ATU
$22.11
Actuant
($.62)
(2.73%)
Earnings Details
1st Quarter November 2018
Thursday, December 20, 2018 8:30:00 AM
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Summary

Actuant Beats

Actuant (ATU) reported 1st Quarter November 2018 earnings of $0.27 per share on revenue of $292.5 million. The consensus earnings estimate was $0.24 per share on revenue of $298.7 million. The Earnings Whisper number was $0.23 per share. Revenue grew 1.2% on a year-over-year basis.

The company said it expects second quarter earnings of $0.15 to $0.20 per share on revenue of $268.0 million to $278.0 million. The current consensus earnings estimate is $0.20 per share on revenue of $284.5 million for the quarter ending February 28, 2019. The company also said it continues to expect fiscal 2019 earnings of $1.09 to $1.20 per share but now expects revenue of $1.15 billion to $1.19 billion. The company's previous guidance was revenue of $1.21 billion to $1.24 billion and the current consensus earnings estimate is $1.17 per share on revenue of $1.23 billion for the year ending August 31, 2019.

Actuant Corp is a diversified company that designs, manufactures and distributes a broad industrial products and systems to various end markets. The Company is organized into three operating segments as follows: Industrial, Energy & Engineered Solutions.

Results
Reported Earnings
$0.27
Earnings Whisper
$0.23
Consensus Estimate
$0.24
Reported Revenue
$292.5 Mil
Revenue Estimate
$298.7 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Actuant Reports First Quarter 2019 Results; Updates Full Year 2019 Outlook

First Quarter 2019 Highlights*

  • Completed sale of Cortland Fibron (upstream oil & gas) on December 19, 2018.
  • Initiated process to divest Cortland US and Precision-Hayes International businesses, which have been moved to Assets and Liabilities Held for Sale.
  • Total net sales were $293 million for the quarter.
  • Core sales increased 3% on a year-over-year basis while foreign currency reduced net sales by 2% and the impact from acquisitions and divestitures was negligible.
  • The Industrial Tools & Services (“IT&S”) segment achieved revenues of $149 million, with a core sales increase of 4% year-over-year.
  • The Engineered Components & Systems (“EC&S”) business achieved revenues of $144 million, with a core sales increase of 2% year-over-year.
  • GAAP Operating Margin was -3.2% versus 5% in first quarter 2018 (see Consolidated Results below, along with the attached reconciliation of earnings). Adjusted Operating Margin expanded 200bp over first quarter 2018 to 9.4% from 7.4%.
  • Adjusted EBITDA Margin increased by 130bp with significant improvement in operating leverage and incremental margins in line with expectations.
  • GAAP diluted earnings per share (“EPS”) was a loss of $0.29 in the first quarter of fiscal 2019 versus EPS of $0.09 in 2018. Adjusted EPS was $0.27, a 42% improvement over first quarter 2018 adjusted EPS of $0.19.
  • Significant year-over-year reduction of Net Debt to Adjusted EBITDA leverage from 3.2x at the end of first quarter 2018 to 2.1x at the end of first quarter 2019.

*This news release contains non-GAAP financial measures in addition to the financial measures in accordance with GAAP. Reconciliations of the GAAP to non-GAAP financial measures can be found in the footnotes to this release.

MILWAUKEE--(BUSINESS WIRE)--Actuant Corporation (NYSE: ATU) today announces results for its fiscal first quarter 2019 ended November 30, 2018.

Randy Baker, President and Chief Executive Officer, said, “Our solid quarterly results demonstrate sustained momentum as we drive growth and incremental profitability across our two business segments. In particular, growth for the Industrial Tools & Services segment was driven by strength in our premier Enerpac branded tools product line and improved profitability in our heavy lifting product category resulting from strategic changes to our product offerings in 2018. We also continued to focus on winning new product platforms at our key OEM customers and expanding operating margins in the Engineered Components & Systems segment. We are executing each segment’s strategy and believe we are well positioned to deliver enhanced shareholder value.”

Mr. Baker continued, “We also made progress with our portfolio optimization efforts, completing the sale of Cortland Fibron. In addition, we have begun processes to divest the remaining Cortland and Precision-Hayes International businesses. The proceeds from these transactions, cash generated from operations, and access to capital markets on reduced leverage, will provide us the fuel needed to continue to invest in our core tools business.”

Consolidated Results

(US$ in millions)

 

Three Months Ended Nov 30,

 

2018

 

2017

Sales

$292.5

 

$289.0

Operating Profit (Loss)

$(9.3)

 

$14.7

Adjusted Op Profit

$27.5

 

$21.3

Adjusted Op Profit %

9.4%

 

7.4%

Earnings (Loss) per Share

$(0.29)

 

$0.09

Adjusted Earnings per Share

$0.27

 

$0.19

EBITDA

$(1.3)

 

$24.4

Adjusted EBITDA

$35.5

 

$31.1

EBITDA %

(0.5)%

 

8.5%

Adjusted EBITDA %

12.1%

 

10.8%

  • Consolidated net sales for the first quarter were $292.5 million, slightly higher than the $289.0 million recorded in the comparable prior year quarter. Core sales improved 3% year-over-year, while foreign currency rate changes reduced net sales by 2%. The net impact from the Mirage and Equalizer acquisitions, net of the Viking divestiture, was negligible.
  • Fiscal 2019 first quarter net loss and EPS were ($17.5) million and $(0.29), compared to $5.2 million and $0.09, respectively, in the comparable prior year quarter.
    • Fiscal 2019 first quarter earnings included impairment & divestiture and other charges of $36.5 million ($33.8 million or $0.55 per share, after tax) primarily related to the anticipated sale of the Cortland US and Precision-Hayes International businesses as well as other divestiture related costs.
    • The first quarter of fiscal 2019 also included $0.4 million of restructuring charges ($0.3 million or less than $0.01 per share, after tax).
  • Fiscal 2018 first quarter earnings included restructuring charges of $6.6 million ($6.3 million or $0.10 per share, after tax).
  • Excluding impairment, divestiture and restructuring charges, adjusted EPS for the first quarter of fiscal 2019 was $0.27, compared to $0.19 in the comparable prior year period (see attached reconciliation of earnings).

Segment Results

 

Industrial Tools & Services Segment (IT&S)

(US$ in millions)

 

Three Months Ended Nov 30,

 

2018

 

2017

Sales

$148.7

 

$142.0

Operating Profit

$26.4

 

$20.8

Adjusted Op Profit (1)

$26.3

 

$22.2

Adjusted Op Profit % (1)

17.7%

 

15.6%

(1) Excludes a minimal restructuring benefit and $1.4 million of restructuring charges in the first quarter of fiscal 2019 and 2018, respectively.

  • First quarter fiscal 2019 IT&S segment net sales were $148.7 million, 5% higher than the prior year. The impact of foreign currency exchange rates reduced sales by 1% year-over-year and the Equalizer and Mirage acquisitions added 2%, resulting in a 4% year-over-year core sales increase.
  • Top line growth including double-digit gains in the Americas, resulted from the continued strength of our end markets and investments in commercial effectiveness, despite difficult comparisons against strong net sales growth in the first quarter of fiscal 2018. Solid service growth in Europe and Middle East as well as product and service growth in Australia and Asia also contributed.
  • Adjusted operating profit improved as a result of increased sales volume and improved margins on our heavy lift product line.

Engineered Components & Systems Segment (EC&S)

(US$ in millions)

 

 

Three Months Ended Nov 30,

 

 

 

2018

 

2017

 

Sales

$143.9

 

$147.0

 

Operating (Loss) Profit

$(28.3)

 

$4.0

 

Adjusted Op Profit (2)

$8.6

 

$5.1

 

Adjusted Op Profit % (2)

6.0%

 

3.5%

 

(2) The first quarter of fiscal 2019 excludes $36.5 million of impairment and other divestiture charges, along with $0.4 million of restructuring charges. The first quarter of 2018 excludes $1.1 million of restructuring charges.

  • First quarter fiscal 2019 EC&S segment net sales were $143.9 million, a 2% decrease over the prior year. Excluding a 2% decline in net sales due to a stronger US Dollar and a 2% decline in sales due to the prior year divestiture of the Viking business, year-over-year core sales increased 2%.
  • Core sales growth was driven by increased demand in automotive, off-highway vehicle and concrete tensioning markets, new platform wins starting production and price realization partially offset by reduced China truck demand.
  • Adjusted operating profit margin improved on pricing and operating efficiencies.

Corporate Expenses and Income Taxes

  • Corporate expenses for the first quarter of fiscal 2019 were $7.4 million, $1.4 million higher than the comparable prior year period, primarily resulting from stock compensation and consulting expenses.
  • The first quarter effective income tax rate of approximately 13.7% was in line with expectations but lower than the prior year rate of 14.7%.

Balance Sheet and Leverage

(US$ in millions)

 

Period Ending

 

Nov 30, 2018

 

Aug 31, 2018

 

Nov 30, 2017

Cash Balance

$203.4

 

$250.5

 

$165.1

Debt Balance

$525.4

 

$532.7

 

$554.6

Net Debt to EBITDA

2.1

 

1.9

 

3.2

  • Net debt at November 30, 2018 was approximately $322 million (total debt of $525 million less $203 million of cash), which increased approximately $40 million from the prior quarter end but declined by $68 million from first quarter of Fiscal 2018. Net Debt to Adjusted EBITDA was 2.1x at November 30, 2018.

Outlook

Mr. Baker concluded, "We achieved a solid start to fiscal 2019, and looking ahead to the rest of the year we expect to benefit from the actions we are taking to manage our portfolio and the strategic investments we have made in new product development, commercial effectiveness and operational excellence. We are on track to deliver our core growth and profitability targets and are focused on executing our strategies to deliver enhanced value for shareholders.”

The Company provided the following outlook for its expected results for the second quarter and for fiscal year 2019. Full fiscal year net sales outlook is being adjusted for the impact of the stronger dollar and the sale of the Cortland Fibron business. The remaining fiscal year net income and EPS outlook remains the same and is:

  • Annual sales growth: Between 3% and 5%;
  • Annual sales: $1.15 to $1.19 billion, which reflect the strengthening of the US Dollar and the sale of the Cortland Fibron business;
  • Full year adjusted EPS: between $1.09 and $1.20, which includes an expected tax rate of 20%;
  • Second quarter sales: $268 to $278 million and continue to expect the back half of our fiscal year to be even stronger;
  • Second quarter adjusted EPS: range of $0.15 to $0.20; and
  • Full year free cash flow: $80 to $85 million.

All guidance excludes restructuring, impairment & divestiture charges, one-time tax adjustments as well as the impact of potential future, acquisitions, dispositions, share repurchases and future tariffs.

Impact of Accounting Change

Effective September 1, 2018, Actuant adopted the new comprehensive revenue recognition accounting standard using a modified retrospective transition approach. Under this approach, revenues for prior periods have not been restated. Application of the new standard for the quarter ended November 30, 2018 had an immaterial impact on items reflected in the condensed consolidated statement of earnings as compared to amounts as determined under the revenue recognition accounting standard applicable during the three months ended November 30, 2017.

Conference Call Information

An investor conference call is scheduled for 10am CT today, December 20, 2018. 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. Among other risks and factors, Actuant’s results are 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, tax reform, foreign currency fluctuations and interest rate risk. See the Company’s Form 10-K for the fiscal year ended August 31, 2018 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.

Non-GAAP Financial Information

This press release contains financial measures that are not measures presented in conformity with GAAP. They include EBITDA, Adjusted EBITDA, Adjusted EPS, Adjusted Operating Profit, Free Cash Flow and Net Debt. This press release includes reconciliations of these non-GAAP measures to the most comparable GAAP measure, including in the tables attached to this press release. Management believes these non-GAAP measures are commonly used financial measures for investors to evaluate Actuant’s operating performance and financial position with respect to the periods presented and, when read in conjunction with the condensed consolidated financial statements, present a useful tool to evaluate ongoing operations and provide investors with metrics they can use to evaluate aspects of the Company’s performance from period to period. In addition, these are some of the factors management uses in internal evaluations of the overall performance of the Company’s business. Management acknowledges that there are many items that impact a company’s reported results and the adjustments reflected in these non-GAAP measures are not intended to present all items that may have impacted these results. In addition, these non-GAAP measures are not necessarily comparable to similarly-titled measures used by other companies.

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 tools and solutions; 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.

Actuant Corporation
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
 

November 30,

August 31,

2018

2018

 
ASSETS
Current assets
Cash and cash equivalents

$

203,443

 

$

250,490

 

Accounts receivable, net

 

191,190

 

 

187,749

 

Inventories, net

 

154,764

 

 

156,356

 

Assets held for sale

 

106,193

 

 

23,573

 

Other current assets

 

51,745

 

 

42,732

 

Total current assets

 

707,335

 

 

660,900

 

 
Property, plant and equipment, net

 

79,160

 

 

90,220

 

Goodwill

 

477,360

 

 

512,412

 

Other intangible assets, net

 

152,719

 

 

181,037

 

Other long-term assets

 

33,459

 

 

36,769

 

 
Total assets

$

1,450,033

 

$

1,481,338

 

 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable

$

124,067

 

$

130,838

 

Accrued compensation and benefits

 

36,343

 

 

54,508

 

Current maturities of debt

 

30,000

 

 

30,000

 

Income taxes payable

 

8,215

 

 

4,091

 

Liabilities held for sale

 

70,030

 

 

44,225

 

Other current liabilities

 

63,714

 

 

67,299

 

Total current liabilities

 

332,369

 

 

330,961

 

 
Long-term debt, net

 

495,384

 

 

502,695

 

Deferred income taxes

 

16,931

 

 

21,933

 

Pension and postretirement benefit liabilities

 

14,671

 

 

14,869

 

Other long-term liabilities

 

53,113

 

 

52,168

 

Total liabilities

 

912,468

 

 

922,626

 

 
Shareholders' equity
Capital stock

 

16,301

 

 

16,285

 

Additional paid-in capital

 

171,606

 

 

167,448

 

Treasury stock

 

(617,731

)

 

(617,731

)

Retained earnings

 

1,149,578

 

 

1,166,955

 

Accumulated other comprehensive loss

 

(182,189

)

 

(174,245

)

Stock held in trust

 

(2,573

)

 

(2,450

)

Deferred compensation liability

 

2,573

 

 

2,450

 

Total shareholders' equity

 

537,565

 

 

558,712

 

 
Total liabilities and shareholders' equity

$

1,450,033

 

$

1,481,338

 

Actuant Corporation
Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
(Unaudited)
 
 

Three Months Ended

November 30,

November 30,

2018

2017

 
Net sales

$

292,531

 

$

288,955

Cost of products sold

 

187,523

 

 

188,044

Gross profit

 

105,008

 

 

100,911

 
Selling, administrative and engineering expenses

 

73,192

 

 

74,478

Amortization of intangible assets

 

4,278

 

 

5,131

Restructuring charges

 

403

 

 

6,629

Impairment & divestiture charges

 

36,453

 

-

Operating (loss) profit

 

(9,318

)

 

14,673

 
Financing costs, net

 

7,295

 

 

7,514

Other expense, net

 

911

 

 

329

(Loss) income before income tax (benefit) expense

 

(17,524

)

 

6,830

 
Income tax (benefit) expense

 

(72

)

 

1,604

Net (loss) income

$

(17,452

)

$

5,226

 
(Loss) earnings per share
Basic

$

(0.29

)

$

0.09

Diluted

 

(0.29

)

 

0.09

 
Weighted average common shares outstanding
Basic

 

61,031

 

 

59,871

Diluted

 

61,031

 

 

60,609

Actuant Corporation

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

November 30,

 

November 30,

 

 

2018

 

2017

 

 
Operating Activities
Net (loss) earnings

$

(17,452

)

$

5,226

 

Adjustments to reconcile net (loss) earnings to net cash used in operating activities:
Impairment & divestiture charges, net of tax effect

 

33,836

 

-

Depreciation and amortization

 

8,890

 

 

10,090

 

Stock-based compensation expense

 

3,594

 

 

5,420

 

Benefit for deferred income taxes

 

(1,143

)

 

(307

)

Amortization of debt issuance costs

 

301

 

 

413

 

Other non-cash adjustments

 

130

 

 

113

 

Changes in components of working capital and other, excluding acquisitions and divestitures:
Accounts receivable

 

(17,676

)

 

(11,478

)

Inventories

 

(17,824

)

 

(11,628

)

Trade accounts payable

 

1,051

 

 

6,204

 

Prepaid expenses and other assets

 

(4,998

)

 

(12,043

)

Income tax accounts

 

1,064

 

 

(1,714

)

Accrued compensation and benefits

 

(16,544

)

 

(12,588

)

Other accrued liabilities

 

(2,339

)

 

1,834

 

Cash used in operating activities

 

(29,110

)

 

(20,458

)

 
Investing Activities
Capital expenditures

 

(7,666

)

 

(7,904

)

Proceeds from sale of property, plant and equipment

 

11

 

 

32

 

Rental asset buyout for Viking divestiture

-

 

(27,718

)

Cash used in investing activities

 

(7,655

)

 

(35,590

)

 
Financing Activities
Principal repayments on term loan

 

(7,500

)

 

(7,500

)

Stock option exercises & other

 

552

 

 

2,231

 

Taxes paid related to the net share settlement of equity awards

 

(201

)

 

(282

)

Cash dividend

 

(2,439

)

 

(2,390

)

Cash used in financing activities

 

(9,588

)

 

(7,941

)

 
Effect of exchange rate changes on cash

 

(694

)

 

(532

)

Net decrease in cash and cash equivalents

 

(47,047

)

 

(64,521

)

Cash and cash equivalents - beginning of period

 

250,490

 

 

229,571

 

Cash and cash equivalents - end of period

$

203,443

 

$

165,050

 

ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA
(Dollars in thousands)
 

FISCAL 2018

 

FISCAL 2019

Q1

Q2

Q3

Q4

TOTAL

 

Q1

Q2

Q3

Q4

TOTAL

SALES
INDUSTRIAL TOOLS & SERVICES SEGMENT

$

141,991

 

$

136,986

 

$

158,735

 

$

153,373

 

$

591,085

 

$

148,655

 

$ -

$ -

$ -

$

148,655

 

ENGINEERED COMPONENTS & SYSTEMS SEGMENT

 

146,964

 

 

138,179

 

 

158,361

 

 

148,022

 

 

591,526

 

 

143,876

 

-

-

-

 

143,876

 

TOTAL

$

288,955

 

$

275,165

 

$

317,096

 

$

301,395

 

$

1,182,611

 

$

292,531

 

$ -

$ -

$ -

$

292,531

 

 

 

 

% SALES GROWTH

 

 

 

INDUSTRIAL TOOLS & SERVICES SEGMENT

 

2

%

 

5

%

 

8

%

 

12

%

 

7

%

 

5

%

-

-

-

 

5

%

ENGINEERED COMPONENTS & SYSTEMS SEGMENT

 

16

%

 

7

%

 

7

%

 

6

%

 

9

%

 

-2

%

-

-

-

 

-2

%

TOTAL

 

9

%

 

6

%

 

7

%

 

9

%

 

8

%

 

1

%

-

-

-

 

1

%

 

 

 

OPERATING PROFIT (LOSS)

 

 

 

INDUSTRIAL TOOLS & SERVICES SEGMENT

$

22,218

 

$

20,510

 

$

32,206

 

$

28,783

 

$

103,718

 

$

26,345

 

$ -

$ -

$ -

$

26,345

 

ENGINEERED COMPONENTS & SYSTEMS SEGMENT

 

5,107

 

 

1,177

 

 

9,714

 

 

8,789

 

 

24,787

 

 

8,593

 

-

-

-

 

8,593

 

CORPORATE / GENERAL

 

(6,023

)

 

(4,827

)

 

(8,149

)

 

(5,404

)

 

(24,404

)

 

(7,400

)

-

-

-

 

(7,400

)

ADJUSTED OPERATING PROFIT

$

21,302

 

$

16,860

 

$

33,771

 

$

32,168

 

$

104,101

 

$

27,538

 

$ -

$ -

$ -

$

27,538

 

IMPAIRMENT & DIVESTITURE CHARGES

-

 

(2,987

)

-

 

(70,071

)

 

(73,058

)

 

(36,453

)

-

-

-

 

(36,453

)

RESTRUCTURING CHARGES (1)

 

(6,629

)

 

(4,284

)

 

(1,186

)

 

(746

)

 

(12,845

)

 

(403

)

-

-

-

 

(403

)

OPERATING PROFIT (LOSS)

$

14,673

 

$

9,589

 

$

32,585

 

$

(38,649

)

$

18,198

 

$

(9,318

)

$ -

$ -

$ -

$

(9,318

)

 

 

 

ADJUSTED OPERATING PROFIT %

 

 

 

INDUSTRIAL TOOLS & SERVICES SEGMENT

 

15.6

%

 

15.0

%

 

20.3

%

 

18.8

%

 

17.5

%

 

17.7

%

-

-

-

 

17.7

%

ENGINEERED COMPONENTS & SYSTEMS SEGMENT

 

3.5

%

 

0.9

%

 

6.1

%

 

5.9

%

 

4.2

%

 

6.0

%

-

-

-

 

6.0

%

ADJUSTED OPERATING PROFIT %

 

7.4

%

 

6.1

%

 

10.7

%

 

10.7

%

 

8.8

%

 

9.4

%

-

-

-

 

9.4

%

 

 

 

EBITDA

 

 

 

INDUSTRIAL TOOLS & SERVICES SEGMENT

$

25,567

 

$

24,594

 

$

36,394

 

$

32,763

 

$

119,318

 

$

30,038

 

$ -

$ -

$ -

$

30,038

 

ENGINEERED COMPONENTS & SYSTEMS SEGMENT

 

11,004

 

 

7,267

 

 

15,093

 

 

15,114

 

 

48,478

 

 

12,841

 

-

-

-

 

12,841

 

CORPORATE / GENERAL

 

(5,508

)

 

(5,073

)

 

(7,113

)

 

(4,672

)

 

(22,366

)

 

(7,362

)

-

-

-

 

(7,362

)

ADJUSTED EBITDA

$

31,063

 

$

26,788

 

$

44,374

 

$

43,205

 

$

145,430

 

$

35,517

 

$ -

$ -

$ -

$

35,517

 

IMPAIRMENT & DIVESTITURE CHARGES

-

 

(2,987

)

-

 

(70,071

)

 

(73,058

)

 

(36,453

)

-

-

-

 

(36,453

)

RESTRUCTURING CHARGES (1)

 

(6,629

)

 

(4,284

)

 

(1,186

)

 

(746

)

 

(12,845

)

 

(403

)

-

-

-

 

(403

)

EBITDA

$

24,434

 

$

19,517

 

$

43,188

 

$

(27,612

)

$

59,527

 

$

(1,339

)

$ -

$ -

$ -

$

(1,339

)

 

 

 

ADJUSTED EBITDA %

 

 

 

INDUSTRIAL TOOLS & SERVICES SEGMENT

 

18.0

%

 

18.0

%

 

22.9

%

 

21.4

%

 

20.2

%

 

20.2

%

-

-

-

 

20.2

%

ENGINEERED COMPONENTS & SYSTEMS SEGMENT

 

7.5

%

 

5.3

%

 

9.5

%

 

10.2

%

 

8.2

%

 

8.9

%

-

-

-

 

8.9

%

ADJUSTED EBITDA %

 

10.8

%

 

9.7

%

 

14.0

%

 

14.3

%

 

12.3

%

 

12.1

%

-

-

-

 

12.1

%

 
Note: (1) Approximately $0.8 million of the Q2 fiscal 2018 restructuring charges were recorded in cost of products sold. De minimis restructuring charges were also recorded in cost of products sold in Q3 fiscal 2018.
ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(Dollars in thousands, except for per share amounts)
 
 
FISCAL 2018FISCAL 2019
Q1Q2Q3Q4TOTALQ1Q2Q3Q4TOTAL
ADJUSTED EARNINGS (1)
NET EARNINGS (LOSS) (GAAP MEASURE)

$

5,226

$

(18,221

)

$

29,012

 

$

(37,664

)

$

(21,648

)

$

(17,452

)

$ -

$ -

$ -

$

(17,452

)

IMPAIRMENT & DIVESTITURE CHARGES, NET OF TAX EFFECT

-

 

12,385

 

-

 

62,949

 

 

75,334

 

 

33,836

 

-

-

-

 

33,836

 

RESTRUCTURING CHARGES, NET OF TAX EFFECT (1)

 

6,254

 

3,784

 

 

(249

)

 

(337

)

 

9,452

 

 

300

 

-

-

-

 

300

 

ACCELERATED DEBT ISSUANCES COSTS, NET OF TAX EFFECT

-

-

-

 

601

 

 

601

 

-

-

-

-

-

OTHER INCOME TAX (BENEFIT) EXPENSE

-

 

9,705

 

 

(4,891

)

 

(1,831

)

 

2,983

 

-

-

-

-

-

ADJUSTED EARNINGS

$

11,480

$

7,653

 

$

23,872

 

$

23,718

 

$

66,722

 

$

16,684

 

$ -

$ -

$ -

$

16,684

 

 

 

 

ADJUSTED DILUTED EARNINGS PER SHARE (2)

 

 

 

NET EARNINGS (LOSS) (GAAP MEASURE)

$

0.09

$

(0.30

)

$

0.48

 

$

(0.62

)

$

(0.36

)

$

(0.29

)

$ -

$ -

$ -

$

(0.29

)

IMPAIRMENT & DIVESTITURE CHARGES, NET OF TAX EFFECT

-

 

0.21

 

-

 

1.03

 

 

1.24

 

 

0.55

 

-

-

-

 

0.55

 

RESTRUCTURING CHARGES, NET OF TAX EFFECT (1)

 

0.10

 

0.06

 

-

 

(0.01

)

 

0.15

 

 

0.01

 

-

-

-

 

0.01

 

ACCELERATED DEBT ISSUANCES COSTS, NET OF TAX EFFECT

-

-

-

 

0.01

 

 

0.01

 

-

-

-

-

-
OTHER INCOME TAX (BENEFIT) EXPENSE

-

 

0.16

 

 

(0.09

)

 

(0.02

)

 

0.05

 

-

-

-

-

-
ADJUSTED DILUTED EARNINGS PER SHARE

$

0.19

$

0.13

 

$

0.39

 

$

0.39

 

$

1.09

 

$

0.27

 

$ -

$ -

$ -

$

0.27

 

 

 

 

ADJUSTED EBITDA (3)

 

 

 

NET EARNINGS (LOSS) (GAAP MEASURE)

$

5,226

$

(18,221

)

$

29,012

 

$

(37,664

)

$

(21,648

)

$

(17,452

)

$ -

$ -

$ -

$

(17,452

)

FINANCING COSTS, NET

 

7,514

 

7,604

 

 

7,756

 

 

8,617

 

 

31,491

 

 

7,295

 

-

-

-

 

7,295

 

INCOME TAX (BENEFIT) EXPENSE

 

1,604

 

19,839

 

 

(3,995

)

 

(8,472

)

 

8,976

 

 

(72

)

-

-

-

 

(72

)

DEPRECIATION & AMORTIZATION

 

10,090

 

10,295

 

 

10,415

 

 

9,907

 

 

40,708

 

 

8,890

 

-

-

-

 

8,890

 

EBITDA

$

24,434

$

19,517

 

$

43,188

 

$

(27,612

)

$

59,527

 

$

(1,339

)

$ -

$ -

$ -

$

(1,339

)

IMPAIRMENT & OTHER DIVESTITURE CHARGES

-

 

2,987

 

-

 

70,071

 

 

73,058

 

 

36,453

 

-

-

-

 

36,453

 

RESTRUCTURING CHARGES

 

6,629

 

4,284

 

 

1,186

 

 

746

 

 

12,845

 

 

403

 

-

-

-

 

403

 

ADJUSTED EBITDA

$

31,063

$

26,788

 

$

44,374

 

$

43,205

 

$

145,430

 

$

35,517

 

$ -

$ -

$ -

$

35,517

 

 
FOOTNOTES
NOTE:The total of the individual quarters may not equal the annual total due to rounding.
 

(1)

Approximately $0.8 million of Q2 fiscal 2018 restructuring charges were recorded in cost of products sold. De minimis restructuring charges were also recorded in cost of products sold in Q3 fiscal 2018.
 

(2)

Adjusted earnings and adjusted diluted earnings per share represent net earnings (loss) and diluted earnings (loss) per share per the Condensed Consolidated Statements of Operations 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 or 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.
 

(3)

EBITDA represents net earnings (loss) before financing costs, net, income tax (benefit) expense, and depreciation & amortization. EBITDA is not a calculation based upon generally accepted accounting principles (GAAP). The amounts included in the EBITDA and Adjusted EBITDA calculation, however, are derived from amounts included in the Condensed Consolidated Statements of Operations. EBITDA should not be considered as an alternative to net earnings (loss), operating profit (loss) or operating cash flows. Actuant has presented EBITDA because it regularly reviews this performance measure. In addition, EBITDA is used by many of our investors and lenders, and is presented as a convenience to them. 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 CORPORATION
SUPPLEMENTAL UNAUDITED DATA
RECONCILIATION OF GAAP TO NON-GAAP GUIDANCE
(Dollars in millions, except for per share amounts)
 
 
Q2 FISCAL 2019FISCAL 2019
LOWHIGHLOWHIGH
RECONCILIATION OF GAAP DILUTED EARNINGS PER SHARE TO ADJUSTED
DILUTED EARNINGS PER SHARE GUIDANCE
GAAP DILUTED EARNINGS PER SHARE

$

0.15

$

0.20

$

1.09

 

$

1.20

 

(GAIN)/LOSS ON PRODUCT LINE DIVESTITURE, NET OF TAX (1)TBDTBDTBDTBD
ADJUSTED DILUTED EARNINGS PER SHARE GUIDANCE

$

0.15

$

0.20

$

1.09

 

$

1.20

 

 
 
RECONCILIATION OF GAAP CASH FLOW FROM OPERATIONS TO FREE CASH FLOW
CASH FLOW FROM OPERATIONS

$

105

 

$

115

 

CAPITAL EXPENDITURES

 

(25

)

 

(30

)

OTHER

-

-

FREE CASH FLOW GUIDANCE

$

80

 

$

85

 

 
FOOTNOTES

NOTE:

Management does not provide guidance on GAAP financial measures as we are unable to predict and estimate with certainty items such as potential impairments, refinancing costs, business divestiture gains/losses, discrete tax adjustments, or other items impacting GAAP financial metrics. As a result, we have included above only those items about which we are aware and are reasonably likely to occur during the guidance period covered.

(1)

The gain/loss on product line divestiture associated with closing of the Cortland Fibron business is subject to numerous uncertainties which makes an estimate not meaningful.

 

Barb Bolens
VP Corporate Strategy & Investor Relations
262-293-1562

Source: Actuant Corporation