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Actuant Reports Second Quarter Results

About Actuant Corporation

Actuant Corporation is a diversified industrial company serving customers from 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 28, August 31,
2013 2012
 
ASSETS
Current assets
Cash and cash equivalents $ 90,823 $ 68,184
Accounts receivable, net 238,601 234,756
Inventories, net 217,540 211,690
Deferred income taxes 23,604 22,583
Other current assets   24,862     24,068  
Total current assets 595,430 561,281
 
Property, plant and equipment, net 114,124 115,884
Goodwill 866,685 866,412
Other intangible assets, net 430,827 445,884
Other long-term assets   16,765     17,658  
 
Total assets $ 2,023,831   $ 2,007,119  
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable $ 153,814 $ 174,746
Accrued compensation and benefits 45,297 58,817
Current maturities of debt 10,000 7,500
Income taxes payable 2,852 5,778
Other current liabilities   58,566     72,165  
Total current liabilities 270,529 319,006
 
Long-term debt 385,000 390,000
Deferred income taxes 129,080 132,653
Pension and postretirement benefit accruals 26,137 26,442
Other long-term liabilities 88,817 87,182
 
Shareholders' equity
Capital stock 15,221 15,102
Additional paid-in capital 23,873 7,725
Treasury stock (71,904 ) (63,083 )
Retained earnings 1,226,346 1,161,564
Accumulated other comprehensive loss (69,268 ) (69,472 )
Stock held in trust (3,076 ) (2,689 )
Deferred compensation liability   3,076     2,689  
Total shareholders' equity   1,124,268     1,051,836  
 
Total liabilities and shareholders' equity $ 2,023,831   $ 2,007,119  
 

Actuant Corporation
Condensed Consolidated Statements of Earnings
(Dollars in thousands except per share amounts)
(Unaudited)
 
    Three Months Ended   Six Months Ended
February 28,   February 29, February 28,   February 29,
2013   2012 2013   2012
 
Net sales $ 370,370 $ 378,024 $ 747,618 $ 770,823
Cost of products sold   230,811       236,732     461,073     476,923
Gross profit 139,559 141,292 286,545 293,900
 
Selling, administrative and engineering expenses 89,977 84,763 177,807 172,872
Amortization of intangible assets   7,638       7,073     15,492     14,291
Operating profit 41,944 49,456 93,246 106,737
 
Financing costs, net 6,260 7,821 12,582 16,043
Other expense (income), net   (36 )     (171 )   328     486
Earnings before income tax expense 35,720 41,806 80,336 90,208
 
Income tax expense   7,285       9,631     15,558     20,859
Net earnings $ 28,435     $ 32,175   $ 64,778   $ 69,349
 
Earnings per share
Basic $ 0.39 $ 0.47 $ 0.89 $ 1.02
Diluted 0.38 0.43 0.87 0.94
 
Weighted average common shares outstanding
Basic 72,946 68,064 72,869 68,242
Diluted 74,416 75,105 74,343 75,124
 

Actuant Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
  Three Months Ended   Six Months Ended
February 28,   February 29, February 28,   February 29,
2013 2012 2013 2012
 
Operating Activities
Net earnings $ 28,435 $ 32,175 $ 64,778 $ 69,349
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization 14,451 13,070 28,898 26,610
Stock-based compensation expense 3,651 3,419 7,128 6,962
Benefit for deferred income taxes (2,862 ) (1,304 ) (6,018 ) (2,254 )
Amortization of debt discount and debt issuance costs 496 500 992 997
Other non-cash adjustments 5 (404 ) (172 ) (346 )
Changes in components of working capital and other:
Accounts receivable (8,260 ) (7,510 ) (3,721 ) (17,107 )
Inventories 7,166 1,535 (4,152 ) (1,060 )
Prepaid expenses and other assets 4,939 (1,312 ) (1,204 ) (2,137 )
Trade accounts payable (10,733 ) (5,242 ) (22,281 ) (8,128 )
Income taxes payable (3,883 ) (1,180 ) (2,722 ) 36
Accrued compensation and benefits 1,526 5,071 (12,427 ) (14,098 )
Other accrued liabilities   (6,883 )   (7,292 )   (8,776 )   (6,823 )
Net cash provided by operating activities 28,048 31,526 40,323 52,001
 
Investing Activities
Proceeds from sale of property, plant and equipment 200 1,857 1,177 7,775
Capital expenditures (4,037 ) (4,857 ) (11,726 ) (10,452 )
Business acquisitions, net of cash acquired   (1,350 )   (18,617 )   (1,433 )   (18,907 )
Net cash used in investing activities (5,187 ) (21,617 ) (11,982 ) (21,584 )
 
Financing Activities
Net repayments on revolving credit facilities and other debt - (4,976 ) - (167 )
Principal repayments on term loan (1,250 ) - (2,500 ) -
Purchase of treasury shares (1,679 ) - (8,821 ) (20,410 )
Stock option exercises and related tax benefits 5,299 2,725 10,772 5,507
Cash dividend   -     -     (2,911 )   (2,748 )
Net cash provided by (used in) financing activities 2,370 (2,251 ) (3,460 ) (17,818 )
 
Effect of exchange rate changes on cash   (2,719 )   2,668     (2,242 )   1,625  
Net increase in cash and cash equivalents 22,512 10,326 22,639 14,224
Cash and cash equivalents - beginning of period   68,311     48,119     68,184     44,221  
Cash and cash equivalents - end of period $ 90,823   $ 58,445   $ 90,823   $ 58,445  
 

ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA
(Dollars in thousands)
 
  FISCAL 2012   FISCAL 2013
Q1   Q2   Q3   Q4   TOTAL Q1   Q2   Q3   Q4   TOTAL
SALES                
INDUSTRIAL SEGMENT $ 100,253 $ 98,342 $ 110,102 $ 110,598 $ 419,295 $ 101,122 $ 98,999 $ 200,121
ENERGY SEGMENT 80,421 78,937 96,399 93,406 349,163 90,769 80,794 171,563
ELECTRICAL SEGMENT 82,833 77,105 85,947 82,936 328,821 69,439 69,902 139,341
ENGINEERED SOLUTIONS SEGMENT   129,292       123,640       136,767       118,364       508,063     115,918       120,675               236,593  
TOTAL $ 392,799     $ 378,024     $ 429,215     $ 405,304     $ 1,605,342   $ 377,248     $ 370,370             $ 747,618  
 
% SALES GROWTH
INDUSTRIAL SEGMENT 15 % 11 % 2 % 2 % 7 % 1 % 1 % 1 %
ENERGY SEGMENT 14 % 28 % 24 % 13 % 19 % 13 % 2 % 8 %
ELECTRICAL SEGMENT 50 % 10 % 7 % 4 % 15 % -16 % -9 % -13 %
ENGINEERED SOLUTIONS SEGMENT 23 % 12 % 8 % -10 % 7 % -10 % -2 % -6 %
TOTAL 23 % 14 % 9 % 0 % 11 % -4 % -2 % -3 %
 
OPERATING PROFIT (LOSS)
INDUSTRIAL SEGMENT $ 27,933 $ 26,690 $ 30,681 $ 29,473 $ 114,777 $ 27,006 $ 26,350 $ 53,356
ENERGY SEGMENT 13,217 11,632 18,515 18,841 62,205 15,387 9,677 25,064
ELECTRICAL SEGMENT 4,977 5,801 8,814 8,300 27,892 7,828 5,072 12,900
ENGINEERED SOLUTIONS SEGMENT 18,999 13,281 18,467 10,104 60,851 7,625 8,275 15,900
CORPORATE / GENERAL   (7,845 )     (7,948 )     (8,813 )     (8,713 )     (33,319 )   (6,544 )     (7,430 )             (13,974 )
TOTAL - EXCLUDING IMPAIRMENT CHARGE $ 57,281 $ 49,456 $ 67,664 $ 58,005 $ 232,406 $ 51,302 $ 41,944 $ 93,246
IMPAIRMENT CHARGE   -       -       -       (62,464 )     (62,464 )   -       -               -  
TOTAL $ 57,281     $ 49,456     $ 67,664     $ (4,459 )   $ 169,942   $ 51,302     $ 41,944             $ 93,246  
 
OPERATING PROFIT %
INDUSTRIAL SEGMENT 27.9 % 27.1 % 27.9 % 26.6 % 27.4 % 26.7 % 26.6 % 26.7 %
ENERGY SEGMENT 16.4 % 14.7 % 19.2 % 20.2 % 17.8 % 17.0 % 12.0 % 14.6 %
ELECTRICAL SEGMENT 6.0 % 7.5 % 10.3 % 10.0 % 8.5 % 11.3 % 7.3 % 9.3 %
ENGINEERED SOLUTIONS SEGMENT 14.7 % 10.7 % 13.5 % 8.5 % 12.0 % 6.6 % 6.9 % 6.7 %
TOTAL (INCLUDING CORPORATE) - EXCLUDING IMPAIRMENT CHARGE 14.6 % 13.1 % 15.8 % 14.3 % 14.5 % 13.6 % 11.3 % 12.5 %
 
EBITDA
INDUSTRIAL SEGMENT $ 29,220 $ 29,116 $ 32,070 $ 31,774 $ 122,180 $ 29,033 $ 28,471 $ 57,504
ENERGY SEGMENT 18,243 15,601 22,216 23,166 79,226 19,694 14,278 33,972
ELECTRICAL SEGMENT 7,705 8,697 11,444 10,969 38,815 10,806 7,653 18,459
ENGINEERED SOLUTIONS SEGMENT 22,213 16,762 21,418 13,991 74,384 12,047 12,611 24,658
CORPORATE / GENERAL   (7,217 )     (7,479 )     (8,506 )     (7,972 )     (31,174 )   (6,195 )     (6,582 )             (12,777 )
TOTAL - EXCLUDING IMPAIRMENT CHARGE $ 70,164 $ 62,697 $ 78,642 $ 71,928 $ 283,431 $ 65,385 $ 56,431 $ 121,816
IMPAIRMENT CHARGE   -       -       -       (62,464 )     (62,464 )   -       -               -  
TOTAL $ 70,164     $ 62,697     $ 78,642     $ 9,464     $ 220,967   $ 65,385     $ 56,431             $ 121,816  
 
EBITDA %
INDUSTRIAL SEGMENT 29.1 % 29.6 % 29.1 % 28.7 % 29.1 % 28.7 % 28.8 % 28.7 %
ENERGY SEGMENT 22.7 % 19.8 % 23.0 % 24.8 % 22.7 % 21.7 % 17.7 % 19.8 %
ELECTRICAL SEGMENT 9.3 % 11.3 % 13.3 % 13.2 % 11.8 % 15.6 % 10.9 % 13.2 %
ENGINEERED SOLUTIONS SEGMENT 17.2 % 13.6 % 15.7 % 11.8 % 14.6 % 10.4 % 10.5 % 10.4 %
TOTAL (INCLUDING CORPORATE) - EXCLUDING IMPAIRMENT CHARGE 17.9 % 16.6 % 18.3 % 17.7 % 17.7 % 17.3 % 15.2 % 16.3 %
 

ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA
RECONCILIATION OF GAAP MEASURE TO NON-GAAP MEASURES
(Dollars in thousands, except for per share amounts)
 
  FISCAL 2012   FISCAL 2013
Q1   Q2   Q3   Q4   TOTAL Q1   Q2   Q3   Q4   TOTAL
EARNINGS (LOSS) BEFORE SPECIAL ITEMS (1)                
NET EARNINGS (LOSS) $ 37,174 $ 32,175 $ 34,401 $ (16,460 ) $ 87,290 $ 36,343 $ 28,435 $ 64,778
DEBT REFINANCING CHARGES, NET OF INCOME TAX - - 10,482 - 10,482 - - -
IMPAIRMENT CHARGE, NET OF INCOME TAX   -     -     -     57,088       57,088   -     -             -
TOTAL $ 37,174   $ 32,175   $ 44,883   $ 40,628     $ 154,860 $ 36,343   $ 28,435           $ 64,778
 
DILUTED EARNINGS (LOSS) PER SHARE, BEFORE
SPECIAL ITEMS (1)(3)
NET EARNINGS (LOSS) $ 0.50 $ 0.43 $ 0.45 $ (0.23 ) $ 1.17 $ 0.49 $ 0.38 $ 0.87
DEBT REFINANCING CHARGES, NET OF INCOME TAX - - 0.15 - 0.15 - - -
IMPAIRMENT CHARGE, NET OF INCOME TAX   -     -     -     0.77       0.76   -     -             -
TOTAL $ 0.50   $ 0.43   $ 0.60   $ 0.55     $ 2.08 $ 0.49   $ 0.38           $ 0.87
 
 
EBITDA (2)
NET EARNINGS (LOSS) (GAAP MEASURE) $ 37,174 $ 32,175 $ 34,401 $ (16,460 ) $ 87,290 $ 36,343 $ 28,435 $ 64,778
FINANCING COSTS, NET 8,222 7,821 24,066 6,281 46,390 6,322 6,260 12,582
INCOME TAX EXPENSE 11,228 9,631 6,593 5,572 33,024 8,273 7,285 15,558
DEPRECIATION & AMORTIZATION   13,540     13,070     13,582     14,071       54,263   14,447     14,451             28,898
EBITDA (NON-GAAP MEASURE) $ 70,164 $ 62,697 $ 78,642 $ 9,464 $ 220,967 $ 65,385 $ 56,431 $ 121,816
IMPAIRMENT CHARGE   -     -     -     62,464       62,464   -     -             -
EBITDA (NON-GAAP MEASURE) - EXCLUDING IMPAIRMENT CHARGE $ 70,164   $ 62,697   $ 78,642   $ 71,928     $ 283,431 $ 65,385   $ 56,431           $ 121,816
FOOTNOTES
   
NOTE: The total of the individual quarters may not equal the annual total due to rounding.
 
(1) Earnings (loss) and diluted earnings (loss) per share, excluding special items (debt refinancing charges and impairment charge), represent net earnings (loss) and diluted earnings (loss) per share per the Condensed Consolidated Statements of Earnings net of charges or credits for items to be highlighted for comparability purposes. These measures should not be considered as an alternative to net earnings (loss) or diluted earnings (loss) per share as an indicator of the Company's operating performance. However, this presentation is important to investors for understanding the operating results of the current portfolio of Actuant companies. The total of the individual components may not equal due to rounding.
 
(2) EBITDA represents net earnings (loss) before financing costs, net, income tax expense, and depreciation & amortization. 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.
 
(3) Due to the net loss for the fourth quarter of fiscal 2012, the basic weighted average common shares are used to calculate both basic and diluted loss per share for the fourth quarter of fiscal 2012 to avoid anti-dilution. Per share results for net earnings (loss) (GAAP measure) was calculated using 72,846 shares outstanding. When excluding the impairment charge from net earnings (loss), the result is net earnings (not a net loss) which requires a diluted basis for calculated EPS. For this reason, the per share results for the impairment charge and total diluted earnings (non-GAAP measure) were calculated using 74,158 shares outstanding for the fourth quarter of fiscal 2012. Due to the difference in shares outstanding being used, the per share results do not add for the fourth quarter of fiscal 2012.
 




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