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Actuant Reports Third Quarter Results; Provides Initial 2013 Outlook

Sales for the nine months ended May 31, 2012 were $1.20 billion, 15% higher than the $1.04 billion in the comparable prior year period. Excluding the 10% impact from acquisitions and negative 1% impact of the weaker Euro, year-to-date core sales increased 6%. Earnings and EPS from continuing operations for the nine months ended May 31, 2012 were $103.8 million and $1.39, respectively, compared to $87.2 million and $1.17 in the comparable prior year period. Fiscal 2012 year-to-date results include pre-tax debt refinancing costs of $16.8 million, or $0.15 per diluted share after tax. Excluding these costs, fiscal 2012 year-to-date EPS from continuing operations of $1.54 was 32% higher than the $1.17 in the prior year. (See attached reconciliation of earnings.)

 

Segment Results
 

Industrial Segment

(US $ in millions)
 
  Three Months Ended May 31,   Nine Months Ended May 31,
2012   2011 2012   2011
Sales $110.1 $107.8 $308.7 $284.1
Operating Profit $30.7 $29.5 $85.3 $69.9
Operating Profit % 27.9% 27.4% 27.6% 24.6%
 

Third quarter fiscal 2012 Industrial segment sales were $110 million, 2% higher than the prior year. Excluding the 3% negative impact of foreign currency rate changes, core sales increased 5% over the prior year’s strong third quarter. The growth was driven by generally strong industrial demand across our served end markets and geographies. The segment continues to benefit from its focus on Growth + Innovation (“G+I”) initiatives including new product introductions, vertical market strategies and emerging market penetration, as well as robust activity within Integrated Solutions. Year-over-year operating profit margins in the third quarter improved 50 basis points due primarily to the higher volumes, partially offset by incremental G+I investments and mix.
 

Energy Segment

(US $ in millions)
 
  Three Months Ended May 31,   Nine Months Ended May 31,
2012   2011 2012   2011
Sales $96.4 $78.0 $255.8 $210.3
Operating Profit $18.5 $13.5 $43.4 $32.2
Operating Profit % 19.2% 17.4% 17.0% 15.3%
 

Fiscal 2012 third quarter year-over-year Energy segment sales increased 24% to $96 million. Excluding the 4% impact from acquisitions and negative 3% impact from foreign currency rate changes, core sales increased 23% reflecting continued higher activity levels across the segment’s diverse end markets. Maintenance spending in oil & gas, refinery, petrochemical and power generation markets, along with higher capital project activity in offshore energy, were the primary drivers. Quoting activity remains healthy and the breadth of geographies served continue to support a strong outlook. Third quarter operating profit margin improved 180 basis points from the prior year due to higher volumes partially offset by increased G+I spending.
 

Electrical Segment

(US $ in millions)
 
  Three Months Ended May 31,   Nine Months Ended May 31,
2012   2011 2012   2011
Sales $85.9 $80.3 $245.9 $205.9
Operating Profit $8.8 $5.5 $19.6 $14.2
Operating Profit % 10.3% 6.8% 8.0% 6.9%
 

Electrical segment fiscal 2012 third quarter sales were $86 million, 7% higher than the comparable prior year quarter. Core sales increased 10%, while the impact of the weaker Euro was a 3% headwind. The strong core sales growth was broad based and reflected higher volumes in the solar, utility, industrial, retail and marine aftermarket channels. The marine OEM market, most notably in Europe, was modestly weaker than the prior year. Third quarter operating profit margin increased 350 basis points from the prior year due to the higher volumes and improved Mastervolt profitability.
 

Engineered Solutions Segment

(US $ in millions)
 
  Three Months Ended May 31,   Nine Months Ended May 31,
2012   2011 2012   2011
Sales $136.8 $126.7 $389.7 $341.6
Operating Profit $18.5 $20.0 $50.7 $47.2
Operating Profit % 13.5% 15.8% 13.0% 13.8%
 

Third quarter fiscal 2012 Engineered Solutions segment sales increased 8% from the prior year to $137 million. Excluding the impact of the weaker Euro (-4%), and the Weasler & Turotest acquisitions (+23%), year-over-year core sales declined 11%, in line with expectations. Third quarter sales reflected lower OEM production levels for heavy-duty trucks in China and Europe as well as a decline in automotive sales. The segment benefited from increased demand in the North American heavy-duty truck, construction and agriculture markets. Third quarter operating profit margin declined 230 basis points from the segment’s record high in the prior year due to the lower core sales, partially offset by favorable acquisition mix.

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