Condensed Consolidating Financial Statements | Condensed Consolidating Financial Statements As discussed in Note 2, "Debt" , the Company's 10.5% Senior Notes are fully and unconditionally guaranteed, jointly and severally, on a senior basis by certain of the Company's 100% owned domestic subsidiaries ("Guarantor Subsidiaries") and secured by a first priority lien on 51% of the capital stock of certain of the Company's foreign restricted subsidiaries ("Non-Guarantor Subsidiaries"). The Company's Guarantor Subsidiaries are not consistent with the Company's business groups or geographic operations; accordingly, this basis of presentation is not intended to present the Company's financial condition, results of operations or cash flows for any purpose other than to comply with the specific requirements for subsidiary guarantor reporting. We are required to present condensed consolidating financial information in order for the Guarantor Subsidiaries of the Company's public debt to be exempt from reporting under the Securities Exchange Act of 1934, as amended. Condensed consolidating financial statements for the Company's Guarantor Subsidiaries and Non-Guarantor Subsidiaries are presented in the following tables (amounts in thousands): Condensed Consolidating Balance Sheet March 31, 2016 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 640 $ 36,209 $ 28,155 $ — $ 65,004 Accounts receivable, net — 41,025 52,143 — 93,168 Intercompany receivable 30,210 132,523 170,224 (332,957 ) — Inventories, net — 113,289 55,590 — 168,879 Prepaid expenses and other 3,325 12,161 12,974 (2,964 ) 25,496 Total current assets 34,175 335,207 319,086 (335,921 ) 352,547 Property and equipment, net 255 93,936 147,648 — 241,839 Investments in NEC TOKIN — 20,334 — — 20,334 Investments in subsidiaries 382,108 429,723 93,359 (905,190 ) — Goodwill — 40,294 — — 40,294 Intangible assets, net — 27,252 6,049 — 33,301 Deferred income taxes — 800 7,597 — 8,397 Other assets 2,764 2,452 616 — 5,832 Long-term intercompany receivable 67,500 41,428 1,088 (110,016 ) — Total assets $ 486,802 $ 991,426 $ 575,443 $ (1,351,127 ) $ 702,544 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 2,000 $ — $ — $ — $ 2,000 Accounts payable, trade 20 34,618 36,343 — 70,981 Intercompany payable 280 275,498 57,179 (332,957 ) — Accrued expenses 17,305 11,807 21,208 — 50,320 Income taxes payable — 2,983 434 (2,964 ) 453 Total current liabilities 19,605 324,906 115,164 (335,921 ) 123,754 Long-term debt, less current portion 354,716 19,881 14,000 — 388,597 Other non-current obligations — 25,797 49,095 — 74,892 Deferred income taxes — 2,242 578 — 2,820 Long-term intercompany payable — 67,500 42,516 (110,016 ) — Stockholders' equity 112,481 551,100 354,090 (905,190 ) 112,481 Total liabilities and stockholders' equity $ 486,802 $ 991,426 $ 575,443 $ (1,351,127 ) $ 702,544 Condensed Consolidating Balance Sheet March 31, 2015 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 640 $ 33,094 $ 22,628 $ — $ 56,362 Accounts receivable, net — 35,535 55,322 — 90,857 Intercompany receivable 321,233 403,557 195,518 (920,308 ) — Inventories, net — 119,221 52,622 — 171,843 Prepaid expenses and other 3,191 21,134 20,164 (2,986 ) 41,503 Total current assets 325,064 612,541 346,254 (923,294 ) 360,565 Property and equipment, net 293 100,844 148,504 — 249,641 Investment in NEC TOKIN — 45,016 — — 45,016 Investment in subsidiaries 401,062 423,737 93,359 (918,158 ) — Goodwill — 35,584 — — 35,584 Intangible assets, net — 26,998 6,284 — 33,282 Restricted cash — — — — — Deferred income taxes — 971 8,803 — 9,774 Other assets 4,088 7,824 919 — 12,831 Long-term intercompany receivable 63,788 39,151 1,088 (104,027 ) — Total assets $ 794,295 $ 1,292,666 $ 605,211 $ (1,945,479 ) $ 746,693 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ — $ 500 $ 462 $ — $ 962 Accounts payable, trade 47 36,565 33,173 — 69,785 Intercompany payable 254,852 578,318 87,138 (920,308 ) — Accrued expenses 17,253 16,644 26,559 — 60,456 Income taxes payable — 2,928 942 (2,986 ) 884 Total current liabilities 272,152 634,955 148,274 (923,294 ) 132,087 Long-term debt, less current portion 357,461 20,948 12,000 — 390,409 Other non-current obligations — 2,987 54,144 — 57,131 Deferred income taxes — 2,241 143 — 2,384 Long-term intercompany payable — 63,789 40,238 (104,027 ) — Stockholders' equity 164,682 567,746 350,412 (918,158 ) 164,682 Total liabilities and stockholders' equity $ 794,295 $ 1,292,666 $ 605,211 $ (1,945,479 ) $ 746,693 Condensed Consolidating Statements of Operations Fiscal Year Ended March 31, 2016 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated Net sales $ — $ 866,163 $ 703,690 $ (835,030 ) $ 734,823 Operating costs and expenses: Cost of sales 1,194 708,143 642,362 (780,156 ) 571,543 Selling, general and administrative expenses 38,071 74,521 43,728 (54,874 ) 101,446 Research and development 79 17,313 7,563 — 24,955 Restructuring charges — 2,564 1,614 — 4,178 Net (gain) loss on sales and disposals of assets (7 ) (484 ) 866 — 375 Total operating costs and expenses 39,337 802,057 696,133 (835,030 ) 702,497 Operating income (loss) (39,337 ) 64,106 7,557 — 32,326 Other (income) expense: Interest income — — (14 ) — (14 ) Interest expense 37,856 1,189 560 — 39,605 Change in value of NEC TOKIN options — 26,300 — — 26,300 Non-operating (income) expense, net (36,183 ) 34,188 (353 ) — (2,348 ) Equity in earnings of subsidiaries 12,619 — — (12,619 ) — Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN (53,629 ) 2,429 7,364 12,619 (31,217 ) Income tax expense (benefit) — (269 ) 6,275 — 6,006 Income (loss) from continuing operations before equity income (loss) from NEC TOKIN (53,629 ) 2,698 1,089 12,619 (37,223 ) Equity income (loss) from NEC TOKIN — (16,406 ) — — (16,406 ) Income (loss) from continuing operations (53,629 ) (13,708 ) 1,089 12,619 (53,629 ) Income (loss) from discontinued operations — — — — — Net income (loss) $ (53,629 ) $ (13,708 ) $ 1,089 $ 12,619 $ (53,629 ) Condensed Consolidating Statements of Comprehensive Income (Loss) Fiscal Year Ended March 31, 2016 Other comprehensive income (loss) $ (49,918 ) $ (24,832 ) $ 5,873 $ 12,619 $ (56,258 ) Condensed Consolidating Statements of Operations Fiscal Year Ended March 31, 2015 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated Net sales $ 195 $ 978,705 $ 773,504 $ (929,212 ) $ 823,192 Operating costs and expenses: Cost of sales 2,468 823,429 707,493 (869,707 ) 663,683 Selling, general and administrative expenses 41,783 70,074 46,181 (59,505 ) 98,533 Research and development 436 17,588 7,778 — 25,802 Restructuring charges — 3,310 9,707 — 13,017 Net (gain) loss on sales and disposals of assets (10 ) 181 (392 ) — (221 ) Total operating costs and expenses 44,677 914,582 770,767 (929,212 ) 800,814 Operating income (loss) (44,482 ) 64,123 2,737 — 22,378 Other (income) expense: Interest income — — (15 ) — (15 ) Interest expense 38,632 998 1,071 — 40,701 Change in value of NEC TOKIN options — (2,100 ) — — (2,100 ) Non-operating (income) expense, net (40,903 ) 49,069 (12,248 ) — (4,082 ) Equity in earnings of subsidiaries (27,998 ) — — 27,998 — Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN (14,213 ) 16,156 13,929 (27,998 ) (12,126 ) Income tax expense (benefit) (70 ) 576 4,721 — 5,227 Income (loss) from continuing operations before equity income (loss) from NEC TOKIN (14,143 ) 15,580 9,208 (27,998 ) (17,353 ) Equity income (loss) from NEC TOKIN — (2,169 ) — — (2,169 ) Income (loss) from continuing operations (14,143 ) 13,411 9,208 (27,998 ) (19,522 ) Income (loss) from discontinued operations — 102 5,277 — 5,379 Net income (loss) $ (14,143 ) $ 13,513 $ 14,485 $ (27,998 ) $ (14,143 ) Condensed Consolidating Statements of Comprehensive Income (Loss) Fiscal Year Ended March 31, 2015 Comprehensive income (loss) $ (32,103 ) $ 19,650 $ (20,672 ) $ (27,998 ) $ (61,123 ) Condensed Consolidating Statements of Operations Fiscal Year Ended March 31, 2014 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated Net sales $ 218 $ 966,369 $ 817,945 $ (950,866 ) $ 833,666 Operating costs and expenses: Cost of sales 1,336 878,308 729,105 (895,824 ) 712,925 Selling, general and administrative expenses 41,359 61,896 47,643 (55,042 ) 95,856 Research and development 229 16,849 7,388 — 24,466 Restructuring charges — 2,858 11,264 — 14,122 Write down of long-lived assets — 1,118 3,358 — 4,476 Net (gain) loss on sales and disposals of assets — (625 ) 657 — 32 Net (gain) loss on intercompany asset transfer — 14,564 (14,564 ) — — Total operating costs and expenses 42,924 974,968 784,851 (950,866 ) 851,877 Operating income (loss) (42,706 ) (8,599 ) 33,094 — (18,211 ) Other (income) expense: Interest income (12 ) (4 ) (179 ) — (195 ) Interest expense 40,069 1,130 (237 ) — 40,962 Change in value of NEC TOKIN options — (3,111 ) — — (3,111 ) Other (income) expense, net (40,642 ) 39,852 1,220 — 430 Equity in earnings of subsidiaries 26,332 — — (26,332 ) — Income (loss) from continuing operations before income taxes and equity income (loss) from NEC TOKIN (68,453 ) (46,466 ) 32,290 26,332 (56,297 ) Income tax expense (benefit) — (1,302 ) 2,784 — 1,482 Income (loss) from continuing operations before equity income (loss) from NEC TOKIN (68,453 ) (45,164 ) 29,506 26,332 (57,779 ) Equity income (loss) from NEC TOKIN — (7,090 ) — — (7,090 ) Income (loss) from continuing operations (68,453 ) (52,254 ) 29,506 26,332 (64,869 ) Income (loss) from discontinued operations (50 ) (1,195 ) (2,389 ) — (3,634 ) Net income (loss) $ (68,503 ) $ (53,449 ) $ 27,117 $ 26,332 $ (68,503 ) Condensed Consolidating Statements of Comprehensive Income (Loss) Fiscal Year Ended March 31, 2014 Comprehensive income (loss) $ (62,676 ) $ (57,309 ) $ 35,640 $ 26,332 $ (58,013 ) Condensed Consolidating Statements of Cash Flows Fiscal Year Ended March 31, 2016 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated Sources (uses) of cash and cash equivalents Net cash provided by (used in) operating activities $ 3,722 $ 15,107 $ 13,536 $ — $ 32,365 Investing activities: Capital expenditures — (9,550 ) (10,919 ) — (20,469 ) Change in restricted cash — 1,802 — — 1,802 Proceeds from sale of assets — 248 723 — 971 Acquisitions, net of cash received — (2,892 ) — — (2,892 ) Net cash provided by (used in) investing activities — (10,392 ) (10,196 ) — (20,588 ) Financing activities: Proceeds from revolving line of credit — 8,000 2,000 — 10,000 Payments of revolving line of credit — (9,600 ) — — (9,600 ) Deferred acquisition payments (3,000 ) — — — (3,000 ) Payments of long-term debt — — (481 ) — (481 ) Proceeds from exercise of stock options — — — — — Purchase of treasury stock (722 ) — — — (722 ) Net cash provided by (used in) financing activities (3,722 ) (1,600 ) 1,519 — (3,803 ) Net increase (decrease) in cash and cash equivalents — 3,115 4,859 — 7,974 Effect of foreign currency fluctuations on cash — — 668 — 668 Cash and cash equivalents at beginning of fiscal year 640 33,094 22,628 — 56,362 Cash and cash equivalents at end of fiscal year $ 640 $ 36,209 $ 28,155 $ — $ 65,004 Condensed Consolidating Statements of Cash Flows Fiscal Year Ended March 31, 2015 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated Sources (uses) of cash and cash equivalents Net cash provided by (used in) operating activities $ 39,575 $ (4,085 ) $ (11,088 ) $ — $ 24,402 Investing activities: Capital expenditures — (12,930 ) (9,302 ) — (22,232 ) Change in restricted cash — 11,509 — — 11,509 Proceeds from sale of assets — 2,403 2,385 — 4,788 Proceeds from sale of discontinued operations — — 9,564 — 9,564 Net cash provided by (used in) investing activities — 982 2,647 — 3,629 Financing activities: Proceeds from revolving line of credit — 37,340 5,000 — 42,340 Payments on revolving line of credit — (22,342 ) (5,000 ) — (27,342 ) Deferred acquisition payments (18,527 ) (1,000 ) — — (19,527 ) Payments of long-term debt (20,417 ) — (1,316 ) — (21,733 ) Proceeds from exercise of stock options 24 — — — 24 Purchase of treasury stock (630 ) — — — (630 ) Net cash provided by (used in) financing activities (39,550 ) 13,998 (1,316 ) — (26,868 ) Net increase (decrease) in cash and cash equivalents 25 10,895 (9,757 ) — 1,163 Effect of foreign currency fluctuations on cash (1 ) (1 ) (2,728 ) — (2,730 ) Cash and cash equivalents at beginning of fiscal year 616 22,200 35,113 — 57,929 Cash and cash equivalents at end of fiscal year $ 640 $ 33,094 $ 22,628 $ — $ 56,362 Condensed Consolidating Statements of Cash Flows Fiscal Year Ended March 31, 2014 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated Sources (uses) of cash and cash equivalents Net cash provided by (used in) operating activities $ 7,724 $ (26,984 ) $ 12,514 $ — $ (6,746 ) Investing activities: Capital expenditures — (13,348 ) (18,799 ) — (32,147 ) Change in restricted cash — 4,047 — — 4,047 Proceeds from sale of assets — 996 1,851 — 2,847 Net cash provided by (used in) investing activities — (8,305 ) (16,948 ) — (25,253 ) Financing activities: Proceeds from revolving line of credit — 9,000 12,000 — 21,000 Payments on revolving line of credit — (2,551 ) — — (2,551 ) Deferred acquisition payments (20,977 ) (1,000 ) — — (21,977 ) Payments of long-term debt (3,583 ) (16 ) — — (3,599 ) Proceeds from exercise of stock options 250 — — — 250 Net cash provided by (used in) financing activities (24,310 ) 5,433 12,000 — (6,877 ) Net increase (decrease) in cash and cash equivalents (16,586 ) (29,856 ) 7,566 — (38,876 ) Effect of foreign currency fluctuations on cash — — 827 — 827 Cash and cash equivalents at beginning of fiscal year 17,202 52,056 26,720 — 95,978 Cash and cash equivalents at end of fiscal year $ 616 $ 22,200 $ 35,113 $ — $ 57,929 |