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.
Actuant (NYSE:ATU)
Historical Stock Chart
From Aug 2024 to Sep 2024
Actuant (NYSE:ATU)
Historical Stock Chart
From Sep 2023 to Sep 2024