Actuant (NYSE:ATU)
Historical Stock Chart
2 Years : From May 2011 to May 2013
Actuant Corporation (NYSE: ATU) today announced results for its second
quarter ended February 29, 2012.
Highlights
-
Delivered record second quarter diluted earnings per share (“EPS”) of
$0.43, a 43% year-over-year increase.
-
Core sales growth of 8% (total sales less the impact of acquisitions,
divestitures and foreign currency rate changes) with double digit core
sales growth in three of the four segments.
-
Year-over-year operating profit margin expansion of 190 basis points.
-
Cash flow from operations of $32 million, a year-over-year increase of
128%.
-
Completed the acquisition of Jeyco, strengthening our energy presence
in the fast growing Australia/Southeast Asia region.
-
Increased full year EPS guidance to $1.98-2.08 reflecting strong
second quarter results and expected continued momentum in the second
half of the year.
Robert C. Arzbaecher, Chairman and CEO of Actuant commented, “We are
very pleased with the results for the second quarter as sales, EPS and
cash flow were all above expectations. During the normally seasonally
weak second quarter, broad-based strength continued across many of our
served end markets, resulting in an 8% increase in year-over-year core
sales. We achieved record second quarter EPS of $0.43 through the
combination of higher sales and robust year-over-year margin
improvement. Our strategic initiatives and proven business model now
have delivered nine consecutive quarters of year-over-year sales, margin
and EPS growth and we are on track to deliver the highest free cash flow
year in Actuant’s history. I want to thank our global team for their
continued solid execution.”
Consolidated Results
Consolidated sales for the second quarter were $378 million, 14% higher
than the comparable prior year quarter. Core sales increased 8% with
acquisitions contributing 7% partially offset by a negative 1% impact of
the stronger US dollar. Fiscal 2012 second quarter net earnings from
continuing operations were $32.2 million compared to $22.1 million in
the comparable prior year quarter. EPS of $0.43 in the second quarter of
fiscal 2012 was 43% higher than the $0.30 in the comparable prior year
quarter.
Sales for the six months ended February 29, 2012 were $771 million, 19%
higher than the $649 million in the comparable prior year period.
Excluding the 11% impact of acquisitions (insignificant foreign currency
impact), year-to-date core sales increased 8%. Earnings and EPS from
continuing operations for the six months ended February 29, 2012 were
$69.3 million, or $0.94 per diluted share, compared to $48.8 million, or
$0.66 per diluted share for the comparable prior year period.
Segment Results
Industrial Segment
(US $ in millions)
Three Months Ended
Six Months Ended
February 29,
February 28,
February 29,
February 28,
2012
2011
2012
2011
Sales
$98.3
$88.9
$198.6
$176.3
Operating Profit
$26.7
$20.1
$54.6
$40.3
Operating Profit %
27.1%
22.7%
27.5%
22.9%
Second quarter fiscal 2012 Industrial segment sales were $98 million,
11% higher than the prior year. The core sales increase of 11%
(insignificant foreign currency impact) was driven by continued strong
industrial demand across our served end markets and geographies. In
addition, Growth + Innovation (“G+I”) initiatives, including new product
introductions, mining & other vertical market strategies and penetration
into emerging geographies such as India and South Africa, contributed to
the sales increase. Year-over-year operating profit margins improved 440
basis points due primarily to the higher volumes, despite incremental
G+I investments.
Energy Segment
(US $ in millions)
Three Months Ended
Six Months Ended
February 29,
February 28,
February 29,
February 28,
2012
2011
2012
2011
Sales
$78.9
$61.6
$159.4
$132.3
Operating Profit
$11.6
$6.8
$24.8
$18.6
Operating Profit %
14.7%
11.0%
15.6%
14.1%
Fiscal 2012 second quarter year-over-year Energy segment sales increased
28% to $79 million. Excluding the 1% impact from acquisitions, core
sales increased a robust 27% reflecting higher activity levels across
the segment’s primary markets. Increased capital project activity in oil
& gas, maintenance related spending, and strong sales to the power
generation market, predominantly nuclear, were among the major drivers.
Quoting activity and higher oil prices continue to support strong demand
across the Energy segment’s served markets. Current year second quarter
operating profit margin increased 370 basis points from the prior year
due to higher volumes as well as income associated with the reduction of
an acquisition earn out provision, partially offset by higher G+I
spending.
Electrical Segment
(US $ in millions)
Three Months Ended
Six Months Ended
February 29,
February 28,
February 29,
February 28,
2012
2011
2012
2011
Sales
$77.1
$70.2
$159.9
$125.6
Operating Profit
$5.8
$4.9
$10.8
$8.7
Operating Profit %
7.5%
7.0%
6.7%
6.9%
Electrical segment fiscal 2012 second quarter sales were $77 million,
10% higher than the comparable prior year quarter. Core sales increased
14% with the impact of the stronger US dollar and Mastervolt of -1% and
-3%, respectively. The strong core sales growth was broad based and
reflected higher volumes in the industrial, utility, retail and marine
aftermarket channels. Mastervolt revenue during the seasonally weak
second quarter reflected modestly lower solar and marine volume on a
comparable quarter basis, and is not included in the second quarter core
sales metric as the acquisition was completed after the beginning of the
prior year quarter. Second quarter operating profit margin increased 50
basis points from the prior year due to the higher volumes and improved
Mastervolt profitability, partially offset by plant closure costs.
Engineered Solutions Segment
(US $ in millions)
Three Months Ended
Six Months Ended
February 29,
February 28,
February 29,
February 28,
2012
2011
2012
2011
Sales
$123.6
$110.0
$252.9
$214.9
Operating Profit
$13.3
$13.4
$32.3
$27.2
Operating Profit %
10.7%
12.2%
12.8%
12.7%
Second quarter fiscal 2012 Engineered Solutions segment sales increased
12% from the prior year to $124 million. Excluding the impact of the
stronger US dollar (-1%), and the Weasler acquisition (+22%),
year-over-year core sales declined 9%, in line with expectations. Second
quarter sales reflected lower OEM production levels for heavy-duty
trucks in China and Europe as well as a year-over-year decline in
automotive sales. The segment benefited from higher activity levels in
the North American heavy-duty truck, construction and agriculture
markets. Second quarter operating profit margin declined 150 basis
points year-over-year due to the lower core sales, partially offset by
favorable acquisition mix.
Corporate
Corporate expenses for the second quarter of fiscal 2012 were $7.9
million, $0.3 million below the comparable prior year period as
increased G+I spending at the corporate level was offset by lower
incentive compensation costs.
Financial Position
Net debt at February 29, 2012 was $467 million (total debt of $525
million less $58 million of cash), a reduction of approximately $15
million during the quarter. The decline in net debt was the result of
strong free cash flow during the quarter which more than offset the
approximately $20 million deployed to acquire Jeyco. At February 29,
2012, the Company had net debt to EBITDA leverage of 1.6 times, and over
$540 million of revolver availability.
Outlook
Commenting on Actuant’s outlook, Arzbaecher stated, “At the mid-point of
fiscal 2012, we are extremely pleased with our financial performance,
notably year-to-date EPS growth of over 40% and free cash flow tracking
well ahead of last year, despite significant investments for future
growth. We continue to expect overall sales and earnings will grow to
record levels, albeit at a moderating pace, reflecting solid momentum,
strong execution and the impact of our G+I initiatives.
Taking these factors into account, as well as the completed acquisition
of Jeyco and current foreign currency exchange rates, we are raising our
full year fiscal 2012 EPS and cash flow guidance. We now expect full
year EPS to be in the $1.98-2.08 range, up from our previous guidance of
$1.85-2.05. The mid-point of the new range would represent a 21%
year-over-year increase in EPS from continuing operations. Given our
strong cash flow to date, we project fiscal 2012 full year free cash
flow to be in the $170-175 million range, compared to prior guidance of
$165-170 million. The continued weak Euro relative to our prior
expectations creates currency translation headwinds; consequently we are
narrowing our sales guidance to $1.600-1.625 billion.
We expect third quarter sales to be in the $420-430 million range, with
EPS of $0.55-0.60, a 13% year-over-year improvement at the mid-point of
the range.
Consistent with past practice, all guidance excludes the impact of
potential future acquisitions and share repurchases.
Actuant is executing well and delivering terrific results. Our balance
sheet and cash flow are strong, which supports the execution of our
business model focused on organic and acquisition driven sales, earnings
and cash flow growth. We remain confident that Actuant is well
positioned for future success.”
Conference Call Information
An investor conference call is scheduled for 10am CDT today, March 21,
2012. Webcast information and conference call materials will be made
available on the Actuant company website (www.actuant.com)
prior to the start of the call.
Safe Harbor Statement
Certain of the above comments represent forward-looking statements made
pursuant to the provisions of the Private Securities Litigation Reform
Act of 1995. Management cautions that these statements are based on
current estimates of future performance and are highly dependent upon a
variety of factors, which could cause actual results to differ from
these estimates. Actuant’s results are also subject to general economic
conditions, variation in demand from customers, the impact of
geopolitical activity on the economy, continued market acceptance of the
Company’s new product introductions, the successful integration of
acquisitions, restructuring, operating margin risk due to competitive
pricing and operating efficiencies, supply chain risk, material and
labor cost increases, foreign currency fluctuations and interest rate
risk. See the Company’s Form 10-K filed with the Securities and Exchange
Commission for further information regarding risk factors. Actuant
disclaims any obligation to publicly update or revise any
forward-looking statements as a result of new information, future events
or any other reason.
About Actuant Corporation
Actuant Corporation is a diversified industrial company with operations
in more than 30 countries. The Actuant businesses are leaders in a broad
array of niche markets including branded hydraulic and electrical tools
and supplies; specialized products and services for energy markets and
highly engineered position and motion control systems. The Company was
founded in 1910 and is headquartered in Menomonee Falls, Wisconsin.
Actuant trades on the NYSE under the symbol ATU. For further information
on Actuant and its businesses, visit the Company's website at www.actuant.com.
(tables follow)
Actuant Corporation
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
February 29,
August 31,
2012
2011
ASSETS
Current assets
Cash and cash equivalents
$
58,445
$
44,221
Accounts receivable, net
239,074
223,760
Inventories, net
219,605
223,235
Deferred income taxes
32,474
32,461
Other current assets
23,799
22,807
Total current assets
573,397
546,484
Property, plant and equipment, net
118,458
128,649
Goodwill
883,823
888,466
Other intangible assets, net
463,541
479,406
Other long-term assets
12,668
13,676
Total assets
$
2,051,887
$
2,056,681
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable
$
159,340
$
170,084
Accrued compensation and benefits
49,368
71,639
Short term borrowings and current maturities of debt
5,000
2,690
Income taxes payable
18,388
19,342
Other current liabilities
67,485
66,548
Total current liabilities
299,581
330,303
Long-term debt
520,072
522,727
Deferred income taxes
166,753
165,945
Pension and postretirement benefit accruals
18,674
18,864
Other long-term liabilities
90,170
99,829
Shareholders' equity
Capital stock
13,855
13,731
Additional paid-in capital
(137,046
)
(154,231
)
Treasury stock
(20,410
)
-
Retained earnings
1,146,541
1,077,192
Accumulated other comprehensive loss
(46,303
)
(17,679
)
Stock held in trust
(2,635
)
(2,137
)
Deferred compensation liability
2,635
2,137
Total shareholders' equity
956,637
919,013
Total liabilities and shareholders' equity
$
2,051,887
$
2,056,681
Actuant Corporation
Condensed Consolidated Statements of Earnings
(Dollars in thousands except per share amounts)
(Unaudited)
Three Months Ended
Six Months Ended
February 29,
February 28,
February 29,
February 28,
2012
2011
2012
2011
Net sales
$
378,024
$
330,698
$
770,823
$
649,110
Cost of products sold
236,732
205,671
476,923
402,230
Gross profit
141,292
125,027
293,900
246,880
Selling, administrative and engineering expenses
84,763
81,095
172,872
155,287
Amortization of intangible assets
7,073
6,886
14,291
12,975
Operating profit
49,456
37,046
106,737
78,618
Financing costs, net
7,821
8,238
16,043
15,790
Other (income) expense, net
(171
)
497
486
945
Earnings from continuing operations before income
tax expense
41,806
28,311
90,208
61,883
Income tax expense
9,631
6,169
20,859
13,080
Earnings from continuing operations
32,175
22,142
69,349
48,803
Loss from discontinued operations, net of income taxes
-
(14,213
)
-
(14,984
)
Net earnings
$
32,175
$
7,929
$
69,349
$
33,819
Earnings from continuing operations per share
Basic
$
0.47
$
0.32
$
1.02
$
0.72
Diluted
0.43
0.30
0.94
0.66
Earnings per share
Basic
$
0.47
$
0.12
$
1.02
$
0.50
Diluted
0.43
0.11
0.94
0.46
Weighted average common shares outstanding
Basic
68,064
68,270
68,242
68,135
Diluted
75,105
75,495
75,124
75,186
Actuant Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
Six Months Ended
February 29,
February 28,
February 29,
February 28,
2012
2011
2012
2011
Operating Activities
Net earnings
$
32,175
$
7,929
$
69,349
$
33,819
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization
13,070
12,883
26,610
25,184
Net loss on disposal of businesses
-
13,742
-
13,742
Stock-based compensation expense
3,419
2,399
6,962
4,813
Benefit for deferred income taxes
(1,304
)
(716
)
(2,254
)
(1,390
)
Amortization of debt discount and debt issuance costs
500
941
997
1,914
Other non-cash adjustments
(404
)
(275
)
(346
)
(46
)
Changes in components of working capital and other:
Accounts receivable
(7,510
)
2,191
(17,107
)
(8,569
)
Inventories
1,535
(16,882
)
(1,060
)
(25,592
)
Prepaid expenses and other assets
(1,312
)
3,408
(2,137
)
3,593
Trade accounts payable
(5,242
)
(6,589
)
(8,128
)
(6,304
)
Income taxes payable
(1,180
)
3,231
36
5,270
Accrued compensation and benefits
5,071
5,521
(14,098
)
(9,419
)
Other accrued liabilities
(7,292
)
(13,973
)
(6,823
)
(16,719
)
Net cash provided by operating activities
31,526
13,810
52,001
20,296
Investing Activities
Proceeds from sale of property, plant and equipment
1,857
207
7,775
266
Proceeds from sale of businesses, net of transaction costs
-
3,463
-
3,463
Capital expenditures
(4,857
)
(4,214
)
(10,452
)
(8,291
)
Business acquisitions, net of cash acquired
(18,617
)
(158,207
)
(18,907
)
(158,533
)
Net cash used in investing activities
(21,617
)
(158,751
)
(21,584
)
(163,095
)
Financing Activities
Net borrowings (repayments) on revolving credit facilities and other
debt
(4,976
)
41,155
(167
)
41,169
Issuance of term loan
-
100,000
-
100,000
Repurchases of 2% Convertible Notes
-
-
-
(34
)
Debt issuance costs
-
(5,197
)
-
(5,197
)
Purchase of treasury shares
-
-
(20,410
)
-
Stock option exercises and related tax benefits
2,725
3,260
5,507
6,813
Cash dividend
-
-
(2,748
)
(2,716
)
Net cash provided by (used in) financing activities
(2,251
)
139,218
(17,818
)
140,035
Effect of exchange rate changes on cash
2,668
1,913
1,625
2,942
Net increase (decrease) in cash and cash equivalents
10,326
(3,810
)
14,224
178
Cash and cash equivalents - beginning of period
48,119
44,210
44,221
40,222
Cash and cash equivalents - end of period
$
58,445
$
40,400
$
58,445
$
40,400
ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA FROM CONTINUING OPERATIONS
(Dollars in thousands)
FISCAL 2011
FISCAL 2012
Q1
Q2
Q3
Q4
TOTAL
Q1
Q2
Q3
Q4
TOTAL
SALES
INDUSTRIAL SEGMENT
$
87,392
$
88,935
$
107,759
$
108,927
$
393,013
$
100,253
$
98,342
$
198,595
ENERGY SEGMENT
70,743
61,587
78,002
82,728
293,060
80,421
78,937
159,358
ELECTRICAL SEGMENT
55,396
70,176
80,329
80,112
286,013
82,833
77,105
159,938
ENGINEERED SOLUTIONS SEGMENT
104,881
110,000
126,687
131,669
473,237
129,292
123,640
252,932
TOTAL
$
318,412
$
330,698
$
392,777
$
403,436
$
1,445,323
$
392,799
$
378,024
$
770,823
% SALES GROWTH
INDUSTRIAL SEGMENT
34
%
28
%
35
%
27
%
31
%
15
%
11
%
13
%
ENERGY SEGMENT
10
%
14
%
38
%
35
%
24
%
14
%
28
%
20
%
ELECTRICAL SEGMENT
2
%
28
%
30
%
28
%
22
%
50
%
10
%
27
%
ENGINEERED SOLUTIONS SEGMENT
18
%
23
%
13
%
31
%
21
%
23
%
12
%
18
%
TOTAL
17
%
24
%
27
%
30
%
25
%
23
%
14
%
19
%
OPERATING PROFIT (LOSS)
INDUSTRIAL SEGMENT
$
20,187
$
20,149
$
29,517
$
28,562
$
98,415
$
27,933
$
26,690
$
54,623
ENERGY SEGMENT
11,858
6,792
13,545
17,150
49,345
13,217
11,632
24,849
ELECTRICAL SEGMENT
3,760
4,945
5,462
6,516
20,683
4,977
5,801
10,778
ENGINEERED SOLUTIONS SEGMENT
13,802
13,425
19,977
16,408
63,612
18,999
13,281
32,280
CORPORATE / GENERAL
(8,035
)
(8,265
)
(10,500
)
(11,685
)
(38,485
)
(7,845
)
(7,948
)
(15,793
)
TOTAL
$
41,572
$
37,046
$
58,001
$
56,951
$
193,570
$
57,281
$
49,456
$
106,737
OPERATING PROFIT %
INDUSTRIAL SEGMENT
23.1
%
22.7
%
27.4
%
26.2
%
25.0
%
27.9
%
27.1
%
27.5
%
ENERGY SEGMENT
16.8
%
11.0
%
17.4
%
20.7
%
16.8
%
16.4
%
14.7
%
15.6
%
ELECTRICAL SEGMENT
6.8
%
7.0
%
6.8
%
8.1
%
7.2
%
6.0
%
7.5
%
6.7
%
ENGINEERED SOLUTIONS SEGMENT
13.2
%
12.2
%
15.8
%
12.5
%
13.4
%
14.7
%
10.7
%
12.8
%
TOTAL (INCLUDING CORPORATE)
13.1
%
11.2
%
14.8
%
14.1
%
13.4
%
14.6
%
13.1
%
13.8
%
EBITDA
INDUSTRIAL SEGMENT
$
22,449
$
22,245
$
31,227
$
30,680
$
106,601
$
29,220
$
29,116
$
58,336
ENERGY SEGMENT
15,745
10,475
16,778
21,488
64,486
18,243
15,601
33,844
ELECTRICAL SEGMENT
5,067
8,075
8,208
9,390
30,740
7,705
8,697
16,402
ENGINEERED SOLUTIONS SEGMENT
17,184
16,346
23,878
20,046
77,454
22,213
16,762
38,975
CORPORATE / GENERAL
(7,161
)
(7,709
)
(9,462
)
(10,769
)
(35,101
)
(7,217
)
(7,479
)
(14,696
)
TOTAL
$
53,284
$
49,432
$
70,629
$
70,835
$
244,180
$
70,164
$
62,697
$
132,861
EBITDA %
INDUSTRIAL SEGMENT
25.7
%
25.0
%
29.0
%
28.2
%
27.1
%
29.1
%
29.6
%
29.4
%
ENERGY SEGMENT
22.3
%
17.0
%
21.5
%
26.0
%
22.0
%
22.7
%
19.8
%
21.2
%
ELECTRICAL SEGMENT
9.1
%
11.5
%
10.2
%
11.7
%
10.7
%
9.3
%
11.3
%
10.3
%
ENGINEERED SOLUTIONS SEGMENT
16.4
%
14.9
%
18.8
%
15.2
%
16.4
%
17.2
%
13.6
%
15.4
%
TOTAL (INCLUDING CORPORATE)
16.7
%
14.9
%
18.0
%
17.6
%
16.9
%
17.9
%
16.6
%
17.2
%
ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA FROM CONTINUING OPERATIONS
(Dollars in thousands, except for per share amounts)
FISCAL 2011
FISCAL 2012
Q1
Q2
Q3
Q4
TOTAL
Q1
Q2
Q3
Q4
TOTAL
EARNINGS FROM CONTINUING OPERATIONS
NET EARNINGS
$
25,890
$
7,929
$
36,358
$
41,382
$
111,559
$
37,174
$
32,175
$
69,349
DISCONTINUED OPERATIONS, NET OF INCOME TAX
771
14,213
2,002
(4,049
)
12,937
-
-
-
TOTAL
$
26,661
$
22,142
$
38,360
$
37,333
$
124,496
$
37,174
$
32,175
$
69,349
DILUTED EARNINGS PER SHARE, FROM CONTINUING
OPERATIONS
NET EARNINGS
$
0.35
$
0.11
$
0.49
$
0.55
$
1.50
$
0.50
$
0.43
$
0.94
DISCONTINUED OPERATIONS, NET OF INCOME TAX
0.01
0.19
0.02
(0.05
)
0.18
-
-
-
TOTAL
$
0.36
$
0.30
$
0.51
$
0.50
$
1.68
$
0.50
$
0.43
$
0.94
RECONCILIATION OF GAAP MEASURE TO NON-GAAP MEASURES
EBITDA (1)
NET EARNINGS (GAAP MEASURE)
$
25,890
$
7,929
$
36,358
$
41,382
$
111,559
$
37,174
$
32,175
$
69,349
FINANCING COSTS, NET
7,552
8,238
7,850
8,479
32,119
8,222
7,821
16,043
INCOME TAX EXPENSE
6,911
6,169
11,460
10,171
34,711
11,228
9,631
20,859
DEPRECIATION & AMORTIZATION
12,160
12,883
12,959
14,852
52,854
13,540
13,070
26,610
DISCONTINUED OPERATIONS, NET OF INCOME TAX
771
14,213
2,002
(4,049
)
12,937
-
-
-
EBITDA (NON-GAAP MEASURE)
$
53,284
$
49,432
$
70,629
$
70,835
$
244,180
$
70,164
$
62,697
$
132,861
FOOTNOTES
NOTE:
The total of the individual quarters may not equal the annual total
due to rounding.
(1)
EBITDA represents net earnings before financing costs, net, income
tax expense, depreciation & amortization and discontinued
operations. EBITDA is not a calculation based upon generally
accepted accounting principles (GAAP). The amounts included in the
EBITDA calculation, however, are derived from amounts included in
the Condensed Consolidated Statements of Earnings data. EBITDA
should not be considered as an alternative to net earnings or
operating profit as an indicator of the Company's operating
performance, or as an alternative to operating cash flows as a
measure of liquidity. Actuant has presented EBITDA because it
regularly reviews this as a measure of the Company's ability to
incur and service debt. In addition, EBITDA is used by many of our
investors and lenders, and is presented as a convenience to
them. However, the EBITDA measure presented may not always be
comparable to similarly titled measures reported by other
companies due to differences in the components of the calculation.
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