaid License Fee | |||||||||||||||||||
Prior to the acquisition of New Colt (see Note 3, “Acquisition”), the Company had fully paid for and received a twenty year license from New Colt for the limited use of certain Colt trade names with an expiration date of December 31, 2023. The prepaid license could be extended beyond December 31, 2023 for successive five-year periods. The Company was amortizing this paid-up license ratably over the 20 year term. | ||||||||||||||||||||
Immediately prior to the Merger, the prepaid license fee balance of $1,056 was written off. This was part of the settlement of a pre-existing relationship with New Colt related to Colt Defense’s license agreement. In prior years, the prepaid license fee was being amortized over its initial 20-year term. Amortization expense was $101 per year in 2012 and 2011. | ||||||||||||||||||||
Warranty Costs | Warranty Costs | |||||||||||||||||||
The Company generally sells its military products with a one-year warranty and records the estimated costs of such product warranties at the time the sale is recorded. For direct foreign sales, posting a warranty bond for periods ranging from one to five years is occasionally required. The Company’s estimated warranty costs are based upon actual past experience, its current production environment as well as specific and identifiable warranty. As of December 31, 2013 and 2012, the balance of the Company’s warranty reserve was $464 and $167, respectively. | ||||||||||||||||||||
Self-Funded Medical Plan | Self-Funded Medical Plan | |||||||||||||||||||
The Company maintains a self-funded employee group medical plan under which the liability is limited by individual and aggregate stop loss insurance coverage. Included in accrued expense in the accompanying consolidated balance sheets is a liability for reported claims outstanding, as well as an estimate of incurred but unreported claims, based on the Company’s best estimate of the ultimate cost not covered by stop loss insurance. The actual amount of the claims could differ from the estimated liability recorded of $823 and $1,396 at December 31, 2013 and 2012, respectively. | ||||||||||||||||||||
Self Funded Worker's Compensation | Self- Funded Worker’s Compensation | |||||||||||||||||||
As of December 31, 2013, the Company self-insures its domestic worker’s compensation by a deductible program that incorporates an aggregate stop loss. Colt’s liability for estimated premiums and incurred losses under this policy has been actuarially determined and was $214 as of December 31, 2013 and $308 as of December 31, 2012. The Company revised its disclosure with respect to the Company’s liability for estimated premiums and incurred losses under the Company’s deductible policies as of December 31, 2013 from $408 to $214. The Company does not consider the revision of this disclosure material. | ||||||||||||||||||||
Accrued Expenses | Accrued Expenses | |||||||||||||||||||
Accrued expenses consisted of: | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
(As Restated) | ||||||||||||||||||||
Accrued compensation and benefits | $ | 7,154 | $ | 5,770 | ||||||||||||||||
Accrued contract obligation expense | 1,194 | — | ||||||||||||||||||
Accrued federal, excise and other taxes | 4,902 | 5,293 | ||||||||||||||||||
Accrued interest | 2,879 | 3,230 | ||||||||||||||||||
Accrued commissions | 929 | 1,229 | ||||||||||||||||||
Other accrued expenses | 5,100 | 4,793 | ||||||||||||||||||
$ | 22,158 | $ | 20,315 | |||||||||||||||||
Advertising Costs | Advertising Costs | |||||||||||||||||||
Advertising costs primarily consisting of print, television and electronic media, trade shows and samples. The Company expenses advertising expenses as incurred. Advertising expense was $2,626 in 2013, $2,406 in 2012 and $1,760 in 2011. Prior period amounts have been reclassified to conform to the current year presentation. | ||||||||||||||||||||
Research and Development Costs | Research and Development Costs | |||||||||||||||||||
Research and development costs consist primarily of compensation and benefits and experimental work materials for the Company’s employees who are responsible for the development and enhancement of new and existing products. Research and development costs incurred to develop new products and to enhance existing products, which are not specifically covered by contracts, and those costs related to the Company’s share of research and development activity in connection with cost-sharing arrangements, are charged to expense as incurred. Research and development expenses were $6,126 in 2013, $4,747 in 2012, and $5,578 in 2011. | ||||||||||||||||||||
Research and development costs incurred under contracts with customers are included as a contract cost and reported as a component of cost of sales when revenue from such contracts is recognized. Government research and development support, not associated with specific contracts, is recorded as a reduction to cost of sales in the period earned. | ||||||||||||||||||||
Common Unit Compensation Expense | Common Unit Compensation Expense | |||||||||||||||||||
The Company uses the Black-Scholes option pricing model to estimate the fair value of all unit-based compensation awards on the date of grant. The fair value of each time-based award is expensed on a straight-line basis over the requisite service period. For performance-based awards, compensation expense is recognized when it is probable that the performance conditions will be met. | ||||||||||||||||||||
Foreign Currency Translation | Foreign Currency Translation | |||||||||||||||||||
The functional currency for the Company’s Canadian operation is the Canadian dollar. The Company translates the balance sheet accounts of its Canadian operation at the end-of-period exchange rates and its income statement accounts at the average exchange rates for each month. The resulting foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income or loss, which is included in members’ deficit. | ||||||||||||||||||||
The Company’s Canadian operation is subject to foreign currency exchange rate risk relating to receipts from customers, payments to suppliers and some intercompany transactions in currencies other than the Canadian dollar. As a matter of policy, the Company does not engage in interest rate or currency speculation and, therefore, the Company has no derivative financial instruments to hedge this exposure. In the Company’s consolidated statements of operations, it had foreign currency gains of $197 in 2013, $155 for 2012 and a foreign currency loss of $294 for 2011. | ||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements | |||||||||||||||||||
The fair value of an asset or liability is the amount at which the instrument could be exchanged or settled in a current transaction between willing parties where neither is compelled to buy or sell. The carrying values for cash, accounts receivable, accounts payable, accrued expenses and other current assets and liabilities approximate their fair values due to their short maturities. The carrying value of the Company’s long-term debt of $294,817 and $247,567 at December 31, 2013 and 2012, respectively, was recorded at amortized cost. The estimated fair value of long-term debt was approximately $262,775 and $161,250 at December 31, 2013 and 2012, respectively. The Fair value of the Senior Notes was based on quoted market prices, which are Level 1 inputs and the fair value of the term loan was based on Level 3 inputs. | ||||||||||||||||||||
Fair value is 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 inputs used to measure fair value fall into the following hierarchy. | ||||||||||||||||||||
Level 1: | Unadjusted quoted prices in active markets for identical assets or liabilities. | |||||||||||||||||||
Level 2: | Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability. | |||||||||||||||||||
Level 3: | Unobservable inputs for the asset or liability. | |||||||||||||||||||
During 2013 and 2012, the Company did not have any financial assets and liabilities reported at fair value and measured on a recurring basis or any significant non-recurring measurements of nonfinancial assets and nonfinancial liabilities. Therefore, Colt did not have any transfers of assets and liabilities between Level 1 and Level 2 of the fair value measurement hierarchy during the years ended December 31, 2013 and 2012. | ||||||||||||||||||||
Retirement Benefits | Retirement Benefits | |||||||||||||||||||
The Company has pension and other postretirement benefit costs and obligations which are dependent on various assumptions. The Company’s major assumptions relate primarily to discount rates, long-term return on plan assets and medical cost trend rates. The Company bases the discount rate assumption on current investment yields of high quality fixed income investments during the retirement benefits maturity period. Long-term return on plan assets is determined based on historical portfolio results and management’s expectation of the future economic environment, as well as target asset allocations. | ||||||||||||||||||||
The Company’s medical cost trend assumptions are developed based on historical cost data, the near-term outlook, an assessment of likely long-term trends and the cap limiting the Company’s required contributions. Actual results that differ from the Company’s assumptions are accumulated and are amortized generally over the estimated future working life of the plan participants. | ||||||||||||||||||||
Income Taxes | Income Taxes | |||||||||||||||||||
The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax basis of assets and liabilities using enacted tax rates in effect for years in which the temporary differences are expected to reverse. The Company provides a valuation allowance when it is more likely than not that deferred tax assets will not be realized. The Company recognizes the benefit of an uncertain tax position that has been taken or it expects to take on income tax returns if such tax position is more likely than not to be sustained. | ||||||||||||||||||||
The Company follows the authoritative guidance regarding accounting for uncertainty in income taxes, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These unrecognized tax benefits relate primarily to issues common among multinational corporations in the Company’s industry. The Company applies a variety of methodologies in making these estimates which include studies performed by independent economists, advice from industry and subject experts, evaluation of public actions taken by the Internal Revenue Service and other taxing authorities, as well as the Company’s own industry experience. The Company provides estimates for unrecognized tax benefits which may be subject to material adjustments until matters are resolved with taxing authorities or statutes expire. If the Company’s estimates are not representative of actual outcomes, its results of operations could be materially impacted. | ||||||||||||||||||||
The Company continues to maintain a valuation allowance against certain deferred tax assets where realization is not certain. It periodically evaluate the likelihood of the realization of deferred tax assets and reduce the carrying amount of these deferred tax assets by a valuation allowance to the extent we believe a portion will not be realized. The Company considers many factors when assessing the likelihood of future realization of deferred tax assets, including the Company’s recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income, carryforward periods available to us for tax reporting purposes, various income tax strategies and other relevant factors. Significant judgment is required in making this assessment and, to the extent future expectations change, we would assess the recoverability of the Company’s deferred tax assets at that time. If we determine that the deferred tax assets are not realizable in a future period, we would record material adjustments to income tax expense in that period. | ||||||||||||||||||||
Recently Accounting Pronouncements | Recent Accounting Pronouncements | |||||||||||||||||||
Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists - In July 2013, the FASB issued ASU 2013-11 to provide guidance on the presentation of unrecognized tax benefits. ASU 2013-11 requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows: to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. ASU 2013-11 is effective for interim and annual periods beginning after December 15, 2013 with earlier adoption permitted. ASU 2013-11 should be applied prospectively with retroactive application permitted. The Company is currently evaluating the impact of the Company’s pending adoption of ASU 2013-11 on its consolidated financial statements | ||||||||||||||||||||
Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income - In February 2013, the Financial Accounting Standards Board (“FASB”) issued ASU 2013-02, which requires disclosure of significant amounts reclassified out of accumulated other comprehensive income by component and their corresponding effect on the respective line items of net income. This guidance is effective for the Company beginning in the first quarter of 2013. The adoption of ASU 2013-02 only impacted disclosure requirements and did not have any effect on the Company’s operating results or its financial condition. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Schedule of activity for allowance for doubtful accounts | ||||||||||||||||||||
Total | ||||||||||||||||||||
Balance at December 31, 2011 | $ | 1 | ||||||||||||||||||
Provision for doubtful accounts | 1 | |||||||||||||||||||
Write-offs | (2 | ) | ||||||||||||||||||
Balance at December 31, 2012 | — | |||||||||||||||||||
Provision for doubtful accounts | 78 | |||||||||||||||||||
Write-offs | — | |||||||||||||||||||
Balance at December 31, 2013 | $ | 78 | ||||||||||||||||||
Schedule of property and equipment | ||||||||||||||||||||
December 31, | Estimated | |||||||||||||||||||
2013 | 2012 | Useful Life | ||||||||||||||||||
Land | $ | 338 | $ | 362 | — | |||||||||||||||
Building | 2,653 | 2,718 | 33 | |||||||||||||||||
Machinery and equipment | 47,476 | 37,749 | 10-Jul | |||||||||||||||||
Furniture, fixtures and leasehold improvements | 7,081 | 6,378 | 5-Mar | |||||||||||||||||
57,548 | 47,207 | |||||||||||||||||||
Less accumulated depreciation and amortization | (32,152 | ) | (28,162 | ) | ||||||||||||||||
25,396 | 19,045 | |||||||||||||||||||
Construction in process | 5,337 | 3,089 | ||||||||||||||||||
Property and equipment, net | $ | 30,733 | $ | 22,134 | ||||||||||||||||
Schedule of changes in the carrying amount of goodwill | ||||||||||||||||||||
Total | ||||||||||||||||||||
Balance at December 31, 2011 | $ | 14,713 | ||||||||||||||||||
Effect of foreign currency translation | 234 | |||||||||||||||||||
Balance at December 31, 2012 | 14,947 | |||||||||||||||||||
Goodwill acquired | 36,974 | |||||||||||||||||||
Effect of foreign currency translation | (696 | ) | ||||||||||||||||||
Balance at December 31, 2013 | $ | 51,225 | ||||||||||||||||||
Schedule of net carrying value of the intangible assets with finite lives | ||||||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||
Gross | Estimated | |||||||||||||||||||
Carrying | Accumulated | Useful | ||||||||||||||||||
Amount | Amortization | Net | Life | |||||||||||||||||
Customer relationship | ||||||||||||||||||||
Canadian Government | $ | 2,369 | $ | (678 | ) | $ | 1,691 | 30 | ||||||||||||
Customer relationships other | 6,160 | (4,077 | ) | 2,083 | 20 | |||||||||||||||
License agreements | 5,240 | (805 | ) | 4,435 | 6 | |||||||||||||||
Backlog | 1,722 | (604 | ) | 1,118 | 3 | |||||||||||||||
Technology-based intangibles | 6,580 | (2,492 | ) | 4,088 | 15 - 20 | |||||||||||||||
$ | 22,071 | $ | (8,656 | ) | $ | 13,415 | ||||||||||||||
As of December 31, 2012 | ||||||||||||||||||||
Gross | Estimated | |||||||||||||||||||
Carrying | Accumulated | Useful | ||||||||||||||||||
Amount | Amortization | Net | Life | |||||||||||||||||
Customer relationship | ||||||||||||||||||||
Canadian Government | $ | 2,533 | $ | (640 | ) | $ | 1,893 | 30 | ||||||||||||
Customer relationships other | 6,586 | (3,970 | ) | 2,616 | 20 | |||||||||||||||
Backlog | 633 | (633 | ) | — | — | |||||||||||||||
Technology-based intangibles | 3,610 | (2,082 | ) | 1,528 | 15 | |||||||||||||||
$ | 13,362 | $ | (7,325 | ) | $ | 6,037 | ||||||||||||||
Schedule of components of accrued expenses | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
(As Restated) | ||||||||||||||||||||
Accrued compensation and benefits | $ | 7,154 | $ | 5,770 | ||||||||||||||||
Accrued contract obligation expense | 1,194 | — | ||||||||||||||||||
Accrued federal, excise and other taxes | 4,902 | 5,293 | ||||||||||||||||||
Accrued interest | 2,879 | 3,230 | ||||||||||||||||||
Accrued commissions | 929 | 1,229 | ||||||||||||||||||
Other accrued expenses | 5,100 | 4,793 | ||||||||||||||||||
$ | 22,158 | $ | 20,315 | |||||||||||||||||
Impact of correcting error related to the M240 Program, previously recorded immaterial out-of-period adjustments and the reclassification of business development expenses | ||||||||||||||||||||
Schedule of adjustments to previously reported income statement - Income/ (Expense) | ||||||||||||||||||||
Adjustments to | ||||||||||||||||||||
Previously Reported Income | ||||||||||||||||||||
Statement - Income / (Expense) | ||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||
For the years ended | 2013 | 2012 | 2011 | |||||||||||||||||
Net sales | $ | (7,065 | )(a) | $ | 262 | — | ||||||||||||||
Cost of sales | (4,129 | )(b) | — | — | ||||||||||||||||
Gross profit | (2,936 | )(c) | 262 | — | ||||||||||||||||
Business development | (575 | )(d) | (881 | )(d) | (504 | )(d) | ||||||||||||||
Operating income | (3,501 | )(e) | (619 | )(f) | (504 | )(d) | ||||||||||||||
Other (income) / expense | (575 | )(d) | (881 | )(d) | (504 | )(d) | ||||||||||||||
Income tax | (59 | ) | 65 | — | ||||||||||||||||
Net income (loss) | (2,867 | )(g) | 197 | — | ||||||||||||||||
(a) Primarily as a result of a ($6,820) reduction in revenue related to a M240 Program contract modification, see Note 13, “Commitments and Contingencies”. | ||||||||||||||||||||
(b) Primarily as a result of a ($4,132) reduction in cost of sales related to a M240 Program contract obligation expense, see Note 13, “Commitments and Contingencies”. | ||||||||||||||||||||
(c) Primarily as a result of a ($6,820) reduction in revenue related to a M240 Program contract modification and a ($4,132) reduction in cost of sales related to a M240 Program contract obligation expense, see Note 13, “Commitments and Contingencies”. | ||||||||||||||||||||
(d) Reclassification of transaction costs incurred in connection with contemplated merger and acquisition activities from other (income)/expense to business development. | ||||||||||||||||||||
(e) Primarily as a result of the ($6,820) reduction in revenue related to a M240 Program contact modification, the ($4,132) reduction in cost of sales related to a M240 Program contract obligation expense and a $575 reclassification of business development costs from other(income)/expense to business development. | ||||||||||||||||||||
(f) Primarily as the result of the reclassification of $881 of costs incurred in connection with contemplated merger and acquisition activities from other(income)/expense to business development and an adjustment to Colt Canada net sales of $262 related to the timing of recognition of certain sales. | ||||||||||||||||||||
(g) Primarily as a result of the M240 Program contract modification and contract obligation expense. | ||||||||||||||||||||
Schedule of adjustments to previously reported balance sheet - Increase/ (Decrease) | ||||||||||||||||||||
Adjustments to | ||||||||||||||||||||
Previously Reported Balance | ||||||||||||||||||||
Sheet - Increase / (Decrease) | ||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||
For the years ended | 2013 | 2012 | 2011 | |||||||||||||||||
Accounts receivable | $ | 1 | $ | 261 | — | |||||||||||||||
Other current assets | (2 | ) | (65 | ) | — | |||||||||||||||
Accrued expenses | (4,133 | )(a) | — | — | ||||||||||||||||
Customer advances and deferred revenue | 6,820 | (b) | — | — | ||||||||||||||||
Accumulated deficit | (2,670 | )(c) | 197 | — | ||||||||||||||||
Accumulated other comprehensive loss | (18 | ) | (1 | ) | — | |||||||||||||||
(a) Primarily related to the reduction in accrued expenses associated with the ($4,132) reduction in cost of sales related to a M240 Program contract obligation expense, see Note 13, “Commitments and Contingencies”. | ||||||||||||||||||||
(b) As a result of recording a ($6,820) reduction in revenue related to a M240 Program contract modification, see Note 13, “Commitments and Contingencies.” | ||||||||||||||||||||
(c) Primarily as a result of the M240 Program contract modification and contract obligation expense. | ||||||||||||||||||||
Correcting previously recorded immaterial out-of-period adjustments | ||||||||||||||||||||
Schedule of adjustments to previously reported income statement - Income/ (Expense) | ||||||||||||||||||||
Adjustments to | ||||||||||||||||||||
Previously Reported Income | ||||||||||||||||||||
Statement - Income / (Expense) | ||||||||||||||||||||
March 31, | June 30, | September 29, | ||||||||||||||||||
For the quarter ended | 2013 | 2013 | 2013 | |||||||||||||||||
Net sales | $ | — | $ | (23 | ) | $ | (208 | ) | ||||||||||||
Cost of sales | 14 | 65 | (168 | ) | ||||||||||||||||
Gross profit | (14 | ) | (88 | ) | (40 | ) | ||||||||||||||
Selling and commissions | (79 | ) | (130 | ) | 221 | |||||||||||||||
Research and development | 1 | 1 | 4 | |||||||||||||||||
General and administrative | 5 | (222 | ) | 10 | ||||||||||||||||
Business development | (75 | ) | (169 | ) | (463 | ) | ||||||||||||||
Operating income | (16 | ) | 94 | (738 | )(a) | |||||||||||||||
Other (income) / expense | (75 | ) | (192 | ) | (440 | ) | ||||||||||||||
Income tax | — | 57 | (10 | ) | ||||||||||||||||
Net income (loss) | 59 | 229 | (288 | ) | ||||||||||||||||
(a) Primarily as a result of the reclassification of costs incurred in connection with contemplated merger and acquisition activities from other (income)/expense to business development and the timing of recognition of certain professional fee accruals. | ||||||||||||||||||||
Consolidated Balance Sheet | ||||||||||||||||||||
Impact of the revision | Colt Defense LLC and Subsidiaries | |||||||||||||||||||
Consolidated Balance Sheet | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
As Restated | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 12,594 | $ | — | $ | 12,594 | ||||||||||||||
Restricted cash | 771 | — | 771 | |||||||||||||||||
Accounts receivable, net | 22,481 | 1 | 22,482 | |||||||||||||||||
Inventories | 66,674 | — | 66,674 | |||||||||||||||||
Deferred tax assets | 954 | — | 954 | |||||||||||||||||
Other current assets | 5,964 | (2 | ) | 5,962 | ||||||||||||||||
Total current assets | 109,438 | (1 | ) | 109,437 | ||||||||||||||||
Property and equipment, net | 30,733 | — | 30,733 | |||||||||||||||||
Goodwill | 51,225 | — | 51,225 | |||||||||||||||||
Trademarks | 50,100 | — | 50,100 | |||||||||||||||||
Intangible assets with finite lives, net | 13,415 | — | 13,415 | |||||||||||||||||
Deferred financing costs | 7,742 | — | 7,742 | |||||||||||||||||
Long-term restricted cash | 572 | — | 572 | |||||||||||||||||
Other assets | 1,510 | — | 1,510 | |||||||||||||||||
Total assets | $ | 264,735 | $ | (1 | ) | $ | 264,734 | |||||||||||||
LIABILITIES AND DEFICIT | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Line of credit | $ | 7,083 | $ | — | 7,083 | |||||||||||||||
Accounts payable | 14,038 | — | 14,038 | |||||||||||||||||
Accrued expenses | 26,291 | (4,133 | ) | 22,158 | ||||||||||||||||
Pension and retirement liabilities - current portion | 1,085 | — | 1,085 | |||||||||||||||||
Customer advances and deferred revenue | 12,647 | 6,820 | 19,467 | |||||||||||||||||
Long-term debt current portion | 5,000 | — | 5,000 | |||||||||||||||||
Accrued distributions to members | 670 | — | 670 | |||||||||||||||||
Total current liabilities | 66,814 | 2,687 | 69,501 | |||||||||||||||||
Long term debt | 289,817 | — | 289,817 | |||||||||||||||||
Pension and retirement liabilities | 21,670 | — | 21,670 | |||||||||||||||||
Long-term deferred tax liability | 18,715 | — | 18,715 | |||||||||||||||||
Long-term distributions to members | 2,277 | — | 2,277 | |||||||||||||||||
Other long-term liabilities | 2,230 | — | 2,230 | |||||||||||||||||
Total long-term liabilities | 334,709 | — | 334,709 | |||||||||||||||||
Total liabilities | 401,523 | 2,687 | 404,210 | |||||||||||||||||
Deficit: | ||||||||||||||||||||
Accumulated deficit | (127,466 | ) | (2,670 | ) | (130,136 | ) | ||||||||||||||
Accumulated other comprehensive loss | (9,322 | ) | (18 | ) | (9,340 | ) | ||||||||||||||
Total deficit | (136,788 | ) | (2,688 | ) | (139,476 | ) | ||||||||||||||
Total liabilities and debt | $ | 264,735 | $ | (1 | ) | $ | 264,734 | |||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Balance Sheet | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
As Revised | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 42,373 | $ | — | $ | 42,373 | ||||||||||||||
Restricted cash | 777 | — | 777 | |||||||||||||||||
Accounts receivable, net | 22,683 | 261 | 22,944 | |||||||||||||||||
Inventories | 40,561 | — | 40,561 | |||||||||||||||||
Deferred tax assets | 185 | — | 185 | |||||||||||||||||
Other current assets | 3,231 | (65 | ) | 3,166 | ||||||||||||||||
Total current assets | 109,810 | 196 | 110,006 | |||||||||||||||||
Property and equipment, net | 22,134 | — | 22,134 | |||||||||||||||||
Goodwill | 14,947 | — | 14,947 | |||||||||||||||||
Trademarks | — | — | — | |||||||||||||||||
Intangible assets with finite lives, net | 6,037 | — | 6,037 | |||||||||||||||||
Deferred financing costs | 7,642 | — | 7,642 | |||||||||||||||||
Long-term restricted cash | 810 | — | 810 | |||||||||||||||||
Other assets | 1,588 | — | 1,588 | |||||||||||||||||
Total assets | $ | 162,968 | $ | 196 | $ | 163,164 | ||||||||||||||
LIABILITIES AND DEFICIT | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Line of credit | $ | 6 | $ | — | 6 | |||||||||||||||
Accounts payable | 13,055 | — | 13,055 | |||||||||||||||||
Accrued expenses | 20,315 | — | 20,315 | |||||||||||||||||
Pension and retirement liabilities - current portion | 626 | — | 626 | |||||||||||||||||
Customer advances and deferred revenue | 10,002 | — | 10,002 | |||||||||||||||||
Long-term debt current portion | — | — | — | |||||||||||||||||
Accrued distributions to members | — | — | — | |||||||||||||||||
Total current liabilities | 44,004 | — | 44,004 | |||||||||||||||||
Long term debt | 247,567 | — | 247,567 | |||||||||||||||||
Pension and retirement liabilities | 20,261 | — | 20,261 | |||||||||||||||||
Long-term deferred tax liability | 1,515 | — | 1,515 | |||||||||||||||||
Long-term distributions to members | — | — | — | |||||||||||||||||
Other long-term liabilities | 908 | — | 908 | |||||||||||||||||
Total long-term liabilities | 270,251 | — | 270,251 | |||||||||||||||||
Total liabilities | 314,255 | — | 314,255 | |||||||||||||||||
Deficit: | ||||||||||||||||||||
Accumulated deficit | (137,446 | ) | 197 | (137,249 | ) | |||||||||||||||
Accumulated other comprehensive loss | (13,841 | ) | (1 | ) | (13,842 | ) | ||||||||||||||
Total deficit | (151,287 | ) | 196 | (151,091 | ) | |||||||||||||||
Total liabilities and deficit | $ | 162,968 | $ | 196 | $ | 163,164 | ||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||||||
Impact of the revision | Colt Defense LLC and Subsidiaries | |||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
As Restated | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Net sales | $ | 277,948 | $ | (7,065 | ) | $ | 270,883 | |||||||||||||
Cost of sales | 201,241 | (4,129 | ) | 197,112 | ||||||||||||||||
Gross profit | 76,707 | (2,936 | ) | 73,771 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 14,143 | (1 | ) | 14,142 | ||||||||||||||||
Research and development | 6,127 | (1 | ) | 6,126 | ||||||||||||||||
General and administrative | 15,297 | (8 | ) | 15,289 | ||||||||||||||||
35,567 | (10 | ) | 35,557 | |||||||||||||||||
Business development | — | 575 | 575 | |||||||||||||||||
Certain transaction costs (Note 3) | 1,147 | — | 1,147 | |||||||||||||||||
Restructuring costs (Note 4) | 782 | — | 782 | |||||||||||||||||
Gain on effective settlement of contract (Note 3) | (15,264 | ) | — | (15,264 | ) | |||||||||||||||
Total operating expenses | 22,232 | 565 | 22,797 | |||||||||||||||||
Operating income | 54,475 | (3,501 | ) | 50,974 | ||||||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 27,687 | — | 27,687 | |||||||||||||||||
Debt prepayment expense | — | — | — | |||||||||||||||||
Other (income)/expense, net | (641 | ) | (575 | ) | (1,216 | ) | ||||||||||||||
Total other expenses, net | 27,046 | (575 | ) | 26,471 | ||||||||||||||||
Income (loss) before provision for income taxes | 27,429 | (2,926 | ) | 24,503 | ||||||||||||||||
Income tax expense | 1,695 | (59 | ) | 1,636 | ||||||||||||||||
Net income (loss) | $ | 25,734 | $ | (2,867 | ) | $ | 22,867 | |||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
As Revised | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Net sales | $ | 213,354 | $ | 262 | $ | 213,616 | ||||||||||||||
Cost of sales | 162,622 | — | 162,622 | |||||||||||||||||
Gross profit | 50,732 | 262 | 50,994 | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 13,117 | — | 13,117 | |||||||||||||||||
Research and development | 4,747 | — | 4,747 | |||||||||||||||||
General and administrative | 14,285 | — | 14,285 | |||||||||||||||||
32,149 | — | 32,149 | ||||||||||||||||||
Business development | — | 881 | 881 | |||||||||||||||||
Certain transaction costs (Note 3) | — | — | — | |||||||||||||||||
Restructuring costs (Note 4) | — | — | — | |||||||||||||||||
Gain on effective settlement of contract (Note 3) | — | — | — | |||||||||||||||||
Total operating expenses | 32,149 | 881 | 33,030 | |||||||||||||||||
Operating income | 18,583 | (619 | ) | 17,964 | ||||||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 24,579 | — | 24,579 | |||||||||||||||||
Debt prepayment expense | — | — | — | |||||||||||||||||
Other (income)/expense, net | (691 | ) | (881 | ) | (1,572 | ) | ||||||||||||||
Total other expenses, net | 23,888 | (881 | ) | 23,007 | ||||||||||||||||
Income (loss) before provision for income taxes | (5,305 | ) | 262 | (5,043 | ) | |||||||||||||||
Income tax expense | 1,750 | 65 | 1,815 | |||||||||||||||||
Net income (loss) | $ | (7,055 | ) | $ | 197 | $ | (6,858 | ) | ||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2011 | ||||||||||||||||||||
As Revised | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Net sales | $ | 208,816 | $ | — | $ | 208,816 | ||||||||||||||
Cost of sales | 143,851 | — | 143,851 | |||||||||||||||||
Gross profit | 64,965 | — | 64,965 | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 13,780 | — | 13,780 | |||||||||||||||||
Research and development | 5,578 | — | 5,578 | |||||||||||||||||
General and administrative | 13,098 | — | 13,098 | |||||||||||||||||
32,456 | — | 32,456 | ||||||||||||||||||
Business development | — | 504 | 504 | |||||||||||||||||
Certain transaction costs (Note 3) | — | — | — | |||||||||||||||||
Restructuring costs (Note 4) | — | — | — | |||||||||||||||||
Gain on effective settlement of contract (Note 3) | — | — | — | |||||||||||||||||
Total operating expenses | 32,456 | 504 | 32,960 | |||||||||||||||||
Operating income | 32,509 | (504 | ) | 32,005 | ||||||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 24,010 | — | 24,010 | |||||||||||||||||
Debt prepayment expense | 295 | — | 295 | |||||||||||||||||
Other (income)/expense, net | 45 | (504 | ) | (459 | ) | |||||||||||||||
Total other expenses, net | 24,350 | (504 | ) | 23,846 | ||||||||||||||||
Income (loss) before provision for income taxes | 8,159 | — | 8,159 | |||||||||||||||||
Income tax expense | 3,171 | — | 3,171 | |||||||||||||||||
Net income (loss) | $ | 4,988 | $ | — | $ | 4,988 | ||||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
Three months ended March 31, 2013 (unaudited) | ||||||||||||||||||||
As Revised | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Net sales | $ | 63,849 | $ | — | $ | 63,849 | ||||||||||||||
Cost of sales | 45,098 | 14 | 45,112 | |||||||||||||||||
Gross profit | 18,751 | (14 | ) | 18,737 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 3,174 | (79 | ) | 3,095 | ||||||||||||||||
Research and development | 819 | 1 | 820 | |||||||||||||||||
General and administrative | 3,725 | 5 | 3,730 | |||||||||||||||||
7,718 | (73 | ) | 7,645 | |||||||||||||||||
Business development | — | 75 | 75 | |||||||||||||||||
Certain transaction costs (Note 3) | — | — | — | |||||||||||||||||
Restructuring costs (Note 4) | — | — | — | |||||||||||||||||
Gain on effective settlement of contract (Note 3) | — | — | — | |||||||||||||||||
Total operating expenses | 7,718 | 2 | 7,720 | |||||||||||||||||
Operating income | 11,033 | (16 | ) | 11,017 | ||||||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 5,994 | — | 5,994 | |||||||||||||||||
Other (income)/expense, net | (712 | ) | (75 | ) | (787 | ) | ||||||||||||||
Total other expenses, net | 5,282 | (75 | ) | 5,207 | ||||||||||||||||
Income (loss) before provision for income taxes | 5,751 | 59 | 5,810 | |||||||||||||||||
Income tax expense | 681 | — | 681 | |||||||||||||||||
Net income (loss) | $ | 5,070 | $ | 59 | $ | 5,129 | ||||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
Three months ended June 30, 2013 (unaudited) | Six months ended June 30, 2013 (unaudited) | |||||||||||||||||||
As Revised | As Revised | |||||||||||||||||||
As | in this Annual | As | in this Annual | |||||||||||||||||
Previously | Report on | Previously | Report on | |||||||||||||||||
Reported | Adjustments | Form 10-K/A | Reported | Adjustments | Form 10-K/A | |||||||||||||||
Net sales | $ | 64,235 | $ | (23 | ) | $ | 64,212 | $ | 128,084 | $ | (23 | ) | $ | 128,061 | ||||||
Cost of sales | 45,765 | 65 | 45,830 | 90,863 | 79 | 90,942 | ||||||||||||||
Gross profit | 18,470 | (88 | ) | 18,382 | 37,221 | (102 | ) | 37,119 | ||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 3,582 | (130 | ) | 3,452 | 6,756 | (209 | ) | 6,547 | ||||||||||||
Research and development | 1,480 | 1 | 1,481 | 2,299 | 2 | 2,301 | ||||||||||||||
General and administrative | 3,237 | (222 | ) | 3,015 | 6,962 | (217 | ) | 6,745 | ||||||||||||
8,299 | (351 | ) | 7,948 | 16,017 | (424 | ) | 15,593 | |||||||||||||
Business development | — | 169 | 169 | — | 244 | 244 | ||||||||||||||
Certain transaction costs (Note 3) | 416 | — | 416 | 416 | — | 416 | ||||||||||||||
Restructuring costs (Note 4) | — | — | — | — | — | — | ||||||||||||||
Gain on effective settlement of contract (Note 3) | — | — | — | — | — | — | ||||||||||||||
Total operating expenses | 8,715 | (182 | ) | 8,533 | 16,433 | (180 | ) | 16,253 | ||||||||||||
Operating income | 9,755 | 94 | 9,849 | 20,788 | 78 | 20,866 | ||||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 6,069 | — | 6,069 | 12,063 | — | 12,063 | ||||||||||||||
Other (income)/expense, net | (493 | ) | (192 | ) | (685 | ) | (1,205 | ) | (267 | ) | (1,472 | ) | ||||||||
Total other expenses, net | 5,576 | (192 | ) | 5,384 | 10,858 | (267 | ) | 10,591 | ||||||||||||
Income (loss) before provision for income taxes | 4,179 | 286 | 4,465 | 9,930 | 345 | 10,275 | ||||||||||||||
Income tax expense | 21 | 57 | 78 | 702 | 57 | 759 | ||||||||||||||
Net income (loss) | $ | 4,158 | $ | 229 | $ | 4,387 | $ | 9,228 | $ | 288 | $ | 9,516 | ||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
Three months ended September 29, 2013 (unaudited) | Nine months ended September 29, 2013 (unaudited) | |||||||||||||||||||
As Revised | As Revised | |||||||||||||||||||
As | in this Annual | As | in this Annual | |||||||||||||||||
Previously | Report on | Previously | Report on | |||||||||||||||||
Reported | Adjustments | Form 10-K/A | Reported | Adjustments | Form 10-K/A | |||||||||||||||
Net sales | $ | 73,238 | $ | (208 | ) | $ | 73,030 | $ | 201,396 | $ | (231 | ) | $ | 201,165 | ||||||
Cost of sales | 58,655 | (168 | ) | 58,487 | 149,731 | (89 | ) | 149,642 | ||||||||||||
Gross profit | 14,583 | (40 | ) | 14,543 | 51,665 | (142 | ) | 51,523 | ||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 3,843 | 221 | 4,064 | 10,386 | 12 | 10,398 | ||||||||||||||
Research and development | 1,710 | 4 | 1,714 | 4,009 | 6 | 4,015 | ||||||||||||||
General and administrative | 3,886 | 10 | 3,896 | 10,848 | (207 | ) | 10,641 | |||||||||||||
9,439 | 235 | 9,674 | 25,243 | (189 | ) | 25,054 | ||||||||||||||
Business development | — | 463 | 463 | — | 707 | 707 | ||||||||||||||
Certain transaction costs (Note 3) | 461 | — | 461 | 877 | — | 877 | ||||||||||||||
Restructuring costs (Note 4) | 631 | — | 631 | 631 | — | 631 | ||||||||||||||
Gain on effective settlement of contract (Note 3) | (15,264 | ) | — | (15,264 | ) | (15,264 | ) | — | (15,264 | ) | ||||||||||
Total operating expenses | (4,733 | ) | 698 | (4,035 | ) | 11,487 | 518 | 12,005 | ||||||||||||
Operating income | 19,316 | (738 | ) | 18,578 | 40,178 | (660 | ) | 39,518 | ||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 7,623 | — | 7,623 | 19,686 | — | 19,686 | ||||||||||||||
Other (income)/expense, net | 746 | (440 | ) | 306 | (385 | ) | (707 | ) | (1,092 | ) | ||||||||||
Total other expenses, net | 8,369 | (440 | ) | 7,929 | 19,301 | (707 | ) | 18,594 | ||||||||||||
Income (loss) before provision for income taxes | 10,947 | (298 | ) | 10,649 | 20,877 | 47 | 20,924 | |||||||||||||
Income tax expense | (198 | ) | (10 | ) | (208 | ) | 504 | 47 | 551 | |||||||||||
Net income (loss) | $ | 11,145 | $ | (288 | ) | $ | 10,857 | $ | 20,373 | $ | — | $ | 20,373 | |||||||
Consolidated Statements of Comprehensive Income (Loss) | ||||||||||||||||||||
Impact of the revision | Colt Defense LLC and Subsidiaries | |||||||||||||||||||
Consolidated Statements of Comprehensive Income (Loss) | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
As Restated | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Net income (loss) | $ | 25,734 | $ | (2,867 | ) | $ | 22,867 | |||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||
Foreign currency translation adjustment: | ||||||||||||||||||||
Foreign currency translation gains (losses) | (1,872 | ) | (17 | ) | (1,889 | ) | ||||||||||||||
Pension and postretirement benefit liabilities: | ||||||||||||||||||||
Other comprehensive income (loss) arising during the period | 5,890 | — | 5,890 | |||||||||||||||||
Reclassification adjustment for unrecognized prior service costs and unrecognized loss included in net income (loss) | 501 | — | 501 | |||||||||||||||||
6,391 | — | 6,391 | ||||||||||||||||||
Comprehensive income (loss) | $ | 30,253 | $ | (2,884 | ) | $ | 27,369 | |||||||||||||
December 31, 2012 | ||||||||||||||||||||
As Revised | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Net income (loss) | $ | (7,055 | ) | $ | 197 | $ | (6,858 | ) | ||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||
Foreign currency translation adjustment: | ||||||||||||||||||||
Foreign currency translation gains (losses) | 518 | (1 | ) | 517 | ||||||||||||||||
Pension and postretirement benefit liabilities: | ||||||||||||||||||||
Other comprehensive income (loss) arising during the period | (2,322 | ) | — | (2,322 | ) | |||||||||||||||
Reclassification adjustment for unrecognized prior service costs and unrecognized loss included in net income (loss) | 1,093 | — | 1,093 | |||||||||||||||||
(1,229 | ) | — | (1,229 | ) | ||||||||||||||||
Comprehensive income (loss) | $ | (7,766 | ) | $ | 196 | $ | (7,570 | ) | ||||||||||||
Consolidated Statements of Changes in Cash Flows | ||||||||||||||||||||
Impact of the revision | Colt Defense LLC and Subsidiaries | |||||||||||||||||||
Consolidated Statement of Changes in Cash Flows | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
As Restated | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net income (loss) | $ | 25,734 | $ | (2,867 | ) | $ | 22,867 | |||||||||||||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization | 6,359 | — | 6,359 | |||||||||||||||||
Amortization of financing fees | 2,020 | — | 2,020 | |||||||||||||||||
Amortization of debt discount | 793 | — | 793 | |||||||||||||||||
Gain on effective settlement of contract | (15,264 | ) | — | (15,264 | ) | |||||||||||||||
Pension curtailment expense | — | — | — | |||||||||||||||||
Deferred income taxes | 29 | — | 29 | |||||||||||||||||
Loss (gain) on sale/disposal of fixed assets | 205 | — | 205 | |||||||||||||||||
Debt prepayment expense | — | — | — | |||||||||||||||||
Amortization of deferred revenue | (127 | ) | — | (127 | ) | |||||||||||||||
Common unit compensation expense | 27 | — | 27 | |||||||||||||||||
Changes in operating assets and liabilities, net of acquisition: | ||||||||||||||||||||
Accounts receivable | 3,222 | 262 | 3,484 | |||||||||||||||||
Inventories | (19,126 | ) | — | (19,126 | ) | |||||||||||||||
Prepaid expense and other current assets | (839 | ) | (65 | ) | (904 | ) | ||||||||||||||
Accounts payable and accrued expense | (542 | ) | (4,132 | ) | (4,674 | ) | ||||||||||||||
Accrued pension and retirement liabilities | (1,099 | ) | — | (1,099 | ) | |||||||||||||||
Customer advances and deferred income | 1,366 | 6,820 | 8,186 | |||||||||||||||||
Other | 260 | 1 | 261 | |||||||||||||||||
Net cash provided by (used in) operating activities | 3,018 | 19 | 3,037 | |||||||||||||||||
Investing Activities | ||||||||||||||||||||
Purchase of property and equipment | (8,598 | ) | — | (8,598 | ) | |||||||||||||||
Proceeds from sale/disposal of property | — | — | — | |||||||||||||||||
Business acquisition, net of cash acquired and reinvested Merger consideration | (59,488 | ) | — | (59,488 | ) | |||||||||||||||
Change in restricted cash | 244 | — | 244 | |||||||||||||||||
Net cash used in investing activities | (67,842 | ) | — | (67,842 | ) | |||||||||||||||
Financing Activities | ||||||||||||||||||||
Debt issuance costs | (2,120 | ) | — | (2,120 | ) | |||||||||||||||
Proceeds from the issuance of long-term debt | 47,707 | — | 47,707 | |||||||||||||||||
Repayment of long-term debt | (1,250 | ) | — | (1,250 | ) | |||||||||||||||
Line of credit advances | 10,083 | — | 10,083 | |||||||||||||||||
Line of credit repayments | (3,006 | ) | — | (3,006 | ) | |||||||||||||||
Purchase of common units | (14,000 | ) | — | (14,000 | ) | |||||||||||||||
Proceeds from the issuance of common units, net of reinvested consideration proceeds | 5,000 | — | 5,000 | |||||||||||||||||
Capital lease obligation payments | (393 | ) | — | (393 | ) | |||||||||||||||
Distributions paid to members | (6,370 | ) | — | (6,370 | ) | |||||||||||||||
Net cash provided by (used in) financing activities | 35,651 | — | 35,651 | |||||||||||||||||
Effect of exchange rates on cash and cash equivalents | (606 | ) | (19 | ) | (625 | ) | ||||||||||||||
Change in cash and cash equivalents | (29,779 | ) | — | (29,779 | ) | |||||||||||||||
Cash and cash equivalents, beginning of period | 42,373 | — | 42,373 | |||||||||||||||||
Cash and cash equivalents, end of period | $ | 12,594 | $ | — | $ | 12,594 | ||||||||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Consolidated Statement of Changes in Cash Flows | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
As Revised | ||||||||||||||||||||
As | in this Annual | |||||||||||||||||||
Previously | Report on | |||||||||||||||||||
Reported | Adjustments | Form 10-K/A | ||||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net income (loss) | $ | (7,055 | ) | $ | 197 | $ | (6,858 | ) | ||||||||||||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization | 5,696 | — | 5,696 | |||||||||||||||||
Amortization of financing fees | 1,653 | — | 1,653 | |||||||||||||||||
Amortization of debt discount | 381 | — | 381 | |||||||||||||||||
Gain on effective settlement of contract | — | — | — | |||||||||||||||||
Pension curtailment expense | 1,325 | — | 1,325 | |||||||||||||||||
Deferred income taxes | 39 | — | 39 | |||||||||||||||||
Loss (gain) on sale/disposal of fixed assets | 4 | — | 4 | |||||||||||||||||
Debt prepayment expense | — | — | — | |||||||||||||||||
Amortization of deferred revenue | (79 | ) | — | (79 | ) | |||||||||||||||
Common unit compensation expense | 17 | — | 17 | |||||||||||||||||
Changes in operating assets and liabilities, net of acquisition: | ||||||||||||||||||||
Accounts receivable | 8,091 | (262 | ) | 7,829 | ||||||||||||||||
Inventories | (4,158 | ) | — | (4,158 | ) | |||||||||||||||
Prepaid expense and other current assets | (984 | ) | 65 | (919 | ) | |||||||||||||||
Accounts payable and accrued expense | 5,201 | — | 5,201 | |||||||||||||||||
Accrued pension and retirement liabilities | (172 | ) | — | (172 | ) | |||||||||||||||
Customer advances and deferred income | 2,001 | — | 2,001 | |||||||||||||||||
Other | 463 | — | 463 | |||||||||||||||||
Net cash provided by (used in) operating activities | 12,423 | — | 12,423 | |||||||||||||||||
Investing Activities | ||||||||||||||||||||
Purchase of property and equipment | (4,410 | ) | — | (4,410 | ) | |||||||||||||||
Proceeds from sale/disposal of property | 66 | — | 66 | |||||||||||||||||
Business acquisition, net of cash acquired and reinvested Merger consideration | — | — | — | |||||||||||||||||
Change in restricted cash | 464 | — | 464 | |||||||||||||||||
Net cash used in investing activities | (3,880 | ) | — | (3,880 | ) | |||||||||||||||
Financing Activities | ||||||||||||||||||||
Debt issuance costs | — | — | — | |||||||||||||||||
Proceeds from the issuance of long-term debt | — | — | — | |||||||||||||||||
Repayment of long-term debt | — | — | — | |||||||||||||||||
Line of credit advances | 6 | — | 6 | |||||||||||||||||
Line of credit repayments | — | — | — | |||||||||||||||||
Purchase of common units | — | — | — | |||||||||||||||||
Proceeds from the issuance of common units, net of reinvested consideration proceeds | — | — | — | |||||||||||||||||
Capital lease obligation payments | (1,148 | ) | — | (1,148 | ) | |||||||||||||||
Distributions paid to members | (3,343 | ) | — | (3,343 | ) | |||||||||||||||
Net cash provided by (used in) financing activities | (4,485 | ) | — | (4,485 | ) | |||||||||||||||
Effect of exchange rates on cash and cash equivalents | 79 | — | 79 | |||||||||||||||||
Change in cash and cash equivalents | 4,137 | — | 4,137 | |||||||||||||||||
Cash and cash equivalents, beginning of period | 38,236 | — | 38,236 | |||||||||||||||||
Cash and cash equivalents, end of period | $ | 42,373 | $ | — | $ | 42,373 | ||||||||||||||
Consolidated Statements of Changes in Deficit | ||||||||||||||||||||
Impact of the revision | Colt Defense LLC and Subsidiaries | |||||||||||||||||||
Consolidated Statements of Changes in Deficit | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
Accumulated Members’ | Accumulated Other | |||||||||||||||||||
Deficit | Comprehensive Loss | Total Changes in Deficit | ||||||||||||||||||
As Restated | As Restated | As Restated | ||||||||||||||||||
As | in this Annual | As | in this Annual | As | in this Annual | |||||||||||||||
Member | Previously | Report on | Previously | Report on | Previously | Report on | ||||||||||||||
Units | Reported | Form 10-K/A | Reported | Form 10-K/A | Reported | Form 10-K/A | ||||||||||||||
Balance, December 31, 2011 | 132,174 | (129,704 | ) | (129,704 | ) | (13,130 | ) | (13,130 | ) | (142,834 | ) | (142,834 | ) | |||||||
Common unit expense | — | 17 | 17 | — | — | 17 | 17 | |||||||||||||
Distribution to members | — | — | — | — | — | — | — | |||||||||||||
State of Connecticut members’ withholding | — | (704 | ) | (704 | ) | — | — | (704 | ) | (704 | ) | |||||||||
Net income | — | (7,055 | ) | (6,858 | ) | — | — | (7,055 | ) | (6,858 | ) | |||||||||
Other comprehensive (loss)/ income: | ||||||||||||||||||||
Pension and postretirement health liabilities | — | — | — | (1,229 | ) | (1,229 | ) | (1,229 | ) | (1,229 | ) | |||||||||
Foreign currency translation | — | — | — | 518 | 517 | 518 | 517 | |||||||||||||
Comprehensive loss | — | — | — | — | (7,766 | ) | (7,570 | ) | ||||||||||||
Balance, December 31, 2012 (As Revised) | 132,174 | (137,446 | ) | (137,249 | ) | (13,841 | ) | (13,842 | ) | (151,287 | ) | (151,091 | ) | |||||||
Common unit expense | — | 27 | 27 | — | — | 27 | 27 | |||||||||||||
Distribution to members | — | (9,317 | ) | (9,317 | ) | — | — | (9,317 | ) | (9,317 | ) | |||||||||
State of Connecticut members’ withholding | — | (408 | ) | (408 | ) | — | — | (408 | ) | (408 | ) | |||||||||
Write off of prepaid license | — | (1,056 | ) | (1,056 | ) | — | — | (1,056 | ) | (1,056 | ) | |||||||||
Repurchase of common units | (31,166 | ) | (14,000 | ) | (14,000 | ) | — | — | (14,000 | ) | (14,000 | ) | ||||||||
Sale of common units | 31,166 | 9,000 | 9,000 | — | — | 9,000 | 9,000 | |||||||||||||
Net income | — | 25,734 | 22,867 | — | — | 25,734 | 22,867 | |||||||||||||
Other comprehensive (loss)/ income: | ||||||||||||||||||||
Pension and postretirement health liabilities | — | — | — | 6,391 | 6,391 | 6,391 | 6,391 | |||||||||||||
Foreign currency translation | — | — | — | (1,872 | ) | (1,889 | ) | (1,872 | ) | (1,889 | ) | |||||||||
Comprehensive income | — | — | — | — | — | 30,253 | 27,369 | |||||||||||||
Balance, December 31, 2013 (As Restated) | 132,174 | (127,466 | ) | (130,136 | ) | (9,322 | ) | (9,340 | ) | (136,788 | ) | (139,476 | ) | |||||||
Acquisition_Tables
Acquisition (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Acquisition | ||||||||
Summary of the fair values of the assets acquired, net of cash acquired, and the liabilities assumed at the Merger Date | The following table summarizes the fair values of the assets acquired and the liabilities assumed at the Merger Date: | |||||||
Cash and cash equivalents | $ | 3,791 | ||||||
Accounts receivable | 3,318 | |||||||
Inventories | 7,585 | |||||||
Property and equipment | 5,182 | |||||||
Other assets | 3,090 | |||||||
Intangible assets with finite lives | 9,340 | |||||||
Trademarks | 50,100 | |||||||
Goodwill | 36,974 | |||||||
Total assets acquired | 119,380 | |||||||
Accounts payable and accrued expenses | 8,808 | |||||||
Customer advances and deferred revenue | 1,832 | |||||||
Capital lease obligations | 393 | |||||||
Pension and retirement liabilities | 9,357 | |||||||
Deferred tax liabilities | 16,447 | |||||||
Total liabilities assumed | 36,837 | |||||||
Net assets acquired | $ | 82,543 | ||||||
Schedule of unaudited pro forma operating results | ||||||||
Unaudited Pro Forma | ||||||||
Years Ended | ||||||||
December 31, | December 31, | |||||||
2013 | 2012 | |||||||
(As Restated) | (As Revised) | |||||||
Net sales | $ | 309,556 | $ | 267,714 | ||||
Net income (loss) | 17,474 | (4,590 | ) |
Restructuring_Costs_Tables
Restructuring Costs (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Restructuring Costs | |||||
Summary of the accrual balances and utilization for restructuring action | |||||
Restructuring accruals at December 31, 2012 | $ | — | |||
Accrued restructuring liability | 1,118 | ||||
Utilization | (412 | ) | |||
Balance at December 31, 2013 | $ | 706 |
Inventories_Tables
Inventories (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Inventories | ||||||||
Summary of inventories, net of reserves for the lower of cost or market | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Raw materials | $ | 43,469 | $ | 29,177 | ||||
Work in process | 9,476 | 7,829 | ||||||
Finished products | 13,729 | 3,555 | ||||||
$ | 66,674 | $ | 40,561 |
Notes_Payable_and_LongTerm_Deb1
Notes Payable and Long-Term Debt (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Notes Payable and Long-Term Debt | ||||||||||||||
Schedule of principal repayments, which are due quarterly on the last day of each calendar quarter | ||||||||||||||
Amount | ||||||||||||||
2014 | $ | 5,000 | ||||||||||||
2015 | 7,500 | |||||||||||||
2016 | 36,250 | |||||||||||||
Total | $ | 48,750 | ||||||||||||
Schedule of outstanding loan balances | ||||||||||||||
Credit | Senior | Term | ||||||||||||
Agreement | Notes | Loan | Total | |||||||||||
Balance at December 31, 2011 | $ | — | $ | 250,000 | $ | — | $ | 250,000 | ||||||
Unamortized discount | — | (2,814 | ) | — | (2,814 | ) | ||||||||
Net debt at December 31, 2011 | — | 247,186 | — | 247,186 | ||||||||||
Line of credit advances | 6 | — | — | 6 | ||||||||||
Amortization of discount (a) | — | 381 | — | 381 | ||||||||||
Net debt at December 31, 2012 | 6 | 247,567 | — | 247,573 | ||||||||||
Line of credit advances | 10,083 | — | — | 10,083 | ||||||||||
Line of credit repayments | (3,006 | ) | — | — | (3,006 | ) | ||||||||
Original issue | — | — | 50,000 | 50,000 | ||||||||||
Debt discount | — | — | (2,293 | ) | (2,293 | ) | ||||||||
Principal payments | — | — | (1,250 | ) | (1,250 | ) | ||||||||
Amortization of discount (a) | — | 417 | 376 | 793 | ||||||||||
Net debt at December 31, 2013 | 7,083 | 247,984 | 46,833 | 301,900 | ||||||||||
Less: current portion | (7,083 | ) | — | (5,000 | ) | (12,083 | ) | |||||||
Long-term debt at December 31, 2013 | $ | — | $ | 247,984 | $ | 41,833 | $ | 289,817 | ||||||
(a) | Interest expense for 2013 and 2012 includes $793 and $381, respectively, of amortization of original issue discount of the Senior Notes and Term Loan. | |||||||||||||
Summary of deferred financing fee activity | ||||||||||||||
Total | ||||||||||||||
Balance at December 31, 2011 | $ | 9,312 | ||||||||||||
Amortization of deferred financing costs | (1,653 | ) | ||||||||||||
Financing fees paid and accrued | (17 | ) | ||||||||||||
Balance at December 31, 2012 | $ | 7,642 | ||||||||||||
Amortization of deferred financing costs | (2,020 | ) | ||||||||||||
Financing fees paid and accrued | 2,120 | |||||||||||||
Balance at December 31, 2013 | $ | 7,742 | ||||||||||||
Lease_Obligations_Tables
Lease Obligations (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Lease Obligations | |||||
Schedule of future minimum lease payments under non-cancelable leases with a remaining term of greater than one year | |||||
Operating | |||||
Leases | |||||
2014 | $ | 1,282 | |||
2015 | 910 | ||||
2016 | 158 | ||||
2017 | 117 | ||||
2018 | 108 | ||||
Thereafter | 459 | ||||
Total minimum lease payments | $ | 3,034 | |||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income Taxes | |||||||||||
Schedule of components of income (loss) before provision for income taxes | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
United States | $ | 18,912 | $ | (11,923 | ) | $ | (4,559 | ) | |||
Foreign | 5,591 | 6,880 | 12,718 | ||||||||
Total | $ | 24,503 | $ | (5,043 | ) | $ | 8,159 | ||||
Schedule of components of expense (benefit) for income tax | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Current: | |||||||||||
Federal | $ | — | $ | — | $ | — | |||||
State | — | — | — | ||||||||
Foreign | 1,607 | 1,776 | 3,442 | ||||||||
Total current | 1,607 | 1,776 | 3,442 | ||||||||
Deferred and other: | |||||||||||
Federal | — | — | — | ||||||||
State | — | — | — | ||||||||
Foreign | 29 | 39 | (271 | ) | |||||||
Total deferred and other: | 29 | 39 | (271 | ) | |||||||
Total tax expense | $ | 1,636 | $ | 1,815 | $ | 3,171 | |||||
Schedule of components of deferred tax assets and liabilities | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Current tax assets: | |||||||||||
Accounts receivable reserves | $ | 74 | $ | — | |||||||
Inventory reserves | 865 | — | |||||||||
Accrued insurance | 250 | — | |||||||||
Accrued payroll | 150 | — | |||||||||
Accrued warranties | 125 | 40 | |||||||||
Other accrued expenses | 316 | 145 | |||||||||
Less: valuation allowance | (826 | ) | — | ||||||||
Total current deferred tax assets | $ | 954 | $ | 185 | |||||||
Long-term tax assets (liabilities): | |||||||||||
Pension & post retirement obligations | $ | 2,913 | $ | — | |||||||
Net operating loss carry forwards | 3,943 | — | |||||||||
Federal AMT credits | 888 | — | |||||||||
Fixed assets | (1,545 | ) | (388 | ) | |||||||
Intangible assets | (21,263 | ) | (1,127 | ) | |||||||
Other long-term assets | 450 | — | |||||||||
Less: valuation allowance | (4,101 | ) | — | ||||||||
Total long-term deferred tax liabilities | $ | (18,715 | ) | $ | (1,515 | ) | |||||
Net long-term deferred tax liabilities | $ | (17,761 | ) | $ | (1,330 | ) | |||||
Schedule of effective income tax provision (benefit) was different than the statutory federal and state income tax rates | |||||||||||
2013 | 2012 | 2011 | |||||||||
Expected Tax Rate | 34 | % | 34 | % | 34 | % | |||||
Meals and Entertainment | 0.05 | (0.21 | ) | 0.12 | |||||||
Pass Through Taxation (Zero Rate) | (26.44 | ) | (80.39 | ) | 19 | ||||||
Other Non-Deductible Items | 0.02 | (0.03 | ) | 0.01 | |||||||
Tax credits | (1.09 | ) | 5.12 | (4.51 | ) | ||||||
Tax Rate Differentials | (2.06 | ) | 12.28 | (11.69 | ) | ||||||
Withholding Tax | 2.12 | (6.54 | ) | 3.73 | |||||||
Valuation Allowance | 0.17 | 0 | 0 | ||||||||
Other Adjustments | (0.09 | ) | (0.23 | ) | (1.79 | ) | |||||
Effective Tax Rate | 6.68 | % | (36.00 | )% | 38.87 | % | |||||
Summary of uncertain tax positions | |||||||||||
2013 | |||||||||||
Balance as of December 12, 2012 | $ | — | |||||||||
Add New Colt’s uncertain tax position as of July 12, 2013 | 198 | ||||||||||
Additions based on tax provisions related to the current year | — | ||||||||||
Additions for tax provisions of prior years | — | ||||||||||
Reductions for tax provisions of prior years | — | ||||||||||
Balance as of December 31, 2013 | $ | 198 |
Pension_Savings_and_Postretire1
Pension, Savings and Postretirement Benefits (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Pension, savings and postretirement benefits | ||||||||||||||||||||
Schedule of disclosures related to the pension plans and the postretirement health care coverage | ||||||||||||||||||||
Postretirement | ||||||||||||||||||||
Pension Plans | Healthcare Coverage | |||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||
Projected benefit obligation (“PBO”) at beginning of year | $ | 29,168 | $ | 25,590 | $ | 14,091 | $ | 12,524 | ||||||||||||
New Colt plans PBO at Merger Date | 9,131 | — | 8,077 | — | ||||||||||||||||
Service cost | 315 | 455 | 549 | 256 | ||||||||||||||||
Interest cost | 1,296 | 1,141 | 658 | 527 | ||||||||||||||||
Plan amendments | — | 951 | — | — | ||||||||||||||||
Actuarial (gain) loss | (2,175 | ) | 1,766 | (1,583 | ) | 1,286 | ||||||||||||||
Benefits paid and expenses | (1,540 | ) | (735 | ) | (717 | ) | (502 | ) | ||||||||||||
Projected benefit obligation at end of year | 36,195 | 29,168 | 21,075 | 14,091 | ||||||||||||||||
Fair value of plan assets at beginning of year | 22,372 | 19,609 | — | — | ||||||||||||||||
Fair value of plan assets at Merger Date | 7,841 | — | — | — | ||||||||||||||||
Employer contributions | 1,740 | 1,500 | 717 | 502 | ||||||||||||||||
Actual return on plan assets | 4,102 | 1,998 | — | — | ||||||||||||||||
Benefits paid and expenses | (1,540 | ) | (735 | ) | (717 | ) | (502 | ) | ||||||||||||
Fair value of plan assets at end of year | 34,515 | 22,372 | — | — | ||||||||||||||||
Funded status at end of year | $ | (1,680 | ) | $ | (6,796 | ) | $ | (21,075 | ) | $ | (14,091 | ) | ||||||||
Schedule of the components of the unfunded benefit obligations of the hourly and salaried defined benefit plans | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Hourly | Salaried | Hourly | Salaried | |||||||||||||||||
Plans | Plans | Total | Plan | Plan | Total | |||||||||||||||
Projected benefit obligation | $ | 26,328 | $ | 9,867 | $ | 36,195 | $ | 20,474 | $ | 8,694 | $ | 29,168 | ||||||||
Fair value of plan assets | 24,607 | 9,908 | 34,515 | 15,602 | 6,770 | 22,372 | ||||||||||||||
Funded status | $ | (1,721 | ) | $ | 41 | $ | (1,680 | ) | $ | (4,872 | ) | $ | (1,924 | ) | $ | (6,796 | ) | |||
Schedule of the components of cost recognized in other comprehensive loss | ||||||||||||||||||||
Post | ||||||||||||||||||||
Pension | Retirement | |||||||||||||||||||
Plans | Health | Total | ||||||||||||||||||
Balance at December 31, 2011 | $ | (13,095 | ) | $ | (2,250 | ) | $ | (15,345 | ) | |||||||||||
Recognized in other comprehensive loss | 22 | (1,251 | ) | (1,229 | ) | |||||||||||||||
Balance at December 31, 2012 | (13,073 | ) | (3,501 | ) | (16,574 | ) | ||||||||||||||
Recognized in other comprehensive loss | 4,736 | 1,655 | 6,391 | |||||||||||||||||
Balance at December 31, 2013 | $ | (8,337 | ) | $ | (1,846 | ) | $ | (10,183 | ) | |||||||||||
Schedule of the estimated amount that will be amortized from accumulated other comprehensive loss into net periodic cost in 2014 | ||||||||||||||||||||
Post | ||||||||||||||||||||
Pension | Retirement | |||||||||||||||||||
Plans | Health | |||||||||||||||||||
Prior service cost/(gain) | $ | — | $ | (172 | ) | |||||||||||||||
Actuarial loss | 264 | 97 | ||||||||||||||||||
Total | $ | 264 | $ | (75 | ) | |||||||||||||||
Schedule of weighted average assumptions used in determining the year-end benefit obligation | ||||||||||||||||||||
Hourly | Salaried | Postretirement | ||||||||||||||||||
Pension Plans (a)(b) | Pension Plans (a)(c) | Healthcare | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||
Discount rate | 4.50 | % | 3.75 | % | 4.75 | % | 4.00 | % | 4.50 | % | 3.50 | % | ||||||||
Expected return on plan assets | 7.00 | % | 7.50 | % | 7.00 | % | 7.50 | % | N/A | N/A | ||||||||||
(a) | After the Merger in 2013, and through December 31, 2013, there were two hourly pension plans and two salaried pension plans. | |||||||||||||||||||
(b) | Effective January 1, 2014, the Colt Defense LLC Bargaining Unit Employees’ Pension Plan merged with the Colt’s Manufacturing Company LLC Bargaining Unit Employees’ Pension Plan. The merged plan retained the name of “Colt’s Manufacturing Company LLC Bargaining Unit Employees’ Pension Plan.” | |||||||||||||||||||
(c) | Effective January 1, 2014, the Colt Defense LLC Salaried Retirement Income Plan merged with the Colt’s Manufacturing Company LLC Salaried Retirement Income Plan. The merged plan was renamed “Colt Retirement Defined Benefit Plan.” | |||||||||||||||||||
Schedule of weighted average assumptions used to determine net periodic cost | ||||||||||||||||||||
Hourly Pension Plans (a) | Salaried Pension Plans (a) | |||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||||
Discount rate | 3.75 | % | 4.25 | % | 5.50 | % | 4.00 | % | 4.50 | % | 5.50 | % | ||||||||
Expected return on plan assets | 7.50 | % | 8.00 | % | 8.00 | % | 7.50 | % | 8.00 | % | 8.00 | % | ||||||||
Postretirement Health | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Discount rate | 3.50 | % | 4.25 | % | 5.50 | % | ||||||||||||||
Expected return on plan assets | N/A | N/A | N/A | |||||||||||||||||
(a) | After the Merger in 2013, and through December 31, 2013, there were two hourly pension plans and two salaried pension plans. | |||||||||||||||||||
Schedule of allocation by asset category | ||||||||||||||||||||
Fair Value Measurements at | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Allocation | ||||||||||||||||||||
Total | Percent | Level 1 | Level 2 | Level 3 | ||||||||||||||||
Equity mutual funds | $ | 19,903 | 58 | % | $ | 19,903 | $ | — | $ | — | ||||||||||
Fixed income mutual funds | 9,431 | 27 | % | 9,431 | — | — | ||||||||||||||
Money market funds | 446 | 1 | % | 446 | — | — | ||||||||||||||
Stable value | 4,735 | 14 | % | — | 4,735 | — | ||||||||||||||
$ | 34,515 | 100 | % | $ | 29,780 | $ | 4,735 | $ | — | |||||||||||
Fair Value Measurements at | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Allocation | ||||||||||||||||||||
Total | Percent | Level 1 | Level 2 | Level 3 | ||||||||||||||||
Equity mutual funds | $ | 11,344 | 51 | % | $ | 11,344 | $ | — | $ | — | ||||||||||
Fixed income mutual funds | 7,193 | 32 | % | 7,193 | — | — | ||||||||||||||
Money market funds | 644 | 3 | % | 644 | — | — | ||||||||||||||
Stable value | 3,191 | 14 | % | — | 3,191 | — | ||||||||||||||
$ | 22,372 | 100 | % | $ | 19,181 | $ | 3,191 | $ | — | |||||||||||
Schedule of benefit payments, which reflect future service as appropriate, which are expected to be paid | ||||||||||||||||||||
Post | ||||||||||||||||||||
Pension | Retirement | |||||||||||||||||||
Years ending | Plans | Health | ||||||||||||||||||
2014 | $ | 1,931 | $ | 1,085 | ||||||||||||||||
2015 | 1,937 | 1,147 | ||||||||||||||||||
2016 | 1,994 | 1,208 | ||||||||||||||||||
2017 | 2,039 | 1,264 | ||||||||||||||||||
2018 | 2,077 | 1,310 | ||||||||||||||||||
2019-2023 | 11,164 | 7,031 | ||||||||||||||||||
Pension plans | ||||||||||||||||||||
Pension, savings and postretirement benefits | ||||||||||||||||||||
Schedule of the components of cost recognized in the statement of operations | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Service cost | $ | 549 | $ | 256 | $ | 179 | ||||||||||||||
Interest cost | 658 | 527 | 573 | |||||||||||||||||
Amortization of unrecognized prior service costs | (172 | ) | (172 | ) | (172 | ) | ||||||||||||||
Amortization of unrecognized loss | 244 | 208 | 70 | |||||||||||||||||
Net periodic cost | $ | 1,279 | $ | 819 | $ | 650 | ||||||||||||||
Postretirement Healthcare Coverage | ||||||||||||||||||||
Pension, savings and postretirement benefits | ||||||||||||||||||||
Schedule of the components of cost recognized in the statement of operations | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Service cost | $ | 315 | $ | 455 | $ | 287 | ||||||||||||||
Interest cost | 1,296 | 1,141 | 1,090 | |||||||||||||||||
Expected return on assets | (1,970 | ) | (1,641 | ) | (1,549 | ) | ||||||||||||||
Curtailment of hourly plan | — | 1,325 | — | |||||||||||||||||
Amortization of unrecognized prior service costs | — | 244 | 170 | |||||||||||||||||
Amortization of unrecognized loss | 429 | 813 | 495 | |||||||||||||||||
Net periodic cost | $ | 70 | $ | 2,337 | $ | 493 | ||||||||||||||
Common_Unit_Compensation_Table
Common Unit Compensation (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Common Unit Compensation | |||||||
Summary of common unit option awards | |||||||
Number of Units | Weighted- | ||||||
Average | |||||||
Exercise Price | |||||||
Outstanding, December 31, 2011 | — | $ | — | ||||
Granted | 11,325 | 100 | |||||
Exercised | — | — | |||||
Forfeited/Cancelled | — | — | |||||
Outstanding, December 31, 2012 | 11,325 | 100 | |||||
Granted | 5,300 | 288.78 | |||||
Exercised | — | — | |||||
Forfeited/Cancelled | (8,271 | ) | 113.69 | ||||
Outstanding, December 31, 2013 | 8,354 | 206.21 | |||||
Transactions_with_Related_Part1
Transactions with Related Parties (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Transactions with Related Parties | |||||||||||
Schedule of transactions by Colt Defense with New Colt | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Net sales to New Colt | $ | 44,773 | $ | 73,292 | $ | 11,746 | |||||
Purchases from New Colt | 1,891 | — | — | ||||||||
Administration and service fees | 920 | 1,098 | 430 | ||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Commitments and Contingencies | |||||||||||||||||
Summary of standby letters of credit issued principally in connection with performance and warranty bonds established for the benefit of certain international customers | |||||||||||||||||
As of December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Standby letters of credit secured by restricted cash | $ | 1,185 | $ | 1,253 | |||||||||||||
Standby letters of credit secured by Credit Agreement | 3,486 | 1,715 | |||||||||||||||
Guarantees of standby letters of credit established by a sales agent on behalf of Colt | 74 | 702 | |||||||||||||||
Summary of M240 Program - contract modification and contract obligation expense activity included in the Company's consolidated statement of operations | |||||||||||||||||
As Originally Reported | Adjustments | As Restated | |||||||||||||||
For the nine | For the three | For the three | |||||||||||||||
months ended | months ended | For the year-ended | months ended | ||||||||||||||
September 29, | December 31, | December 31, | M240 Program | December 31, | |||||||||||||
2013 | 2013 | 2013 | Error | 2013 | |||||||||||||
M240 Program - contract modification | $ | — | $ | — | $ | — | $ | (6,820 | ) | $ | (6,820 | ) | |||||
Impact to Total Net Sales | — | — | — | (6,820 | ) | (6,820 | ) | ||||||||||
Cost of Sales | — | — | — | 3,381 | 3,381 | ||||||||||||
Contract obligation expense | 7,041 | 472 | 7,513 | (7,513 | ) | — | |||||||||||
Impact to Total Cost of Sales | 7,041 | 472 | 7,513 | (4,132 | ) | 3,381 | |||||||||||
Impact to Gross Profit | $ | (7,041 | ) | $ | (472 | ) | $ | (7,513 | ) | $ | (2,688 | ) | $ | (10,201 | ) | ||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Segment Information | |||||||||||
Schedule of reconciliation of net income (loss) to Adjusted EBITDA | The following table represents a reconciliation of net income (loss) to Adjusted EBITDA: | ||||||||||
2013 | 2012 | 2011 | |||||||||
(As Restated) | (As Revised) | ||||||||||
Net income (loss) | $ | 22,867 | $ | (6,858 | ) | $ | 4,988 | ||||
Income tax (benefit) expense | 1,636 | 1,815 | 3,171 | ||||||||
Depreciation and amortization (i) | 6,359 | 5,696 | 5,476 | ||||||||
Interest expense | 27,687 | 24,579 | 24,010 | ||||||||
Sciens fees and expenses (ii) | 686 | 356 | 450 | ||||||||
Pension curtailment expense (iii) | — | 1,325 | — | ||||||||
Business development costs (iv) | 575 | 881 | 504 | ||||||||
Transaction costs (v) | 1,147 | — | — | ||||||||
Restructuring costs (vi) | 782 | — | — | ||||||||
Gain on effective settlement of contract (vii) | (15,264 | ) | — | — | |||||||
Lease buyout expense (viii) | 287 | — | — | ||||||||
M240 Program - contract modification and obligation expense (ix) | 10,201 | — | — | ||||||||
Other (income) expenses, net (x) | (562 | ) | (474 | ) | 266 | ||||||
Adjusted EBITDA | $ | 56,401 | $ | 27,320 | $ | 38,865 | |||||
(i) | Includes depreciation and amortization of intangible assets. | ||||||||||
(ii) | Includes fees and expenses pursuant to the agreements with Sciens Management and Sciens International. | ||||||||||
(iii) | Non-cash expense associated with the curtailment of pension plans. | ||||||||||
(iv) | Primarily outside professional service fees associated with strategic initiatives. | ||||||||||
(v) | Non-recurring costs associated with the Merger. | ||||||||||
(vi) | Non-recurring costs associated with restructuring initiatives undertaken as a result of the Merger. | ||||||||||
(vii) | Gain from the settlement of the pre-existing License agreement between Colt Defense and New Colt. | ||||||||||
(viii) | Expense associated with the early retirement of capital and operating leases. | ||||||||||
(ix) | M240 Program contract modification and contract obligation expense, see Note 13, “Commitments and Contingencies” | ||||||||||
(x) | Includes income and/or expenses such as foreign currency exchange gains or losses and other less significant charges not related to on-going operations. | ||||||||||
Schedule of net sales by product category | |||||||||||
For the Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(As Restated) | (As Revised) | ||||||||||
Long guns | $ | 194,634 | $ | 159,528 | $ | 125,141 | |||||
Hand guns | 30,052 | 1,260 | — | ||||||||
Spares and other | 46,197 | 52,828 | 83,675 | ||||||||
Total | $ | 270,883 | $ | 213,616 | $ | 208,816 | |||||
Schedule of total net sales for specific geographic regions | |||||||||||
2013 | 2012 | 2011 | |||||||||
(As Restated) | (As Revised) | ||||||||||
United States | $ | 158,311 | $ | 111,878 | $ | 89,544 | |||||
Asia/Pacific | 64,959 | 45,866 | 26,762 | ||||||||
Canada | 28,130 | 30,244 | 26,064 | ||||||||
Europe | 9,255 | 16,501 | 34,908 | ||||||||
Middle East/Asia | 3,065 | 3,675 | 26,188 | ||||||||
Latin America/Caribbean | 7,163 | 5,452 | 5,350 | ||||||||
$ | 270,883 | $ | 213,616 | $ | 208,816 | ||||||
Schedule of long-lived assets, which are net fixed assets attributable to specific geographic regions: | |||||||||||
2013 | 2012 | ||||||||||
United States | $ | 25,745 | $ | 17,272 | |||||||
Canada | 4,988 | 4,862 | |||||||||
$ | 30,733 | $ | 22,134 | ||||||||
Other_LongTerm_Liabilities_Tab
Other Long-Term Liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Other Long-Term Liabilities | ||||||||
Schedule of other long-term liabilities | ||||||||
As of December 31, | ||||||||
2013 | 2012 | |||||||
Deferred revenue | $ | 778 | $ | 905 | ||||
Royalty payable | 1,125 | — | ||||||
Other | 327 | 3 | ||||||
$ | 2,230 | $ | 908 |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Accumulated Other Comprehensive Loss | ||||||||||||||
Schedule of the components of accumulated other comprehensive loss | ||||||||||||||
Unrecognized | Foreign | |||||||||||||
Prior Service | Unrecognized | Currency | ||||||||||||
Cost | Loss | Translation | Total | |||||||||||
Balance, December 31, 2010 | $ | 380 | $ | (10,523 | ) | $ | 2,659 | $ | (7,484 | ) | ||||
Other comprehensive income before reclassifications | — | (5,765 | ) | — | (5,765 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income | (2 | ) | 565 | — | 563 | |||||||||
Currency translation | — | — | (444 | ) | (444 | ) | ||||||||
Net current period other comprehensive income | (2 | ) | (5,200 | ) | (444 | ) | (5,646 | ) | ||||||
Balance, December 31, 2011 | 378 | (15,723 | ) | 2,215 | (13,130 | ) | ||||||||
Other comprehensive income before reclassifications | 375 | (2,697 | ) | — | (2,322 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income | 72 | 1,021 | — | 1,093 | ||||||||||
Currency translation | — | — | 517 | 517 | ||||||||||
Net current period other comprehensive income | 447 | (1,676 | ) | 517 | (712 | ) | ||||||||
Balance, December 31, 2012 (As Revised) | 825 | (17,399 | ) | 2,732 | (13,842 | ) | ||||||||
Other comprehensive income before reclassifications | — | 5,890 | — | 5,890 | ||||||||||
Amounts reclassified from accumulated other comprehensive income | (172 | ) | 673 | 501 | ||||||||||
Currency translation | — | — | (1,889 | ) | (1,889 | ) | ||||||||
Net current period other comprehensive income | (172 | ) | 6,563 | (1,889 | ) | 4,502 | ||||||||
Balance, December 31, 2013 (As Restated) | $ | 653 | $ | (10,836 | ) | $ | 843 | (9,340 | ) | |||||
Quarterly_Operating_Results_Un1
Quarterly Operating Results (Unaudited) (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Quarterly Operating Results (Unaudited) | ||||||||||||||
Schedule of quarterly operating results (unaudited) | ||||||||||||||
For the Year Ended December 31, 2013 | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
(As Revised) | (As Revised) | (As Revised) | (As Restated) | |||||||||||
Statement of operations data: | ||||||||||||||
Net sales | $ | 63,849 | $ | 64,212 | $ | 73,030 | $ | 69,792 | ||||||
Cost of sales | 45,112 | 45,830 | 58,487 | 47,683 | ||||||||||
Gross profit | 18,737 | 18,382 | 14,543 | 22,109 | ||||||||||
Business development | 75 | 169 | 463 | (132 | ) | |||||||||
Transaction and restructuring costs | — | 416 | 1,092 | 421 | ||||||||||
Gain on effective settlement of contract | — | — | (15,264 | ) | — | |||||||||
Net income | 5,129 | 4,387 | 10,857 | 2,494 | ||||||||||
For the Year Ended December 31, 2012 | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
(As Revised) | ||||||||||||||
Statement of operations data: | ||||||||||||||
Net sales | $ | 43,853 | $ | 45,837 | $ | 56,555 | $ | 67,371 | ||||||
Gross profit | 7,743 | 8,720 | 16,310 | 18,221 | ||||||||||
Business development | 35 | — | 100 | 746 | ||||||||||
Net income (loss) | (7,088 | ) | (6,237 | ) | 2,894 | 3,573 |
Supplemental_Condensed_Consoli1
Supplemental Condensed Consolidating Financial Statement Information (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Supplemental Condensed Consolidating Financial Statement Information | ||||||||||||||||||||
Schedule of condensed consolidating balance sheet | ||||||||||||||||||||
Condensed Consolidating Balance Sheet | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
(As Restated) | ||||||||||||||||||||
Colt | Colt | Total | Total Non- | Consolidating | ||||||||||||||||
Defense | Finance | Guarantor | Guarantor | /Eliminating | ||||||||||||||||
LLC | Corp | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 2,899 | $ | — | $ | 9,695 | $ | — | $ | — | $ | 12,594 | ||||||||
Restricted cash | 771 | — | — | — | — | 771 | ||||||||||||||
Accounts receivable, net | 11,764 | — | 10,718 | — | — | 22,482 | ||||||||||||||
Inventories | 50,834 | — | 15,840 | — | — | 66,674 | ||||||||||||||
Other current assets | 32,536 | — | 4,192 | — | (29,812 | ) | 6,916 | |||||||||||||
Total current assets | 98,804 | — | 40,445 | — | (29,812 | ) | 109,437 | |||||||||||||
Property and equipment, net | 19,674 | — | 11,059 | — | — | 30,733 | ||||||||||||||
Investment in subsidiaries | 37,058 | — | — | — | (37,058 | ) | — | |||||||||||||
Goodwill | 4,175 | — | 47,050 | — | — | 51,225 | ||||||||||||||
Trademarks | — | — | 50,100 | — | — | 50,100 | ||||||||||||||
Intangible assets with finite lives, net | 1,327 | — | 12,088 | — | — | 13,415 | ||||||||||||||
Deferred financing costs | 5,987 | — | 1,755 | — | — | 7,742 | ||||||||||||||
Long-term restricted cash | 572 | — | — | — | — | 572 | ||||||||||||||
Other assets | 391 | — | 1,119 | — | — | 1,510 | ||||||||||||||
Total assets | $ | 167,988 | $ | — | $ | 163,616 | $ | — | $ | (66,870 | ) | $ | 264,734 | |||||||
LIABILITIES AND DEFICIT | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Line of credit | $ | 7,083 | $ | — | $ | — | $ | — | $ | — | $ | 7,083 | ||||||||
Accounts payable | 9,070 | — | 34,780 | — | (29,812 | ) | 14,038 | |||||||||||||
Accrued expenses | 16,274 | — | 6,554 | — | — | 22,828 | ||||||||||||||
Pension and retirement liabilities - current portion | 618 | — | 467 | — | — | 1,085 | ||||||||||||||
Customer advances and deferred revenue | 9,553 | — | 9,914 | — | — | 19,467 | ||||||||||||||
Long-term debt current portion | — | — | 5,000 | — | — | 5,000 | ||||||||||||||
Total current liabilities | 42,598 | — | 56,715 | — | (29,812 | ) | 69,501 | |||||||||||||
Long term debt | 247,984 | — | 41,833 | — | — | 289,817 | ||||||||||||||
Pension and retirement liabilities | 13,718 | — | 7,952 | — | — | 21,670 | ||||||||||||||
Other long-term liabilities | 3,164 | — | 20,058 | — | — | 23,222 | ||||||||||||||
Total long-term liabilities | 264,866 | — | 69,843 | — | — | 334,709 | ||||||||||||||
Total liabilities | 307,464 | — | 126,558 | — | (29,812 | ) | 404,210 | |||||||||||||
Commitments and contingencies (Notes 7 & 11) | ||||||||||||||||||||
Deficit: | ||||||||||||||||||||
Total (deficit) equity | (139,476 | ) | — | 37,058 | — | (37,058 | ) | (139,476 | ) | |||||||||||
Total liabilities and debt | $ | 167,988 | $ | — | $ | 163,616 | $ | — | $ | (66,870 | ) | $ | 264,734 | |||||||
Condensed Consolidating Balance Sheet | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||
(As Revised) | ||||||||||||||||||||
Colt | Colt | Total | Total Non- | Consolidating | ||||||||||||||||
Defense | Finance | Guarantor | Guarantor | /Eliminating | ||||||||||||||||
LLC | Corp | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 33,647 | $ | — | $ | 8,726 | $ | — | $ | — | $ | 42,373 | ||||||||
Restricted cash | 777 | — | — | — | — | 777 | ||||||||||||||
Accounts receivable, net | 15,243 | — | 7,701 | — | — | 22,944 | ||||||||||||||
Inventories | 30,338 | — | 10,223 | — | — | 40,561 | ||||||||||||||
Other current assets | 3,936 | — | 1,743 | — | (2,328 | ) | 3,351 | |||||||||||||
Total current assets | 83,941 | — | 28,393 | — | (2,328 | ) | 110,006 | |||||||||||||
Property and equipment, net | 17,272 | — | 4,862 | — | — | 22,134 | ||||||||||||||
Investment in subsidiaries | 27,849 | — | — | — | (27,849 | ) | — | |||||||||||||
Goodwill | 4,175 | — | 10,772 | — | — | 14,947 | ||||||||||||||
Intangible assets with finite lives, net | 1,528 | — | 4,509 | — | — | 6,037 | ||||||||||||||
Deferred financing costs | 7,642 | — | — | — | — | 7,642 | ||||||||||||||
Long-term restricted cash | 810 | — | — | — | — | 810 | ||||||||||||||
Other assets | 1,588 | — | — | — | — | 1,588 | ||||||||||||||
Total assets | $ | 144,805 | $ | ` | $ | 48,536 | $ | — | $ | (30,177 | ) | $ | 163,164 | |||||||
LIABILITIES AND DEFICIT | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Line of credit | $ | 6 | $ | — | $ | — | $ | — | $ | — | $ | 6 | ||||||||
Accounts payable | 9,691 | — | 5,692 | — | (2,328 | ) | 13,055 | |||||||||||||
Accrued expenses | 16,289 | — | 4,026 | — | — | 20,315 | ||||||||||||||
Pension and retirement liabilities - current portion | 626 | — | — | — | — | 626 | ||||||||||||||
Customer advances and deferred revenue | 744 | — | 9,258 | — | — | 10,002 | ||||||||||||||
Total current liabilities | 27,356 | — | 18,976 | — | (2,328 | ) | 44,004 | |||||||||||||
Long term debt | 247,567 | — | — | — | — | 247,567 | ||||||||||||||
Pension and retirement liabilities | 20,261 | — | — | — | — | 20,261 | ||||||||||||||
Other long-term liabilities | 908 | — | 1,515 | — | — | 2,423 | ||||||||||||||
Total long-term liabilities | 268,736 | — | 1,515 | — | — | 270,251 | ||||||||||||||
Total liabilities | 296,092 | — | 20,491 | — | (2,328 | ) | 314,255 | |||||||||||||
Commitments and contingencies (Notes 7 & 11) | ||||||||||||||||||||
Deficit: | ||||||||||||||||||||
Total (deficit) equity | (151,287 | ) | — | 28,045 | — | (27,849 | ) | (151,091 | ) | |||||||||||
Total liabilities and debt | $ | 144,805 | $ | — | $ | 48,536 | $ | — | $ | (30,177 | ) | $ | 163,164 | |||||||
Schedule of condensed consolidating statements of income | Condensed Consolidating Statement of Income | |||||||||||||||||||
For the Year Ended December 31, 2013 | ||||||||||||||||||||
(As Restated) | ||||||||||||||||||||
Colt | Colt | Total | Total Non- | Consolidating | ||||||||||||||||
Defense | Finance | Guarantor | Guarantor | /Eliminating | ||||||||||||||||
LLC | Corp | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
Net sales | $ | 206,115 | $ | — | $ | 114,959 | $ | — | $ | (50,191 | ) | $ | 270,883 | |||||||
Cost of sales | 152,766 | — | 93,843 | — | (49,497 | ) | 197,112 | |||||||||||||
Gross Profit | 53,349 | — | 21,116 | — | (694 | ) | 73,771 | |||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 10,799 | — | 3,343 | — | — | 14,142 | ||||||||||||||
Research and development | 2,452 | — | 3,674 | — | — | 6,126 | ||||||||||||||
General and administrative | 11,125 | — | 4,546 | — | (382 | ) | 15,289 | |||||||||||||
Business development | 575 | — | — | — | — | 575 | ||||||||||||||
Certain transaction costs | — | — | 1,147 | — | — | 1,147 | ||||||||||||||
Restructuring costs | 479 | — | 303 | — | — | 782 | ||||||||||||||
Gain on effective settlement of contract | (15,264 | ) | — | — | — | — | (15,264 | ) | ||||||||||||
Total operating expenses | 10,166 | — | 13,013 | — | (382 | ) | 22,797 | |||||||||||||
Operating income (loss) | 43,183 | — | 8,103 | — | (312 | ) | 50,974 | |||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 24,294 | — | 3,393 | — | — | 27,687 | ||||||||||||||
Other (income)/expense, net | (1,722 | ) | — | 412 | — | 94 | (1,216 | ) | ||||||||||||
Total other expenses, net | 22,572 | — | 3,805 | — | 94 | 26,471 | ||||||||||||||
Income (loss) before provision for income taxes | 20,611 | — | 4,298 | — | (406 | ) | 24,503 | |||||||||||||
Income tax expense | 183 | — | 1,453 | — | — | 1,636 | ||||||||||||||
Equity in income from operations of consolidated subsidiaries | 2,618 | — | — | — | (2,618 | ) | — | |||||||||||||
Net income (loss) | $ | 23,046 | $ | — | $ | 2,845 | $ | — | $ | (3,024 | ) | $ | 22,867 | |||||||
Comprehensive income (loss) | $ | 27,565 | $ | — | $ | 1,732 | $ | — | $ | (1,928 | ) | $ | 27,369 | |||||||
Condensed Consolidating Statement of Income | ||||||||||||||||||||
For the Year Ended December 31, 2012 | ||||||||||||||||||||
(As Revised) | ||||||||||||||||||||
Colt | Colt | Total | Total Non- | Consolidating | ||||||||||||||||
Defense | Finance | Guarantor | Guarantor | /Eliminating | ||||||||||||||||
LLC | Corp | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
Net sales | $ | 169,050 | $ | — | $ | 45,377 | $ | — | $ | (811 | ) | $ | 213,616 | |||||||
Cost of sales | 133,371 | — | 29,776 | — | (525 | ) | 162,622 | |||||||||||||
Gross Profit | 35,679 | — | 15,601 | — | (286 | ) | 50,994 | |||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 10,766 | — | 2,351 | — | — | 13,117 | ||||||||||||||
Research and development | 2,497 | — | 2,250 | — | — | 4,747 | ||||||||||||||
General and administrative | 10,985 | — | 3,300 | — | — | 14,285 | ||||||||||||||
Business development | 881 | — | — | — | — | 881 | ||||||||||||||
Total operating expenses | 25,129 | — | 7,901 | — | — | 33,030 | ||||||||||||||
Operating income (loss) | 10,550 | — | 7,700 | — | (286 | ) | 17,964 | |||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 24,502 | — | 77 | — | — | 24,579 | ||||||||||||||
Other (income)/expense, net | (2,315 | ) | — | 743 | — | — | (1,572 | ) | ||||||||||||
Total other expenses, net | 22,187 | — | 820 | — | — | 23,007 | ||||||||||||||
Income (loss) before provision for income taxes | (11,637 | ) | — | 6,880 | — | (286 | ) | (5,043 | ) | |||||||||||
Income tax expense | 330 | — | 1,485 | — | — | 1,815 | ||||||||||||||
Equity in income from operations of consolidated subsidiaries | 4,912 | — | — | — | (4,912 | ) | — | |||||||||||||
Net income (loss) | $ | (7,055 | ) | $ | — | $ | 5,395 | $ | — | $ | (5,198 | ) | $ | (6,858 | ) | |||||
Comprehensive income (loss) | $ | (7,766 | ) | $ | — | $ | 5,912 | $ | — | $ | (5,716 | ) | $ | (7,570 | ) | |||||
Condensed Consolidating Statement of Income | ||||||||||||||||||||
For the Year Ended December 31, 2011 | ||||||||||||||||||||
(As Revised) | ||||||||||||||||||||
Colt | Colt | Total | Total Non- | Consolidating | ||||||||||||||||
Defense | Finance | Guarantor | Guarantor | /Eliminating | ||||||||||||||||
LLC | Corp | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
Net sales | $ | 148,711 | $ | — | $ | 60,769 | $ | — | $ | (664 | ) | $ | 208,816 | |||||||
Cost of sales | 106,707 | — | 37,808 | — | (664 | ) | 143,851 | |||||||||||||
Gross Profit | 42,004 | — | 22,961 | — | — | 64,965 | ||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and commissions | 10,959 | — | 2,821 | — | — | 13,780 | ||||||||||||||
Research and development | 2,654 | — | 2,924 | — | — | 5,578 | ||||||||||||||
General and administrative | 10,116 | — | 2,982 | — | — | 13,098 | ||||||||||||||
Business development | 504 | — | — | — | — | 504 | ||||||||||||||
Total operating expenses | 24,233 | — | 8,727 | — | — | 32,960 | ||||||||||||||
Operating income (loss) | 17,771 | — | 14,234 | — | — | 32,005 | ||||||||||||||
Other (income)/expense: | ||||||||||||||||||||
Interest expense | 23,991 | — | 19 | — | — | 24,010 | ||||||||||||||
Other (income)/expense, net | (3,700 | ) | — | 1,497 | — | 2,039 | (164 | ) | ||||||||||||
Total other expenses, net | 20,291 | — | 1,516 | — | 2,039 | 23,846 | ||||||||||||||
Income (loss) before provision for income taxes | (2,520 | ) | — | 12,718 | — | (2,039 | ) | 8,159 | ||||||||||||
Income tax expense | 304 | — | 2,867 | — | — | 3,171 | ||||||||||||||
Equity in income from operations of consolidated subsidiaries | 7,812 | — | — | — | (7,812 | ) | — | |||||||||||||
Net income (loss) | $ | 4,988 | $ | — | $ | 9,851 | $ | — | $ | (9,851 | ) | $ | 4,988 | |||||||
Comprehensive income (loss) | $ | (658 | ) | $ | — | $ | 9,407 | $ | — | $ | (9,407 | ) | $ | (658 | ) | |||||
Schedule of condensed consolidating statements of cash flows | Colt Defense LLC and Subsidiaries | |||||||||||||||||||
Condensed Consolidating Statements of Cash Flows | ||||||||||||||||||||
(As Restated) | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Colt | Colt | Total | Total Non- | Consolidating | ||||||||||||||||
Defense | Finance | Guarantor | Guarantor | /Eliminating | ||||||||||||||||
LLC | Corp | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
Operating Activities | ||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 5,254 | $ | — | $ | (2,217 | ) | $ | — | $ | — | $ | 3,037 | |||||||
Investing Activities | ||||||||||||||||||||
Purchase of property and equipment | (6,385 | ) | — | (2,213 | ) | — | — | (8,598 | ) | |||||||||||
Business acquisition, net of cash acquired and reinvested Merger consideration | (59,488 | ) | — | — | — | — | (59,488 | ) | ||||||||||||
Investment in subsidiary | (13,924 | ) | — | 13,924 | — | — | — | |||||||||||||
Change in restricted cash | 244 | — | — | — | — | 244 | ||||||||||||||
Net cash (used in) provided by investing activities | (79,553 | ) | — | 11,711 | — | — | (67,842 | ) | ||||||||||||
Financing Activities | ||||||||||||||||||||
Debt issuance costs | (2,120 | ) | — | — | — | — | (2,120 | ) | ||||||||||||
Proceeds from the issuance of long-term debt | 47,707 | — | — | — | — | 47,707 | ||||||||||||||
Term loan and note repayments | — | — | (1,250 | ) | — | — | (1,250 | ) | ||||||||||||
Line of credit advances/repayments, net | 7,077 | — | — | — | — | 7,077 | ||||||||||||||
Capital lease obligation payments | — | — | (393 | ) | — | — | (393 | ) | ||||||||||||
Purchase of common units | (14,000 | ) | — | — | — | — | (14,000 | ) | ||||||||||||
Proceeds from the issuance of common units, net of reinvested consideration proceeds | 5,000 | — | — | — | — | 5,000 | ||||||||||||||
Distribution from subsidiary | 6,257 | — | (6,257 | ) | — | — | — | |||||||||||||
Distributions to Members’ | (6,370 | ) | — | — | — | — | (6,370 | ) | ||||||||||||
Net cash provided by (used in) financing activities | 43,551 | — | (7,900 | ) | — | — | 35,651 | |||||||||||||
Effect of exchange rates on cash and cash equivalents | — | — | (625 | ) | — | — | (625 | ) | ||||||||||||
Change in cash and cash equivalents | (30,748 | ) | — | 969 | — | — | (29,779 | ) | ||||||||||||
Cash and cash equivalents, beginning of period | 33,647 | — | 8,726 | — | — | 42,373 | ||||||||||||||
Cash and cash equivalents, end of period | $ | 2,899 | $ | — | $ | 9,695 | $ | — | $ | — | $ | 12,594 | ||||||||
Colt Defense LLC and Subsidiaries | ||||||||||||||||||||
Condensed Consolidating Statements of Cash Flows | ||||||||||||||||||||
(As Revised) | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
As Restated | ||||||||||||||||||||
Colt | Colt | Total | Total Non- | Consolidating | ||||||||||||||||
Defense | Finance | Guarantor | Guarantor | /Eliminating | ||||||||||||||||
LLC | Corp | Subsidiaries | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
Operating Activities | ||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 9,503 | $ | — | $ | 2,920 | $ | — | $ | — | $ | 12,423 | ||||||||
Investing Activities | ||||||||||||||||||||
Purchase of property and equipment | (3,481 | ) | — | (929 | ) | — | — | (4,410 | ) | |||||||||||
Proceeds from sale of property | — | — | 66 | — | — | 66 | ||||||||||||||
Change in restricted cash | 464 | — | — | — | — | 464 | ||||||||||||||
Net cash (used in) provided by investing activities | (3,017 | ) | — | (863 | ) | — | — | (3,880 | ) | |||||||||||
Financing Activities | ||||||||||||||||||||
Revolver advances | 6 | — | — | — | — | 6 | ||||||||||||||
Capital lease obligation payments | (1,148 | ) | — | — | — | — | (1,148 | ) | ||||||||||||
Distributions to Members’ | (3,343 | ) | — | — | — | — | (3,343 | ) | ||||||||||||
Net cash provided by (used in) financing activities | (4,485 | ) | — | — | — | — | (4,485 | ) | ||||||||||||
Effect of exchange rates on cash and cash equivalents | — | — | 79 | — | — | 79 | ||||||||||||||
Change in cash and cash equivalents | 2,001 | — | 2,136 | — | — | 4,137 | ||||||||||||||
Cash and cash equivalents, beginning of period | 31,646 | — | 6,590 | — | — | 38,236 | ||||||||||||||
Cash and cash equivalents, end of period | $ | 33,647 | $ | — | $ | 8,726 | $ | — | $ | — | $ | 42,373 | ||||||||
Condensed Consolidating Statements of Cash Flows | ||||||||||||||||||||
For the Year Ended December 31, 2011 | ||||||||||||||||||||
Colt | Colt | Total | Total Non- | Consolidating | Consolidated | |||||||||||||||
Defense | Finance | Guarantor | guarantor | /Eliminating | ||||||||||||||||
LLC | Corp. | Subsidiaries | Subsidiaries | Adjustments | ||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net cash provided by operating activities | $ | (16,222 | ) | $ | — | $ | 17,566 | $ | — | $ | (2,039 | ) | $ | (695 | ) | |||||
Investing Activities | ||||||||||||||||||||
Purchases of property and equipment | (4,009 | ) | — | (1,591 | ) | — | — | (5,600 | ) | |||||||||||
Proceeds from sale of property | 12 | — | — | — | — | 12 | ||||||||||||||
Change in restricted cash | (1,380 | ) | — | — | — | — | (1,380 | ) | ||||||||||||
Net cash used in investing activities | (5,377 | ) | — | (1,591 | ) | — | — | (6,968 | ) | |||||||||||
Financing Activities | ||||||||||||||||||||
Debt issuance costs | (1,636 | ) | — | — | — | — | (1,636 | ) | ||||||||||||
Capital lease obligation payments | (1,229 | ) | — | — | — | — | (1,229 | ) | ||||||||||||
Colt Canada distribution of share capital | 15,373 | (17,412 | ) | — | 2,039 | — | ||||||||||||||
Distributions to members | (12,889 | ) | — | — | — | — | (12,889 | ) | ||||||||||||
Net cash used in financing activities | (381 | ) | — | (17,412 | ) | — | 2,039 | (15,754 | ) | |||||||||||
Effects of exchange rates of cash | — | — | 209 | — | — | 209 | ||||||||||||||
Change in cash and cash equivalents | (21,980 | ) | — | (1,228 | ) | — | — | (23,208 | ) | |||||||||||
Cash and cash equivalents, beginning of period | 53,626 | — | 7,818 | — | — | 61,444 | ||||||||||||||
Cash and cash equivalents, end of period | $ | 31,646 | $ | — | $ | 6,590 | $ | — | $ | — | $ | 38,236 | ||||||||
Nature_of_Business_Details
Nature of Business (Details) | Dec. 31, 2013 |
Colt Finance Corp. | |
Nature of Business | |
Ownership percentage | 100.00% |
New Colt Holding Corp. | |
Nature of Business | |
Ownership percentage | 100.00% |
CDTS | |
Nature of Business | |
Ownership percentage | 100.00% |
New Colt Holding Corp. | Colt's Manufacturing Company LLC | |
Nature of Business | |
Ownership percentage | 100.00% |
Commercial operating entity, and Colt Defense LLC and CDTS | Colt International Cooperatief U.A. | |
Nature of Business | |
Ownership percentage | 100.00% |
Colt International Cooperatief U.A. | Colt Canada | |
Nature of Business | |
Ownership percentage | 100.00% |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Jun. 30, 2013 | Sep. 29, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Effects of the revision on Consolidated Statements of Operations | |||||||||||||
Net sales | $69,792 | $73,030 | $64,212 | $63,849 | $67,371 | $56,555 | $45,837 | $43,853 | $128,061 | $201,165 | $270,883 | $213,616 | $208,816 |
Cost of sales | 47,683 | 58,487 | 45,830 | 45,112 | 90,942 | 149,642 | 197,112 | 162,622 | 143,851 | ||||
Gross profit | 22,109 | 14,543 | 18,382 | 18,737 | 18,221 | 16,310 | 8,720 | 7,743 | 37,119 | 51,523 | 73,771 | 50,994 | 64,965 |
Business development | -132 | 463 | 169 | 75 | 746 | 100 | 35 | 244 | 707 | 575 | 881 | 504 | |
Operating income | 18,578 | 9,849 | 11,017 | 20,866 | 39,518 | 50,974 | 17,964 | 32,005 | |||||
Other (income) expense | -306 | 685 | 787 | 1,472 | 1,092 | 1,216 | 1,572 | 459 | |||||
Income tax expense | -208 | 78 | 681 | 759 | 551 | 1,636 | 1,815 | 3,171 | |||||
Net income (loss) | 10,857 | 4,387 | 5,129 | 9,516 | 20,373 | 22,867 | -6,858 | 4,988 | |||||
Adjustments | |||||||||||||
Effects of the revision on Consolidated Statements of Operations | |||||||||||||
Net sales | -208 | -23 | -23 | -231 | -7,065 | 262 | |||||||
Cost of sales | -168 | 65 | 14 | 79 | -89 | -4,129 | |||||||
Gross profit | -40 | -88 | -14 | -102 | -142 | -2,936 | 262 | ||||||
Business development | 463 | 169 | 75 | 244 | 707 | 575 | 881 | 504 | |||||
Operating income | -738 | 94 | -16 | 78 | -660 | -3,501 | -619 | -504 | |||||
Other (income) expense | 440 | 192 | 75 | 267 | 707 | 575 | 881 | 504 | |||||
Income tax expense | -10 | 57 | 57 | 47 | -59 | 65 | |||||||
Net income (loss) | -288 | 229 | 59 | 288 | -2,867 | 197 | |||||||
Impact of correcting error related to the M240 Program, previously recorded immaterial out-of-period adjustments and the reclassification of business development expenses | Adjustments | |||||||||||||
Effects of the revision on Consolidated Statements of Operations | |||||||||||||
Net sales | -7,065 | 262 | |||||||||||
Cost of sales | -4,129 | ||||||||||||
Gross profit | -2,936 | 262 | |||||||||||
Business development | -575 | -881 | -504 | ||||||||||
Operating income | -3,501 | -619 | -504 | ||||||||||
Other (income) expense | -575 | -881 | -504 | ||||||||||
Income tax expense | -59 | 65 | |||||||||||
Net income (loss) | -2,867 | 197 | |||||||||||
Impact of a contract modification related to the M240 machine gun program | |||||||||||||
Effects of the revision on Consolidated Statements of Operations | |||||||||||||
Net sales | -6,820 | ||||||||||||
Cost of sales | 3,381 | ||||||||||||
Impact of a contract modification related to the M240 machine gun program | Adjustments | |||||||||||||
Effects of the revision on Consolidated Statements of Operations | |||||||||||||
Net sales | -6,820 | ||||||||||||
Cost of sales | 3,381 | ||||||||||||
Net income (loss) | -2,700 | ||||||||||||
Impact of a contract obligation expense related to the M240 machine gun program | |||||||||||||
Effects of the revision on Consolidated Statements of Operations | |||||||||||||
Net sales | -3,700 | ||||||||||||
Error related to reclassification of business development expenses | Adjustments | |||||||||||||
Effects of the revision on Consolidated Statements of Operations | |||||||||||||
Net sales | 262 | ||||||||||||
Business development | $575 | $881 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, unless otherwise specified | ||||
Effects of the revisions on Consolidated Balance Sheet | ||||
Accounts receivable | $22,482 | $22,944 | ||
Other current assets | 5,962 | 3,166 | ||
Accounts payable | 14,038 | 13,055 | ||
Accrued expenses | 22,158 | 20,315 | ||
Customer advances and deferred revenue | 19,467 | 10,002 | ||
Accumulated deficit | -130,136 | -137,249 | ||
Accumulated other comprehensive loss | -9,340 | -13,842 | -13,130 | -7,484 |
Adjustments | ||||
Effects of the revisions on Consolidated Balance Sheet | ||||
Accounts receivable | 1 | 261 | ||
Other current assets | -2 | -65 | ||
Accrued expenses | -4,133 | |||
Customer advances and deferred revenue | 6,820 | |||
Accumulated deficit | -2,670 | 197 | ||
Accumulated other comprehensive loss | -17 | -1 | ||
Impact of correcting error related to the M240 Program, previously recorded immaterial out-of-period adjustments and the reclassification of business development expenses | Adjustments | ||||
Effects of the revisions on Consolidated Balance Sheet | ||||
Accounts receivable | 1 | 261 | ||
Other current assets | -2 | -65 | ||
Accrued expenses | -4,133 | |||
Customer advances and deferred revenue | 6,820 | |||
Accumulated deficit | -2,670 | 197 | ||
Accumulated other comprehensive loss | -17 | -1 | ||
Impact of a contract modification related to the M240 machine gun program | Adjustments | ||||
Effects of the revisions on Consolidated Balance Sheet | ||||
Customer advances and deferred revenue | -6,820 | |||
Impact of a contract obligation expense related to the M240 machine gun program | Adjustments | ||||
Effects of the revisions on Consolidated Balance Sheet | ||||
Accrued expenses | ($4,132) |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 3) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | |||||
Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2013 | Sep. 29, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | |
Effects of the revision on consolidated statements of cash flows | ||||||||||
Net income (loss) | $10,857,000 | $4,387,000 | $5,129,000 | $9,516,000 | $20,373,000 | $22,867,000 | ($6,858,000) | $4,988,000 | ||
Adjustments | ||||||||||
Effects of the revision on consolidated statements of cash flows | ||||||||||
Net income (loss) | -288,000 | 229,000 | 59,000 | 288,000 | -2,867,000 | 197,000 | ||||
Impact of a contract modification related to the M240 machine gun program | Adjustments | ||||||||||
Effects of the revision on consolidated statements of cash flows | ||||||||||
Net income (loss) | -2,700,000 | |||||||||
Correcting previously recorded immaterial out-of-period adjustments | Adjustments | ||||||||||
Effects of the revision on consolidated statements of cash flows | ||||||||||
Net income (loss) | -288,000 | 229,000 | 59,000 | -179,000 | 197,000 | |||||
Increase in operating assets and liabilities | $2,700,000 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details 4) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Jun. 30, 2013 | Sep. 29, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Effects of the revision on Consolidated Statements of Operations | |||||||||||||
Net sales | $69,792 | $73,030 | $64,212 | $63,849 | $67,371 | $56,555 | $45,837 | $43,853 | $128,061 | $201,165 | $270,883 | $213,616 | $208,816 |
Cost of sales | 47,683 | 58,487 | 45,830 | 45,112 | 90,942 | 149,642 | 197,112 | 162,622 | 143,851 | ||||
Gross profit | 22,109 | 14,543 | 18,382 | 18,737 | 18,221 | 16,310 | 8,720 | 7,743 | 37,119 | 51,523 | 73,771 | 50,994 | 64,965 |
Selling and commissions | 4,064 | 3,452 | 3,095 | 6,547 | 10,398 | 14,142 | 13,117 | 13,780 | |||||
Research and development | 1,714 | 1,481 | 820 | 2,301 | 4,015 | 6,126 | 4,747 | 5,578 | |||||
General and administrative | 3,896 | 3,015 | 3,730 | 6,745 | 10,641 | 15,289 | 14,285 | 13,098 | |||||
Business development | -132 | 463 | 169 | 75 | 746 | 100 | 35 | 244 | 707 | 575 | 881 | 504 | |
Operating income | 18,578 | 9,849 | 11,017 | 20,866 | 39,518 | 50,974 | 17,964 | 32,005 | |||||
Other (income) / expense | -306 | 685 | 787 | 1,472 | 1,092 | 1,216 | 1,572 | 459 | |||||
Income tax expense | -208 | 78 | 681 | 759 | 551 | 1,636 | 1,815 | 3,171 | |||||
Net income (loss) | 10,857 | 4,387 | 5,129 | 9,516 | 20,373 | 22,867 | -6,858 | 4,988 | |||||
Adjustments | |||||||||||||
Effects of the revision on Consolidated Statements of Operations | |||||||||||||
Net sales | -208 | -23 | -23 | -231 | -7,065 | 262 | |||||||
Cost of sales | -168 | 65 | 14 | 79 | -89 | -4,129 | |||||||
Gross profit | -40 | -88 | -14 | -102 | -142 | -2,936 | 262 | ||||||
Selling and commissions | 221 | -130 | -79 | -209 | 12 | -1 | |||||||
Research and development | 4 | 1 | 1 | 2 | 6 | -1 | |||||||
General and administrative | 10 | -222 | 5 | -217 | -207 | -8 | |||||||
Business development | 463 | 169 | 75 | 244 | 707 | 575 | 881 | 504 | |||||
Operating income | -738 | 94 | -16 | 78 | -660 | -3,501 | -619 | -504 | |||||
Other (income) / expense | 440 | 192 | 75 | 267 | 707 | 575 | 881 | 504 | |||||
Income tax expense | -10 | 57 | 57 | 47 | -59 | 65 | |||||||
Net income (loss) | -288 | 229 | 59 | 288 | -2,867 | 197 | |||||||
Impact of correcting previously recorded immaterial out-of-period adjustments and the reclassification of business development expenses | Adjustments | |||||||||||||
Effects of the revision on Consolidated Statements of Operations | |||||||||||||
Net sales | -208 | -23 | |||||||||||
Cost of sales | -168 | 65 | 14 | ||||||||||
Gross profit | -40 | -88 | -14 | ||||||||||
Selling and commissions | 221 | -130 | -79 | ||||||||||
Research and development | 4 | 1 | 1 | ||||||||||
General and administrative | 10 | -222 | 5 | ||||||||||
Business development | 463 | 169 | 75 | ||||||||||
Operating income | -738 | 94 | -16 | ||||||||||
Other (income) / expense | -440 | -192 | -75 | ||||||||||
Income tax expense | -10 | 57 | |||||||||||
Net income (loss) | ($288) | $229 | $59 |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies (Details 5) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, unless otherwise specified | ||||
Current assets: | ||||
Cash and cash equivalents | $12,594 | $42,373 | $38,236 | $61,444 |
Restricted cash | 771 | 777 | ||
Accounts receivable, net | 22,482 | 22,944 | ||
Inventories | 66,674 | 40,561 | ||
Deferred tax assets | 954 | 185 | ||
Other current assets | 5,962 | 3,166 | ||
Total current assets | 109,437 | 110,006 | ||
Property and equipment, net | 30,733 | 22,134 | ||
Goodwill | 51,225 | 14,947 | 14,713 | |
Trademarks | 50,100 | |||
Intangible assets with finite lives, net | 13,415 | 6,037 | ||
Deferred financing costs | 7,742 | 7,642 | 9,312 | |
Long-term restricted cash | 572 | 810 | ||
Other assets | 1,510 | 1,588 | ||
Total assets | 264,734 | 163,164 | ||
Current liabilities: | ||||
Line of credit | 7,083 | 6 | ||
Accounts payable | 14,038 | 13,055 | ||
Accrued expenses | 22,158 | 20,315 | ||
Pension and retirement liabilities - current portion | 1,085 | 626 | ||
Customer advances and deferred revenue | 19,467 | 10,002 | ||
Long-term debt current portion | 5,000 | |||
Accrued distributions to members | 670 | |||
Total current liabilities | 69,501 | 44,004 | ||
Long term debt | 289,817 | 247,567 | ||
Pension and retirement liabilities | 21,670 | 20,261 | ||
Long- term deferred tax liability | 18,715 | 1,515 | ||
Long-term distributions to members | 2,277 | |||
Other long-term liabilities | 2,230 | 908 | ||
Total long-term liabilities | 334,709 | 270,251 | ||
Total liabilities | 404,210 | 314,255 | ||
Deficit: | ||||
Accumulated deficit | -130,136 | -137,249 | ||
Accumulated other comprehensive loss | -9,340 | -13,842 | -13,130 | -7,484 |
Total deficit | -139,476 | -151,091 | ||
Total liabilities and deficit | 264,734 | 163,164 | ||
As Previously Reported | ||||
Current assets: | ||||
Cash and cash equivalents | 12,594 | 42,373 | 38,236 | |
Restricted cash | 771 | 777 | ||
Accounts receivable, net | 22,481 | 22,683 | ||
Inventories | 66,674 | 40,561 | ||
Deferred tax assets | 954 | 185 | ||
Other current assets | 5,964 | 3,231 | ||
Total current assets | 109,438 | 109,810 | ||
Property and equipment, net | 30,733 | 22,134 | ||
Goodwill | 51,225 | 14,947 | ||
Trademarks | 50,100 | |||
Intangible assets with finite lives, net | 13,415 | 6,037 | ||
Deferred financing costs | 7,742 | 7,642 | ||
Long-term restricted cash | 572 | 810 | ||
Other assets | 1,510 | 1,588 | ||
Total assets | 264,735 | 162,968 | ||
Current liabilities: | ||||
Line of credit | 7,083 | 6 | ||
Accounts payable | 14,038 | 13,055 | ||
Accrued expenses | 26,291 | 20,315 | ||
Pension and retirement liabilities - current portion | 1,085 | 626 | ||
Customer advances and deferred revenue | 12,647 | 10,002 | ||
Long-term debt current portion | 5,000 | |||
Accrued distributions to members | 670 | |||
Total current liabilities | 66,814 | 44,004 | ||
Long term debt | 289,817 | 247,567 | ||
Pension and retirement liabilities | 21,670 | 20,261 | ||
Long- term deferred tax liability | 18,715 | 1,515 | ||
Long-term distributions to members | 2,277 | |||
Other long-term liabilities | 2,230 | 908 | ||
Total long-term liabilities | 334,709 | 270,251 | ||
Total liabilities | 401,523 | 314,255 | ||
Deficit: | ||||
Accumulated deficit | -127,466 | -137,446 | ||
Accumulated other comprehensive loss | -9,322 | -13,841 | ||
Total deficit | -136,788 | -151,287 | ||
Total liabilities and deficit | 264,735 | 162,968 | ||
Adjustments | ||||
Current assets: | ||||
Accounts receivable, net | 1 | 261 | ||
Other current assets | -2 | -65 | ||
Total current assets | -1 | 196 | ||
Total assets | -1 | 196 | ||
Current liabilities: | ||||
Accrued expenses | -4,133 | |||
Customer advances and deferred revenue | 6,820 | |||
Total current liabilities | 2,686 | |||
Total liabilities | 2,686 | |||
Deficit: | ||||
Accumulated deficit | -2,670 | 197 | ||
Accumulated other comprehensive loss | -17 | -1 | ||
Total deficit | -2,687 | 196 | ||
Total liabilities and deficit | ($1) | $196 |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies (Details 6) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Jun. 30, 2013 | Sep. 29, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Consolidated Statements of Operations | |||||||||||||
Net sales | $69,792 | $73,030 | $64,212 | $63,849 | $67,371 | $56,555 | $45,837 | $43,853 | $128,061 | $201,165 | $270,883 | $213,616 | $208,816 |
Cost of sales | 47,683 | 58,487 | 45,830 | 45,112 | 90,942 | 149,642 | 197,112 | 162,622 | 143,851 | ||||
Gross profit | 22,109 | 14,543 | 18,382 | 18,737 | 18,221 | 16,310 | 8,720 | 7,743 | 37,119 | 51,523 | 73,771 | 50,994 | 64,965 |
Operating expenses: | |||||||||||||
Selling and commissions | 4,064 | 3,452 | 3,095 | 6,547 | 10,398 | 14,142 | 13,117 | 13,780 | |||||
Research and development | 1,714 | 1,481 | 820 | 2,301 | 4,015 | 6,126 | 4,747 | 5,578 | |||||
General and administrative | 3,896 | 3,015 | 3,730 | 6,745 | 10,641 | 15,289 | 14,285 | 13,098 | |||||
Total selling and commissions, research and development, general and administrative | 9,674 | 7,948 | 7,645 | 15,593 | 25,054 | 35,557 | 32,149 | 32,456 | |||||
Business development | -132 | 463 | 169 | 75 | 746 | 100 | 35 | 244 | 707 | 575 | 881 | 504 | |
Certain transaction costs (Note 3) | 461 | 416 | 416 | 877 | 1,147 | ||||||||
Restructuring costs (Note 4) | 631 | 631 | 782 | ||||||||||
Gain on effective settlement of contract (Note 3) | -15,264 | -15,264 | -15,264 | ||||||||||
Total operating expenses | -4,035 | 8,533 | 7,720 | 16,253 | 12,005 | 22,797 | 33,030 | 32,960 | |||||
Operating income | 18,578 | 9,849 | 11,017 | 20,866 | 39,518 | 50,974 | 17,964 | 32,005 | |||||
Other (income)/expense: | |||||||||||||
Interest expense | 7,623 | 6,069 | 5,994 | 12,063 | 19,686 | 27,687 | 24,579 | 24,010 | |||||
Debt prepayment expense | 295 | ||||||||||||
Other (income)/expense, net | 306 | -685 | -787 | -1,472 | -1,092 | -1,216 | -1,572 | -459 | |||||
Total other expenses, net | 7,929 | 5,384 | 5,207 | 10,591 | 18,594 | 26,471 | 23,007 | 23,846 | |||||
Income (loss) before provision for income taxes | 10,649 | 4,465 | 5,810 | 10,275 | 20,924 | 24,503 | -5,043 | 8,159 | |||||
Income tax expense | -208 | 78 | 681 | 759 | 551 | 1,636 | 1,815 | 3,171 | |||||
Net income (loss) | 10,857 | 4,387 | 5,129 | 9,516 | 20,373 | 22,867 | -6,858 | 4,988 | |||||
As Previously Reported | |||||||||||||
Consolidated Statements of Operations | |||||||||||||
Net sales | 73,238 | 64,235 | 63,849 | 128,084 | 201,396 | 277,948 | 213,354 | 208,816 | |||||
Cost of sales | 58,655 | 45,765 | 45,098 | 90,863 | 149,731 | 201,241 | 162,622 | 143,851 | |||||
Gross profit | 14,583 | 18,470 | 18,751 | 37,221 | 51,665 | 76,707 | 50,732 | 64,965 | |||||
Operating expenses: | |||||||||||||
Selling and commissions | 3,843 | 3,582 | 3,174 | 6,756 | 10,386 | 14,143 | 13,117 | 13,780 | |||||
Research and development | 1,710 | 1,480 | 819 | 2,299 | 4,009 | 6,127 | 4,747 | 5,578 | |||||
General and administrative | 3,886 | 3,237 | 3,725 | 6,962 | 10,848 | 15,297 | 14,285 | 13,098 | |||||
Total selling and commissions, research and development, general and administrative | 9,439 | 8,299 | 7,718 | 16,017 | 25,243 | 35,567 | 32,149 | 32,456 | |||||
Certain transaction costs (Note 3) | 461 | 416 | 416 | 877 | 1,147 | ||||||||
Restructuring costs (Note 4) | 631 | 631 | 782 | ||||||||||
Gain on effective settlement of contract (Note 3) | -15,264 | -15,264 | -15,264 | ||||||||||
Total operating expenses | -4,733 | 8,715 | 7,718 | 16,433 | 11,487 | 22,232 | 32,149 | 32,456 | |||||
Operating income | 19,316 | 9,755 | 11,033 | 20,788 | 40,178 | 54,475 | 18,583 | 32,509 | |||||
Other (income)/expense: | |||||||||||||
Interest expense | 7,623 | 6,069 | 5,994 | 12,063 | 19,686 | 27,687 | 24,579 | 24,010 | |||||
Debt prepayment expense | 295 | ||||||||||||
Other (income)/expense, net | 746 | -493 | -712 | -1,205 | -385 | -641 | -691 | 45 | |||||
Total other expenses, net | 8,369 | 5,576 | 5,282 | 10,858 | 19,301 | 27,046 | 23,888 | 24,350 | |||||
Income (loss) before provision for income taxes | 10,947 | 4,179 | 5,751 | 9,930 | 20,877 | 27,429 | -5,305 | 8,159 | |||||
Income tax expense | -198 | 21 | 681 | 702 | 504 | 1,695 | 1,750 | 3,171 | |||||
Net income (loss) | 11,145 | 4,158 | 5,070 | 9,228 | 20,373 | 25,734 | -7,055 | 4,988 | |||||
Adjustments | |||||||||||||
Consolidated Statements of Operations | |||||||||||||
Net sales | -208 | -23 | -23 | -231 | -7,065 | 262 | |||||||
Cost of sales | -168 | 65 | 14 | 79 | -89 | -4,129 | |||||||
Gross profit | -40 | -88 | -14 | -102 | -142 | -2,936 | 262 | ||||||
Operating expenses: | |||||||||||||
Selling and commissions | 221 | -130 | -79 | -209 | 12 | -1 | |||||||
Research and development | 4 | 1 | 1 | 2 | 6 | -1 | |||||||
General and administrative | 10 | -222 | 5 | -217 | -207 | -8 | |||||||
Total selling and commissions, research and development, general and administrative | 235 | -351 | -73 | -424 | -189 | -10 | |||||||
Business development | 463 | 169 | 75 | 244 | 707 | 575 | 881 | 504 | |||||
Total operating expenses | 698 | -182 | 2 | -180 | 518 | 565 | 881 | 504 | |||||
Operating income | -738 | 94 | -16 | 78 | -660 | -3,501 | -619 | -504 | |||||
Other (income)/expense: | |||||||||||||
Other (income)/expense, net | -440 | -192 | -75 | -267 | -707 | -575 | -881 | -504 | |||||
Total other expenses, net | -440 | -192 | -75 | -267 | -707 | -575 | -881 | -504 | |||||
Income (loss) before provision for income taxes | -298 | 286 | 59 | 345 | 47 | -2,926 | 262 | ||||||
Income tax expense | -10 | 57 | 57 | 47 | -59 | 65 | |||||||
Net income (loss) | ($288) | $229 | $59 | $288 | ($2,867) | $197 |
Summary_of_Significant_Account9
Summary of Significant Accounting Policies (Details 7) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2013 | Sep. 29, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Consolidated Statements of Comprehensive Income (Loss) | ||||||||
Net income (loss) | $10,857 | $4,387 | $5,129 | $9,516 | $20,373 | $22,867 | ($6,858) | $4,988 |
Foreign currency translation adjustment: | ||||||||
Foreign currency translation gains (losses) | -1,889 | 517 | -444 | |||||
Pension and postretirement benefit liabilities: | ||||||||
Other comprehensive income (loss) arising during the period | 5,890 | -2,322 | -5,765 | |||||
Reclassification adjustment for unrecognized prior service costs and unrecognized loss included in net income (loss) | 501 | 1,093 | 563 | |||||
Total | 6,391 | -1,229 | -5,202 | |||||
Comprehensive income (loss) | 27,369 | -7,570 | -658 | |||||
As Previously Reported | ||||||||
Consolidated Statements of Comprehensive Income (Loss) | ||||||||
Net income (loss) | 11,145 | 4,158 | 5,070 | 9,228 | 20,373 | 25,734 | -7,055 | 4,988 |
Foreign currency translation adjustment: | ||||||||
Foreign currency translation gains (losses) | -1,872 | 518 | ||||||
Pension and postretirement benefit liabilities: | ||||||||
Other comprehensive income (loss) arising during the period | 5,890 | -2,322 | ||||||
Reclassification adjustment for unrecognized prior service costs and unrecognized loss included in net income (loss) | 501 | 1,093 | ||||||
Total | 6,391 | -1,229 | ||||||
Comprehensive income (loss) | 30,253 | -7,766 | ||||||
Adjustments | ||||||||
Consolidated Statements of Comprehensive Income (Loss) | ||||||||
Net income (loss) | -288 | 229 | 59 | 288 | -2,867 | 197 | ||
Foreign currency translation adjustment: | ||||||||
Foreign currency translation gains (losses) | -17 | -1 | ||||||
Pension and postretirement benefit liabilities: | ||||||||
Comprehensive income (loss) | ($2,884) | $196 |
Recovered_Sheet1
Summary of Significant Accounting Policies (Details 8) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2013 | Sep. 29, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Operating Activities | ||||||||
Net income (loss) | $10,857 | $4,387 | $5,129 | $9,516 | $20,373 | $22,867 | ($6,858) | $4,988 |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||||||||
Depreciation and amortization | 6,359 | 5,696 | 5,476 | |||||
Amortization of financing fees | 2,020 | 1,653 | 1,498 | |||||
Amortization of debt discount | 793 | 381 | 348 | |||||
Gain on effective settlement of contract | -15,264 | -15,264 | -15,264 | |||||
Pension curtailment expense | 1,325 | |||||||
Deferred income taxes | 29 | 39 | -271 | |||||
Loss (gain) on sale/disposal of fixed assets | 205 | 4 | -12 | |||||
Amortization of deferred revenue | -127 | -79 | -125 | |||||
Common unit compensation expense | 27 | 17 | ||||||
Changes in operating assets and liabilities, net of acquisition: | ||||||||
Accounts receivable | 3,484 | 7,829 | -15,761 | |||||
Inventories | -19,126 | -4,158 | -4,765 | |||||
Prepaid expense and other current assets | -904 | -919 | 405 | |||||
Accounts payable and accrued expense | -4,674 | 5,201 | 8,001 | |||||
Accrued pension and retirement liabilities | -1,099 | -172 | -622 | |||||
Customer advances and deferred income | 8,186 | 2,001 | -46 | |||||
Other | 261 | 463 | -104 | |||||
Net cash provided by (used in) operating activities | 3,037 | 12,423 | -695 | |||||
Investing Activities | ||||||||
Purchase of property and equipment | -8,598 | -4,410 | -5,600 | |||||
Proceeds from sale/disposal of property | 66 | 12 | ||||||
Business acquisition, net of cash acquired and reinvested Merger consideration | -59,488 | |||||||
Change in restricted cash | 244 | 464 | -1,380 | |||||
Net cash used in investing activities | -67,842 | -3,880 | -6,968 | |||||
Financing Activities | ||||||||
Debt issuance costs | -2,120 | -1,636 | ||||||
Proceeds from the issuance of long-term debt | 47,707 | |||||||
Repayment of long-term debt | -1,250 | |||||||
Line of credit advances | 10,083 | 6 | ||||||
Line of credit repayments | -3,006 | |||||||
Purchase of common units | -14,000 | |||||||
Proceeds from the issuance of common units, net of reinvested consideration proceeds | 5,000 | |||||||
Capital lease obligation payments | -393 | -1,148 | -1,229 | |||||
Distributions paid to members | -6,370 | -3,343 | -12,889 | |||||
Net cash provided by (used in) financing activities | 35,651 | -4,485 | -15,754 | |||||
Effect of exchange rates on cash and cash equivalents | -625 | 79 | 209 | |||||
Change in cash and cash equivalents | -29,779 | 4,137 | -23,208 | |||||
Cash and cash equivalents, beginning of period | 42,373 | 42,373 | 42,373 | 42,373 | 38,236 | 61,444 | ||
Cash and cash equivalents, end of period | 12,594 | 42,373 | 38,236 | |||||
As Previously Reported | ||||||||
Operating Activities | ||||||||
Net income (loss) | 11,145 | 4,158 | 5,070 | 9,228 | 20,373 | 25,734 | -7,055 | 4,988 |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||||||||
Depreciation and amortization | 6,359 | 5,696 | ||||||
Amortization of financing fees | 2,020 | 1,653 | ||||||
Amortization of debt discount | 793 | 381 | ||||||
Gain on effective settlement of contract | -15,264 | -15,264 | -15,264 | |||||
Pension curtailment expense | 1,325 | |||||||
Deferred income taxes | 29 | 39 | ||||||
Loss (gain) on sale/disposal of fixed assets | 205 | 4 | ||||||
Amortization of deferred revenue | -127 | -79 | ||||||
Common unit compensation expense | 27 | 17 | ||||||
Changes in operating assets and liabilities, net of acquisition: | ||||||||
Accounts receivable | 3,222 | 8,091 | ||||||
Inventories | -19,126 | -4,158 | ||||||
Prepaid expense and other current assets | -839 | -984 | ||||||
Accounts payable and accrued expense | -542 | 5,201 | ||||||
Accrued pension and retirement liabilities | -1,099 | -172 | ||||||
Customer advances and deferred income | 1,366 | 2,001 | ||||||
Other | 260 | 463 | ||||||
Net cash provided by (used in) operating activities | 3,018 | 12,423 | ||||||
Investing Activities | ||||||||
Purchase of property and equipment | -8,598 | -4,410 | ||||||
Proceeds from sale/disposal of property | 66 | |||||||
Business acquisition, net of cash acquired and reinvested Merger consideration | -59,488 | |||||||
Change in restricted cash | 244 | 464 | ||||||
Net cash used in investing activities | -67,842 | -3,880 | ||||||
Financing Activities | ||||||||
Debt issuance costs | -2,120 | |||||||
Proceeds from the issuance of long-term debt | 47,707 | |||||||
Repayment of long-term debt | -1,250 | |||||||
Line of credit advances | 10,083 | 6 | ||||||
Line of credit repayments | -3,006 | |||||||
Purchase of common units | -14,000 | |||||||
Proceeds from the issuance of common units, net of reinvested consideration proceeds | 5,000 | |||||||
Capital lease obligation payments | -393 | -1,148 | ||||||
Distributions paid to members | -6,370 | -3,343 | ||||||
Net cash provided by (used in) financing activities | 35,651 | -4,485 | ||||||
Effect of exchange rates on cash and cash equivalents | -606 | 79 | ||||||
Change in cash and cash equivalents | -29,779 | 4,137 | ||||||
Cash and cash equivalents, beginning of period | 42,373 | 42,373 | 42,373 | 42,373 | 38,236 | |||
Cash and cash equivalents, end of period | 12,594 | 42,373 | 38,236 | |||||
Adjustments | ||||||||
Operating Activities | ||||||||
Net income (loss) | -288 | 229 | 59 | 288 | -2,867 | 197 | ||
Changes in operating assets and liabilities, net of acquisition: | ||||||||
Accounts receivable | 262 | -262 | ||||||
Prepaid expense and other current assets | -65 | 65 | ||||||
Accounts payable and accrued expense | -4,132 | |||||||
Customer advances and deferred income | 6,820 | |||||||
Other | 1 | |||||||
Net cash provided by (used in) operating activities | 19 | |||||||
Financing Activities | ||||||||
Effect of exchange rates on cash and cash equivalents | ($19) |
Recovered_Sheet2
Summary of Significant Accounting Policies (Details 9) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Balance | ($151,091) | ($142,834) | ($151,091) | ($142,834) | ($141,398) | |||||||
Common unit expense | 27 | 17 | ||||||||||
Distributions to members | -9,317 | -626 | ||||||||||
State of Connecticut members' withholding | -408 | -704 | -152 | |||||||||
Write off of prepaid license | -1,056 | |||||||||||
Repurchase of common units | -14,000 | |||||||||||
Sale of common units | 9,000 | |||||||||||
Net (loss) income | 2,494 | 10,857 | 4,387 | 5,129 | 3,573 | 2,894 | -6,237 | -7,088 | 22,867 | -6,858 | 4,988 | |
Pension and postretirement health liabilities | 6,391 | -1,229 | -5,202 | |||||||||
Foreign currency translation | -1,889 | 517 | -444 | |||||||||
Comprehensive income (loss) | 27,369 | -7,570 | -658 | |||||||||
Balance | -139,476 | -151,091 | -139,476 | -151,091 | -142,834 | |||||||
Member Units | ||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Balance (in shares) | 132,174 | 132,174 | 132,174 | |||||||||
Repurchase of common units (in shares) | -31,166 | |||||||||||
Sale of common units (in shares) | 31,166 | |||||||||||
Balance (in shares) | 132,174 | 132,174 | 132,174 | 132,174 | ||||||||
Accumulated Members' Deficit | ||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Balance | -137,249 | -129,704 | -137,249 | -129,704 | -133,914 | |||||||
Common unit expense | 27 | 17 | ||||||||||
Distributions to members | -9,317 | -626 | ||||||||||
State of Connecticut members' withholding | -408 | -704 | -152 | |||||||||
Write off of prepaid license | -1,056 | |||||||||||
Repurchase of common units | -14,000 | |||||||||||
Sale of common units | 9,000 | |||||||||||
Net (loss) income | 22,867 | -6,858 | 4,988 | |||||||||
Balance | -130,136 | -137,249 | -130,136 | -137,249 | -129,704 | |||||||
Accumulated Other Comprehensive Loss | ||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Balance | -13,842 | -13,130 | -13,842 | -13,130 | -7,484 | |||||||
Pension and postretirement health liabilities | 6,391 | -1,229 | -5,202 | |||||||||
Foreign currency translation | -1,889 | 517 | -444 | |||||||||
Balance | -9,340 | -13,842 | -9,340 | -13,842 | -13,130 | |||||||
As Previously Reported | ||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Balance | -151,287 | -142,834 | -151,287 | -142,834 | ||||||||
Common unit expense | 27 | 17 | ||||||||||
Distributions to members | -9,317 | |||||||||||
State of Connecticut members' withholding | -408 | -704 | ||||||||||
Write off of prepaid license | -1,056 | |||||||||||
Repurchase of common units | -14,000 | |||||||||||
Sale of common units | 9,000 | |||||||||||
Net (loss) income | 25,734 | -7,055 | ||||||||||
Pension and postretirement health liabilities | 6,391 | -1,229 | ||||||||||
Foreign currency translation | -1,872 | 518 | ||||||||||
Comprehensive income (loss) | 30,253 | -7,766 | ||||||||||
Balance | -136,788 | -151,287 | -136,788 | -151,287 | ||||||||
As Previously Reported | Accumulated Members' Deficit | ||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Balance | -137,446 | -129,704 | -137,446 | -129,704 | ||||||||
Common unit expense | 27 | 17 | ||||||||||
Distributions to members | -9,317 | |||||||||||
State of Connecticut members' withholding | -408 | -704 | ||||||||||
Write off of prepaid license | -1,056 | |||||||||||
Repurchase of common units | -14,000 | |||||||||||
Sale of common units | 9,000 | |||||||||||
Net (loss) income | 25,734 | -7,055 | ||||||||||
Balance | -127,466 | -137,446 | -127,466 | -137,446 | ||||||||
As Previously Reported | Accumulated Other Comprehensive Loss | ||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Balance | -13,841 | -13,130 | -13,841 | -13,130 | ||||||||
Pension and postretirement health liabilities | 6,391 | -1,229 | ||||||||||
Foreign currency translation | -1,872 | 518 | ||||||||||
Balance | ($9,322) | ($13,841) | ($9,322) | ($13,841) |
Recovered_Sheet3
Summary of Significant Accounting Policies (Details 10) (New Colt Holding Corp.) | Jul. 12, 2013 |
New Colt Holding Corp. | |
Basis of Accounting and Consolidation | |
Ownership interest acquired (as a percent) | 100.00% |
Recovered_Sheet4
Summary of Significant Accounting Policies (Details 11) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
item | |||
Revenue | |||
Bill and hold sales | $805 | $0 | $6,840 |
Number of long-term contracts/programs | 2 | ||
Number of claims recorded | 0 | ||
Changes in allowance for doubtful accounts | |||
Balance at the beginning of the period | 0 | 1 | |
Provision for doubtful accounts | 78 | 1 | |
Write-offs | -2 | ||
Balance at the end of the period | $78 | $0 | $1 |
Period from the balance sheet date within which there are no material amounts not expected to be collected | 1 year |
Recovered_Sheet5
Summary of Significant Accounting Policies (Details 12) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property and equipment | |||
Depreciation and amortization | $4,606 | $4,891 | $4,633 |
Property and equipment, gross, excluding Construction in process | 57,548 | 47,207 | |
Less accumulated depreciation and amortization | -32,152 | -28,162 | |
Property and equipment, net, excluding Construction in process | 25,396 | 19,045 | |
Construction in process | 5,337 | 3,089 | |
Property and equipment, net | 30,733 | 22,134 | |
Changes in the carrying amount of goodwill | |||
Balance at the beginning of the period | 14,947 | 14,713 | |
Goodwill acquired | 36,974 | ||
Effect of foreign currency translation | -696 | 234 | |
Balance at the end of the period | 51,225 | 14,947 | 14,713 |
Goodwill | |||
Accumulated impairment | 1,245 | 1,245 | |
Goodwill book value | 52,470 | 16,192 | |
Impairment of goodwill | 0 | 0 | 0 |
Land | |||
Property and equipment | |||
Property and equipment, gross, excluding Construction in process | 338 | 362 | |
Building | |||
Property and equipment | |||
Property and equipment, gross, excluding Construction in process | 2,653 | 2,718 | |
Estimated Useful Life | 33 years | ||
Machinery and equipment | |||
Property and equipment | |||
Fair value of the property and equipment acquired | 4,420 | ||
Property and equipment, gross, excluding Construction in process | 47,476 | 37,749 | |
Machinery and equipment | Minimum | |||
Property and equipment | |||
Estimated Useful Life | 7 years | ||
Machinery and equipment | Maximum | |||
Property and equipment | |||
Estimated Useful Life | 10 years | ||
Furniture, fixtures and leasehold improvements | |||
Property and equipment | |||
Fair value of the property and equipment acquired | 30 | ||
Property and equipment, gross, excluding Construction in process | 7,081 | 6,378 | |
Furniture, fixtures and leasehold improvements | Minimum | |||
Property and equipment | |||
Estimated Useful Life | 3 years | ||
Furniture, fixtures and leasehold improvements | Maximum | |||
Property and equipment | |||
Estimated Useful Life | 5 years | ||
Construction in process | |||
Property and equipment | |||
Fair value of the property and equipment acquired | $732 |
Recovered_Sheet6
Summary of Significant Accounting Policies (Details 13) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Trademarks | ||
Acquired indefinite-lived intangible for the Colt brand and related trademarks | $50,100 | |
Long-lived assets reclassified to held for sale | 0 | 0 |
New Colt Holding Corp. | ||
Acquired finite-lived intangible assets: | ||
Acquired finite-lived intangible assets | 9,340 | |
License agreements | New Colt Holding Corp. | ||
Acquired finite-lived intangible assets: | ||
Acquired finite-lived intangible assets | 5,240 | |
Weighted-average useful lives of acquired assets | 6 years | |
Developed technology | New Colt Holding Corp. | ||
Acquired finite-lived intangible assets: | ||
Acquired finite-lived intangible assets | 2,970 | |
Weighted-average useful lives of acquired assets | 20 years | |
Backlog | New Colt Holding Corp. | ||
Acquired finite-lived intangible assets: | ||
Acquired finite-lived intangible assets | $1,130 | |
Weighted-average useful lives of acquired assets | 3 years |
Recovered_Sheet7
Summary of Significant Accounting Policies (Details 14) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net carrying value of intangible assets with finite lives | |||
Gross Carrying Amount | $22,071 | $13,362 | |
Accumulated Amortization | -8,656 | -7,325 | |
Net | 13,415 | 6,037 | |
Amortization expense | 1,670 | 704 | 742 |
Expected annual amortization expense | |||
2014 | 3,271 | ||
2015 | 2,785 | ||
2016 | 1,927 | ||
2017 | 1,187 | ||
2018 | 873 | ||
Customer relationship Canadian Government | |||
Net carrying value of intangible assets with finite lives | |||
Gross Carrying Amount | 2,369 | 2,533 | |
Accumulated Amortization | -678 | -640 | |
Net | 1,691 | 1,893 | |
Estimated Useful Life | 30 years | 30 years | |
Customer relationships other | |||
Net carrying value of intangible assets with finite lives | |||
Gross Carrying Amount | 6,160 | 6,586 | |
Accumulated Amortization | -4,077 | -3,970 | |
Net | 2,083 | 2,616 | |
Estimated Useful Life | 20 years | 20 years | |
License agreements | |||
Net carrying value of intangible assets with finite lives | |||
Gross Carrying Amount | 5,240 | ||
Accumulated Amortization | -805 | ||
Net | 4,435 | ||
Estimated Useful Life | 6 years | ||
Backlog | |||
Net carrying value of intangible assets with finite lives | |||
Gross Carrying Amount | 1,722 | 633 | |
Accumulated Amortization | -604 | -633 | |
Net | 1,118 | ||
Estimated Useful Life | 3 years | ||
Technology-based intangibles | |||
Net carrying value of intangible assets with finite lives | |||
Gross Carrying Amount | 6,580 | 3,610 | |
Accumulated Amortization | -2,492 | -2,082 | |
Net | $4,088 | $1,528 | |
Estimated Useful Life | 15 years | ||
Technology-based intangibles | Minimum | |||
Net carrying value of intangible assets with finite lives | |||
Estimated Useful Life | 15 years | ||
Technology-based intangibles | Maximum | |||
Net carrying value of intangible assets with finite lives | |||
Estimated Useful Life | 20 years |
Recovered_Sheet8
Summary of Significant Accounting Policies (Details 15) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Jul. 11, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2013 | Sep. 29, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
item | |||||||||
Prepaid License Fee | |||||||||
Extended term of license | 5 years | ||||||||
Prepaid license fee written off | $1,056 | ||||||||
Initial term of license | 20 years | ||||||||
Amortization expense | 101 | 101 | |||||||
Warranty Costs | |||||||||
Warranty period for military products | 1 year | ||||||||
Warranty bond posted for direct foreign sales, minimum period | 1 year | ||||||||
Warranty bond posted for direct foreign sales, maximum period | 5 years | ||||||||
Warranty reserve | 464 | 167 | |||||||
Self-Funded Medical Plan | |||||||||
Recorded estimated liability | 823 | 1,396 | |||||||
Self-Funded Worker's Compensation | |||||||||
Liability for estimated premiums and incurred losses | 408 | 308 | |||||||
Accrued expenses | |||||||||
Accrued compensation and benefits | 7,154 | 5,770 | |||||||
Accrued contract obligation expense | 1,194 | ||||||||
Accrued federal, excise and other taxes | 4,902 | 5,293 | |||||||
Accrued interest | 2,879 | 3,230 | |||||||
Accrued commissions | 929 | 1,229 | |||||||
Other accrued expenses | 5,100 | 4,793 | |||||||
Total accrued expenses | 22,158 | 20,315 | |||||||
Advertising Costs | |||||||||
Advertising expense | 2,626 | 2,406 | 1,760 | ||||||
Research and Development Costs | |||||||||
Research and development expenses | 1,714 | 1,481 | 820 | 2,301 | 4,015 | 6,126 | 4,747 | 5,578 | |
Foreign Currency Translation | |||||||||
Derivative financial instruments to hedge foreign currency translation exposure | 0 | ||||||||
Foreign currency gain (losses) | 197 | 155 | -294 | ||||||
Fair Value Measurements | |||||||||
Carrying value of long-term debt | 289,817 | 247,567 | |||||||
Estimated fair value of long-term debt | $262,775 | $161,250 |
Acquisition_Details
Acquisition (Details) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||||
Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Jun. 30, 2013 | Sep. 29, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jul. 12, 2013 | |
item | |||||||||||||||
Acquisition | |||||||||||||||
Sales | $69,792,000 | $73,030,000 | $64,212,000 | $63,849,000 | $67,371,000 | $56,555,000 | $45,837,000 | $43,853,000 | $128,061,000 | $201,165,000 | $270,883,000 | $213,616,000 | $208,816,000 | ||
Aggregate consideration from issue and sale of common units | 5,000,000 | ||||||||||||||
Transaction-related costs | 461,000 | 416,000 | 416,000 | 877,000 | 1,147,000 | ||||||||||
Incremental net sales of acquiree since acquisition date | 29,100,000 | ||||||||||||||
Operating loss of acquiree since acquisition date | 1,700,000 | ||||||||||||||
Fair values of the assets acquired, net of cash acquired, and the liabilities assumed at the Merger Date | |||||||||||||||
Goodwill | 51,225,000 | 14,947,000 | 51,225,000 | 51,225,000 | 14,947,000 | 14,713,000 | |||||||||
Notes issued | 50,000,000 | ||||||||||||||
Interest expense | New Colt Holding Corp. | |||||||||||||||
Unaudited pro forma operating results | |||||||||||||||
Net income (loss) | 2,467,000 | 6,879,000 | |||||||||||||
Term Loan | |||||||||||||||
Fair values of the assets acquired, net of cash acquired, and the liabilities assumed at the Merger Date | |||||||||||||||
Notes issued | 50,000,000 | ||||||||||||||
New Colt Holding Corp. | |||||||||||||||
Acquisition | |||||||||||||||
Ownership interest acquired (as a percent) | 100.00% | ||||||||||||||
Sales | 29,100,000 | 130,000,000 | |||||||||||||
Sales from the resale of Colt Defense manufactured rifles | 83,000,000 | ||||||||||||||
Number of manufacturers of Colt firearms to be consolidated | 2 | ||||||||||||||
Settlement gain on pre-existing relationship | 15,264,000 | ||||||||||||||
Aggregate purchase price | 82,543,000 | ||||||||||||||
Aggregate purchase price paid in cash | 5,000,000 | ||||||||||||||
Merger consideration reinvested by certain investors | 4,000,000 | ||||||||||||||
Transaction-related costs | 1,147,000 | ||||||||||||||
Purchase accounting adjustments | 1,600,000 | 1,600,000 | 1,600,000 | ||||||||||||
Fair values of the assets acquired, net of cash acquired, and the liabilities assumed at the Merger Date | |||||||||||||||
Cash and cash equivalents | 3,791,000 | ||||||||||||||
Accounts receivable | 3,318,000 | ||||||||||||||
Inventories | 7,585,000 | ||||||||||||||
Property and equipment | 5,182,000 | ||||||||||||||
Other assets | 3,090,000 | ||||||||||||||
Intangible assets with finite lives | 9,340,000 | ||||||||||||||
Trademarks | 50,100,000 | ||||||||||||||
Goodwill | 36,974,000 | ||||||||||||||
Total assets acquired | 119,380,000 | ||||||||||||||
Accounts payable and accrued expenses | 8,808,000 | ||||||||||||||
Customer advances and deferred revenue | 1,832,000 | ||||||||||||||
Capital lease obligations | 393,000 | ||||||||||||||
Pension and retirement liabilities | 9,357,000 | ||||||||||||||
Deferred tax liabilities | 16,447,000 | ||||||||||||||
Total liabilities assumed | 36,837,000 | ||||||||||||||
Net assets acquired | 82,543,000 | ||||||||||||||
Unaudited pro forma operating results | |||||||||||||||
Net sales | 309,556,000 | 267,714,000 | |||||||||||||
Net income (loss) | 17,474,000 | -4,590,000 | |||||||||||||
New Colt Holding Corp. | License agreements | |||||||||||||||
Acquisition | |||||||||||||||
Settlement gain on pre-existing relationship | 15,264,000 | ||||||||||||||
Fair values of the assets acquired, net of cash acquired, and the liabilities assumed at the Merger Date | |||||||||||||||
Intangible assets with finite lives | 5,240,000 | ||||||||||||||
Weighted-average useful lives of acquired assets | 6 years | ||||||||||||||
New Colt Holding Corp. | Developed technology | |||||||||||||||
Fair values of the assets acquired, net of cash acquired, and the liabilities assumed at the Merger Date | |||||||||||||||
Intangible assets with finite lives | 2,970,000 | ||||||||||||||
Weighted-average useful lives of acquired assets | 20 years | ||||||||||||||
New Colt Holding Corp. | Backlog | |||||||||||||||
Fair values of the assets acquired, net of cash acquired, and the liabilities assumed at the Merger Date | |||||||||||||||
Intangible assets with finite lives | 1,130,000 | ||||||||||||||
Weighted-average useful lives of acquired assets | 3 years | ||||||||||||||
New Colt Holding Corp. | New Colt Holding Corp. | |||||||||||||||
Unaudited pro forma operating results | |||||||||||||||
Net income (loss) | 1,383,000 | ||||||||||||||
New Colt Holding Corp. | Transaction-related costs | |||||||||||||||
Unaudited pro forma operating results | |||||||||||||||
Net income (loss) | 2,530,000 | 2,530,000 | |||||||||||||
New Colt Holding Corp. | Settlement Gain | |||||||||||||||
Unaudited pro forma operating results | |||||||||||||||
Net income (loss) | 15,264,000 | 15,264,000 | |||||||||||||
New Colt Holding Corp. | Amortization of finite-lived intangible assets | |||||||||||||||
Unaudited pro forma operating results | |||||||||||||||
Net income (loss) | 1,409,000 | 2,347,000 | |||||||||||||
New Colt Holding Corp. | Common units | |||||||||||||||
Acquisition | |||||||||||||||
Aggregate consideration from issue and sale of common units | 9,000,000 | ||||||||||||||
New Colt Holding Corp. | Term Loan | |||||||||||||||
Acquisition | |||||||||||||||
Proceeds from senior secured term loan | 50,000,000 | ||||||||||||||
Unaudited pro forma operating results | |||||||||||||||
Net income (loss) | 50,000,000 | 50,000,000 | |||||||||||||
New Colt Holding Corp. | Trademarks | |||||||||||||||
Acquisition | |||||||||||||||
Settlement gain on pre-existing relationship | 15,264,000 | ||||||||||||||
Gross settlement gain | 16,320,000 | ||||||||||||||
Prepaid license balance | $1,056,000 |
Restructuring_Costs_Details
Restructuring Costs (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 29, 2013 | Sep. 29, 2013 | Dec. 31, 2013 |
item | |||
Restructuring Costs | |||
Net pre-tax restructuring costs | $631 | $631 | $782 |
Reimbursement from an escrow | 336 | ||
Restructuring costs recorded in operating expenses | 782 | ||
Number of salaried employees, reduction in workforce | 10 | ||
Accrual balances and utilization for restructuring action | |||
Accrued restructuring liability | 1,118 | ||
Utilization | -412 | ||
Balance at the end of the period | $706 |
Inventories_Details
Inventories (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Inventories | ||
Raw materials | $43,469 | $29,177 |
Work in process | 9,476 | 7,829 |
Finished products | 13,729 | 3,555 |
Inventories | $66,674 | $40,561 |
Notes_Payable_and_LongTerm_Deb2
Notes Payable and Long-Term Debt (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jul. 12, 2013 | Nov. 10, 2009 | Sep. 29, 2011 |
Notes payable and long-term debt | ||||||
Line of credit advance | $7,083 | $6 | ||||
Notes issued | 50,000 | |||||
Lenders fees and legal expenses | 2,814 | |||||
Financing costs incurred | 2,120 | -17 | 1,653 | |||
Principal repayments which are due quarterly on the last day of each calendar quarter | ||||||
Total | 301,900 | 247,573 | 247,186 | |||
Outstanding debt balances | ||||||
Principal amount | 250,000 | |||||
Unamortized discount | -2,814 | |||||
Outstanding debt balances | ||||||
Net debt at the beginning of the period | 247,573 | 247,186 | ||||
Line of credit advances | 7,083 | 6 | ||||
Line of credit repayments | -3,006 | |||||
Original issue | 50,000 | |||||
Debt discount | -2,814 | |||||
Principal payments | -1,250 | |||||
Amortization of discount | 793 | 381 | 348 | |||
Net debt at the ending of the period | 301,900 | 247,573 | 247,186 | |||
Less: current portion | -5,000 | |||||
Loan outstanding, excluding current portion | 289,817 | 247,567 | ||||
Deferred Financing Costs | ||||||
Financing costs incurred | 2,120 | -17 | 1,653 | |||
Amortization of deferred financing costs | 2,020 | 1,653 | 1,498 | |||
Payment of financing costs | 2,120 | 1,636 | ||||
Reversal of financing costs | 17 | |||||
Deferred financing fee activity | ||||||
Balance at the beginning of the period | 7,642 | 9,312 | ||||
Amortization of deferred financing costs | -2,020 | -1,653 | -1,498 | |||
Financing fees paid and accrued | 2,120 | -17 | 1,653 | |||
Balance at the end of the period | 7,742 | 7,642 | 9,312 | |||
Debt Prepayment Expense | ||||||
Total debt prepayment expense | 295 | |||||
Colt Finance Corp | ||||||
Notes payable and long-term debt | ||||||
Percentage of ownership | 100.00% | 100.00% | 100.00% | |||
Credit Agreement | ||||||
Notes payable and long-term debt | ||||||
Maximum borrowing capacity | 50,000 | |||||
Annual servicing fee | 40 | |||||
Number of consecutive days threshold | 60 days | |||||
Line of credit advance | 10,083 | 6 | ||||
Principal repayments which are due quarterly on the last day of each calendar quarter | ||||||
Total | 7,083 | |||||
Outstanding debt balances | ||||||
Net debt at the beginning of the period | 6 | |||||
Line of credit advances | 10,083 | 6 | ||||
Line of credit repayments | -3,006 | |||||
Net debt at the ending of the period | 7,083 | |||||
Less: current portion | -7,083 | |||||
Credit Agreement | Canadian Banker's Acceptance Rate | ||||||
Notes payable and long-term debt | ||||||
Variable interest rate base | Canadian Banker's Acceptance Rate | |||||
Credit Agreement | Lender's prime rate | ||||||
Notes payable and long-term debt | ||||||
Variable interest rate base | Lender's prime rate | |||||
Credit Agreement | Minimum | ||||||
Notes payable and long-term debt | ||||||
Annual fee on unused available balance payable quarterly (as a percent) | 0.38% | |||||
Excess availability calculation, trade payables, number of days past due | 60 days | |||||
Excess availability threshold amount | 11,000 | |||||
Credit Agreement | Maximum | ||||||
Notes payable and long-term debt | ||||||
Annual fee on unused available balance payable quarterly (as a percent) | 0.50% | |||||
Excess availability, threshold limit | 50,000 | |||||
Term Loan | ||||||
Notes payable and long-term debt | ||||||
Notes issued | 50,000 | 50,000 | ||||
Lenders fees and legal expenses | 2,293 | |||||
Financing costs incurred | 2,120 | 2,120 | ||||
Principal repayments which are due quarterly on the last day of each calendar quarter | ||||||
2014 | 5,000 | |||||
2015 | 7,500 | |||||
2016 | 36,250 | |||||
Total | 48,750 | |||||
Number of rolling quarters used in calculation of financial covenants | 4 | |||||
Number of proceeding fiscal quarters used in calculation of financial covenants | 3 | |||||
Outstanding debt balances | ||||||
Unamortized discount | -2,293 | |||||
Outstanding debt balances | ||||||
Original issue | 50,000 | 50,000 | ||||
Debt discount | -2,293 | |||||
Principal payments | -1,250 | |||||
Amortization of discount | 376 | 381 | ||||
Net debt at the ending of the period | 48,750 | |||||
Less: current portion | -5,000 | |||||
Loan outstanding, excluding current portion | 41,833 | |||||
Deferred Financing Costs | ||||||
Financing costs incurred | 2,120 | 2,120 | ||||
Deferred financing fee activity | ||||||
Financing fees paid and accrued | 2,120 | 2,120 | ||||
Term Loan | 3-month LIBOR | ||||||
Notes payable and long-term debt | ||||||
Variable interest rate base | 3-month LIBOR | |||||
Basis spread on variable rate (as a percent) | 9.75% | |||||
Term Loan | Base rate | ||||||
Notes payable and long-term debt | ||||||
Alternative reference rate if greater than 3-month LIBOR | 1.00% | |||||
Letters of credit facility | ||||||
Notes payable and long-term debt | ||||||
Maximum borrowing capacity | 20,000 | |||||
Letters of credit outstanding | 3,486 | 1,715 | ||||
Senior Notes | ||||||
Notes payable and long-term debt | ||||||
Notes issued | 250,000 | |||||
Lenders fees and legal expenses | 2,814 | 3,522 | ||||
Interest rate (as a percent) | 8.75% | |||||
Principal repayments required until maturity | 0 | |||||
Principal repayments which are due quarterly on the last day of each calendar quarter | ||||||
Total | 247,984 | 247,567 | ||||
Outstanding debt balances | ||||||
Principal amount | 250,000 | |||||
Unamortized discount | -2,814 | -3,522 | ||||
Outstanding debt balances | ||||||
Net debt at the beginning of the period | 247,567 | 247,186 | ||||
Original issue | 250,000 | |||||
Debt discount | -2,814 | -3,522 | ||||
Amortization of discount | 417 | 381 | ||||
Net debt at the ending of the period | 247,984 | 247,567 | ||||
Loan outstanding, excluding current portion | 247,984 | |||||
Senior Notes | Minimum | ||||||
Notes payable and long-term debt | ||||||
Aggregate default indebtedness | $20,000 |
Lease_Obligations_Details
Lease Obligations (Details) (USD $) | 12 Months Ended | 0 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jul. 12, 2013 | Jul. 12, 2013 |
Operating leases | |||||
Operating leases outstanding | $3,034 | ||||
Lease buyout expenses | 287 | ||||
Future minimum operating lease payments | |||||
2014 | 1,282 | ||||
2015 | 910 | ||||
2016 | 158 | ||||
2017 | 117 | ||||
2018 | 108 | ||||
Thereafter | 459 | ||||
Total minimum lease payments | 3,034 | ||||
Rent expense | 1,167 | 1,048 | 1,095 | ||
New Colt Holding Corp. | |||||
Operating leases | |||||
Capital lease obligations | 393 | 393 | |||
Operating leases outstanding | 1,216 | 1,216 | |||
Lease buyout expenses | 287 | ||||
Fair value of assets recorded related to the payoff of the operating leases | 5,182 | 5,182 | |||
Future minimum operating lease payments | |||||
Total minimum lease payments | 1,216 | 1,216 | |||
West Hartford facility | |||||
Future minimum operating lease payments | |||||
Rent expense | 642 | ||||
West Hartford facility | Colt's Manufacturing | |||||
Future minimum operating lease payments | |||||
Rental income for the portion subleased | 192 | 161 | 186 | ||
Machinery and equipment | |||||
Operating leases | |||||
Fair value of assets recorded related to the payoff of the operating leases | 4,420 | ||||
Machinery and equipment | New Colt Holding Corp. | |||||
Operating leases | |||||
Fair value of assets recorded related to the payoff of the operating leases | $1,002 | $1,002 |
Income_Taxes_Details
Income Taxes (Details) | 12 Months Ended | |
Dec. 31, 2013 | Jul. 12, 2013 | |
item | ||
Income Taxes | ||
Number of Units to which Highest Taxable Income Allocated | 1 | |
New Colt Holding Corp. | ||
Income taxes | ||
Ownership percentage | 100.00% | |
Ownership interest acquired (as a percent) | 100.00% | |
Colt Defense and Colt Technical Services LLC | Colt International | ||
Income taxes | ||
Ownership percentage | 100.00% | |
Colt International | Colt Canada | ||
Income taxes | ||
Ownership percentage | 100.00% | |
Colt Canada | ||
Income taxes | ||
Rate to withhold taxes on dividends (as a percent) | 5.00% |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2013 | Sep. 29, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Components of income (loss) before provision for income taxes | ||||||||
United States | $18,912 | ($11,923) | ($4,559) | |||||
Foreign | 5,591 | 6,880 | 12,718 | |||||
Total | 24,503 | -5,043 | 8,159 | |||||
Current: | ||||||||
Foreign | 1,607 | 1,776 | 3,442 | |||||
Total current | 1,607 | 1,776 | 3,442 | |||||
Deferred and other: | ||||||||
Foreign | 29 | 39 | -271 | |||||
Total deferred and other: | 29 | 39 | -271 | |||||
Total tax expense | -208 | 78 | 681 | 759 | 551 | 1,636 | 1,815 | 3,171 |
Current tax assets: | ||||||||
Accounts receivable reserves | 74 | |||||||
Inventory reserves | 865 | |||||||
Accrued insurance | 250 | |||||||
Accrued payroll | 150 | |||||||
Accrued warranties | 125 | 40 | ||||||
Other accrued expenses | 316 | 145 | ||||||
Less: valuation allowance | -826 | |||||||
Total current deferred tax assets | 954 | 185 | ||||||
Long-term tax assets (liabilities): | ||||||||
Pension & post retirement obligations | 2,913 | |||||||
Net operating loss carry forwards | 3,943 | |||||||
Federal AMT credits | 888 | |||||||
Fixed assets | -1,545 | -388 | ||||||
Intangible assets | -21,263 | -1,127 | ||||||
Other long-term assets | 450 | |||||||
Less: valuation allowance | -4,101 | |||||||
Total long-term deferred tax liabilities | -18,715 | -1,515 | ||||||
Net long-term deferred tax liabilities | ($17,761) | ($1,330) |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Operating loss carry forwards | |
Federal AMT credits | $888 |
U.S. federal | New Colt Holding Corp. | |
Operating loss carry forwards | |
Net operating loss carry forwards | 21,828 |
Federal AMT credits | 888 |
Net operating loss carry forwards not expected to be utilized | 9,699 |
U.S. state | New Colt Holding Corp. | |
Operating loss carry forwards | |
Net operating loss carry forwards | $3,350 |
Income_Taxes_Details_4
Income Taxes (Details 4) (USD $) | 0 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Jul. 12, 2013 | Dec. 31, 2013 |
Notes payable and long-term debt | ||
Notes issued | $50,000 | |
Term Loan | ||
Notes payable and long-term debt | ||
Notes issued | $50,000 | $50,000 |
Income_Taxes_Details_5
Income Taxes (Details 5) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Effective income tax provision (benefit) was different than the statutory federal and state income tax rates | |||
Expected Tax Rate (as a percent) | 34.00% | 34.00% | 34.00% |
Meals and Entertainment (as a percent) | 0.05% | -0.21% | 0.12% |
Pass Through Taxation (Zero Rate) (as a percent) | -26.44% | -80.39% | 19.00% |
Other Non-Deductible Items (as a percent) | 0.02% | -0.03% | 0.01% |
Tax credits (as a percent) | -1.09% | 5.12% | -4.51% |
Tax Rate Differentials (as a percent) | -2.06% | 12.28% | -11.69% |
Withholding Tax (as a percent) | 2.12% | -6.54% | 3.73% |
Valuation allowance (as a percent) | 0.17% | 0.00% | 0.00% |
Other Adjustments (as a percent) | -0.09% | -0.23% | -1.79% |
Effective Tax Rate (as a percent) | 6.68% | -36.00% | 38.87% |
Reserves for uncertain tax positions | $198 | $0 | |
Uncertain tax positions | |||
Add New Colt's uncertain tax position as of July 12, 2013 | 198 | ||
Balance as of the end of the period | 198 | ||
Reversal of uncertain tax position in the next twelve months | 0 | ||
Current uncertain tax positions | $0 |
Pension_Savings_and_Postretire2
Pension, Savings and Postretirement Benefits (Details) (USD $) | 12 Months Ended | 6 Months Ended | |||
Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | Jul. 12, 2013 | |
item | item | ||||
Fair value of plan assets | |||||
Balance at end of year | $22,372,000 | $34,515,000 | $34,515,000 | ||
Components of cost recognized in our consolidated statement of operations | |||||
Curtailment of hourly plan | 1,325,000 | ||||
Pension plans | |||||
Pension, savings and postretirement benefits | |||||
Number of noncontributory plans | 4 | ||||
Projected benefit obligation ("PBO") | |||||
Balance at beginning of year | 25,590,000 | 29,168,000 | 9,131,000 | ||
Service cost | 455,000 | 315,000 | 287,000 | ||
Interest cost | 1,141,000 | 1,296,000 | 1,090,000 | ||
Plan amendments | 951,000 | ||||
Actuarial (gain) loss | 1,766,000 | -2,175,000 | |||
Benefits paid and expenses | -735,000 | -1,540,000 | |||
Balance at end of year | 29,168,000 | 36,195,000 | 25,590,000 | 36,195,000 | 9,131,000 |
Fair value of plan assets | |||||
Balance at beginning of year | 19,609,000 | 22,372,000 | 7,841,000 | ||
Employer contributions | 1,500,000 | 1,740,000 | |||
Actual return on plan assets | 1,998,000 | 4,102,000 | |||
Benefits paid and expenses | -735,000 | -1,540,000 | |||
Balance at end of year | 22,372,000 | 34,515,000 | 19,609,000 | 34,515,000 | 7,841,000 |
Unfunded benefit obligation | |||||
Funded status at end of year | -6,796,000 | -1,680,000 | -1,680,000 | ||
Additional benefits accrued since effective dates of the freezes of plan | 0 | 0 | |||
Components of cost recognized in our consolidated statement of operations | |||||
Service cost | 455,000 | 315,000 | 287,000 | ||
Interest cost | 1,141,000 | 1,296,000 | 1,090,000 | ||
Expected return on assets | -1,641,000 | -1,970,000 | -1,549,000 | ||
Curtailment of hourly plan | 1,325,000 | ||||
Amortization of unrecognized prior service costs | 244,000 | 170,000 | |||
Amortization of unrecognized loss | 813,000 | 429,000 | 495,000 | ||
Net periodic cost | 2,337,000 | 70,000 | 493,000 | ||
Hourly Plan | |||||
Projected benefit obligation ("PBO") | |||||
Balance at end of year | 20,474,000 | 26,328,000 | 26,328,000 | ||
Fair value of plan assets | |||||
Balance at end of year | 15,602,000 | 24,607,000 | 24,607,000 | ||
Unfunded benefit obligation | |||||
Funded status at end of year | -4,872,000 | -1,721,000 | -1,721,000 | ||
Number of hourly defined benefit plans | 2 | 2 | |||
Salaried Plan | |||||
Projected benefit obligation ("PBO") | |||||
Balance at end of year | 8,694,000 | 9,867,000 | 9,867,000 | ||
Fair value of plan assets | |||||
Balance at end of year | 6,770,000 | 9,908,000 | 9,908,000 | ||
Unfunded benefit obligation | |||||
Funded status at end of year | -1,924,000 | 41,000 | 41,000 | ||
Number of salaried defined benefit plans | 2 | ||||
Postretirement Healthcare Coverage | |||||
Pension, savings and postretirement benefits | |||||
Monthly maximum contribution to the cost of providing retiree health care benefits (in dollars per employee) | 250 | ||||
Projected benefit obligation ("PBO") | |||||
Balance at beginning of year | 12,524,000 | 14,091,000 | 8,077,000 | ||
Service cost | 256,000 | 549,000 | 179,000 | ||
Interest cost | 527,000 | 658,000 | 573,000 | ||
Actuarial (gain) loss | 1,286,000 | -1,583,000 | |||
Benefits paid and expenses | -502,000 | -717,000 | |||
Balance at end of year | 14,091,000 | 21,075,000 | 12,524,000 | 21,075,000 | 8,077,000 |
Fair value of plan assets | |||||
Employer contributions | 502,000 | 717,000 | |||
Benefits paid and expenses | -502,000 | -717,000 | |||
Unfunded benefit obligation | |||||
Funded status at end of year | -14,091,000 | -21,075,000 | -21,075,000 | ||
Components of cost recognized in our consolidated statement of operations | |||||
Service cost | 256,000 | 549,000 | 179,000 | ||
Interest cost | 527,000 | 658,000 | 573,000 | ||
Amortization of unrecognized prior service costs | -172,000 | -172,000 | -172,000 | ||
Amortization of unrecognized loss | 208,000 | 244,000 | 70,000 | ||
Net periodic cost | $819,000 | $1,279,000 | $650,000 |
Pension_Savings_and_Postretire3
Pension, Savings and Postretirement Benefits (Details 2) (USD $) | 6 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
item | item | |||
Components of cost recognized in other comprehensive loss | ||||
Balance at the beginning of the period | -16,574 | -15,345 | ||
Change in pension and post-retirement health liabilities | 6,391 | -1,229 | -5,202 | |
Balance at the end of the period | -10,183 | -10,183 | -16,574 | -15,345 |
Pension plans | ||||
Components of cost recognized in other comprehensive loss | ||||
Balance at the beginning of the period | -13,073 | -13,095 | ||
Change in pension and post-retirement health liabilities | 4,736 | 22 | ||
Balance at the end of the period | -8,337 | -8,337 | -13,073 | |
Estimated amount that will be amortized from accumulated other comprehensive loss into net periodic cost | ||||
Actuarial loss | 264 | |||
Total | 264 | |||
Hourly Plan | ||||
Weighted average assumptions used in determining the year-end benefit obligation | ||||
Discount rate (as a percent) | 4.50% | 4.50% | 3.75% | |
Expected return on plan assets (as a percent) | 7.00% | 7.50% | ||
Number of hourly defined benefit plans | 2 | 2 | ||
Weighted average assumptions used to determine net periodic cost | ||||
Discount rate (as a percent) | 3.75% | 4.25% | 5.50% | |
Expected return on plan assets (as a percent) | 7.50% | 8.00% | 8.00% | |
Salaried Plan | ||||
Weighted average assumptions used in determining the year-end benefit obligation | ||||
Discount rate (as a percent) | 4.75% | 4.75% | 4.00% | |
Expected return on plan assets (as a percent) | 7.00% | 7.50% | ||
Number of salaried defined benefit plans | 2 | |||
Weighted average assumptions used to determine net periodic cost | ||||
Discount rate (as a percent) | 4.00% | 4.50% | 5.50% | |
Expected return on plan assets (as a percent) | 7.50% | 8.00% | 8.00% | |
Postretirement Healthcare Coverage | ||||
Components of cost recognized in other comprehensive loss | ||||
Balance at the beginning of the period | -3,501 | -2,250 | ||
Change in pension and post-retirement health liabilities | 1,655 | -1,251 | ||
Balance at the end of the period | -1,846 | -1,846 | -3,501 | -2,250 |
Estimated amount that will be amortized from accumulated other comprehensive loss into net periodic cost | ||||
Prior service cost/(gain) | -172 | |||
Actuarial loss | 97 | |||
Total | -75 | |||
Weighted average assumptions used in determining the year-end benefit obligation | ||||
Discount rate (as a percent) | 4.50% | 4.50% | 3.50% | |
Weighted average assumptions used to determine net periodic cost | ||||
Discount rate (as a percent) | 3.50% | 4.25% | 5.50% |
Pension_Savings_and_Postretire4
Pension, Savings and Postretirement Benefits (Details 3) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Jul. 12, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Fair Value Measurements | ||||
Total | $34,515 | $22,372 | ||
Allocation Percent | 100.00% | 100.00% | ||
Level 1 | ||||
Fair Value Measurements | ||||
Total | 29,780 | 19,181 | ||
Level 2 | ||||
Fair Value Measurements | ||||
Total | 4,735 | 3,191 | ||
Equity securities | ||||
Target allocation | ||||
Plan's target allocation (as a percent) | 50.00% | |||
Equity mutual funds | ||||
Fair Value Measurements | ||||
Total | 19,903 | 11,344 | ||
Allocation Percent | 58.00% | 51.00% | ||
Equity mutual funds | Level 1 | ||||
Fair Value Measurements | ||||
Total | 19,903 | 11,344 | ||
Fixed income securities | ||||
Target allocation | ||||
Plan's target allocation (as a percent) | 45.00% | |||
Fixed income mutual funds | ||||
Fair Value Measurements | ||||
Total | 9,431 | 7,193 | ||
Allocation Percent | 27.00% | 32.00% | ||
Fixed income mutual funds | Level 1 | ||||
Fair Value Measurements | ||||
Total | 9,431 | 7,193 | ||
Money market | ||||
Fair Value Measurements | ||||
Total | 446 | 644 | ||
Allocation Percent | 1.00% | 3.00% | ||
Money market | Level 1 | ||||
Fair Value Measurements | ||||
Total | 446 | 644 | ||
Stable value | ||||
Fair Value Measurements | ||||
Total | 4,735 | 3,191 | ||
Allocation Percent | 14.00% | 14.00% | ||
Stable value | Level 2 | ||||
Fair Value Measurements | ||||
Total | 4,735 | 3,191 | ||
Cash equivalents | ||||
Target allocation | ||||
Plan's target allocation (as a percent) | 5.00% | |||
Pension plans | ||||
Fair Value Measurements | ||||
Total | 34,515 | 7,841 | 22,372 | 19,609 |
Employer contributions | ||||
Anticipated pension contributions to the plans in 2014 | 1,750 | |||
Benefit payments expected to be paid | ||||
2014 | 1,931 | |||
2015 | 1,937 | |||
2016 | 1,994 | |||
2017 | 2,039 | |||
2018 | 2,077 | |||
2019-2023 | 11,164 | |||
Postretirement Healthcare Coverage | ||||
Benefit payments expected to be paid | ||||
2014 | 1,085 | |||
2015 | 1,147 | |||
2016 | 1,208 | |||
2017 | 1,264 | |||
2018 | 1,310 | |||
2019-2023 | $7,031 |
Pension_Savings_and_Postretire5
Pension, Savings and Postretirement Benefits (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
item | |||
401K Plan | |||
Defined Contribution Plans | |||
Number of domestic contributory savings plans | 2 | ||
Number of domestic contributory savings plans combined | 2 | ||
Percentage of employee' contributions up to which employer match their contribution | 15.00% | ||
Amount expensed by employer | $793 | $310 | $272 |
401K Plan | Employees represented by a collective bargaining agreement | Maximum | |||
Defined Contribution Plans | |||
Percentage of employee salaries for which employer match their contribution | 3.00% | ||
401K Plan | All other employees | |||
Defined Contribution Plans | |||
Percentage of employee' contributions up to which employer match their contribution | 50.00% | ||
401K Plan | All other employees | Maximum | |||
Defined Contribution Plans | |||
Percentage of employee salaries for which employer match their contribution | 6.00% | ||
401K Plan | Employees hired after April 1, 2012 represented by collective bargaining agreement | Maximum | |||
Defined Contribution Plans | |||
Percentage of employee salaries for which employer match their contribution | 3.00% | ||
Defined contribution plans under Canadian operations | |||
Defined Contribution Plans | |||
Amount expensed by employer | $429 | $603 | $1,020 |
Defined contribution pension plan under Canadian operations | |||
Defined Contribution Plans | |||
Maximum contribution by an employee as a percentage of gross earnings | 2.50% | ||
Working hours required for eligibility under the contribution plan | 700 hours | ||
Vesting period | 0 years | ||
Profit sharing plan under Canadian operations | |||
Defined Contribution Plans | |||
Maximum contribution under the profit sharing plan of Canadian operation as a percentage of net operating earnings | 7.00% |
Colt_Defense_LLC_Accumulated_D1
Colt Defense LLC Accumulated Deficit (Details) | Dec. 31, 2013 | Dec. 31, 2012 |
Colt Defense LLC Accumulated Deficit | ||
Authorized preferred units (in shares) | 250,000 | |
Preferred units issued (in shares) | 0 | |
Common units | ||
Colt Defense LLC Accumulated Deficit | ||
Authorized common units (in shares) | 1,000,000 | |
Common units issued (in shares) | 132,174 | 132,174 |
Common units outstanding (in shares) | 132,174 | 132,174 |
Class B common units | ||
Colt Defense LLC Accumulated Deficit | ||
Authorized common units (in shares) | 18,878 |
Colt_Defense_LLC_Accumulated_D2
Colt Defense LLC Accumulated Deficit (Details 2) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Jul. 12, 2013 | Mar. 22, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Colt defense LLC accumulated deficit | |||||
Aggregate purchase price | $14,000,000 | ||||
Aggregate proceeds from issue and sale of common units | 5,000,000 | ||||
Accrued distributions to members | 670,000 | ||||
Accrued tax distributions to members | 2,900,000 | ||||
Accrued distribution classified as a long term liability | 2,200,000 | ||||
Common units | Blackstone Funds | |||||
Colt defense LLC accumulated deficit | |||||
Repurchase of common units (in shares) | 31,165.59 | ||||
Common membership units held by the Blackstone Funds (as a percent) | 100.00% | ||||
Aggregate purchase price | 14,000,000 | ||||
Common units issued and sold (in shares) | 31,165.59 | ||||
Aggregate proceeds from issue and sale of common units | 9,000,000 | ||||
E-Plan Holding | |||||
Colt defense LLC accumulated deficit | |||||
Obligation to make future payment | $0 | ||||
Number of outstanding units owned (in shares) | 1,576 | ||||
E-Plan Holding | Common units | |||||
Colt defense LLC accumulated deficit | |||||
Common units purchased (in shares) | 372 | 0 | 0 |
Common_Unit_Compensation_Detai
Common Unit Compensation (Details) (USD $) | 1 Months Ended | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 02, 2012 |
Common Unit Compensation | ||||
Nonvoting Class B common units reserved for issuance in connection with awards under the Plan (in shares) | 18,878 | |||
Term of each option from the grant date | P10Y | |||
Options granted (in shares) | 11,325 | 5,300 | 11,325 | |
Weighted-average exercise price (in dollars per share) | $100 | $288.78 | $100 | |
Compensation expense | ||||
Allocated share-based compensation expense in general and administrative expense | $27 | $17 | ||
Number of Units | ||||
Outstanding balance at the beginning of the period (in shares) | 11,325 | |||
Granted (in shares) | 11,325 | 5,300 | 11,325 | |
Forfeited/Cancelled (in shares) | -8,271 | |||
Outstanding balance at the end of the period (in shares) | 8,354 | 11,325 | ||
Weighted-Average Exercise Price | ||||
Outstanding balance at the beginning of the period (in dollar per share) | $100 | |||
Granted (in dollars per share) | $100 | $288.78 | $100 | |
Forfeited/Cancelled (in dollars per share) | $113.69 | |||
Outstanding balance at the end of the period (in dollars per share) | $206.21 | $100 |
Transactions_with_Related_Part2
Transactions with Related Parties (Details) (USD $) | 12 Months Ended | 6 Months Ended | 1 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jul. 11, 2013 | Jul. 31, 2013 | Jul. 31, 2007 |
Transactions with Certain Other Parties | ||||||
Annual advisory fees | $686 | $356 | $450 | |||
Rent expense | 1,167 | 1,048 | 1,095 | |||
New Colt Holding Corp. | ||||||
Transactions with Certain Other Parties | ||||||
Net sales to New Colt | 73,292 | 11,746 | 44,773 | |||
Purchases from New Colt | 1,891 | |||||
Administration and service fees | 1,098 | 430 | 920 | |||
West Hartford facility | ||||||
Transactions with Certain Other Parties | ||||||
Rent expense | 642 | |||||
Sciens Institutional and Sciens Management | ||||||
Transactions with Certain Other Parties | ||||||
Annual advisory fees | 686 | 356 | 450 | |||
Consulting Agreement | Sciens Institutional | ||||||
Transactions with Certain Other Parties | ||||||
Aggregate annual advisory fees | 350 | |||||
Aggregate annual fees of agreement | 650 | |||||
Archive Services Agreement | Archives Properties | ||||||
Transactions with Certain Other Parties | ||||||
Aggregate annual fees of agreement | $241 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Jun. 30, 2013 | Sep. 29, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
sqft | |||||||||||||
Commitments and contingencies | |||||||||||||
Net sales | $69,792,000 | $73,030,000 | $64,212,000 | $63,849,000 | $67,371,000 | $56,555,000 | $45,837,000 | $43,853,000 | $128,061,000 | $201,165,000 | $270,883,000 | $213,616,000 | $208,816,000 |
Cost of sales | 47,683,000 | 58,487,000 | 45,830,000 | 45,112,000 | 90,942,000 | 149,642,000 | 197,112,000 | 162,622,000 | 143,851,000 | ||||
Gross profit | 22,109,000 | 14,543,000 | 18,382,000 | 18,737,000 | 18,221,000 | 16,310,000 | 8,720,000 | 7,743,000 | 37,119,000 | 51,523,000 | 73,771,000 | 50,994,000 | 64,965,000 |
Settlement amount of dispute | 625,000 | ||||||||||||
Settlement amount with taxing authority | 1,000,000 | ||||||||||||
Area of lease facility with Osceola County in Florida (in square feet) | 16,000 | ||||||||||||
Contributed amount of funds to the County to assist with the cost of the renovations | 250,000 | ||||||||||||
Minimum capital investment | 2,500,000 | 2,500,000 | |||||||||||
Capital investment in lease | 181,000 | ||||||||||||
Lease term | 12 years | ||||||||||||
Lease payments due for the initial five years | 0 | 0 | |||||||||||
Lease initial specific period | 5 years | ||||||||||||
Lease annual cost | 108,000 | ||||||||||||
Lease annual charge accounted under straight-line basis | 78,000 | ||||||||||||
Deferred lease expense | 36,000 | 36,000 | |||||||||||
As Originally Reported | |||||||||||||
Commitments and contingencies | |||||||||||||
Net sales | 73,238,000 | 64,235,000 | 63,849,000 | 128,084,000 | 201,396,000 | 277,948,000 | 213,354,000 | 208,816,000 | |||||
Cost of sales | 58,655,000 | 45,765,000 | 45,098,000 | 90,863,000 | 149,731,000 | 201,241,000 | 162,622,000 | 143,851,000 | |||||
Gross profit | 14,583,000 | 18,470,000 | 18,751,000 | 37,221,000 | 51,665,000 | 76,707,000 | 50,732,000 | 64,965,000 | |||||
Adjustments | |||||||||||||
Commitments and contingencies | |||||||||||||
Net sales | -208,000 | -23,000 | -23,000 | -231,000 | -7,065,000 | 262,000 | |||||||
Cost of sales | -168,000 | 65,000 | 14,000 | 79,000 | -89,000 | -4,129,000 | |||||||
Gross profit | -40,000 | -88,000 | -14,000 | -102,000 | -142,000 | -2,936,000 | 262,000 | ||||||
M240 Program - contract modification and contract obligation expense | |||||||||||||
Commitments and contingencies | |||||||||||||
Net sales | -6,820,000 | ||||||||||||
Cost of sales | 3,381,000 | ||||||||||||
Gross profit | -10,201,000 | 10,201,000 | |||||||||||
M240 Program - contract modification and contract obligation expense | As Originally Reported | |||||||||||||
Commitments and contingencies | |||||||||||||
Cost of sales | 472,000 | 7,041,000 | 7,513,000 | ||||||||||
Gross profit | -472,000 | -7,041,000 | -7,513,000 | ||||||||||
M240 Program - contract modification and contract obligation expense | Adjustments | |||||||||||||
Commitments and contingencies | |||||||||||||
Net sales | -6,820,000 | ||||||||||||
Cost of sales | -4,132,000 | ||||||||||||
Gross profit | -2,688,000 | ||||||||||||
M240 Program - contract modification | |||||||||||||
Commitments and contingencies | |||||||||||||
Net sales | -6,820,000 | ||||||||||||
Cost of sales | 3,381,000 | ||||||||||||
M240 Program - contract modification | Adjustments | |||||||||||||
Commitments and contingencies | |||||||||||||
Net sales | -6,820,000 | ||||||||||||
Cost of sales | 3,381,000 | ||||||||||||
M240 Program - contract obligation expense | |||||||||||||
Commitments and contingencies | |||||||||||||
Net sales | -3,700,000 | ||||||||||||
Contract obligation expense | 7,000,000 | ||||||||||||
Accrued contract obligation expense | 1,194,000 | 1,194,000 | |||||||||||
M240 Program - contract obligation expense | As Originally Reported | |||||||||||||
Commitments and contingencies | |||||||||||||
Contract obligation expense | 472,000 | 7,041,000 | 7,513,000 | ||||||||||
M240 Program - contract obligation expense | Adjustments | |||||||||||||
Commitments and contingencies | |||||||||||||
Contract obligation expense | -7,513,000 | ||||||||||||
Capital expenditures for machinery and equipment | |||||||||||||
Commitments and contingencies | |||||||||||||
Unconditional purchase obligations | 892,000 | 2,357,000 | 892,000 | 2,357,000 | |||||||||
Standby letters of credit | Secured by restricted cash | |||||||||||||
Commitments and contingencies | |||||||||||||
Standby letters of credit | 1,185,000 | 1,253,000 | 1,185,000 | 1,253,000 | |||||||||
Standby letters of credit | Secured by Credit Agreement | |||||||||||||
Commitments and contingencies | |||||||||||||
Standby letters of credit | 3,486,000 | 1,715,000 | 3,486,000 | 1,715,000 | |||||||||
Standby letters of credit | Established by a sales agent on behalf of Colt | |||||||||||||
Commitments and contingencies | |||||||||||||
Standby letters of credit | 74,000 | 702,000 | 74,000 | 702,000 | |||||||||
Industrial Cooperation Agreements | |||||||||||||
Commitments and contingencies | |||||||||||||
Remaining gross offset purchase commitments | 64,131,000 | 68,180,000 | 64,131,000 | 68,180,000 | |||||||||
Remaining net offset purchase commitments, accrual amount | $1,639,000 | $1,804,000 | $1,639,000 | $1,804,000 |
Segment_Information_Details
Segment Information (Details) | 12 Months Ended | 0 Months Ended |
Dec. 31, 2013 | Jul. 12, 2013 | |
item | item | |
Segment information | ||
Number of operating segments | 2 | |
New Colt Holding Corp. | ||
Segment information | ||
Number of manufacturers of Colt firearms to be consolidated | 2 |
Segment_Information_Details_2
Segment Information (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Mar. 31, 2012 | Jun. 30, 2013 | Sep. 29, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statements of Operations Data: | ||||||||||||
Net income (loss) | $10,857 | $4,387 | $5,129 | $9,516 | $20,373 | $22,867 | ($6,858) | $4,988 | ||||
Income tax (benefit) expense | -208 | 78 | 681 | 759 | 551 | 1,636 | 1,815 | 3,171 | ||||
Depreciation and amortization | 6,359 | 5,696 | 5,476 | |||||||||
Interest expense | 7,623 | 6,069 | 5,994 | 12,063 | 19,686 | 27,687 | 24,579 | 24,010 | ||||
Sciens fees and expenses | 686 | 356 | 450 | |||||||||
Pension curtailment expense | 1,325 | |||||||||||
Business development costs | -132 | 463 | 169 | 75 | 746 | 100 | 35 | 244 | 707 | 575 | 881 | 504 |
Transaction costs | 461 | 416 | 416 | 877 | 1,147 | |||||||
Restructuring costs | 631 | 631 | 782 | |||||||||
Gain on effective settlement of contract | -15,264 | -15,264 | -15,264 | |||||||||
Lease buyout expenses | 287 | |||||||||||
M240 Program - contract modification and obligation expense | 10,201 | |||||||||||
Other (income) expenses, net | -562 | -474 | 266 | |||||||||
Adjusted EBITDA | $56,401 | $27,320 | $38,865 |
Segment_Information_Details_3
Segment Information (Details 3) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | 6 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Jun. 30, 2013 | Sep. 29, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 |
Product Information | ||||||||||||||
Net sales | $69,792 | $73,030 | $64,212 | $63,849 | $67,371 | $56,555 | $45,837 | $43,853 | $128,061 | $201,165 | $270,883 | $213,616 | $208,816 | |
New Colt Holding Corp. | ||||||||||||||
Product Information | ||||||||||||||
Net sales | 130,000 | 29,100 | ||||||||||||
Long guns | ||||||||||||||
Product Information | ||||||||||||||
Net sales | 194,634 | 159,528 | 125,141 | |||||||||||
Hand guns | ||||||||||||||
Product Information | ||||||||||||||
Net sales | 30,052 | 1,260 | ||||||||||||
Spares and other | ||||||||||||||
Product Information | ||||||||||||||
Net sales | $46,197 | $52,828 | $83,675 |
Segment_Information_Details_4
Segment Information (Details 4) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Jun. 30, 2013 | Sep. 29, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Geographical Information | |||||||||||||
Net sales | $69,792 | $73,030 | $64,212 | $63,849 | $67,371 | $56,555 | $45,837 | $43,853 | $128,061 | $201,165 | $270,883 | $213,616 | $208,816 |
Long-lived assets | 30,733 | 22,134 | 30,733 | 22,134 | |||||||||
United States | |||||||||||||
Geographical Information | |||||||||||||
Net sales | 158,311 | 111,888 | 89,544 | ||||||||||
Long-lived assets | 25,745 | 17,272 | 25,745 | 17,272 | |||||||||
Asia/Pacific | |||||||||||||
Geographical Information | |||||||||||||
Net sales | 64,959 | 45,866 | 26,762 | ||||||||||
Canada | |||||||||||||
Geographical Information | |||||||||||||
Net sales | 28,130 | 30,244 | 26,064 | ||||||||||
Long-lived assets | 4,988 | 4,862 | 4,988 | 4,862 | |||||||||
Europe | |||||||||||||
Geographical Information | |||||||||||||
Net sales | 9,255 | 16,501 | 34,908 | ||||||||||
Middle East/Asia | |||||||||||||
Geographical Information | |||||||||||||
Net sales | 3,065 | 3,675 | 26,188 | ||||||||||
Latin America/Caribbean | |||||||||||||
Geographical Information | |||||||||||||
Net sales | $7,163 | $5,452 | $5,350 |
Segment_Information_Details_5
Segment Information (Details 5) (Net sales, Customer concentration risk) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
New Colt Holding Corp. | |||
Major Customer Information | |||
Percentage of net sales | 16.00% | 34.00% | |
New Colt Holding Corp. | Maximum | |||
Major Customer Information | |||
Percentage of net sales | 10.00% | ||
U.S. Government | |||
Major Customer Information | |||
Percentage of net sales | 7.00% | 11.00% | 31.00% |
Domestic distributor | |||
Major Customer Information | |||
Percentage of net sales | 11.00% | ||
Number of major customers | 1 | ||
Direct foreign customer | |||
Major Customer Information | |||
Percentage of net sales | 11.00% | ||
Number of major customers | 2 | 2 | |
Direct foreign customer, one | |||
Major Customer Information | |||
Percentage of net sales | 23.00% | 21.00% | |
Direct foreign customer, two | |||
Major Customer Information | |||
Percentage of net sales | 10.00% | 10.00% |
Concentration_of_Risk_Details
Concentration of Risk (Details) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Accounts receivable | Concentration of credit risk | ||
Concentration of risks | ||
Number of largest individual trade receivable balances | 2 | 2 |
Accounts receivable | Concentration of credit risk | Customer with largest individual trade balance | ||
Concentration of risks | ||
Concentration risk, percentage | 28.00% | 55.00% |
Accounts receivable | Concentration of credit risk | Customer with second largest individual trade balance | ||
Concentration of risks | ||
Concentration risk, percentage | 18.00% | 25.00% |
U.S. workforce | Labor concentration risk | ||
Concentration of risks | ||
Concentration risk, percentage | 72.00% |
Other_LongTerm_Liabilities_Det
Other Long-Term Liabilities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Other Long-Term Liabilities | ||
Deferred revenue | $778 | $905 |
Royalty payable | 1,125 | |
Other | 327 | 3 |
Other long-term liabilities | $2,230 | $908 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Components of accumulated other comprehensive loss | |||
Balance at the beginning of the period | ($13,842) | ($13,130) | ($7,484) |
Other comprehensive income before reclassifications | 5,890 | -2,322 | -5,765 |
Amounts reclassified from accumulated other comprehensive income | 501 | 1,093 | 563 |
Currency translation | -1,889 | 517 | -444 |
Net current period other comprehensive income | 4,502 | -712 | -5,646 |
Balance at the end of the period | -9,340 | -13,842 | -13,130 |
Unrecognized Prior Service Cost | |||
Components of accumulated other comprehensive loss | |||
Balance at the beginning of the period | 825 | 378 | 380 |
Other comprehensive income before reclassifications | 375 | ||
Amounts reclassified from accumulated other comprehensive income | -172 | 72 | -2 |
Net current period other comprehensive income | -172 | 447 | -2 |
Balance at the end of the period | 653 | 825 | 378 |
Unrecognized Loss | |||
Components of accumulated other comprehensive loss | |||
Balance at the beginning of the period | -17,399 | -15,723 | -10,523 |
Other comprehensive income before reclassifications | 5,890 | -2,697 | -5,765 |
Amounts reclassified from accumulated other comprehensive income | 673 | 1,021 | 565 |
Net current period other comprehensive income | 6,563 | -1,676 | -5,200 |
Balance at the end of the period | -10,836 | -17,399 | -15,723 |
Foreign Currency Translation | |||
Components of accumulated other comprehensive loss | |||
Balance at the beginning of the period | 2,732 | 2,215 | 2,659 |
Currency translation | -1,889 | 517 | -444 |
Net current period other comprehensive income | -1,889 | 517 | -444 |
Balance at the end of the period | $843 | $2,732 | $2,215 |
Quarterly_Operating_Results_Un2
Quarterly Operating Results (Unaudited) (Details) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | 6 Months Ended | ||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Jun. 30, 2013 | Sep. 29, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Jul. 12, 2013 |
Net sales | $69,792 | $73,030 | $64,212 | $63,849 | $67,371 | $56,555 | $45,837 | $43,853 | $128,061 | $201,165 | $270,883 | $213,616 | $208,816 | ||
Cost of sales | 47,683 | 58,487 | 45,830 | 45,112 | 90,942 | 149,642 | 197,112 | 162,622 | 143,851 | ||||||
Gross profit | 22,109 | 14,543 | 18,382 | 18,737 | 18,221 | 16,310 | 8,720 | 7,743 | 37,119 | 51,523 | 73,771 | 50,994 | 64,965 | ||
Business development | -132 | 463 | 169 | 75 | 746 | 100 | 35 | 244 | 707 | 575 | 881 | 504 | |||
Transaction and restructuring costs | 421 | 1,092 | 416 | ||||||||||||
Gain on effective settlement of contract | 15,264 | 15,264 | 15,264 | ||||||||||||
Net income (loss) | 2,494 | 10,857 | 4,387 | 5,129 | 3,573 | 2,894 | -6,237 | -7,088 | 22,867 | -6,858 | 4,988 | ||||
Certain transaction costs (Note 3) | 461 | 416 | 416 | 877 | 1,147 | ||||||||||
Restructuring costs | 631 | 631 | 782 | ||||||||||||
Adjustments | |||||||||||||||
Net sales | -208 | -23 | -23 | -231 | -7,065 | 262 | |||||||||
Cost of sales | -168 | 65 | 14 | 79 | -89 | -4,129 | |||||||||
Gross profit | -40 | -88 | -14 | -102 | -142 | -2,936 | 262 | ||||||||
Business development | 463 | 169 | 75 | 244 | 707 | 575 | 881 | 504 | |||||||
M240 Program - contract modification and contract obligation expense | |||||||||||||||
Net sales | -6,820 | ||||||||||||||
Cost of sales | 3,381 | ||||||||||||||
Gross profit | -10,201 | 10,201 | |||||||||||||
M240 Program - contract modification and contract obligation expense | Adjustments | |||||||||||||||
Net sales | -6,820 | ||||||||||||||
Cost of sales | -4,132 | ||||||||||||||
Gross profit | -2,688 | ||||||||||||||
M240 Program - contract modification | |||||||||||||||
Net sales | -6,820 | ||||||||||||||
Cost of sales | 3,381 | ||||||||||||||
M240 Program - contract modification | Adjustments | |||||||||||||||
Net sales | -6,820 | ||||||||||||||
Cost of sales | 3,381 | ||||||||||||||
M240 Program - contract obligation expense | |||||||||||||||
Net sales | -3,700 | ||||||||||||||
Contract obligation expense | 7,000 | ||||||||||||||
M240 Program - contract obligation expense | Adjustments | |||||||||||||||
Contract obligation expense | -7,513 | ||||||||||||||
New Colt Holding Corp. | |||||||||||||||
Net sales | 130,000 | 29,100 | |||||||||||||
Certain transaction costs (Note 3) | 1,147 | ||||||||||||||
Restructuring costs | 800 | ||||||||||||||
Settlement gain on pre-existing relationship | 15,264 | ||||||||||||||
New Colt Holding Corp. | Trademarks | |||||||||||||||
Settlement gain on pre-existing relationship | 15,264 | ||||||||||||||
Gross settlement gain | 16,320 | ||||||||||||||
Prepaid license balance | $1,056 |
Supplemental_Condensed_Consoli2
Supplemental Condensed Consolidating Financial Statement Information (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Nov. 10, 2009 |
In Thousands, unless otherwise specified | |||||
Current assets: | |||||
Cash and cash equivalents | $12,594 | $42,373 | $38,236 | $61,444 | |
Restricted cash | 771 | 777 | |||
Accounts receivable, net | 22,482 | 22,944 | |||
Inventories | 66,674 | 40,561 | |||
Other current assets | 5,962 | 3,166 | |||
Total current assets | 109,437 | 110,006 | |||
Property and equipment, net | 30,733 | 22,134 | |||
Goodwill | 51,225 | 14,947 | 14,713 | ||
Intangible assets with finite lives, net | 13,415 | 6,037 | |||
Trademarks | 50,100 | ||||
Deferred financing costs | 7,742 | 7,642 | 9,312 | ||
Long-term restricted cash | 572 | 810 | |||
Other assets | 1,510 | 1,588 | |||
Total assets | 264,734 | 163,164 | |||
Current liabilities: | |||||
Line of credit | 7,083 | 6 | |||
Accounts payable | 14,038 | 13,055 | |||
Accrued expenses | 22,828 | 20,315 | |||
Pension and retirement liabilities - current portion | 1,085 | 626 | |||
Customer advances and deferred revenue | 19,467 | 10,002 | |||
Long-term debt - current portion | 5,000 | ||||
Total current liabilities | 69,501 | 44,004 | |||
Long term debt | 289,817 | 247,567 | |||
Pension and retirement liabilities | 21,670 | 20,261 | |||
Other long-term liabilities | 23,222 | 2,423 | |||
Total long-term liabilities | 334,709 | 270,251 | |||
Total liabilities | 404,210 | 314,255 | |||
Commitments and contingencies (Notes 7 & 11) | |||||
Deficit: | |||||
Total deficit | -139,476 | -151,091 | |||
Total liabilities and deficit | 264,734 | 163,164 | |||
Consolidating /Eliminating Adjustments | |||||
Current assets: | |||||
Other current assets | -29,812 | -2,328 | |||
Total current assets | -29,812 | -2,328 | |||
Investment in subsidiaries | -37,058 | -27,849 | |||
Total assets | -66,870 | -30,177 | |||
Current liabilities: | |||||
Accounts payable | -29,812 | -2,328 | |||
Total current liabilities | -29,812 | -2,328 | |||
Total liabilities | -29,812 | -2,328 | |||
Commitments and contingencies (Notes 7 & 11) | |||||
Deficit: | |||||
Total deficit | -37,058 | -27,849 | |||
Total liabilities and deficit | -66,870 | -30,177 | |||
Colt Defense LLC | |||||
Condensed Consolidating Balance Sheet | |||||
Ownership interest in subsidiary (as a percent) | 100.00% | ||||
Colt Defense LLC | Reportable entities | |||||
Current assets: | |||||
Cash and cash equivalents | 2,899 | 33,647 | 31,646 | 53,626 | |
Restricted cash | 771 | 777 | |||
Accounts receivable, net | 11,764 | 15,243 | |||
Inventories | 50,834 | 30,338 | |||
Other current assets | 32,536 | 3,936 | |||
Total current assets | 98,804 | 83,941 | |||
Property and equipment, net | 19,674 | 17,272 | |||
Investment in subsidiaries | 37,058 | 27,849 | |||
Goodwill | 4,175 | 4,175 | |||
Intangible assets with finite lives, net | 1,327 | 1,528 | |||
Deferred financing costs | 5,987 | 7,642 | |||
Long-term restricted cash | 572 | 810 | |||
Other assets | 391 | 1,588 | |||
Total assets | 167,988 | 144,805 | |||
Current liabilities: | |||||
Line of credit | 7,083 | 6 | |||
Accounts payable | 9,070 | 9,691 | |||
Accrued expenses | 16,274 | 16,289 | |||
Pension and retirement liabilities - current portion | 618 | 626 | |||
Customer advances and deferred revenue | 9,553 | 744 | |||
Total current liabilities | 42,598 | 27,356 | |||
Long term debt | 247,984 | 247,567 | |||
Pension and retirement liabilities | 13,718 | 20,261 | |||
Other long-term liabilities | 3,164 | 908 | |||
Total long-term liabilities | 264,866 | 268,736 | |||
Total liabilities | 307,464 | 296,092 | |||
Commitments and contingencies (Notes 7 & 11) | |||||
Deficit: | |||||
Total deficit | -139,476 | -151,287 | |||
Total liabilities and deficit | 167,988 | 144,805 | |||
Colt Finance Corp | |||||
Condensed Consolidating Balance Sheet | |||||
Ownership interest in subsidiary (as a percent) | 100.00% | 100.00% | 100.00% | ||
Total Guarantor Subsidiaries | Reportable entities | |||||
Current assets: | |||||
Cash and cash equivalents | 9,695 | 8,726 | 6,590 | 7,818 | |
Accounts receivable, net | 10,718 | 7,701 | |||
Inventories | 15,840 | 10,223 | |||
Other current assets | 4,192 | 1,743 | |||
Total current assets | 40,445 | 28,393 | |||
Property and equipment, net | 11,059 | 4,862 | |||
Goodwill | 47,050 | 10,772 | |||
Intangible assets with finite lives, net | 12,088 | 4,509 | |||
Trademarks | 50,100 | ||||
Deferred financing costs | 1,755 | ||||
Other assets | 1,119 | ||||
Total assets | 163,616 | 48,536 | |||
Current liabilities: | |||||
Accounts payable | 34,780 | 5,692 | |||
Accrued expenses | 6,554 | 4,026 | |||
Pension and retirement liabilities - current portion | 467 | ||||
Customer advances and deferred revenue | 9,914 | 9,258 | |||
Long-term debt - current portion | 5,000 | ||||
Total current liabilities | 56,715 | 18,976 | |||
Long term debt | 41,833 | ||||
Pension and retirement liabilities | 7,952 | ||||
Other long-term liabilities | 20,058 | 1,515 | |||
Total long-term liabilities | 69,843 | 1,515 | |||
Total liabilities | 126,558 | 20,491 | |||
Commitments and contingencies (Notes 7 & 11) | |||||
Deficit: | |||||
Total deficit | 37,058 | 28,045 | |||
Total liabilities and deficit | $163,616 | $48,536 |
Supplemental_Condensed_Consoli3
Supplemental Condensed Consolidating Financial Statement Information (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 29, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Jun. 30, 2013 | Sep. 29, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Condensed Consolidating Statement of Income | |||||||||||||
Net sales | $69,792 | $73,030 | $64,212 | $63,849 | $67,371 | $56,555 | $45,837 | $43,853 | $128,061 | $201,165 | $270,883 | $213,616 | $208,816 |
Cost of sales | 47,683 | 58,487 | 45,830 | 45,112 | 90,942 | 149,642 | 197,112 | 162,622 | 143,851 | ||||
Gross profit | 22,109 | 14,543 | 18,382 | 18,737 | 18,221 | 16,310 | 8,720 | 7,743 | 37,119 | 51,523 | 73,771 | 50,994 | 64,965 |
Operating expenses: | |||||||||||||
Selling and commissions | 4,064 | 3,452 | 3,095 | 6,547 | 10,398 | 14,142 | 13,117 | 13,780 | |||||
Research and development | 1,714 | 1,481 | 820 | 2,301 | 4,015 | 6,126 | 4,747 | 5,578 | |||||
General and administrative | 3,896 | 3,015 | 3,730 | 6,745 | 10,641 | 15,289 | 14,285 | 13,098 | |||||
Business development | -132 | 463 | 169 | 75 | 746 | 100 | 35 | 244 | 707 | 575 | 881 | 504 | |
Certain transaction costs (Note 3) | 461 | 416 | 416 | 877 | 1,147 | ||||||||
Restructuring costs | 631 | 631 | 782 | ||||||||||
Gain on effective settlement of contract | -15,264 | -15,264 | -15,264 | ||||||||||
Total operating expenses | -4,035 | 8,533 | 7,720 | 16,253 | 12,005 | 22,797 | 33,030 | 32,960 | |||||
Operating income | 18,578 | 9,849 | 11,017 | 20,866 | 39,518 | 50,974 | 17,964 | 32,005 | |||||
Other (income)/expense: | |||||||||||||
Interest expense | 7,623 | 6,069 | 5,994 | 12,063 | 19,686 | 27,687 | 24,579 | 24,010 | |||||
Other (income)/expense, net | 306 | -685 | -787 | -1,472 | -1,092 | -1,216 | -1,572 | -459 | |||||
Total other expenses, net | 7,929 | 5,384 | 5,207 | 10,591 | 18,594 | 26,471 | 23,007 | 23,846 | |||||
Income (loss) before provision for income taxes | 10,649 | 4,465 | 5,810 | 10,275 | 20,924 | 24,503 | -5,043 | 8,159 | |||||
Income tax expense | -208 | 78 | 681 | 759 | 551 | 1,636 | 1,815 | 3,171 | |||||
Net income (loss) | 10,857 | 4,387 | 5,129 | 9,516 | 20,373 | 22,867 | -6,858 | 4,988 | |||||
Comprehensive income (loss) | 27,369 | -7,570 | -658 | ||||||||||
Consolidating /Eliminating Adjustments | |||||||||||||
Condensed Consolidating Statement of Income | |||||||||||||
Net sales | -50,191 | -811 | -664 | ||||||||||
Cost of sales | -49,497 | -525 | -664 | ||||||||||
Gross profit | -694 | -286 | |||||||||||
Operating expenses: | |||||||||||||
General and administrative | -382 | ||||||||||||
Total operating expenses | -382 | ||||||||||||
Operating income | -312 | -286 | |||||||||||
Other (income)/expense: | |||||||||||||
Other (income)/expense, net | 94 | 2,039 | |||||||||||
Total other expenses, net | 94 | 2,039 | |||||||||||
Income (loss) before provision for income taxes | -406 | -286 | -2,039 | ||||||||||
Equity in income from operations of consolidated subsidiaries | -2,618 | -4,912 | -7,812 | ||||||||||
Net income (loss) | -3,024 | -5,198 | -9,851 | ||||||||||
Comprehensive income (loss) | -1,928 | -5,716 | -9,407 | ||||||||||
Colt Defense LLC | Reportable entities | |||||||||||||
Condensed Consolidating Statement of Income | |||||||||||||
Net sales | 206,115 | 169,050 | 148,711 | ||||||||||
Cost of sales | 152,766 | 133,371 | 106,707 | ||||||||||
Gross profit | 53,349 | 35,679 | 42,004 | ||||||||||
Operating expenses: | |||||||||||||
Selling and commissions | 10,799 | 10,766 | 10,959 | ||||||||||
Research and development | 2,452 | 2,497 | 2,654 | ||||||||||
General and administrative | 11,125 | 10,985 | 10,116 | ||||||||||
Business development | 575 | 881 | 504 | ||||||||||
Restructuring costs | 479 | ||||||||||||
Gain on effective settlement of contract | -15,264 | ||||||||||||
Total operating expenses | 10,166 | 25,129 | 24,233 | ||||||||||
Operating income | 43,183 | 10,550 | 17,771 | ||||||||||
Other (income)/expense: | |||||||||||||
Interest expense | 24,294 | 24,502 | 23,991 | ||||||||||
Other (income)/expense, net | -1,722 | -2,315 | -3,700 | ||||||||||
Total other expenses, net | 22,572 | 22,187 | 20,291 | ||||||||||
Income (loss) before provision for income taxes | 20,611 | -11,637 | -2,520 | ||||||||||
Income tax expense | 183 | 330 | 304 | ||||||||||
Equity in income from operations of consolidated subsidiaries | 2,618 | 4,912 | 7,812 | ||||||||||
Net income (loss) | 23,046 | -7,055 | 4,988 | ||||||||||
Comprehensive income (loss) | 27,565 | -7,766 | -658 | ||||||||||
Total Guarantor Subsidiaries | Reportable entities | |||||||||||||
Condensed Consolidating Statement of Income | |||||||||||||
Net sales | 114,959 | 45,377 | 60,769 | ||||||||||
Cost of sales | 93,843 | 29,776 | 37,808 | ||||||||||
Gross profit | 21,116 | 15,601 | 22,961 | ||||||||||
Operating expenses: | |||||||||||||
Selling and commissions | 3,343 | 2,351 | 2,821 | ||||||||||
Research and development | 3,674 | 2,250 | 2,924 | ||||||||||
General and administrative | 4,546 | 3,300 | 2,982 | ||||||||||
Certain transaction costs (Note 3) | 1,147 | ||||||||||||
Restructuring costs | 303 | ||||||||||||
Total operating expenses | 13,013 | 7,901 | 8,727 | ||||||||||
Operating income | 8,103 | 7,700 | 14,234 | ||||||||||
Other (income)/expense: | |||||||||||||
Interest expense | 3,393 | 77 | 19 | ||||||||||
Other (income)/expense, net | 412 | 743 | 1,497 | ||||||||||
Total other expenses, net | 3,805 | 820 | 1,516 | ||||||||||
Income (loss) before provision for income taxes | 4,298 | 6,880 | 12,718 | ||||||||||
Income tax expense | 1,453 | 1,485 | 2,867 | ||||||||||
Net income (loss) | 2,845 | 5,395 | 9,851 | ||||||||||
Comprehensive income (loss) | $1,732 | $5,912 | $9,407 |
Supplemental_Condensed_Consoli4
Supplemental Condensed Consolidating Financial Statement Information) (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Operating Activities | |||
Net cash provided by (used in) operating activities | $3,037 | $12,423 | ($695) |
Investing Activities | |||
Purchase of property and equipment | -8,598 | -4,410 | -5,600 |
Business acquisition, net of cash acquired and reinvested Merger consideration | -59,488 | ||
Proceeds from sale of property | 66 | 12 | |
Change in restricted cash | 244 | 464 | -1,380 |
Net cash used in investing activities | -67,842 | -3,880 | -6,968 |
Financing Activities | |||
Debt issuance costs | -2,120 | -1,636 | |
Proceeds from the issuance of long-term debt | 47,707 | ||
Term loan and note repayments | -1,250 | ||
Line of credit advances/repayments, net | 10,083 | 6 | |
Capital lease obligation payments | -393 | -1,148 | -1,229 |
Purchase of common units | -14,000 | ||
Proceeds from the issuance of common units, net of reinvested consideration proceeds | 5,000 | ||
Distributions to members | -6,370 | -3,343 | -12,889 |
Net cash provided by (used in) financing activities | 35,651 | -4,485 | -15,754 |
Effect of exchange rates on cash and cash equivalents | -625 | 79 | 209 |
Change in cash and cash equivalents | -29,779 | 4,137 | -23,208 |
Cash and cash equivalents, beginning of period | 42,373 | 38,236 | 61,444 |
Cash and cash equivalents, end of period | 12,594 | 42,373 | 38,236 |
Consolidating /Eliminating Adjustments | |||
Operating Activities | |||
Net cash provided by (used in) operating activities | -2,039 | ||
Financing Activities | |||
Colt Canada distribution of share capital | 2,039 | ||
Net cash provided by (used in) financing activities | 2,039 | ||
Colt Defense LLC | Reportable entities | |||
Operating Activities | |||
Net cash provided by (used in) operating activities | 5,254 | 9,503 | -16,222 |
Investing Activities | |||
Purchase of property and equipment | -6,385 | -3,481 | -4,009 |
Business acquisition, net of cash acquired and reinvested Merger consideration | -59,488 | ||
Investment in subsidiary | -13,924 | ||
Proceeds from sale of property | 12 | ||
Change in restricted cash | 244 | 464 | -1,380 |
Net cash used in investing activities | -79,553 | -3,017 | -5,377 |
Financing Activities | |||
Debt issuance costs | -2,120 | -1,636 | |
Proceeds from the issuance of long-term debt | 47,707 | ||
Line of credit advances/repayments, net | 7,077 | 6 | |
Capital lease obligation payments | -1,148 | -1,229 | |
Colt Canada distribution of share capital | 15,373 | ||
Purchase of common units | -14,000 | ||
Proceeds from the issuance of common units, net of reinvested consideration proceeds | 5,000 | ||
Distribution from subsidiary | 6,257 | ||
Distributions to members | -6,370 | -3,343 | -12,889 |
Net cash provided by (used in) financing activities | 43,551 | -4,485 | -381 |
Change in cash and cash equivalents | -30,748 | 2,001 | -21,980 |
Cash and cash equivalents, beginning of period | 33,647 | 31,646 | 53,626 |
Cash and cash equivalents, end of period | 2,899 | 33,647 | 31,646 |
Total Guarantor Subsidiaries | Reportable entities | |||
Operating Activities | |||
Net cash provided by (used in) operating activities | -2,217 | 2,920 | 17,566 |
Investing Activities | |||
Purchase of property and equipment | -2,213 | -929 | -1,591 |
Investment in subsidiary | 13,924 | ||
Proceeds from sale of property | 66 | ||
Net cash used in investing activities | 11,711 | -863 | -1,591 |
Financing Activities | |||
Term loan and note repayments | -1,250 | ||
Capital lease obligation payments | -393 | ||
Colt Canada distribution of share capital | -17,412 | ||
Distribution from subsidiary | -6,257 | ||
Net cash provided by (used in) financing activities | -7,900 | -17,412 | |
Effect of exchange rates on cash and cash equivalents | -625 | 79 | 209 |
Change in cash and cash equivalents | 969 | 2,136 | -1,228 |
Cash and cash equivalents, beginning of period | 8,726 | 6,590 | 7,818 |
Cash and cash equivalents, end of period | $9,695 | $8,726 | $6,590 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 12 Months Ended | 9 Months Ended | 0 Months Ended | |||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 28, 2014 | Feb. 09, 2015 | 5-May-15 | Nov. 17, 2014 | Apr. 14, 2015 | Nov. 10, 2009 | Sep. 29, 2011 | |
Subsequent events | ||||||||||
Interest payments | $24,808,000 | $22,198,000 | $22,075,000 | |||||||
Payment of fees and expenses | 2,120,000 | 1,636,000 | ||||||||
Senior Notes | ||||||||||
Subsequent events | ||||||||||
Interest rate (as a percent) | 8.75% | |||||||||
MS Term Loan | ||||||||||
Subsequent events | ||||||||||
Period following each fiscal year within which to provide audited financials per debt covenant | 90 days | |||||||||
Credit Agreement | ||||||||||
Subsequent events | ||||||||||
Maximum borrowing capacity | 50,000,000 | |||||||||
Subsequent event | Cortland | Credit Agreement | ||||||||||
Subsequent events | ||||||||||
Additional liquidity | 13,200,000 | |||||||||
Payment of fees and expenses | 2,400,000 | |||||||||
Interest rate (as a percent) | 10.00% | |||||||||
Subsequent event | Cortland | Credit Agreement | Term loan due August 15, 2018 | ||||||||||
Subsequent events | ||||||||||
Face amount of term loan facility | 33,000,000 | |||||||||
Subsequent event | Cortland | Letters of credit facility | ||||||||||
Subsequent events | ||||||||||
Maximum borrowing capacity | 7,000,000 | |||||||||
Cash collateral | 5,300,000 | |||||||||
Amount available under credit agreement | 1,700,000 | |||||||||
Subsequent event | Senior Notes | ||||||||||
Subsequent events | ||||||||||
Minimum percentage of the aggregate principal amount of debt held for which holders may provide notice to the borrower for non-compliance | 25.00% | |||||||||
Period from receipt of notice of non-compliance from holders that entity must cure debt before acceleration of repayment | 60 days | |||||||||
Interest payments | 10,900,000 | |||||||||
Subsequent event | MS Term Loan | ||||||||||
Subsequent events | ||||||||||
Face amount of term loan facility | 70,000,000 | |||||||||
Additional liquidity | 4,100,000 | |||||||||
Payment of fees and expenses | 2,000,000 | |||||||||
Percentage of accrual of interest in cash | 8.00% | |||||||||
Percentage of accrual of interest in kind | 2.00% | |||||||||
Subsequent event | Term Loan | ||||||||||
Subsequent events | ||||||||||
Repayments of Debt | 53,000,000 | |||||||||
Amount of premium payable | 4,300,000 | |||||||||
Subsequent event | Credit Agreement | ||||||||||
Subsequent events | ||||||||||
Repayments of Debt | 12,100,000 | |||||||||
Maximum borrowing capacity | 33,000,000 | |||||||||
Threshold minimum borrowing capacity | 7,500,000 | |||||||||
Letters of credit | $4,800,000 | |||||||||
Subsequent event | Forecast | New Notes | ||||||||||
Subsequent events | ||||||||||
Interest rate (as a percent) | 10.00% | |||||||||
Debt exchange ratio | 0.3 | |||||||||
Minimum percentage of Senior Notes tendered necessary for closing of Exchange Offer | 98.00% | |||||||||
Percentage of principal amount of debt to be cancelled in exchange for pro rata share of new debt issuance under Chapter 11 bankruptcy petitions | 100.00% | |||||||||
Percentage of principal amount of debt tendered in exchange offer for similarity to debt restructuring under Chapter11 Bankruptcy petitions | 100.00% | |||||||||
Subsequent event | Forecast | Senior Notes | ||||||||||
Subsequent events | ||||||||||
Additional consent payment ratio | 0.5 |