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8-K - FORM 8-K (ROYAL HISTORICAL AND PRO FORMA FINANCIALS) - FULLER H B COd659192d8k.htm
EX-99.4 - PRO FORMA UNAUDITED FINANCIAL STATEMENTS - FULLER H B COd659192dex994.htm
EX-99.2 - ROYAL 2016 AUDITED FINANCIAL STATEMENTS - FULLER H B COd659192dex992.htm
EX-99.1 - ROYAL 2014 AND 2015 AUDITED FINANCIAL STATMENTS - FULLER H B COd659192dex991.htm
EX-23.2 - CONSENT OF ERNST & YOUNG LLP - FULLER H B COd659192dex232.htm
EX-23.1 - CONSENT OF CROWE HORWATH LLP - FULLER H B COd659192dex231.htm

Exhibit 99.3

ROYAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Month Periods ended June 30, 2017 and 2016

(Unaudited)


ROYAL HOLDINGS, INC. AND SUBSIDIARIES

South Bend, Indiana

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Month Periods ended June 30, 2017 and 2016

(Unaudited)

CONTENTS

 

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)   

CONDENSED CONSOLIDATED BALANCE SHEETS

     1  

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

     2  

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

     3  

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

     4  

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     5  


ROYAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amount)

 

     June 30,
2017
    September 30,
2016
 
     (Unaudited)        

ASSETS

    

Current assets

    

Cash and cash equivalents

   $ 31,515     $ 31,253  

Trade receivables, net

     78,807       72,180  

Inventories, net

     76,193       68,973  

Refundable income taxes

     4,422       1,563  

Prepaid expenses and other current assets

     5,381       5,838  
  

 

 

   

 

 

 

Total current assets

     196,318       179,807  

Property, plant and equipment, net

     137,054       131,110  

Other assets

    

Intangible assets, net

     439,029       464,852  

Goodwill

     506,866       500,678  

Other assets

     271       292  
  

 

 

   

 

 

 

Total other assets

     946,166       965,822  
  

 

 

   

 

 

 

Total assets

   $ 1,279,538     $ 1,276,739  
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDER’S EQUITY

    

Current liabilities

    

Accounts payable

   $ 37,903     $ 34,973  

Current maturities of long-term debt

     6,066       5,615  

Accrued payroll and related benefits

     9,587       13,829  

Other current liabilities

     12,011       12,706  
  

 

 

   

 

 

 

Total current liabilities

     65,567       67,123  

Noncurrent liabilities

    

Long-term debt, less current maturities

     678,618       691,579  

Deferred income taxes

     149,309       145,252  

Pension liability

     16,534       16,310  

Other long-term liabilities

     3,705       8,597  
  

 

 

   

 

 

 

Total noncurrent liabilities

     848,166       861,738  
  

 

 

   

 

 

 

Total liabilities

     913,733       928,861  

Commitments and contingencies

    

Shareholder’s equity

    

Common stock, $.01 par value, 5,000 shares authorized; 1,100 shares issued and outstanding

     —         —    

Additional paid-in capital

     355,963       354,852  

Retained earnings

     16,168       2,870  

Accumulated other comprehensive loss

     (6,326     (9,844
  

 

 

   

 

 

 

Total shareholder’s equity

     365,805       347,878  
  

 

 

   

 

 

 

Total liabilities and shareholder’s equity

   $ 1,279,538     $ 1,276,739  
  

 

 

   

 

 

 

See accompanying notes to condensed consolidated financial statements.

 

1


ROYAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Nine months ended June 30, 2017 and 2016

(Dollars in thousands)

(Unaudited)

 

     Nine months ended June 30,  
     2017      2016  

Revenues. net

   $ 472,072      $ 454,275  

Cost of goods sold

     325,895        313,872  
  

 

 

    

 

 

 

Gross profit

     146,177        140,403  

Operating expenses

     

Selling and marketing

     27,783        26,034  

General and administrative

     25,528        30,802  

Research and development

     10,319        9,744  

Amortization expense

     27,531        29,494  
  

 

 

    

 

 

 

Total operating expenses

     91,161        96,074  
  

 

 

    

 

 

 

Operating income

     55,016        44,329  

Other expenses

     

Interest expense, net

     35,159        33,114  

Transaction-related costs

     —          382  
  

 

 

    

 

 

 

Total other expenses

     35,159        33,496  
  

 

 

    

 

 

 

Income before income taxes

     19,857        10,833  

Income taxes

     6,559        3,016  
  

 

 

    

 

 

 

Net income

   $ 13,298      $ 7,817  
  

 

 

    

 

 

 

See accompanying notes to condensed consolidated financial statements.

 

2


ROYAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Nine months ended June 30, 2017 and 2016

(Dollars in thousands)

(Unaudited)

 

     Nine months ended June 30,  
     2017      2016  

Net income

   $ 13,298      $ 7,817  

Other comprehensive income (loss), net of tax

     

Defined benefit pension plan adjustments

     193        (1,136

Foreign currency translation adjustment

     3,325        (6,245
  

 

 

    

 

 

 

Other comprehensive income (loss)

     3,518        (7,381
  

 

 

    

 

 

 

Comprehensive income

   $ 16,816      $ 436  
  

 

 

    

 

 

 

See accompanying notes to condensed consolidated financial statements.

 

3


ROYAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine months ended June 30, 2017 and 2016

(Dollars in thousands)

(Unaudited)

 

     Nine months ended June 30,  
     2017     2016  

Cash flows from operating activities

    

Net income

   $ 13,298     $ 7,817  

Adjustments to reconcile net income to net cash provided by operating activities

    

Depreciation

     7,646       7,385  

Amortization of intangible assets

     27,531       29,494  

Share-based compensation

     1,111       1,438  

Amortization of deferred financing costs

     7,348       3,157  

Unrealized foreign currency transaction loss

     (61     49  

Deferred income taxes

     —         (403

Loss on disposal of assets

     4       66  

Changes in operating assets and liabilities, excluding impact of acquisitions:

    

Trade receivables

     (6,074     (7,276

Inventories

     (6,791     4,830  

Other current assets

     (782     852  

Other assets

     643       —    

Accounts payable

     2,657       (5,907

Accrued expenses and other liabilities

     (7,624     1,690  

Refundable income taxes

     (3,065     (813

Pension liability

     143       (1,105
  

 

 

   

 

 

 

Net cash provided by operating activities

     35,984       41,274  

Cash flows from investing activities

    

Business acquisitions, net of cash acquired

     (3,966     (63,227

Purchase of property, plant and equipment

     (12,630     (9,409
  

 

 

   

 

 

 

Net cash used in investing activities

     (16,596     (72,636

Cash flows from financing activities

    

Borrowings of long-term debt

     55,000       38,000  

Payments on long-term debt

     (72,991     (4,241

Capital distribution

     —         (75

Capital contribution

     —         400  

Deferred financing costs

     (1,928     (305
  

 

 

   

 

 

 

Net cash (used in)/provided by financing activities

     (19,919     33,779  
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     (531     2,417  

Effect of exchange rate changes on cash and cash equivalents

     793       1,066  

Cash and cash equivalents as of beginning of period

     31,253       30,524  
  

 

 

   

 

 

 

Cash and cash equivalents as of end of period

   $ 31,515     $ 34,007  
  

 

 

   

 

 

 

See accompanying notes to condensed consolidated financial statements.

 

4


ROYAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

(Unaudited)

NOTE 1—DESCRIPTION OF THE BUSINESS

Royal Holdings, Inc. (the “Company”) is a wholly owned subsidiary of Royal Acquisition Corp.

The principal operating subsidiaries included in the Company’s Consolidated Financial Statements are Royal Adhesives and Sealants, LLC and ADCO Products, LLC (formerly ADCO Products, Inc.), which are located in the United States of America, as well as Kömmerling Chemische Fabrik, GmbH located in Germany. The Company also has smaller operating subsidiaries located in the United Kingdom, Canada, France, and China. Through its subsidiaries, the Company’s products are sold to customers throughout North America, Europe and Southeast Asia.

The Company manufactures and markets specialty adhesives, sealants, coatings, polymers, tapes, encapsulants and additives for use in a wide range of commercial, industrial and institutional applications. The Company’s products are sold into five primary market sectors: transportation, assembly and construction; commercial roofing; insulating glass; flooring and carpet; and textile, paper, printing and packaging. These products are also used in a variety of secondary markets including aerospace and defense, automotive, recreational vehicle, bus, truck and trailer, marine, assembly, electrical/electronic, filter, printing, flexible packaging, laminating, graphic arts, solar/renewable energy, personal care, home furnishings, roofing and flooring.

NOTE 2—BASIS OF PRESENTATION

The accompanying unaudited Condensed Consolidated Financial Statements of Royal Holdings, Inc. and Subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

In the opinion of management, all adjustments, consisting of a normal and recurring nature, considered necessary, for the fair presentation of these interim financial statements in accordance with GAAP have been made. Operating results for such interim periods presented are not necessarily indicative of results for the full year. These condensed consolidated financial statements should be read in conjunction with the annual consolidated financial statements and the notes thereto.

The preparation of the consolidated financial statements in accordance with GAAP requires management to make certain estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. Actual results could materially differ from those estimates.

NOTE 3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation: The accompanying consolidated financial statements include the accounts of Royal Holdings, Inc. and it subsidiaries, all of which are wholly owned. All intercompany accounts and transactions have been eliminated.

 

5


ROYAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

(Unaudited)

 

NOTE 3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Accounting Developments: In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which was subsequently amended by ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross Versus Net),” and ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.” ASU No. 2014-09, as amended, supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605).” The standard is principle based and provides a five step model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. There are also expanded disclosure requirements in this ASU. In July 2015, the FASB voted to delay the effective date of ASU 2014-09 by one year. For non-public entities, this guidance is effective for annual reporting periods beginning after December 15, 2018; hence, the Company is required to apply the new standard for its fiscal year commencing October 1, 2019. Early adoption is permitted for annual reporting period beginning after December 15, 2016, or the Company’s fiscal year commencing October 1, 2017. The Company is currently evaluating the impact of ASU No. 2014-09 on its Consolidated Financial Statements.

In February 2016, the FASB issued a new accounting standard that will require that an entity recognize lease assets and lease liabilities on its balance sheet for leases in excess of one year that were previously classified as operating leases under U.S. GAAP. The standard also requires companies to disclose in the footnotes to the financial statements information about the amount, timing, and uncertainty for the payments made for the lease agreements. The standard is effective for financial statements issued for annual and interim periods beginning after December 15, 2018 on a retroactive basis. Early adoption is permitted. The Company is currently evaluating the effect of adopting this new accounting standard and has not yet determined the impact that the implementation of it will have on its condensed consolidated financial statements.

In January 2017, the FASB issued a new accounting standard that clarifies the definition of a business. This standard will assist companies in interpreting the definition of a business which may affect certain areas of accounting including acquisitions, disposals, goodwill and consolidation. The standard is effective for financial statements issued for annual and interim periods beginning after December 15, 2017. The standard may be applied on a retrospective basis and early adoption is permitted. The Company is currently evaluating the effect of adopting this new accounting standard and has not yet determined the impact that the implementation of it will have on its condensed consolidated financial statements.

In March 2017, the FASB issued a new accounting standard that will change how employers that sponsor defined benefit pension and/or other postretirement benefit plans present the net periodic benefit cost in the income statement. Under the new guidance, employers will present the service cost component of the net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. In addition, only the service cost component will be eligible for capitalization in assets. Employers will present the other components separately from the line item(s) that includes the service cost and outside of any subtotal of operating income, if one is presented. Employers will have to disclose the line(s) used to present the other components of net periodic benefit cost, if the components are not presented separately in the income statement. The standard is effective for financial statements issued for annual and interim periods beginning after December 15, 2017 and early adoption is permitted. The Company is currently evaluating the effect of adopting this new accounting standard and has not yet determined the impact that the implementation of it will have on its condensed consolidated financial statements.

 

(Continued)

 

6


ROYAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

(Unaudited)

 

NOTE 3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

In September 2015, the FASB issued ASU No. 2015-16, “Simplifying the Accounting for Measurement Period Adjustments,” which eliminates the requirement to retrospectively account for measurement period adjustments related to a business combination. This ASU is effective for annual periods beginning after December 15, 2016, or the Company’s fiscal year commencing October 1, 2017, and is to be applied prospectively. Early adoption is permitted. The Company adopted the amendments of this ASU as of October 1, 2016, and it did not have an impact on its consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory,” which requires a company to measure inventory within the scope of this guidance (inventory measured using first-in, first-out (FIFO) or average cost) at the lower of cost and net realizable value methods. This ASU is effective for annual periods beginning after December 15, 2016, or our fiscal year commencing October 1, 2017; however, the Company elected to early adopt this guidance effective October 1, 2016, as early adoption is permitted. The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements.

Subsequent Events: Management has performed an analysis of the activities and transactions subsequent to June 30, 2017 to determine the need for any adjustments to and/or disclosures within the financial statements for the nine-month period ended June 30, 2017. Management has performed their analysis through October 5, 2017, the date the financial statements were available to be issued.

NOTE 4—BUSINESS COMBINATIONS

During the nine months ended June 30, 2017, the Company finalized the purchase price allocation for the acquisition of CASS Holdings Company d/b/a CASS Polymers, Inc. (“CASS”) on June 30, 2016.

The final allocation of the purchase price is as follows:

 

Accounts Receivable

   $ 492  

Inventories

     272  

Prepaids & Other

     17  

Property and Equipment

     135  
  

 

 

 

Total Tangible Assets Acquired

     916  

Accounts Payable

     (18

Deferred Tax Liabilities

     (3,000
  

 

 

 

Total Liabilities Assumed

     (3,018

Identified Intangible Assets

     7,900  

Goodwill

     9,170  
  

 

 

 

Net Assets Acquired

   $ 14,968  
  

 

 

 

 

(Continued)

 

7


ROYAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

(Unaudited)

 

NOTE 4—BUSINESS COMBINATIONS (Continued)

 

During the nine months ended June 2017, the Company completed an acquisition of a business for approximately $2,100. The Company is in the process of determining the fair value of the assets acquired.

NOTE 5—INVENTORIES

Inventories consist of the following:

 

     June 30,      September 30,  
     2017      2016  

Raw and packaging materials

   $ 44,280      $ 37,736  

Work in process

     2,265        1,542  

Finished goods

     34,754        33,882  
  

 

 

    

 

 

 
     81,299        73,160  

Inventory reserves

     (5,106      (4,187
  

 

 

    

 

 

 
   $ 76,193      $ 68,973  
  

 

 

    

 

 

 

NOTE 6—DEBT

Debt consists of the following:

 

     June 30,      September 30,  
     2017      2016  

1st Lien Credit Agreement Term Loan

   $ 605,084      $ 553,000  

2nd Lien Credit Agreement Term Loan

     80,000        145,000  

Revolving Line of Credit

     15,000        20,000  

Capital leases

     2        17  
  

 

 

    

 

 

 
     700,086        718,017  

Debt issue costs

     (15,402      (20,823
  

 

 

    

 

 

 
     684,684        697,194  

Current maturities

     (6,066      (5,615
  

 

 

    

 

 

 

Debt, long-term portion

   $ 678,618      $ 691,579  
  

 

 

    

 

 

 

During February 2017, the Company restructured a portion of its debt. The Company obtained additional borrowings on its 1st Lien Term Loan of $55,000, and reduced the rate on the loan by 0.25%. The Company used these funds, plus $10,000 of available cash to pay down $65,000 on the 2nd Lien Term Loan. As part of the debt restructuring, the Company incurred approximately $1,925 in fees which were expensed, and wrote off approximately $2,830 in debt issue costs related to the extinguished debt and included the amount within interest expense.

Revolving Line of Credit: The Company may borrow $68,000, subject to limitation based on a defined leverage calculation, through June 19, 2020. The borrowings were not limited at June 30, 2017 or 2016.

 

(Continued)

 

8


ROYAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

(Unaudited)

 

NOTE 6—DEBT (Continued)

 

Letter of Credit: The 1st Lien Credit Agreement also provides for standby letters of credit in an aggregate amount of $10,000. Any outstanding letters of credit would reduce the availability under the revolving line of credit.

Interest on the 1st Lien Term Loan is payable at either 2% over the base rate plus 2.25% or 1% over the LIBOR monthly rate plus applicable margin of 3.25%, as defined by the updated debt agreement. The effective rate of the 1st Lien Term Loan was 4.5% at June 30, 2017.

Interest on outstanding borrowings under the Revolving Line of Credit is payable at either 2% over the base rate plus 2.50% or 1% over the LIBOR monthly rate plus applicable margin of 3.50%. The effective rate of interest on the revolving line of credit was 4.7% at June 30, 2017.

Interest on the 2nd Lien Term Loan is payable at 1% over the LIBOR monthly rate plus applicable margin of 7.5%, as defined by the debt agreement. The effective rate of the 2nd Lien Term Note was 8.8% at June 30, 2017.

Collateral and Restrictive Covenants: Borrowings under the 1st lien and 2nd lien credit agreements are collateralized by substantially all assets of the Company. The Credit Agreements and Revolving Line of Credit contain, among other provisions, certain restrictive covenants including maintenance of a minimum total leverage ratio. As of June 30, 2017, the Company was in compliance with these covenants.

Capital leases: The Company leases copiers and office equipment under capital leases which mature by the end of 2017. The leases require monthly principal and interest payments.

As noted above, the Company is subject to additional principal payments on the 1st and 2nd Lien Credit Agreement Term Loans based upon the results of annual excess cash flow calculations, as prescribed in the related agreements, which are performed at September 30 each year, commencing September 30, 2016. At June 30, 2017, the Company is not required to make an excess cash flow payment.

NOTE 7—INCOME TAXES

The effective tax rate for the nine-months ended June 30, 2017 and 2016 differs from the U.S. federal statutory rate primarily due to the projected mix of earnings in non-U.S. jurisdictions with lower tax rates.

NOTE 8- COMMITMENTS AND CONTINGENCIES

Litigation and Claims: The Company is party to legal proceedings arising from its operations. Related reserves are recorded when it is probable that liabilities exist and where reasonable estimates of such liabilities can be made. While it is not possible to predict the outcome of any of these proceedings, the Company’s management, based on its assessment of the facts and circumstances now known, does not believe that any of these proceedings, individually or in the aggregate, will have a material adverse effect on the Company’s financial position. The Company does not believe that, with respect to any pending legal matters, it is reasonably possible that a loss exceeding amounts already recognized may be material. However, actual outcomes may be different than expected and could have a material effect on the company’s results of operations or cash flows in a particular period.

 

(Continued)

 

9


ROYAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

(Unaudited)

 

NOTE 8—COMMITMENTS AND CONTINGENCIES (Continued)

 

Environmental Matter: The Company and the former owners of Para-Chem are parties to an Asset Purchase Agreement (“the Agreement”) dated December 13, 2010. The Company acquired these environmental matters as part of the purchase of Para-Chem. In the mid-1980s, the Para-Chem facility located in Simpsonville, South Carolina was designated by the Environmental Protection Agency (“EPA”) as a Superfund Site and placed on the National Priorities List. On September 27, 1993, the EPA issued a Record of Decision (“ROD”) which was subsequently amended on December 23, 1999, regarding the cleanup of the site. This ROD set forth an agreement for remediation of the site, primarily based upon continued groundwater extraction and treatment for up to 20 years. Prior to the acquisition, Para-Chem addressed the matters in the ROD, except for the annual maintenance issues.

The Company’s environmental liability totaled $3,700 at June 30, 2017 and September 30, 2016.

The Company considers groundwater monitoring and remediation costs to be operating expenses, and consequently, expenses these costs as incurred. The Company’s statement of operations includes $101 and $50 for these costs, which are included in general and administrative expense, for the periods ended June 30, 2017 and 2016, respectively.

NOTE 9—ACCUMULATED OTHER COMPREHENSIVE LOSS

The components of accumulated other comprehensive loss, net of tax, are as follows:

 

     June 30,      September 30,  
     2017      2016  

Defined benefit pension plan adjustments

   $ (2,267    $ (2,460

Cumulative foreign currency translation adjustment

     (4,059      (7,384
  

 

 

    

 

 

 
   $ (6,326    $ (9,844
  

 

 

    

 

 

 

NOTE 10—EMPLOYEE BENEFIT PLANS

The components of net periodic benefit cost and weighted-average assumptions are as follows:

 

     Nine months ended June 30,  
     2017     2016  

U.S. Pension Plan:

    

Expected return on plan assets

   $ (188   $ (334

Other

     346       277  
  

 

 

   

 

 

 

Total pension cost

   $ 158     $ (57
  

 

 

   

 

 

 

Weighted-average assumptions:

    

Expected return on plan assets

     5.5     5.5

Rate of compensation increase

     N/A       N/A  

 

(Continued)

 

10


ROYAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

(Unaudited)

 

NOTE 10—EMPLOYEE BENEFIT PLANS (Continued)

 

     Nine months ended June 30,  
     2017     2016  

German Pension Plan:

    

Actuarial gain

   $ 7     $ 329  

Other

     290       264  
  

 

 

   

 

 

 

Total pension cost

   $ 297     $ 593  
  

 

 

   

 

 

 

Weighted-average assumptions:

    

Expected return on plan assets

     N/A       N/A  

Rate of compensation increase

     2.5     2.5

The Company’s expected long-term rate of return on plan assets is based on historical rates of return for a similar mix of invested assets.

NOTE 11—SUBSEQUENT EVENTS

On September 2, 2017, the owner of the Company’s parent entity agreed to sell the stock of the parent to H.B. Fuller Company for a base purchase price of $1.575 billion.

 

 

11