##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
 For the quarterly period ended September 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
 For the transition period from           to
 Commission file number 001-13023
 Thermadyne Holdings Corporation
  Delaware
    
    74-2482571(State or Other Jurisdiction of
Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)16052 Swingley Ridge Road, Suite 300,
Chesterfield, MO
    
    63017(Address of Principal Executive Offices)
    
    (Zip Code)
 (636) 728-3000
 þ o
 o þ
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
 þ o




---



##### 



THERMADYNE HOLDINGS CORPORATION
 INDEX
 PagePART I  FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets
    
    3Condensed Consolidated Statements of Operations
    
    4Condensed Consolidated Statements of Cash Flows
    
    5Notes to Condensed Consolidated Financial Statements
    
    6-22Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    23-29Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    29Item 4. Controls and Procedures
    
    29PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    30Item 6. Exhibits
    
    30SIGNATURES
    
    31EX-4.1EX-31.1EX-31.2EX-32.1EX-32.2
  2




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1.
 THERMADYNE HOLDINGS CORPORATION


CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
 September 30,
    
    
    December 31,2009
    
    
    2008(unaudited)Current Assets:Cash and cash equivalents
    
    $
    18,860
    
    
    $
    11,916Accounts receivable, less allowance for doubtful accounts of
$600 and $900, respectively
    
    
    57,018
    
    
    
    72,044Inventories
    
    
    77,476
    
    
    
    102,479Prepaid expenses and other
    
    
    5,440
    
    
    
    5,443Assets held for sale
    
    
    
    
    
    
    916Deferred tax assets
    
    
    2,277
    
    
    
    2,277Total current assets
    
    
    161,071
    
    
    
    195,075Property, plant and equipment, net of accumulated depreciation
of $55,009 and $46,653, respectively
    
    
    46,716
    
    
    
    47,501Goodwill
    
    
    187,503
    
    
    
    184,043Intangibles, net
    
    
    59,012
    
    
    
    60,783Other assets
    
    
    4,045
    
    
    
    6,967Total assets
    
    $
    458,347
    
    
    $
    494,369Current Liabilities:Working capital facility
    
    $
    
    
    
    $
    32,531Current maturities of long-term obligations
    
    
    2,678
    
    
    
    2,060Accounts payable
    
    
    21,596
    
    
    
    30,823Accrued and other liabilities
    
    
    27,071
    
    
    
    28,295Accrued interest
    
    
    3,142
    
    
    
    6,558Income taxes payable
    
    
    1,310
    
    
    
    2,849Deferred tax liability
    
    
    3,253
    
    
    
    3,253Liabilities related to assets held for sale
    
    
    
    
    
    
    5,266Total current liabilities
    
    
    59,050
    
    
    
    111,635Long-term obligations, less current maturities
    
    
    206,518
    
    
    
    199,454Deferred tax liabilities
    
    
    51,416
    
    
    
    47,292Other long-term liabilities
    
    
    13,503
    
    
    
    17,685Shareholders equity:Common stock, $0.01 par value:Authorized  25,000,000 sharesIssued and outstanding  13,537,019 shares at September 30, 2009 and
13,509,698 shares at December 31, 2008
    
    
    135
    
    
    
    135Additional paid-in capital
    
    
    188,735
    
    
    
    189,256Accumulated deficit
    
    
    (63,079
    )
    
    
    (69,245
    )Accumulated other comprehensive income/(loss)
    
    
    2,069
    
    
    
    (1,843
    )Total shareholders equity
    
    
    127,860
    
    
    
    118,303Total liabilities and shareholders equity
    
    $
    458,347
    
    
    $
    494,369
  3




---



##### Table of Contents



THERMADYNE HOLDINGS CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
 (Unaudited)
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales
    
    $
    89,501
    
    
    $
    139,373
    
    
    $
    257,617
    
    
    $
    412,275Cost of goods sold
    
    
    60,706
    
    
    
    95,477
    
    
    
    182,517
    
    
    
    278,933Gross margin
    
    
    28,795
    
    
    
    43,896
    
    
    
    75,100
    
    
    
    133,342Selling, general and administrative expenses
    
    
    21,968
    
    
    
    30,294
    
    
    
    59,669
    
    
    
    87,419Amortization of intangibles
    
    
    673
    
    
    
    669
    
    
    
    2,016
    
    
    
    2,005Net periodic postretirement benefits
    
    
    (217
    )
    
    
    52
    
    
    
    (208
    )
    
    
    156Operating income
    
    
    6,371
    
    
    
    12,881
    
    
    
    13,623
    
    
    
    43,762Other income (expenses):Interest, net
    
    
    (5,577
    )
    
    
    (5,137
    )
    
    
    (15,121
    )
    
    
    (15,794
    )Amortization of deferred financing costs
    
    
    (276
    )
    
    
    (235
    )
    
    
    (749
    )
    
    
    (703
    )Settlement of retiree medical obligations
    
    
    7,150
    
    
    
    
    
    
    
    7,150
    
    
    
    Other
    
    
    
    
    
    
    (28
    )
    
    
    
    
    
    
    (149
    )Income (loss) from continuing operations before
income tax provision and discontinued
operations
    
    
    7,668
    
    
    
    7,481
    
    
    
    4,903
    
    
    
    27,116Income tax provision
    
    
    2,639
    
    
    
    4,443
    
    
    
    1,788
    
    
    
    13,116Income from continuing operations
    
    
    5,029
    
    
    
    3,038
    
    
    
    3,115
    
    
    
    14,000Income (loss) from discontinued operations, net of tax
    
    
    1,118
    
    
    
    (320
    )
    
    
    3,051
    
    
    
    (795
    )Net income
    
    $
    6,147
    
    
    $
    2,718
    
    
    $
    6,166
    
    
    $
    13,205Basic income (loss) per share:Continuing operations
    
    $
    0.37
    
    
    $
    0.22
    
    
    $
    0.23
    
    
    $
    1.04Discontinued operations
    
    
    0.09
    
    
    
    (0.02
    )
    
    
    0.23
    
    
    
    (0.06
    )Net income
    
    $
    0.46
    
    
    $
    0.20
    
    
    $
    0.46
    
    
    $
    0.98Diluted income (loss) per share:Continuing operations
    
    $
    0.37
    
    
    $
    0.22
    
    
    $
    0.23
    
    
    $
    1.04Discontinued operations
    
    
    0.08
    
    
    
    (0.02
    )
    
    
    0.22
    
    
    
    (0.06
    )Net income
    
    $
    0.45
    
    
    $
    0.20
    
    
    $
    0.45
    
    
    $
    0.98
  4




---



##### Table of Contents



THERMADYNE HOLDINGS CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 (Unaudited)
 Nine Months Ended September 30,2009
    
    
    2008Cash flows from continuing operations:Cash flows from operating activities:Net income
    
    $
    6,166
    
    
    $
    13,205Adjustments to reconcile net income to net cash provided by (used in) operating activities:(Income)/loss from discontinued operations
    
    
    (3,051
    )
    
    
    795Depreciation and amortization
    
    
    9,601
    
    
    
    9,346Deferred income taxes
    
    
    (270
    )
    
    
    7,898Net periodic post-retirement benefits
    
    
    (7,358
    )
    
    
    156Changes in operating assets and liabilities:Accounts receivable
    
    
    18,598
    
    
    
    (9,969
    )Inventories
    
    
    28,774
    
    
    
    (18,699
    )Prepaids
    
    
    887
    
    
    
    (1,235
    )Accounts payable
    
    
    (9,872
    )
    
    
    13,785Accrued and other liabilities
    
    
    (6,350
    )
    
    
    6,250Accrued interest
    
    
    (3,416
    )
    
    
    (4,989
    )Accrued taxes
    
    
    (1,936
    )
    
    
    (248
    )Other long-term liabilities
    
    
    (796
    )
    
    
    (1,017
    )Other, net
    
    
    
    
    
    
    149Net cash provided by (used in) operating activities
    
    
    30,977
    
    
    
    15,427Cash flows from investing activities:Capital expenditures
    
    
    (4,626
    )
    
    
    (8,125
    )Proceeds from sales of discontinued operations
    
    
    
    
    
    
    500Purchase of outside interest in joint venture
    
    
    
    
    
    
    (3,013
    )Other
    
    
    (245
    )
    
    
    (391
    )Net cash provided by (used in) investing activities
    
    
    (4,871
    )
    
    
    (11,029
    )Cash flows from financing activities:Borrowings under Working Capital Facility
    
    
    8,923
    
    
    
    24,461Repayments of Working Capital Facility
    
    
    (41,454
    )
    
    
    (8,750
    )Borrowings under Second-Lien Facility and other
    
    
    25,075
    
    
    
    Repayments of Second-Lien Facility and other
    
    
    (16,630
    )
    
    
    (22,829
    )Stock compensation expense
    
    
    (616
    )
    
    
    1,831Exercise of employee stock purchases
    
    
    95
    
    
    
    1,920Advances from (to) discontinued operations
    
    
    2,398
    
    
    
    (3,322
    )Termination payment from derivative counterparty
    
    
    2,313
    
    
    
    Other, net
    
    
    (818
    )
    
    
    (253
    )Net cash provided by (used in) financing activities
    
    
    (20,714
    )
    
    
    (6,942
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    1,552
    
    
    
    116Net cash provided by (used in) continuing operations
    
    
    6,944
    
    
    
    (2,428
    )Cash flows from discontinued operationsNet cash provided by (used in) operating activities
    
    
    (1,491
    )
    
    
    (2,711
    )Net cash provided by sales of discontinued operations
    
    
    1,783
    
    
    
    500Advances from (to) continuing operations
    
    
    (1,071
    )
    
    
    2,204Effect of exchange rates on cash and cash equivalents
    
    
    194
    
    
    
    (42
    )Net cash provided by (used in) discontinued operations
    
    
    (585
    )
    
    
    (49
    )Total increase (decrease) in cash and cash equivalents
    
    
    6,359
    
    
    
    (2,477
    )Total cash and cash equivalents beginning of period
    
    
    12,501
    
    
    
    16,435Total cash and cash equivalents end of period
    
    $
    18,860
    
    
    $
    13,958Continuing operationsCash and cash equivalents beginning of period
    
    $
    11,916
    
    
    $
    16,159Net cash provided by (used in) continuing operations
    
    
    6,944
    
    
    
    (2,428
    )Cash and cash equivalents end of period
    
    $
    18,860
    
    
    $
    13,731Discontinued operationsCash and cash equivalents beginning of period
    
    $
    585
    
    
    $
    276Net cash provided by (used in) discontinued operations
    
    
    (585
    )
    
    
    (49
    )Cash and cash equivalents end of period
    
    $
    
    
    
    $
    227Income taxes paid
    
    $
    3,928
    
    
    $
    5,409Interest paid
    
    $
    19,016
    
    
    $
    21,046
  5




---



##### Table of Contents



THERMADYNE HOLDINGS CORPORATION
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 (Dollars in thousands, except share data)
 1.
    
    Organization and Basis of PresentationThermadyne Holdings Corporation (Thermadyne or the Company), a Delaware corporation, is
a global designer and manufacturer of cutting and welding products, including equipment,
accessories and consumables.The accompanying unaudited condensed consolidated financial statements have been prepared in
accordance with U.S. generally accepted accounting principles for interim financial
information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by U.S. generally accepted
accounting principles for complete financial statements. In the opinion of management, all
adjustments, consisting of normal recurring accruals, considered necessary for a fair
presentation have been included in these condensed consolidated financial statements. The
combined results of operations of the Company for the three and nine months ended September
30, 2009 are not necessarily indicative of the results that may be expected for the year
ending December 31, 2009. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Companys annual report on Form 10-K for
the year ended December 31, 2008. Subsequent events were evaluated through, October 27,
2009, the date these financial statements were issued.The preparation of financial statements requires the use of estimates and assumptions that
affect the amounts reported in Thermadynes condensed consolidated financial statements and
accompanying notes. Actual results could differ from these estimates.
 2.
    
    Significant Accounting PoliciesProduct Warranty ProgramsVarious products are sold with product warranty programs. Provisions for warranty programs
are made based on historical experience as the products are sold and such provisions are
adjusted periodically based on current estimates of anticipated warranty costs. The
following table provides the activity in the warranty accrual for the three and nine months
ended September 30, 2009 and 2008:
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Balance at beginning of period
    
    $
    2,659
    
    
    $
    3,452
    
    
    $
    2,961
    
    
    $
    3,072Charged to costs and expenses
    
    
    692
    
    
    
    715
    
    
    
    1,044
    
    
    
    2,667Deductions
    
    
    (851
    )
    
    
    (1,043
    )
    
    
    (1,505
    )
    
    
    (2,615
    )Balance at end of period
    
    $
    2,500
    
    
    $
    3,124
    
    
    $
    2,500
    
    
    $
    3,124
 Fair ValueThe carrying values of the obligations outstanding under the Working Capital Facility, the
Second Lien Facility and other long-term obligations, excluding the Senior Subordinated
Notes, approximate fair values because these obligations are fully secured and have varying
interest charges based on current market rates. The estimated fair value of the Companys
Senior Subordinated Notes of $149,625 and $97,125 at September 30, 2009 and December 31,
2008, respectively, is based on available market information.Recent Accounting PronouncementsBusiness Combinations. The Company adopted Accounting Standards Codification (ASC) Topic
805, Business Combinations, effective January 1, 2009. This establishes principles and
requirements for how an acquirer recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, any
 6




---



##### Table of Contents



noncontrolling interest in the
acquiree and the goodwill acquired. After adoption of this pronouncement, the benefit of net
operating loss carryovers reduces income tax expense as the carryovers are utilized.Subsequent Events. The Company adopted ASC Subtopic 855-10, Subsequent Events effective
June 15, 2009. This establishes general standards of accounting for and disclosure of events
that occur after the balance sheet date but before financial statements are issued or are
available to be issued. The adoption of this statement did not have a material effect on the
Companys financial statements.The Company has determined that all other recently issued accounting pronouncements will not
have a material impact on its consolidated financial position, results of operations and
cash flows, or do not apply to its operations.
 3.
    
    Discontinued OperationsOn December 21, 2007, the Company committed to a plan to dispose of its cutting table
business, C&G Systems (C&G). A definitive sales agreement was signed with closing
occurring on January 18, 2008. Based on the sales price of $500, a loss of $570 (net of $350
of tax) was recorded in 2007 as a component of discontinued operations.On December 30, 2006, the Company committed to a plan to sell its Brazilian manufacturing
operations. A loss of approximately $15,200 (net of $1,200 of tax) was recorded as a
component of discontinued operations in the fourth quarter of 2006. This reflected the
estimated net realizable value of the assets and the estimated remaining liabilities of the
operation. The Company closed the Brazilian manufacturing operations in the fourth quarter
of 2007 disposing of its cutting table business and auctioning various remaining inventory
and equipment. Sale of the building and land was completed in the quarter ended September
30, 2009. In addition, remaining unresolved liabilities were revised to adjust the estimates
of liabilities from tax matters, employee severance obligations and other estimated
liabilities. As of September 30, 2009 the Brazilian operations show remaining
liabilities, primarily associated with tax matters, of $4,232 for which the timing of
resolution is uncertain. A gain, net of tax, of $1,118 was recorded in the third quarter of
2009 related to Brazil including a gain of $2,876 on the sale of the facilities, a charge of
$1,072 to revise the estimates of the remaining liabilities, and income tax expense of $686.
The remaining assets and liabilities have been included within continuing operations.On December 30, 2006, the Company committed to a plan to sell its South Africa operations.
On February 5, 2007, the Company entered into an agreement to sell the South African
subsidiaries. A loss of $9,200 (net of $6,300 of tax) was recorded in 2006 as a component of
discontinued operations. The sale closed on May 25, 2007 with $13,800 net cash received at
closing along with a note due in May 2010 in the amount of 30,000 South African Rand and
bearing 14% interest payable. In April 2009, the note was settled and the Company recorded a
gain of $1,933. The Company also recorded $522 of interest income in continuing operations
related to this transaction.On January 2, 2006, the Company completed the disposition of Soldaduras Soltec Limitada
(Soltec). On December 29, 2005, the Company completed the disposition of GenSet S.P.A.
(GenSet). Adjustments related to the disposal costs were recorded for these entities in
2008.The table below sets forth the net income (loss) of each of the discontinued:
 SouthC&G
    
    Brazil
    
    Africa
    
    Soltec/Genset
    
    TotalThree months ended September 30, 2009
    
    
    
    
    
    
    1,118
    
    
    
    
    
    
    
    
    
    
    
    1,118Three months ended September 30, 2008
    
    
    
    
    
    
    (320
    )
    
    
    
    
    
    
    
    
    
    
    (320
    )Nine months ended September 30, 2009
    
    
    
    
    
    
    1,118
    
    
    
    1,933
    
    
    
    
    
    
    
    3,051Nine months ended September 30, 2008
    
    
    (194
    )
    
    
    (593
    )
    
    
    
    
    
    
    (8
    )
    
    
    (795
    )
 7




---



##### Table of Contents



4.
    
    InventoriesThe composition of inventories was as follows:
 September 30,
    
    
    December 31,2009
    
    
    2008Raw materials and component parts
    
    $
    24,997
    
    
    $
    41,185Work-in-process
    
    
    10,946
    
    
    
    12,216Finished goods
    
    
    51,990
    
    
    
    63,59787,933
    
    
    
    116,998LIFO reserve
    
    
    (10,457
    )
    
    
    (14,519
    )$
    77,476
    
    
    $
    102,479
 5.
    
    Intangible AssetsThe composition of intangibles was as follows:
 September 30,
    
    
    December 31,2009
    
    
    2008Goodwill
    
    $
    187,503
    
    
    $
    184,043Patents and customer relationships
    
    
    42,625
    
    
    
    42,380Trademarks
    
    
    33,403
    
    
    
    33,403263,531
    
    
    
    259,826Accumulated amortization of patents and customer relationships
    
    
    (17,016
    )
    
    
    (15,000
    )$
    246,515
    
    
    $
    244,826
 Amortization of patents and customer relationships amounted to $673 and $2,016 for the three
and nine month periods ended September 30, 2009, respectively, and to $669 and $2,005 for
the three and nine month periods ended September 30, 2008.Goodwill and trademarks are tested for impairment annually, as of October 1st, or
more frequently if events occur or circumstances change that would, more likely than not,
reduce the fair value of the reporting unit below its carrying value. The impairment
analysis is performed on a consolidated enterprise level based on one reporting unit. The
impairment test involves the comparison of the estimated fair value to the carrying amount.
An impairment would be recorded if the carrying amount exceeded the estimated enterprise fair
value. To estimate enterprise fair value, management relies primarily on its determination
of the present value of expected future cash flows. Significant judgments and estimates
about current and future conditions are used to estimate the fair value. In estimating
future cash flows, management estimates future sales volumes, sales prices, changes in
commodity costs and the weighted cost of capital. Unforeseen events and changes in
circumstances and market conditions, including general economic and competitive conditions
could result in significant changes in those estimates. Management also considers market
value comparables and the current market capitalization of the Company in determining
whether an impairment exists. Management performed an impairment analysis as of December 31,
2008, March 31, 2009, June 30, 2009 and September 30, 2009. Given ongoing uncertain global
economic conditions, further analyses will be performed as of December 31, 2009.During the fourth quarter 2008, the stock price of Thermadyne reported on NASDAQ declined
from $16.48 per share as of October 1, 2008 to $6.87 per share at December 31, 2008. During
the nine months ended September 30, 2009, the stock price closed as low as $1.71 per share
on March 11, 2009 and thereafter closed as high as $6.91 per share on September 30, 2009. It
averaged $5.62 per share in September 2009. Stock price is an important consideration in
managements impairment assessment.We believe the trading prices for our stock have been abnormally disrupted due to
extraordinary selling pressures from certain institutional investors who liquidated their
operations late in 2008 and early in 2009 and the institutional investors who liquidated
their positions in June 2009 with the removal of Thermadyne from the Russell 3000 Index.
Consequently, in performing the impairment assessment for this testing period, management
has
 8




---



##### Table of Contents



shifted its relative weighting of the three factors it considers in estimating
enterprise value. Management relies primarily upon its determination of the present value of
expected future cash flows to estimate fair value. In consideration of the recent declines
in global business conditions, the expected future cash flows were updated quarterly during
2009 to reflect managements ongoing re-assessment of the impact of these declines. The
demand for the Companys products has historically had a direct correlation with the
performance of the steel industry. In developing our various assumptions, we utilized the
findings of a recently conducted study of the impacts on prices, volumes and the duration of
the recessionary period for the steel industry during the five major recessions which have
occurred since 1958. We also increased our assumed cost of capital in the revised five year
forecasts based on recent financial market conditions. For the purpose of this assessment,
our assumed scenario over the future three year period exceeded the severity of the impacts
on the steel industry of any recession dating back to 1958. Based on the analyses, no
impairment charges were recorded. If current global economic recessionary conditions or
declines in our stock price prove to be sustained beyond the time frames assumed in
managements analysis, the Company may be required to record an impairment.The change in the carrying amount of goodwill was as follows:
 Carrying Amountof GoodwillBalance as of December 31, 2008
    
    $
    184,043Foreign currency translation
    
    
    3,460Balance as of September 30, 2009
    
    $
    187,503
 6.
    
    Debt and Capital Lease ObligationsThe composition of debt and capital lease obligations was as follows:
 September 30,
    
    
    December 31,2009
    
    
    2008Working Capital Facility
    
    $
    
    
    
    $
    32,531Second-Lien Facility
    
    
    25,000
    
    
    
    14,000Issuance discount on Second-Lien Facility
    
    
    (1,844
    )
    
    
    Senior Subordinated Notes, due February 1, 2014, 9 1/4% interest
payable semiannually on February 1 and August 1
    
    
    175,000
    
    
    
    175,000Capital leases
    
    
    9,036
    
    
    
    9,524Other
    
    
    2,004
    
    
    
    2,990209,196
    
    
    
    234,045Current maturities and working capital facility
    
    
    (2,678
    )
    
    
    (34,591
    )$
    206,518
    
    
    $
    199,454
 Recent Financing AmendmentsOn August 14, 2009, the Company entered into the 2009 Amended and Restated Second Lien
Credit Agreement with the agent and the existing second lien lenders (the Amended and
Restated Second Lien Credit Agreement). The Amended and Restated Second Lien Credit
Agreement refinanced the loans outstanding under the Second Lien Credit Agreement dated July
29, 2004. Under the Agreement the Company issued a new $25,000 Second Lien Facility at
92.346% of the face amount, repaid the $14,000 balance of the Second Lien Facility and
realized $9,000 of net proceeds. The maturity date was extended from November 7, 2010 to
November 30, 2012 and certain assets of the Companys Australian subsidiaries were added as
collateral for the loans. The Agreement permits a single prepayment of as much as $14,000
beginning April 1, 2010 through August 30, 2010 in lieu of repurchasing outstanding Senior
Subordinated Notes with excess cash flow and prepayment of the balance as permitted
beginning August 30, 2010. The applicable interest rate was changed to, at the Companys
option, (a) the greater of LIBOR or
6%, plus 6% or (b) the greater of the prime rate, the federal funds rate plus one half of
1.00% or 6%, plus 6%. The existing second lien lenders and additional entities each became
lenders under the Amended and Restated Second Lien Credit Agreement, a copy of which is
filed as an exhibit to this document.
 9




---



##### Table of Contents



On June 15, 2009, the Company amended the Working Capital Facility with General Electric
Capital Corporation. The Amended GE Credit Agreement: (i) increased the interest rate to
90-day LIBOR plus 4.00%; (ii) deleted the cash flow portion of the revolver; (iii) added a
prepayment fee of 2% if the Facility is terminated prior to June 27, 2010 or 1% prior to
June 27, 2011; (iv) increased the equipment portion of the Facility from $8,000 to $10,000;
(v) amended the minimum fixed charge coverage ratio for the twelve-months ended June 30,
2009, September 30, 2009 and December 31, 2009 to 0.95, 0.825 and 0.975, respectively, with
1.10 for the twelve month periods ending quarterly thereafter; and (vi) at the Companys
request, reduced the Credit Agreement from $100,000 to $70,000.At September 30, 2009, $3,941 of letters of credit were outstanding. Unused availability,
net of these letters of credit, was $47,125 under the Working Capital Facility.Failure to comply with our financial covenants in future periods would result in defaults
under our credit agreements unless covenants are further amended or waived. The most
restrictive financial covenant is the fixed charge coverage covenant under our Working
Capital Facility which requires EBITDA, as defined, to be at least 1.10 of Fixed Charges, as
defined, except in 2009, as described above. Under the Second Lien Facility, the most
restrictive financial covenant is the senior leverage ratio covenant which requires that
debt, including total debt less the Senior Subordinated Notes and cash, not exceed 2.75 of
EBITDA, as defined. Compliance is measured quarterly based on the trailing four quarters. A
default of the financial covenants under the Working Capital Facility or Second Lien
Facility would constitute a default under the Senior Subordinated Notes.Parent Company Financial InformationBorrowings under the Companys financing agreements are the obligations of Thermadyne
Industries, Inc. (Industries), the Companys principal operating subsidiary, and certain
of Industries subsidiaries. Certain borrowing agreements contain restrictions on the
ability of the subsidiaries to dividend cash and other assets to the parent company,
Thermadyne Holdings Corporation. At September 30, 2009 and December 31, 2008, the primary
asset carried on the parent company books of Thermadyne Holdings Corporation was its
investment in its operating subsidiaries and the only liabilities were the $175,000 of
Senior Subordinated Notes. As a result of the limited assets and liabilities at the parent
company level, separate financial statements have not been presented for Thermadyne Holdings
Corporation.
 7.
    
    Derivative InstrumentsIn February 2004, the Company entered into an interest rate swap arrangement to convert a
portion of the fixed rate exposure on its Senior Subordinated Notes to variable rates. On
February 1, 2009, the swap arrangement was terminated by the counterparty pursuant to terms
of the arrangement and a $3,000 payment was received by the Company in conjunction with this
termination. The Company recorded a fair value adjustment to the portion of its Senior
Subordinated Notes that was hedged and this effect is amortized as a reduction of interest
expense over the remaining term of the Notes.
 8.
    
    Comprehensive IncomeComprehensive income for the three and nine months ended September 30, 2009 and 2008 was as
follows:
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income
    
    $
    6,147
    
    
    $
    2,718
    
    
    $
    6,166
    
    
    $
    13,205Cumulative foreign currency translation
gains (losses), net of tax
    
    
    2,322
    
    
    
    (5,842
    )
    
    
    6,566
    
    
    
    (4,496
    )Minimum pension liability, net of tax
    
    
    153
    
    
    
    
    
    
    
    468
    
    
    
    Minimum post-retirement liability, net of tax
    
    
    (2,939
    )
    
    
    (56
    )
    
    
    (3,123
    )
    
    
    (169
    )Comprehensive income (loss)
    
    $
    5,683
    
    
    $
    (3,180
    )
    
    $
    10,078
    
    
    $
    8,540
 10




---



##### Table of Contents



9.
    
    Income TaxesThe Company accounts for income taxes by recognizing deferred tax assets and liabilities
using enacted tax rates for the effect of temporary differences between the financial
reporting and tax bases of recorded assets and liabilities. Deferred tax assets are reduced
by a valuation allowance if it is more likely than not that some portion of or all of the
deferred tax asset will not be realized.The Company adopted ASC Topic 805, Business Combinations effective January 1, 2009. Among
other matters, this establishes that the benefit of net operating loss carryovers reduce
current year income tax expense as the carryovers are utilized. In 2008 and prior, the tax
benefit from net operating loss carryovers from periods prior to emergence from bankruptcy
did not reduce the Companys current year provision for taxes, but instead adjusted the
goodwill amount.At the beginning of 2009, the Company had approximately $147,000 in U.S. net operating loss
carryovers of which $60,000 relate to the pre-emergence period. For 2009, the Companys
management estimates that actual cash income tax payments will, as in prior years, primarily
relate to state and foreign taxes due to the use of net operating loss carryovers to offset
U.S. taxable income.10.
    
    ContingenciesThe Company and certain of its wholly owned subsidiaries are defendants in various legal
actions, primarily related to welding fumes and other product liability claims. While there
is uncertainty relating to any litigation, management is of the opinion that the outcome of
this litigation will not have a material adverse effect on the Companys financial condition
or results of operations.The Company is party to certain environmental matters. Any related obligations are not
expected to have a material adverse effect on the Companys financial condition or results
of operations.All other legal proceedings and actions involving the Company are of an ordinary and routine
nature and are incidental to the operations of the Company. Management believes that such
proceedings should not, individually or in the aggregate, have a material adverse effect on
the Companys financial condition or on the results of operations.11.
    
    Stock Options and Stock-Based CompensationThe Company utilizes the modified prospective method of accounting for stock compensation,
and accordingly recognized compensation cost for all share-based payments, which consist of
stock options and restricted stock, granted after January 1, 2006. Stock compensation cost
included in selling, general and administrative expense was a net credit of $52 for the
three months ended September 30, 2009 and $738 of expense for the three months ended
September 30, 2008. For the nine months ended September 30, 2009, stock compensation cost
included in selling, general and administrative expense was a net credit of $616 due to the
failure to achieve required performance targets, and the resulting reversals of prior performance-based
accruals. This compares to $1,831 of expense for the nine months ended September 30, 2008.The estimated fair value of the restricted stock awards is determined as the closing price
of the stock as of the date of the awards. The estimated fair value of stock option grants
is computed using the Black-Scholes-Merton option-pricing model. Expected volatility is
based on historical periods generally commensurate with the expected life of options. The
expected life is based on historical experience. Stock option expense is recognized in the
consolidated condensed statements of operations ratably over the vesting period based on the
number of options that are expected to ultimately vest.
 11




---



##### Table of Contents



As of September 30, 2009, options to purchase 1,218,559 shares were outstanding under the
2004 Stock Incentive Plan and other specific agreements. Changes in stock options during the
nine months ended September 30, 2009 were as follows:
 Weighted-Weighted
    
    AverageAverage
    
    Remaining
    
    AggregateExercise
    
    Contractual
    
    IntrinsicEmployee and Director Stock Options
    
    Shares
    
    Price
    
    Term
    
    ValueOptions outstanding at December 31, 2008
    
    
    1,249,497
    
    
    $
    13.61Granted
    
    
    108,527
    
    
    $
    4.97Exercised
    
    
    Forfeited or expired
    
    
    (139,465
    )
    
    $
    14.36Options outstanding at September 30, 2009
    
    
    1,218,559
    
    
    $
    12.75
    
    
    
    5.8
    
    
    $
    202Options exercisable at September 30, 2009
    
    
    676,773
    
    
    $
    13.19
    
    
    
    5.2
    
    
    $
    28
 No options were exercised in the three or nine month periods ended September 30, 2009.
In the nine month period ended September 30, 2008, 131,931 options were exercised with a
value of $1,717. The fair value of options vested during the three-month and nine-month
periods ended September 30, 2009 were $137 and $682, respectively.The Company also granted 194,900 restricted shares in March 2009 to various salaried
employees which fully vest if the targeted return on invested operating capital (ROIOC) of
36% is achieved in any year during the five year period ending December 31, 2013.
Proportionate vesting occurs for ROIOC performance between 36% and 18% in any of those
performance years.At September 30, 2009, the total stock-based compensation cost related to non-vested awards
not yet recognized was approximately $486 and the weighted average period over which this
amount is expected to be recognized was approximately 2.28 years.12.
    
    Earnings (Loss) Per ShareThe calculation of net income (loss) per share follows:
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Numerator:Income (loss) applicable to common sharesContinuing operations
    
    $
    5,029
    
    
    $
    3,038
    
    
    $
    3,115
    
    
    $
    14,000Discontinued operations
    
    
    1,118
    
    
    
    (320
    )
    
    
    3,051
    
    
    
    (795
    )Net income
    
    $
    6,147
    
    
    $
    2,718
    
    
    $
    6,166
    
    
    $
    13,205Denominator:Weighted average shares for basic earnings per share
    
    
    13,537,019
    
    
    
    13,469,821
    
    
    
    13,525,386
    
    
    
    13,409,491Dilutive effect of stock options
    
    
    111,640
    
    
    
    396,699
    
    
    
    76,134
    
    
    
    101,388Weighted average shares for diluted earnings per share
    
    
    13,648,659
    
    
    
    13,866,520
    
    
    
    13,601,520
    
    
    
    13,510,879Basic income (loss) per share amounts:Continuing operations
    
    $
    0.37
    
    
    $
    0.22
    
    
    $
    0.23
    
    
    $
    1.04Discontinued operations
    
    $
    0.09
    
    
    $
    (0.02
    )
    
    
    0.23
    
    
    
    (0.06
    )Net income
    
    $
    0.46
    
    
    $
    0.20
    
    
    $
    0.46
    
    
    $
    0.98Diluted income (loss) per share amounts:Continuing operations
    
    $
    0.37
    
    
    $
    0.22
    
    
    $
    0.23
    
    
    $
    1.04Discontinued operations
    
    $
    0.08
    
    
    $
    (0.02
    )
    
    
    0.22
    
    
    
    (0.06
    )Net income
    
    $
    0.45
    
    
    $
    0.20
    
    
    $
    0.45
    
    
    $
    0.98
 12




---



##### Table of Contents



13.
    
    Employee Benefit PlansNet periodic pension and other postretirement benefit costs include the following
components:
 Pension Benefits
    
    
    Other Postretirement BenefitsThree Months Ended September 30,
    
    
    Three Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Components of the net periodic benefit cost:Service Cost
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Interest Cost
    
    
    321
    
    
    
    311
    
    
    
    
    
    
    
    52Expected return on plan assets
    
    
    (235
    )
    
    
    (365
    )
    
    
    
    
    
    
    Recognized (gain) loss
    
    
    161
    
    
    
    
    
    
    
    (217
    )
    
    
    Settlement gain
    
    
    
    
    
    
    
    
    
    
    (7,150
    )
    
    
    Net periodic benefit cost
    
    $
    247
    
    
    $
    (54
    )
    
    $
    (7,367
    )
    
    $
    52
 Pension Benefits
    
    
    Other Postretirement BenefitsNine Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Components of the net periodic benefit cost:Service Cost
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Interest Cost
    
    
    963
    
    
    
    933
    
    
    
    9
    
    
    
    156Expected return on plan assets
    
    
    (705
    )
    
    
    (1,095
    )
    
    
    
    
    
    
    Recognized (gain) loss
    
    
    483
    
    
    
    
    
    
    
    (217
    )
    
    
    Settlement gain
    
    
    
    
    
    
    
    
    
    
    (7,150
    )
    
    
    Net periodic benefit cost
    
    $
    741
    
    
    $
    (162
    )
    
    $
    (7,358
    )
    
    $
    156
 During the quarter ended September 30, 2009, the Company terminated its commitments to provide
future supplemental medical benefits for retirees. As a result, the Company reduced
previously recorded liabilities and recorded a one-time settlement gain totaling $7,150 in
the third quarter of 2009.14.
    
    Segment InformationThe Companys continuing operations are comprised of several product lines and operating
locations. The similarity of products, paths to market, end users, and production processes
result in performance evaluation and decisions regarding allocation of resources being made
on a combined basis. Accordingly, management has concluded the Company operates in one
segment.Summarized financial information concerning the Companys geographic regions for its
continuing operations is shown in the following tables:
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net Sales:U.S.
    
    $
    48,746
    
    
    $
    74,103
    
    
    $
    147,210
    
    
    $
    225,001International:Australia
    
    
    19,988
    
    
    
    26,015
    
    
    
    50,175
    
    
    
    74,381Other
    
    
    20,767
    
    
    
    39,255
    
    
    
    60,232
    
    
    
    112,89340,755
    
    
    
    65,270
    
    
    
    110,407
    
    
    
    187,274Total
    
    $
    89,501
    
    
    $
    139,373
    
    
    $
    257,617
    
    
    $
    412,275
 13




---



##### Table of Contents



September 30,
    
    
    December 31,2009
    
    
    2008Identifiable Assets (excluding working
capital and intangibles):Americas
    
    $
    40,503
    
    
    $
    44,992Asia-Pacific
    
    
    7,990
    
    
    
    6,958Europe/Middle East
    
    
    1,982
    
    
    
    2,182$
    50,475
    
    
    $
    54,132
 Product Line InformationThe Company manufactures a variety of products, substantially all of which are used by
manufacturing, construction and foundry operations to cut, join and reinforce steel, aluminum
and other metals in various applications including construction, oil, gas rig and pipeline
construction, repair and maintenance of manufacturing equipment, and shipbuilding. The
following table shows sales from continuing operations for each of the Companys key product
lines:
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Gas equipment
    
    $
    31,718
    
    
    $
    52,030
    
    
    $
    90,218
    
    
    $
    153,477Arc accessories including torches, related consumable
parts and accessories
    
    
    15,249
    
    
    
    26,395
    
    
    
    45,213
    
    
    
    80,580Filler metals
    
    
    20,738
    
    
    
    26,921
    
    
    
    59,259
    
    
    
    77,400Plasma power supplies, torches and related consumable parts
    
    
    12,873
    
    
    
    19,976
    
    
    
    38,705
    
    
    
    60,267Welding equipment
    
    
    8,923
    
    
    
    14,051
    
    
    
    24,222
    
    
    
    40,551$
    89,501
    
    
    $
    139,373
    
    
    $
    257,617
    
    
    $
    412,275
 15.
    
    Restructuring and Other Charges
 In the first quarter of 2009, the Company offered a voluntary retirement program and the
Company accrued restructuring charges for $1,300 in separation pay and COBRA benefits
payable under the program. The amounts have been substantially paid through August 2009.During the quarter ended September 30, 2009, the Company recorded restructuring charges of
$1,400 for severance expenses. The charges relate to manufacturing personnel placed on
permanent lay-off status, salaried positions eliminated in connection with further
organizational restructurings, and additional personnel electing to participate in a
voluntary retirement program initiated in the first quarter.16.
    
    Condensed Consolidating Financial StatementsCertain of the Companys wholly owned subsidiaries (Guarantor Subsidiaries) fully and
unconditionally provided guarantees under the Companys various borrowing arrangements and
are jointly and severally liable for certain payments under these agreements. Each of the
Guarantor Subsidiaries is wholly owned by the Company.The following financial information presents the guarantors and non-guarantors as of
September 30, 2009 and December 31, 2008, in accordance with Rule 3-10 of Regulation S-X.
The condensed consolidating financial information includes the accounts of the Company,
which has no independent assets or operations, the combined accounts of the Guarantor
Subsidiaries and the combined accounts of the non-guarantor subsidiaries for the periods
indicated. Separate financial statements of each of the Guarantor Subsidiaries are not
presented because management has determined such information is not material in assessing
the financial condition, cash flows or results of operations of the Company and its
subsidiaries. This information was prepared on the same basis as the consolidated financial
statements.
 14




---



##### Table of Contents



THERMADYNE HOLDINGS CORPORATION
CONDENSED CONSOLIDATING BALANCE SHEET
SEPTEMBER 30, 2009
(unaudited)
(In thousands)
 ParentThermadyneHoldings
    
    
    
    
    
    
    Non-Corporation
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent Assets:Cash and cash equivalents
    
    $
    
    
    
    $
    12,005
    
    
    $
    6,855
    
    
    $
    
    
    
    $
    18,860Accounts receivable, net
    
    
    
    
    
    
    51,441
    
    
    
    5,577
    
    
    
    
    
    
    
    57,018Inventories
    
    
    
    
    
    
    68,899
    
    
    
    8,577
    
    
    
    
    
    
    
    77,476Prepaid expenses and other
    
    
    
    
    
    
    4,307
    
    
    
    1,133
    
    
    
    
    
    
    
    5,440Deferred tax assets
    
    
    
    
    
    
    2,277
    
    
    
    
    
    
    
    
    
    
    
    2,277Total current assets
    
    
    
    
    
    
    138,929
    
    
    
    22,142
    
    
    
    
    
    
    
    161,071Property, plant and equipment, net
    
    
    
    
    
    
    43,086
    
    
    
    3,630
    
    
    
    
    
    
    
    46,716Goodwill
    
    
    
    
    
    
    187,503
    
    
    
    
    
    
    
    
    
    
    
    187,503Intangibles, net
    
    
    
    
    
    
    51,193
    
    
    
    7,819
    
    
    
    
    
    
    
    59,012Other assets
    
    
    2,175
    
    
    
    1,870
    
    
    
    
    
    
    
    
    
    
    
    4,045Investment in and advances to subsidiaries
    
    
    202,877
    
    
    
    
    
    
    
    
    
    
    
    (202,877
    )
    
    
    Total assets
    
    $
    205,052
    
    
    $
    422,581
    
    
    $
    33,591
    
    
    $
    (202,877
    )
    
    $
    458,347LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)Current Liabilities:Working capital facility
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Current maturities of long-term obligations
    
    
    463
    
    
    
    1,923
    
    
    
    292
    
    
    
    
    
    
    
    2,678Accounts payable
    
    
    
    
    
    
    18,786
    
    
    
    2,810
    
    
    
    
    
    
    
    21,596Accrued and other liabilities
    
    
    
    
    
    
    21,172
    
    
    
    5,899
    
    
    
    
    
    
    
    27,071Accrued interest
    
    
    3,062
    
    
    
    80
    
    
    
    
    
    
    
    
    
    
    
    3,142Income taxes payable
    
    
    
    
    
    
    1,326
    
    
    
    (16
    )
    
    
    
    
    
    
    1,310Deferred tax liability
    
    
    
    
    
    
    3,253
    
    
    
    
    
    
    
    
    
    
    
    3,253Total current liabilities
    
    
    3,525
    
    
    
    46,540
    
    
    
    8,985
    
    
    
    
    
    
    
    59,050Long-term obligations, less current maturities
    
    
    175,000
    
    
    
    30,976
    
    
    
    542
    
    
    
    
    
    
    
    206,518Deferred tax liabilities
    
    
    
    
    
    
    51,416
    
    
    
    
    
    
    
    
    
    
    
    51,416Other long-term liabilities
    
    
    1,542
    
    
    
    11,337
    
    
    
    624
    
    
    
    
    
    
    
    13,503Shareholders equity (deficit):Common stock
    
    
    135
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135Additional paid-in-capital
    
    
    188,735
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    188,735Accumulated deficit
    
    
    (63,078
    )
    
    
    51,655
    
    
    
    (67,320
    )
    
    
    15,664
    
    
    
    (63,079
    )Accumulated other comprehensive income (loss)
    
    
    2,069
    
    
    
    (22,185
    )
    
    
    (5,120
    )
    
    
    27,305
    
    
    
    2,069Total shareholders equity (deficit)
    
    
    127,861
    
    
    
    29,470
    
    
    
    (72,440
    )
    
    
    42,969
    
    
    
    127,860Net equity (deficit) and advances to / from subsidiaries
    
    
    (102,876
    )
    
    
    252,842
    
    
    
    95,880
    
    
    
    (245,846
    )
    
    
    Total liabilities and shareholders equity (deficit)
    
    $
    205,052
    
    
    $
    422,581
    
    
    $
    33,591
    
    
    $
    (202,877
    )
    
    $
    458,347
 15




---



##### Table of Contents



THERMADYNE HOLDINGS CORPORATION
CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2008
(In thousands)
 ParentThermadyneHoldings
    
    
    
    
    
    
    Non-Corporation
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent Assets:Cash and cash equivalents
    
    $
    
    
    
    $
    6,301
    
    
    $
    5,615
    
    
    $
    
    
    
    $
    11,916Accounts receivable, net
    
    
    
    
    
    
    63,760
    
    
    
    8,284
    
    
    
    
    
    
    
    72,044Inventories
    
    
    
    
    
    
    90,220
    
    
    
    12,259
    
    
    
    
    
    
    
    102,479Prepaid expenses and other
    
    
    
    
    
    
    4,653
    
    
    
    790
    
    
    
    
    
    
    
    5,443Assets held for sale
    
    
    
    
    
    
    
    
    
    
    916
    
    
    
    
    
    
    
    916Deferred tax assets
    
    
    
    
    
    
    2,277
    
    
    
    
    
    
    
    
    
    
    
    2,277Total current assets
    
    
    
    
    
    
    167,211
    
    
    
    27,864
    
    
    
    
    
    
    
    195,075Property, plant and equipment, net
    
    
    
    
    
    
    43,295
    
    
    
    4,206
    
    
    
    
    
    
    
    47,501Goodwill
    
    
    
    
    
    
    184,043
    
    
    
    
    
    
    
    
    
    
    
    184,043Intangibles, net
    
    
    
    
    
    
    53,166
    
    
    
    7,617
    
    
    
    
    
    
    
    60,783Other assets
    
    
    5,541
    
    
    
    1,426
    
    
    
    
    
    
    
    
    
    
    
    6,967Investment in and advances to subsidiaries
    
    
    191,869
    
    
    
    
    
    
    
    
    
    
    
    (191,869
    )
    
    
    Total assets
    
    $
    197,410
    
    
    $
    449,141
    
    
    $
    39,687
    
    
    $
    (191,869
    )
    
    $
    494,369LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)Current Liabilities:Working capital facility
    
    $
    
    
    
    $
    32,531
    
    
    $
    
    
    
    $
    
    
    
    $
    32,531Current maturities of long-term obligations
    
    
    
    
    
    
    1,702
    
    
    
    358
    
    
    
    
    
    
    
    2,060Accounts payable
    
    
    
    
    
    
    26,132
    
    
    
    4,691
    
    
    
    
    
    
    
    30,823Accrued and other liabilities
    
    
    
    
    
    
    26,673
    
    
    
    1,622
    
    
    
    
    
    
    
    28,295Accrued interest
    
    
    6,412
    
    
    
    146
    
    
    
    
    
    
    
    
    
    
    
    6,558Income taxes payable
    
    
    
    
    
    
    2,798
    
    
    
    51
    
    
    
    
    
    
    
    2,849Deferred tax liability
    
    
    
    
    
    
    3,253
    
    
    
    
    
    
    
    
    
    
    
    3,253Liabilities related to assets held for sale
    
    
    
    
    
    
    
    
    
    
    5,266
    
    
    
    
    
    
    
    5,266Total current liabilities
    
    
    6,412
    
    
    
    93,235
    
    
    
    11,988
    
    
    
    
    
    
    
    111,635Long-term obligations, less current maturities
    
    
    175,000
    
    
    
    23,761
    
    
    
    693
    
    
    
    
    
    
    
    199,454Deferred tax liabilities
    
    
    
    
    
    
    47,292
    
    
    
    
    
    
    
    
    
    
    
    47,292Other long-term liabilities
    
    
    2,991
    
    
    
    14,155
    
    
    
    539
    
    
    
    
    
    
    
    17,685Shareholders equity (deficit):Common stock
    
    
    135
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135Additional paid-in-capital
    
    
    189,256
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    189,256Accumulated deficit
    
    
    (69,244
    )
    
    
    34,540
    
    
    
    (67,892
    )
    
    
    33,351
    
    
    
    (69,245
    )Accumulated other comprehensive income (loss)
    
    
    (1,844
    )
    
    
    (16,065
    )
    
    
    (4,060
    )
    
    
    20,126
    
    
    
    (1,843
    )Total shareholders equity (deficit)
    
    
    118,303
    
    
    
    18,475
    
    
    
    (71,952
    )
    
    
    53,477
    
    
    
    118,303Net equity (deficit) and advances to / from subsidiaries
    
    
    (105,296
    )
    
    
    252,223
    
    
    
    98,419
    
    
    
    (245,346
    )
    
    
    Total liabilities and shareholders equity (deficit)
    
    $
    197,410
    
    
    $
    449,141
    
    
    $
    39,687
    
    
    $
    (191,869
    )
    
    $
    494,369
 16




---



##### Table of Contents



THERMADYNE HOLDINGS CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2009
(unaudited)
(In thousands)
 ParentThermadyneHoldings
    
    
    
    
    
    
    Non-Corporation
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    262,972
    
    
    $
    20,625
    
    
    $
    (25,980
    )
    
    $
    257,617Cost of goods sold
    
    
    
    
    
    
    193,196
    
    
    
    16,260
    
    
    
    (26,939
    )
    
    
    182,517Gross margin
    
    
    
    
    
    
    69,776
    
    
    
    4,365
    
    
    
    959
    
    
    
    75,100Selling, general and administrative expenses
    
    
    (616
    )
    
    
    55,863
    
    
    
    4,422
    
    
    
    
    
    
    
    59,669Amortization of intangibles
    
    
    
    
    
    
    2,016
    
    
    
    
    
    
    
    
    
    
    
    2,016Net periodic postretirement benefits
    
    
    
    
    
    
    (208
    )
    
    
    
    
    
    
    
    
    
    
    (208
    )Operating income (loss)
    
    
    616
    
    
    
    12,105
    
    
    
    (57
    )
    
    
    959
    
    
    
    13,623Other income (expense):Interest, net
    
    
    (12,721
    )
    
    
    (2,361
    )
    
    
    (39
    )
    
    
    
    
    
    
    (15,121
    )Amortization of deferred financing costs
    
    
    (375
    )
    
    
    (373
    )
    
    
    (1
    )
    
    
    
    
    
    
    (749
    )Equity in net income (loss) of subsidiaries
    
    
    18,646
    
    
    
    
    
    
    
    
    
    
    
    (18,646
    )
    
    
    Settlement of retiree medical obligations
    
    
    
    
    
    
    7,150
    
    
    
    
    
    
    
    
    
    
    
    7,150Income (loss) from continuing operations before income
tax provision and discontinued operations
    
    
    6,166
    
    
    
    16,521
    
    
    
    (97
    )
    
    
    (17,687
    )
    
    
    4,903Income tax provision
    
    
    
    
    
    
    1,360
    
    
    
    428
    
    
    
    
    
    
    
    1,788Income (loss) from continuing operations
    
    
    6,166
    
    
    
    15,161
    
    
    
    (525
    )
    
    
    (17,687
    )
    
    
    3,115Gain from discontinued operations, net of tax
    
    
    
    
    
    
    1,954
    
    
    
    1,097
    
    
    
    
    
    
    
    3,051Net income (loss)
    
    $
    6,166
    
    
    $
    17,115
    
    
    $
    572
    
    
    $
    (17,687
    )
    
    $
    6,166
 17




---



##### Table of Contents



THERMADYNE HOLDINGS CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2009
(unaudited)
(In thousands)
 ParentThermadyneHoldings
    
    
    
    
    
    
    Non-Corporation
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    80,434
    
    
    $
    7,808
    
    
    $
    1,259
    
    
    $
    89,501Cost of goods sold
    
    
    
    
    
    
    54,327
    
    
    
    5,970
    
    
    
    409
    
    
    
    60,706Gross margin
    
    
    
    
    
    
    26,107
    
    
    
    1,838
    
    
    
    850
    
    
    
    28,795Selling, general and administrative expenses
    
    
    52
    
    
    
    20,454
    
    
    
    1,462
    
    
    
    
    
    
    
    21,968Amortization of intangibles
    
    
    
    
    
    
    672
    
    
    
    1
    
    
    
    
    
    
    
    673Net periodic postretirement benefits
    
    
    
    
    
    
    (217
    )
    
    
    
    
    
    
    
    
    
    
    (217
    )Operating income (loss)
    
    
    (52
    )
    
    
    5,198
    
    
    
    375
    
    
    
    850
    
    
    
    6,371Other income (expenses):Interest, net
    
    
    (4,479
    )
    
    
    (1,087
    )
    
    
    (11
    )
    
    
    
    
    
    
    (5,577
    )Amortization of deferred financing costs
    
    
    (125
    )
    
    
    (150
    )
    
    
    (1
    )
    
    
    
    
    
    
    (276
    )Equity in net income (loss) of subsidiaries
    
    
    10,803
    
    
    
    
    
    
    
    
    
    
    
    (10,803
    )
    
    
    Settlement of retiree medical obligations
    
    
    
    
    
    
    7,150
    
    
    
    
    
    
    
    
    
    
    
    7,150Income (loss) from continuing operations before income
tax provision and discontinued operations
    
    
    6,147
    
    
    
    11,111
    
    
    
    363
    
    
    
    (9,953
    )
    
    
    7,668Income tax provision
    
    
    
    
    
    
    2,401
    
    
    
    238
    
    
    
    
    
    
    
    2,639Income (loss) from continuing operations
    
    
    6,147
    
    
    
    8,710
    
    
    
    125
    
    
    
    (9,953
    )
    
    
    5,029Gain (loss) from discontinued operations, net of tax
    
    
    
    
    
    
    1,954
    
    
    
    (836
    )
    
    
    
    
    
    
    1,118Net income (loss)
    
    $
    6,147
    
    
    $
    10,664
    
    
    $
    (711
    )
    
    $
    (9,953
    )
    
    $
    6,147
 18




---



##### Table of Contents



THERMADYNE HOLDINGS CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2008
(unaudited)
(In thousands)
 ParentThermadyneHoldings
    
    
    
    
    
    
    Non-Corporation
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    468,534
    
    
    $
    38,360
    
    
    $
    (94,619
    )
    
    $
    412,275Cost of goods sold
    
    
    
    
    
    
    345,765
    
    
    
    28,161
    
    
    
    (94,993
    )
    
    
    278,933Gross margin
    
    
    
    
    
    
    122,769
    
    
    
    10,199
    
    
    
    374
    
    
    
    133,342Selling, general and administrative expenses
    
    
    1,288
    
    
    
    82,024
    
    
    
    4,107
    
    
    
    
    
    
    
    87,419Amortization of intangibles
    
    
    
    
    
    
    2,004
    
    
    
    1
    
    
    
    
    
    
    
    2,005Net periodic postretirement benefits
    
    
    
    
    
    
    156
    
    
    
    
    
    
    
    
    
    
    
    156Operating income (loss)
    
    
    (1,288
    )
    
    
    38,585
    
    
    
    6,091
    
    
    
    374
    
    
    
    43,762Other income (expense):Interest, net
    
    
    (12,511
    )
    
    
    (3,236
    )
    
    
    (47
    )
    
    
    
    
    
    
    (15,794
    )Amortization of deferred financing costs
    
    
    (375
    )
    
    
    (328
    )
    
    
    
    
    
    
    
    
    
    
    (703
    )Equity in net income (loss) of subsidiaries
    
    
    27,379
    
    
    
    
    
    
    
    
    
    
    
    (27,379
    )
    
    
    Other
    
    
    
    
    
    
    (149
    )
    
    
    
    
    
    
    
    
    
    
    (149
    )Income (loss) from continuing operations before income
tax provision and discontinued operations
    
    
    13,205
    
    
    
    34,872
    
    
    
    6,044
    
    
    
    (27,005
    )
    
    
    27,116Income tax provision
    
    
    
    
    
    
    11,861
    
    
    
    1,255
    
    
    
    
    
    
    
    13,116Income (loss) from continuing operations
    
    
    13,205
    
    
    
    23,011
    
    
    
    4,789
    
    
    
    (27,005
    )
    
    
    14,000Loss from discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    (795
    )
    
    
    
    
    
    
    (795
    )Net income (loss)
    
    $
    13,205
    
    
    $
    23,011
    
    
    $
    3,994
    
    
    $
    (27,005
    )
    
    $
    13,205
 19




---



##### Table of Contents



THERMADYNE HOLDINGS CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2008
(unaudited)
(In thousands)
 ParentThermadyneHoldings
    
    
    
    
    
    
    Non-Corporation
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    162,430
    
    
    $
    15,179
    
    
    $
    (38,236
    )
    
    $
    139,373Cost of goods sold
    
    
    
    
    
    
    122,251
    
    
    
    11,403
    
    
    
    (38,177
    )
    
    
    95,477Gross margin
    
    
    
    
    
    
    40,179
    
    
    
    3,776
    
    
    
    (59
    )
    
    
    43,896Selling, general and administrative expenses
    
    
    738
    
    
    
    28,142
    
    
    
    1,414
    
    
    
    
    
    
    
    30,294Amortization of intangibles
    
    
    
    
    
    
    669
    
    
    
    
    
    
    
    
    
    
    
    669Net periodic postretirement benefits
    
    
    
    
    
    
    52
    
    
    
    
    
    
    
    
    
    
    
    52Operating income (loss)
    
    
    (738
    )
    
    
    11,316
    
    
    
    2,362
    
    
    
    (59
    )
    
    
    12,881Other income (expenses):Interest, net
    
    
    (4,191
    )
    
    
    (935
    )
    
    
    (11
    )
    
    
    
    
    
    
    (5,137
    )Amortization of deferred financing costs
    
    
    (125
    )
    
    
    (110
    )
    
    
    
    
    
    
    
    
    
    
    (235
    )Equity in net income (loss) of subsidiaries
    
    
    7,772
    
    
    
    
    
    
    
    
    
    
    
    (7,772
    )
    
    
    Other
    
    
    
    
    
    
    (28
    )
    
    
    
    
    
    
    
    
    
    
    (28
    )Income (loss) from continuing operations before income
tax provision and discontinued operations
    
    
    2,718
    
    
    
    10,243
    
    
    
    2,351
    
    
    
    (7,831
    )
    
    
    7,481Income tax provision
    
    
    
    
    
    
    3,917
    
    
    
    526
    
    
    
    
    
    
    
    4,443Income (loss) from continuing operations
    
    
    2,718
    
    
    
    6,326
    
    
    
    1,825
    
    
    
    (7,831
    )
    
    
    3,038Loss from discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    (320
    )
    
    
    
    
    
    
    (320
    )Net income (loss)
    
    $
    2,718
    
    
    $
    6,326
    
    
    $
    1,505
    
    
    $
    (7,831
    )
    
    $
    2,718
 20




---



##### Table of Contents



THERMADYNE HOLDINGS CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2009
(unaudited)
(In thousands)
 ParentThermadyneHoldings
    
    
    
    
    
    
    Non-Corporation
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCash flows from continuing operations:Net cash provided by (used in) operating activities
    
    $
    1,742
    
    
    $
    42,187
    
    
    $
    4,735
    
    
    $
    (17,687
    )
    
    $
    30,977Cash flows from investing activities:Capital expenditures
    
    
    
    
    
    
    (4,560
    )
    
    
    (66
    )
    
    
    
    
    
    
    (4,626
    )Other
    
    
    
    
    
    
    (43
    )
    
    
    (202
    )
    
    
    
    
    
    
    (245
    )Net cash provided by (used in) investing activities
    
    
    
    
    
    
    (4,603
    )
    
    
    (268
    )
    
    
    
    
    
    
    (4,871
    )Cash flows from financing activities:Borrowings under Working Capital Facility
    
    
    
    
    
    
    8,923
    
    
    
    
    
    
    
    
    
    
    
    8,923Repayments under Working Capital Facility
    
    
    
    
    
    
    (41,454
    )
    
    
    
    
    
    
    
    
    
    
    (41,454
    )Borrowings of Second-Lien Facility and other
    
    
    
    
    
    
    25,075
    
    
    
    
    
    
    
    
    
    
    
    25,075Repayments of Second-Lien Facility and other
    
    
    
    
    
    
    (16,391
    )
    
    
    (239
    )
    
    
    
    
    
    
    (16,630
    )Changes in net equity
    
    
    (8,588
    )
    
    
    619
    
    
    
    (2,539
    )
    
    
    10,508
    
    
    
    Advances to / from discontinued operations
    
    
    3,605
    
    
    
    (9,774
    )
    
    
    1,388
    
    
    
    7,179
    
    
    
    2,398Other
    
    
    3,241
    
    
    
    (2,266
    )
    
    
    (1
    )
    
    
    
    
    
    
    974Net cash provided by (used in) financing activities
    
    
    (1,742
    )
    
    
    (35,268
    )
    
    
    (1,391
    )
    
    
    17,687
    
    
    
    (20,714
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    1,434
    
    
    
    118
    
    
    
    
    
    
    
    1,552Net cash provided by (used in) continuing operations
    
    
    
    
    
    
    3,750
    
    
    
    3,194
    
    
    
    
    
    
    
    6,944Cash flows from discontinued operations:Net cash provided by operating activities
    
    
    
    
    
    
    1,954
    
    
    
    (3,445
    )
    
    
    
    
    
    
    (1,491
    )Net cash provided by sales of discontinued operations
    
    
    
    
    
    
    
    
    
    
    1,783
    
    
    
    
    
    
    
    1,783Advances from (to) continuing operations
    
    
    
    
    
    
    
    
    
    
    (1,071
    )
    
    
    
    
    
    
    (1,071
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    194
    
    
    
    
    
    
    
    194Net cash provided by (used in) discontinued operations
    
    
    
    
    
    
    1,954
    
    
    
    (2,539
    )
    
    
    
    
    
    
    (585
    )Total increase (decrease) in cash and cash equivalents
    
    
    
    
    
    
    5,704
    
    
    
    655
    
    
    
    
    
    
    
    6,359Total cash and cash equivalents beginning of period
    
    
    
    
    
    
    6,301
    
    
    
    6,200
    
    
    
    
    
    
    
    12,501Total cash and cash equivalents end of period
    
    $
    
    
    
    $
    12,005
    
    
    $
    6,855
    
    
    $
    
    
    
    $
    18,860
 21




---



##### Table of Contents



THERMADYNE HOLDINGS CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2008
(unaudited)
(In thousands)
 ParentThermadyneHoldings
    
    
    
    
    
    
    Non-Corporation
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCash flows from continuing operations:Net cash provided by (used in) operating activities
    
    $
    8,520
    
    
    $
    31,599
    
    
    $
    (1,101
    )
    
    $
    (23,591
    )
    
    $
    15,427Cash flows from investing activities:Capital expenditures
    
    
    
    
    
    
    (7,148
    )
    
    
    (977
    )
    
    
    
    
    
    
    (8,125
    )Proceeds from sales of assets
    
    
    
    
    
    
    500
    
    
    
    
    
    
    
    
    
    
    
    500Purchase of outside interest in joint venture
    
    
    824
    
    
    
    
    
    
    
    (3,837
    )
    
    
    
    
    
    
    (3,013
    )Other
    
    
    
    
    
    
    (138
    )
    
    
    (253
    )
    
    
    
    
    
    
    (391
    )Net cash provided by (used in) investing activities
    
    
    824
    
    
    
    (6,786
    )
    
    
    (5,067
    )
    
    
    
    
    
    
    (11,029
    )Cash flows from financing activities:Borrowings under Working Capital Facility
    
    
    
    
    
    
    24,461
    
    
    
    
    
    
    
    
    
    
    
    24,461Repayments under Working Capital Facility
    
    
    
    
    
    
    (8,750
    )
    
    
    
    
    
    
    
    
    
    
    (8,750
    )Repayments of other debt
    
    
    
    
    
    
    (22,810
    )
    
    
    (19
    )
    
    
    
    
    
    
    (22,829
    )Changes in net equity and advances to / from discontinued operations
    
    
    (12,849
    )
    
    
    (23,103
    )
    
    
    9,039
    
    
    
    23,591
    
    
    
    (3,322
    )Other
    
    
    3,505
    
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    3,498Net cash provided by (used in) financing activities
    
    
    (9,344
    )
    
    
    (30,209
    )
    
    
    9,020
    
    
    
    23,591
    
    
    
    (6,942
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    172
    
    
    
    (56
    )
    
    
    
    
    
    
    116Net cash provided by (used in) continuing operations
    
    
    
    
    
    
    (5,224
    )
    
    
    2,796
    
    
    
    
    
    
    
    (2,428
    )Cash flows from discontinued operations:Net cash used in operating activities
    
    
    
    
    
    
    
    
    
    
    (2,711
    )
    
    
    
    
    
    
    (2,711
    )Net cash provided by sales of discontinued operations
    
    
    
    
    
    
    
    
    
    
    500
    
    
    
    
    
    
    
    500Advances from (to) continuing operations
    
    
    
    
    
    
    
    
    
    
    2,204
    
    
    
    
    
    
    
    2,204Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    (42
    )
    
    
    
    
    
    
    (42
    )Net cash used in discontinued operations
    
    
    
    
    
    
    
    
    
    
    (49
    )
    
    
    
    
    
    
    (49
    )Total increase (decrease) in cash and cash equivalents
    
    
    
    
    
    
    (5,224
    )
    
    
    2,747
    
    
    
    
    
    
    
    (2,477
    )Total cash and cash equivalents beginning of period
    
    
    
    
    
    
    14,637
    
    
    
    1,798
    
    
    
    
    
    
    
    16,435Total cash and cash equivalents end of period
    
    $
    
    
    
    $
    9,413
    
    
    $
    4,545
    
    
    $
    
    
    
    $
    13,958
 22




---



##### Table of Contents



Item 2.
 MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Overview
    Cautionary Statement Concerning Forward-looking Statements
  23




---



##### Table of Contents



Key Indicators
    RESULTS OF OPERATIONS
  Net sales
 Three Months Ended September 30,
    
    
    
    
    
    
    Nine Months Ended September 30,(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    % Change
    
    
    2009
    
    
    2008
    
    
    % ChangeNet sales summary:U.S.
    
    $
    48,746
    
    
    $
    74,103
    
    
    
    (34.2
    %)
    
    $
    147,210
    
    
    $
    225,001
    
    
    
    (34.6
    %)International
    
    
    40,755
    
    
    
    65,270
    
    
    
    (37.6
    %)
    
    
    110,407
    
    
    
    187,274
    
    
    
    (41.0
    %)Consolidated
    
    $
    89,501
    
    
    $
    139,373
    
    
    
    (35.8
    %)
    
    $
    257,617
    
    
    $
    412,275
    
    
    
    (37.5
    %)
   24




---



##### Table of Contents



Gross margin
 Three Months Ended September 30,
    
    
    
    
    
    Nine Months Ended September 30,(Dollars in thousands)
    
    2009
    
    2008
    
    % Change
    
    2009
    
    2008
    
    % ChangeGross margin
    
    $
    28,795
    
    
    $
    43,896
    
    
    
    (34.4
    %)
    
    $
    75,100
    
    
    $
    133,342
    
    
    
    (43.7
    %)Gross margin as a
percent of net sales
    
    
    32.2
    %
    
    
    31.5
    %
    
    
    
    
    
    
    29.2
    %
    
    
    32.3
    %
   Selling, general and administrative expenses
 Three Months Ended September 30,
    
    
    
    
    
    Nine Months Ended September 30,(Dollars in thousands)
    
    2009
    
    2008
    
    % Change
    
    2009
    
    2008
    
    % ChangeSelling, general and
administrative expenses
    
    $
    21,968
    
    
    $
    30,294
    
    
    
    (27.5
    %)
    
    $
    59,669
    
    
    $
    87,419
    
    
    
    (31.7
    %)SG&A as a percent of net sales
    
    
    24.5
    %
    
    
    21.7
    %
    
    
    
    
    
    
    23.2
    %
    
    
    21.2
    %
   Interest, net
 Three Months Ended September 30,
    
    
    
    
    
    Nine Months Ended September 30,(Dollars in thousands)
    
    2009
    
    2008
    
    % Change
    
    2009
    
    2008
    
    % ChangeInterest, net
    
    $
    5,577
    
    
    $
    5,137
    
    
    
    8.6
    %
    
    $
    15,121
    
    
    $
    15,794
    
    
    
    (4.3
    %)
 25




---



##### Table of Contents



Other Income
  Income tax provision (benefit)
 Three Months Ended September 30,
    
    
    
    
    
    Nine Months Ended September 30,(Dollars in thousands)
    
    2009
    
    2008
    
    % Change
    
    2009
    
    2008
    
    % ChangeIncome tax provision
(benefit)
    
    $
    2,639
    
    
    $
    4,443
    
    
    
    (40.6
    %)
    
    $
    1,788
    
    
    $
    13,116
    
    
    
    (86.4
    %)
   Income (loss) from discontinued operations
 Three Months Ended September 30,
    
    
    
    
    
    Nine Months Ended September 30,(Dollars in thousands)
    
    2009
    
    2008
    
    % Change
    
    2009
    
    2008
    
    % ChangeIncome (loss) from
discontinued
operations
    
    $
    1,118
    
    
    $
    (320
    )
    
    
    (449.4
    %)
    
    $
    3,051
    
    
    $
    (795
    )
    
    
    (483.8
    %)
   26




---



##### Table of Contents



RECENT ACCOUNTING PRONOUNCEMENTS
 Business Combinations
 Subsequent Events
  LIQUIDITY AND CAPITAL RESOURCES
   Nine Months EndedSeptember 30,(Dollars in thousands)
    
    2009
    
    
    2008Net cash provided by (used in) continuing operations :Operating activities
    
    $
    30,977
    
    
    $
    15,427Investing activities
    
    
    (4,871
    )
    
    
    (11,029
    )Financing activities
    
    
    (20,714
    )
    
    
    (6,942
    )Effect of exchange rates
    
    
    1,552
    
    
    
    116Cash provided by (used in) continuing operations
    
    $
    6,944
    
    
    $
    (2,428
    )
 Operating Activities
  27




---



##### Table of Contents



Investing Activities
  Financing Activities
        28




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
     
 Item 4. Controls and Procedures
  29




---



##### Table of Contents



Item 1. Legal Proceedings
 Contingencies
 
 Item 6. Exhibits
 4.1
    
    2009 Amended and Restated Second Lien Credit Agreement dated as
of August 14, 2009, by and among Thermadyne Industries, Inc., Thermal Dynamics
Corporation, Victor Equipment Company, C&G Merger Co., Stoody Company, and
Thermadyne International Corp., as borrowers, the guarantors party thereto, the
lenders parties thereto, and Regions Bank, as administrative agent, collateral
agent and funding agent.10.1
    
    Amended and Restated Employment Agreement by and among Thermadyne
Holdings Corporation, its subsidiaries and Martin Quinn, dated August 17, 2009
(incorporated by reference to Exhibit 10.1 to the Companys Current Report on
Form 8-K (File No.001-13023) filed on August 21, 2009 (the August 21, 2009
8-K)).10.2
    
    Third Amended and Restated Employment Agreement by and among
Thermadyne Holdings Corporation, its subsidiaries and Terry Downes, dated August
17, 2009 (incorporated by reference to Exhibit 10.2 to the August 21, 2009 8-K).10.3
    
    Amended and Restated Employment Agreement by and among Thermadyne
Holdings Corporation, its subsidiaries and Paul Melnuk, dated August 17, 2009
(incorporated by reference to Exhibit 10.3 to the August 21, 2009 8-K).10.4
    
    Lease Modification and Extension Agreement effective October 1,
2009, by and among Bowling Green Area Economic Development Authority, Inc.,
successor to Bowling Green-Warren County Industrial Park Authority, Inc., Stoody
Company, Themadyne Industries, Inc. and Thermadyne Holdings Corporation
(incorporated by reference to Exhibit 10.1 to the October 8, 2009 8-K).31.1
    
    CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 (Exchange Act Rule 13a-14(a))31.2
    
    CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 (Exchange Act Rule 13a-14(a))32.1
    
    CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (18 U.S.C. Section 1350 and Exchange Act Rule 13a-14(b))32.2
    
    CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (18 U.S.C. Section 1350 and Exchange Act Rule 13a-14(b))
 30




---



##### Table of Contents



SIGNATURES
  THERMADYNE HOLDINGS CORPORATIONBy:
    /s/ Steven A. SchummSteven A. SchummChief Financial and Administrative Officer
(Principal Financial and Accounting Officer)  31