ATU
$24.07
Actuant
($.14)
(.58%)
Earnings Details
3rd Quarter May 2019
Wednesday, June 26, 2019 8:30:00 AM
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Summary

Actuant Beats

Actuant (ATU) reported 3rd Quarter May 2019 earnings of $0.45 per share on revenue of $295.3 million. The consensus earnings estimate was $0.40 per share on revenue of $300.9 million. The Earnings Whisper number was $0.42 per share. Revenue fell 6.9% compared to the same quarter a year ago.

The company said it expects fourth quarter earnings of $0.25 to $0.31 per share on revenue of $265.0 million to $275.0 million. The current consensus earnings estimate is $0.30 per share on revenue of $292.8 million for the quarter 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
$0.45
Earnings Whisper
$0.42
Consensus Estimate
$0.40
Reported Revenue
$295.3 Mil
Revenue Estimate
$300.9 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Actuant Reports Third Quarter 2019 Results

Third Quarter 2019 Highlights*

  • Total net sales were $295 million for the quarter.  Core sales increased 3% on a year-over-year basis while foreign currency decreased net sales 4% and the impact from acquisitions and divestitures decreased net sales by 6%.
  • The Industrial Tools & Services (“IT&S”) segment achieved third quarter revenues of $167 million and delivered a core net sales increase of 8% year-over-year.
  • The Engineered Components & Systems (“EC&S”) segment achieved revenues of $129 million with a core net sales decrease of 2%.
  • GAAP Operating Margin was 16.0% versus 10.3% in third quarter 2018 (see Consolidated Results below, along with the attached reconciliation of earnings).  Adjusted Operating Margin expanded 280bps over third quarter 2018 to 13.5%, from 10.7%.
  • Adjusted EBITDA Margin increased by 190bps with sustained improvement in operating leverage over the third quarter of 2018.
  • GAAP diluted earnings per share (“EPS”) was $0.52 in the third quarter of fiscal 2019, versus $0.48 in the comparable period in 2018.  Adjusted EPS was $0.45, a 15% improvement over third quarter 2018 adjusted EPS of $0.39.
  • Continued reduction in year-over-year leverage (Net Debt to Adjusted EBITDA), achieving 1.8x at the end of third quarter 2019, down from 2.6x at the end of third quarter 2018.
  • Retaining the remaining Cortland business following a comprehensive sale process and strategic review of Cortland’s future growth opportunities, specifically in the medical business.

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

MILWAUKEE--(BUSINESS WIRE)--Actuant Corporation (NYSE: ATU) today announced results for its fiscal 2019 third quarter ended May 31, 2019.

“We are pleased with the continued strong performance of our IT&S segment, which was driven by solid product sales in North America and very strong service sales in the Middle East and North Sea. Despite challenging year-over-year comparisons, this quarter marks five consecutive quarters of total core growth and seven quarters of core product sales growth within the consolidated IT&S business. We continue to take actions to enhance growth and profitability, including driving new product development and executing on our previously announced restructuring actions,” commented Randy Baker, Actuant’s President and CEO.

Mr. Baker continued, “Our results this quarter reflect the solid execution of our growth and profitability plans resulting from the hard work of our teams around the world. I appreciate their incredible dedication, which has been instrumental in getting us to where we are today. We are well positioned to become a top-tier industrial tools and services company, and we have a bright future ahead of us.”

 

Consolidated Results

 

 

 

 

(US$ in millions)

 

 

 

 

 

 

 

 

Three Months Ended May 31

Nine Months Ended May 31

2019

2018

2019

2018

Sales

$295.3

$317.1

$859.7

$881.2

Operating Profit

$47.4

$32.7

$54.4

$57.2

Adjusted Op Profit

$39.9

$33.9

$90.7

$72.3

Adjusted Op Profit %

13.5%

10.7%

10.6%

8.2%

Earnings Per Share

$0.52

$0.48

$0.29

$0.26

Adjusted Earnings Per Share

$0.45

$0.39

$0.90

$0.71

Net Income

$32.4

$29.0

$17.7

$16.0

EBITDA

$56.2

$43.2

$78.1

$87.1

Adjusted EBITDA

$47.1

$44.4

$112.7

$102.2

EBITDA Margin%

19.0%

13.6%

9.1%

9.9%

Adjusted EBITDA Margin%

15.9%

14.0%

13.1%

11.6%

  • Consolidated net sales for the third quarter were $295.3 million, compared to $317.1 million in the prior year quarter. Core sales improved 3% year-over-year, while foreign currency rate changes decreased net sales by 4% and the impact of divestitures (Precision-Hayes International and Cortland Fibron) reduced net sales by 6%.
  • Fiscal 2019 third quarter net income and EPS were $32.4 million and $0.52, compared to a net income of $29.0 million and EPS of $0.48, respectively, in the comparable prior year quarter. Fiscal 2019 third quarter earnings included:
    • Net benefit of $9.9 million, or $0.16 per share after tax, related to an impairment and divestiture benefit, along with a depreciation/amortization true-up resulting from Cortland assets being reclassified into assets held for use, partially offset by EC&S divestiture costs;
    • Restructuring charges of $1.1 million, $0.7 million benefit net of tax ($0.01 per share) related to the previously announced IT&S restructuring;
    • $5.4 million ($0.09 per share) of charges primarily related to an adjustment to the original provision for U.S. tax reform; and
    • Debt issuance costs of $0.5 million related to the modification of our revolving credit facilities in the third quarter.
  • Fiscal 2018 third quarter earnings included restructuring charges of $1.2 million (benefit of $0.2 million and no EPS impact, after tax) and a $4.9 million ($0.09 per share) benefit related to an adjustment to the original provision for U.S. tax reform.
  • Excluding impairment, other divestiture and restructuring charges, adjusted EPS for the third quarter of fiscal 2019 was $0.45, compared to $0.39 in the comparable prior year period (see attached reconciliation of earnings).
  • Consolidated net sales for the nine months ended May 31, 2019 were $859.7 million, compared to $881.2 million in the prior year period. Core sales improved 4% year-over-year while foreign currency rates decreased net sales by 3% and the net impact of acquisitions and divestitures also decreased net sales by 3%.
  • Fiscal 2019’s first nine months’ net income and EPS were $17.7 million and $0.29, respectively, compared to a net income and EPS of $16.0 million and $0.26, respectively, in the comparable prior year period.

Segment Results

 

Industrial Tools & Services Segment (IT&S)

(US$ in millions)

 

Three Months Ended May 31

Nine Months Ended May 31

2019

2018

2019

2018

Sales

$166.7

$158.7

$464.9

$437.7

Operating Profit

$34.9

$31.7

$87.8

$71.5

Adjusted Op Profit (1)

$36.0

$32.2

$88.9

$74.9

Adjusted Op Profit Margin% (1)

21.6%

20.3%

19.1%

17.1%

 

(1) Excludes $1.1 million of restructuring charges in both the third quarter of fiscal 2019 and the nine
months ended May 31, 2019 compared to $0.5 million in the third quarter of fiscal 2018 and $3.4
million in the nine months ended May 31, 2018.

  • Third quarter fiscal 2019 IT&S segment net sales were $166.7 million, 5% higher than the prior year. Core sales increased 8%, the impact of foreign currency exchange rates decreased net sales by 4% year-over-year, and acquisitions added 1%.
  • Solid top line growth in both product and service resulted from the continued strength of our end markets and the impact of our prior commercial investments. The Middle East experienced double digit top line growth in product and service and North America experienced solid product sales.
  • Adjusted operating profit improved as a result of increased sales volume and continued product margin expansion.

Engineered Components & Systems Segment (EC&S)

(US$ in millions)

 

Three Months Ended May 31

Nine Months Ended May 31

2019

2018

2019

2018

Sales

$128.5

$158.4

$394.8

$443.5

Operating Profit

$19.6

$9.6

$(10.1)

$9.2

Adjusted Op Profit (2)

$10.7

$9.7

$24.7

$16.0

Adjusted Op Profit Margin% (2)

8.3%

6.1%

6.3%

3.6%

 

(2) The third quarter of fiscal 2019 excludes a net $10.6 million impairment and divestiture benefit,
along with $1.7 million of depreciation/amortization true-up related to Cortland assets being
reclassified into assets held for use. The third quarter of 2018 excludes $0.1 million of restructuring
charges. The nine months ended May 31, 2019 excludes restructuring charges of $0.4 million,
impairment and other divestiture charges of $32.7 million and $1.7 million of
depreciation/amortization true-up also related to Cortland assets being reclassified into assets held
for use. The nine months ended May 31, 2018 excludes restructuring charges of $3.8 million and
$3.0 million of impairment and other divestiture charges.

  • Third quarter fiscal 2019 EC&S net sales were $128.5 million, a 19% decrease from the prior year. The divestiture of Precision-Hayes International and Cortland Fibron resulted in a decrease in net sales of $21.7 million (14%) and the strengthening of the US dollar reduced net sales an additional 3%.
  • Core sales were down 2% due to weather-related challenges in the U.S. agriculture market along with softening in the U.S. frac and European truck markets.
  • Adjusted operating profit margin improved due to pricing, operating efficiencies and lower incentive compensation expense.

Corporate Expenses and Income Taxes (excluding restructuring, debt-issuance and one-time tax items)

  • Corporate expenses for the third quarter of fiscal 2019 were $6.8 million, $1.3 million lower than the comparable prior year period, primarily resulting from decreased incentive compensation expense.
  • The third quarter effective income tax rate of approximately 15% was in line with expectations but higher than the prior year rate of 9%.

Balance Sheet and Leverage

(US$ in millions)

Period Ending

May 31, 2019

Aug 31, 2018

May 31, 2018

Cash Balance

$201.3

$250.5

$189.5

Debt Balance

$475.2

$532.7

$540.0

Net Debt to Adjusted EBITDA

1.8

1.9

2.6

  • Net debt at May 31, 2019 was approximately $274 million (total debt of $475 million less $201 million of cash), which decreased approximately $57.5 million from the end of fiscal 2018 and $77 million from third quarter of fiscal 2018. Net Debt to Adjusted EBITDA was 1.8x at May 31, 2019.

Outlook for Q4 2019

The company provides the following updated outlook for its fourth quarter 2019:

  • Annual sales: $1.125 to $1.135 billion, with annual core sales growth between 2% and 3%;
  • Full year adjusted EBITDA: $151 to $155 million;
  • Full year adjusted EPS: $1.15 to $1.21;
  • Full year free cash flow: $62 to $70 million;
  • Fourth quarter sales: $265 to $275 million;
  • Fourth quarter adjusted EBITDA: $38 to $42 million; and
  • Fourth quarter adjusted EPS: $0.25 to $0.31.

Mr. Baker said, “Our outlook for the year reflects the continued positive fundamentals of the IT&S business and its solid end-markets, offset by some softness in several EC&S end-markets. Looking forward, we are excited about the IT&S opportunities we see to drive growth and operate even more efficiently as we execute our strategies to deliver enhanced value for shareholders.”

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

EC&S Divestiture Process

As previously announced, the Company intends to solely focus on the IT&S segment and pursue a standalone strategy as a pure play industrial tools and services company. To achieve its objective, the Company initiated a process to unlock value of the remaining EC&S segment and enhance long-term value for its shareholders through a potential divestiture of the segment.

The process continues and the Company will comment on or provide updates regarding these matters (including the status of the divestiture) only when the Company determines that further disclosure is appropriate or required. No assurance can be given that any transaction will result from the EC&S sale process or as to its timing.

Conference Call Information

An investor conference call is scheduled for 10am CT today, June 26, 2019. 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.

(tables follow)

Actuant Corporation

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

 

May 31,

August 31,

2019

2018

 
ASSETS
Current assets
Cash and cash equivalents

$

201,334

 

$

250,490

 

Accounts receivable, net

 

202,808

 

 

187,749

 

Inventories, net

 

167,592

 

 

156,356

 

Assets held for sale

 

-

 

 

23,573

 

Other current assets

 

44,475

 

 

42,732

 

Total current assets

 

616,209

 

 

660,900

 

 
Property, plant and equipment, net

 

89,973

 

 

90,220

 

Goodwill

 

491,499

 

 

512,412

 

Other intangible assets, net

 

158,182

 

 

181,037

 

Other long-term assets

 

37,293

 

 

36,769

 

 
Total assets

$

1,393,156

 

$

1,481,338

 

 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable

$

126,145

 

$

130,838

 

Accrued compensation and benefits

 

39,929

 

 

54,508

 

Current maturities of debt

 

6,250

 

 

30,000

 

Income taxes payable

 

8,762

 

 

4,091

 

Liabilities held for sale

 

-

 

 

44,225

 

Other current liabilities

 

52,477

 

 

67,299

 

Total current liabilities

 

233,563

 

 

330,961

 

 
Long-term debt, net

 

468,984

 

 

502,695

 

Deferred income taxes

 

21,101

 

 

21,933

 

Pension and postretirement benefit liabilities

 

14,275

 

 

14,869

 

Other long-term liabilities

 

47,809

 

 

52,168

 

Total liabilities

 

785,732

 

 

922,626

 

 
Shareholders' equity
Capital stock

 

16,374

 

 

16,285

 

Additional paid-in capital

 

177,584

 

 

167,448

 

Treasury stock

 

(617,731

)

 

(617,731

)

Retained earnings

 

1,184,749

 

 

1,166,955

 

Accumulated other comprehensive loss

 

(153,552

)

 

(174,245

)

Stock held in trust

 

(3,075

)

 

(2,450

)

Deferred compensation liability

 

3,075

 

 

2,450

 

Total shareholders' equity

 

607,424

 

 

558,712

 

 
Total liabilities and shareholders' equity

$

1,393,156

 

$

1,481,338

 

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

Three Months Ended

Nine Months Ended

May 31,

May 31,

May 31,

May 31,

2019

2018

2019

2018

 
Net sales

$

295,266

 

$

317,096

 

$

859,704

$

881,216

Cost of products sold

 

183,365

 

 

200,587

 

 

545,309

 

574,100

Gross profit

 

111,901

 

 

116,509

 

 

314,395

 

307,116

 
Selling, administrative and engineering expenses

 

69,612

 

 

77,463

 

 

213,548

 

220,228

Amortization of intangible assets

 

4,411

 

 

5,184

 

 

12,131

 

15,483

Restructuring charges

 

1,115

 

 

1,170

 

 

1,578

 

11,249

Impairment & divestiture charges

 

(10,597

)

 

-

 

 

32,741

 

2,987

Operating profit

 

47,360

 

 

32,692

 

 

54,397

 

57,169

 
Financing costs, net

 

7,255

 

 

7,756

 

 

21,703

 

22,874

Other expense (income), net

 

378

 

 

(81

)

 

1,946

 

830

Income before income tax expense (benefit)

 

39,727

 

 

25,017

 

 

30,748

 

33,465

 
Income tax expense (benefit)

 

7,309

 

 

(3,995

)

 

13,029

 

17,448

Net earnings

$

32,418

 

$

29,012

 

$

17,719

$

16,017

 
Earnings per share
Basic

$

0.53

 

$

0.48

 

$

0.29

$

0.27

Diluted

 

0.52

 

 

0.48

 

 

0.29

 

0.26

 
Weighted average common shares outstanding
Basic

 

61,422

 

 

60,683

 

 

61,232

 

60,291

Diluted

 

61,840

 

 

61,064

 

 

61,701

 

60,850

Actuant Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
 

Three Months Ended

Nine Months Ended

May 31,

May 31,

May 31,

May 31,

2019

2018

2019

2018

 
Operating Activities
Net earnings

$

32,418

 

$

29,012

 

$

17,719

 

$

16,017

 

Adjustments to reconcile net earnings to net cash provided by operating activities:
Impairment & divestiture charges, net of tax effect

 

(11,162

)

 

-

 

 

29,362

 

 

12,385

 

Depreciation and amortization

 

9,263

 

 

10,415

 

 

25,604

 

 

30,800

 

Stock-based compensation expense

 

3,091

 

 

3,659

 

 

10,253

 

 

11,951

 

Benefit for deferred income taxes

 

(684

)

 

(3,455

)

 

(2,129

)

 

(10,579

)

Amortization of debt issuance costs

 

282

 

 

413

 

 

884

 

 

1,239

 

Other non-cash adjustments

 

199

 

 

147

 

 

262

 

 

347

 

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

 

11,393

 

 

(4,584

)

 

(25,043

)

 

(21,456

)

Inventories

 

2,135

 

 

(4,157

)

 

(22,662

)

 

(22,590

)

Trade accounts payable

 

1,443

 

 

6,915

 

 

(1,367

)

 

5,162

 

Prepaid expenses and other assets

 

5,392

 

 

(4,524

)

 

(4,029

)

 

(13,692

)

Income tax accounts

 

2,881

 

 

8,484

 

 

4,412

 

 

25,989

 

Accrued compensation and benefits

 

2,623

 

 

7,778

 

 

(13,817

)

 

(2,181

)

Other accrued liabilities

 

(6,769

)

 

7,592

 

 

(18,258

)

 

2,197

 

Cash provided by operating activities

 

52,505

 

 

57,695

 

 

1,191

 

 

35,589

 

 
Investing Activities
Capital expenditures

 

(8,052

)

 

(6,169

)

 

(23,719

)

 

(18,716

)

Proceeds from sale of property, plant and equipment

 

1,297

 

 

35

 

 

1,349

 

 

148

 

Rental asset buyout for Viking divestiture

 

-

 

 

-

 

 

-

 

 

(27,718

)

Proceeds from sale of business, net of transaction costs

 

-

 

 

-

 

 

36,159

 

 

8,780

 

Cash paid for business acquisitions, net of cash acquired

 

-

 

 

(5,809

)

 

-

 

 

(22,326

)

Cash (used in) provided by investing activities

 

(6,755

)

 

(11,943

)

 

13,789

 

 

(59,832

)

 
Financing Activities
Principal repayments on term loan

 

(10,000

)

 

(7,500

)

 

(57,500

)

 

(22,500

)

Payment for redemption of term loan

 

(200,000

)

 

-

 

 

(200,000

)

 

-

 

Proceeds from issuance of term loan

 

200,000

 

 

-

 

 

200,000

 

 

-

 

Payment of debt issuance costs

 

(2,125

)

 

-

 

 

(2,125

)

 

-

 

Stock option exercises & other

 

321

 

 

130

 

 

1,352

 

 

10,435

 

Taxes paid related to the net share settlement of equity awards

 

(322

)

 

(172

)

 

(1,811

)

 

(1,279

)

Cash dividend

 

-

 

 

-

 

 

(2,439

)

 

(2,390

)

Cash used in financing activities

 

(12,126

)

 

(7,542

)

 

(62,523

)

 

(15,734

)

 
Effect of exchange rate changes on cash

 

(2,678

)

 

(2,315

)

 

(1,613

)

 

(104

)

Net increase (decrease) in cash and cash equivalents

 

30,946

 

 

35,895

 

 

(49,156

)

 

(40,081

)

Cash and cash equivalents - beginning of period

 

170,388

 

 

153,595

 

 

250,490

 

 

229,571

 

Cash and cash equivalents - end of period

$

201,334

 

$

189,490

 

$

201,334

 

$

189,490

ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA
(Dollars in thousands)
 
FISCAL 2018FISCAL 2019
Q1Q2Q3Q4TOTALQ1Q2Q3Q4TOTAL
SALES 
INDUSTRIAL TOOLS & SERVICES SEGMENT

 $

        141,991

 

 $

        136,986

 

 $

        158,735

 

 $

        153,373

 

 $

        591,085

 

 $

        148,655

 

 $

        149,521

 

 $

        166,732

 

 $

                 -  

 $

        464,908

 

ENGINEERED COMPONENTS & SYSTEMS SEGMENT

 

           146,964

 

 

           138,179

 

 

           158,361

 

 

           148,022

 

 

           591,526

 

 

           143,876

 

 

           122,386

 

 

           128,534

 

 

                    -  

 

           394,796

 

TOTAL

 $

        288,955

 

 $

        275,165

 

 $

        317,096

 

 $

        301,395

 

 $

      1,182,611

 

 $

        292,531

 

 $

        271,907

 

 $

        295,266

 

 $

                 -  

 $

        859,704

 

 
% SALES GROWTH   
INDUSTRIAL TOOLS & SERVICES SEGMENT

 

2

%

 

5

%

 

8

%

 

12

%

 

7

%

 

5

%

 

9

%

 

5

%

 

                    -  

 

6

%

ENGINEERED COMPONENTS & SYSTEMS SEGMENT

 

16

%

 

7

%

 

7

%

 

6

%

 

9

%

 

-2

%

 

-11

%

 

-19

%

 

                    -  

 

-11

%

TOTAL 

 

9

%

 

6

%

 

7

%

 

9

%

 

8

%

 

1

%

 

-1

%

 

-7

%

 

                    -  

 

-2

%

 
OPERATING PROFIT (LOSS)
INDUSTRIAL TOOLS & SERVICES SEGMENT

 $

          22,218

 

 $

          20,510

 

 $

          32,206

 

 $

          28,783

 

 $

        103,718

 

 $

          26,345

 

 $

          26,596

 

 $

          35,992

 

 $

                 -  

 $

          88,933

 

ENGINEERED COMPONENTS & SYSTEMS SEGMENT

 

               5,107

 

 

               1,177

 

 

               9,714

 

 

               8,789

 

 

             24,787

 

 

               8,593

 

 

               5,484

 

 

             10,664

 

 

                    -  

 

             24,741

 

CORPORATE / GENERAL

 

             (6,023

)

 

             (4,612

)

 

             (8,042

)

 

             (5,298

)

 

            (23,976

)

 

             (7,400

)

 

             (8,780

)

 

             (6,786

)

 

                    -  

 

            (22,966

)

ADJUSTED OPERATING PROFIT

 $

          21,302

 

 $

          17,075

 

 $

          33,878

 

 $

          32,274

 

 $

        104,529

 

 $

          27,538

 

 $

          23,300

 

 $

          39,870

 

 $

                 -  

 $

          90,708

 

IMPAIRMENT & DIVESTITURE CHARGES

 

                    -  

 

 

             (2,987

)

 

                    -  

 

 

            (70,071

)

 

            (73,058

)

 

            (36,453

)

 

             (6,886

)

 

             10,597

 

 

                    -  

 

            (32,742

)

RESTRUCTURING CHARGES (1)

 

             (6,629

)

 

             (4,284

)

 

             (1,186

)

 

                (746

)

 

            (12,845

)

 

                (403

)

 

                  (60

)

 

             (1,115

)

 

                    -  

 

             (1,578

)

DEBT MODIFICATION COSTS

 

                    -  

 

 

                    -  

 

 

                    -  

 

 

                    -  

 

 

                    -  

 

 

                    -  

 

 

                    -  

 

 

                (288

)

 

                    -  

 

                (288

)

DEPRECIATION & AMORTIZATION TRUE UP (2)

 

                    -  

 

 

                    -  

 

 

                    -  

 

 

                    -  

 

 

                    -  

 

 

                    -  

 

 

                    -  

 

 

             (1,704

)

 

                    -  

 

             (1,704

)

OPERATING PROFIT (LOSS)

 $

          14,673

 

 $

            9,804

 

 $

          32,692

 

 $

         (38,543

)

 $

          18,626

 

 $

           (9,318

)

 $

          16,354

 

 $

          47,360

 

 $

                 -  

 $

          54,396

 

 
ADJUSTED OPERATING PROFIT %
INDUSTRIAL TOOLS & SERVICES SEGMENT

 

15.6

%

 

15.0

%

 

20.3

%

 

18.8

%

 

17.5

%

 

17.7

%

 

17.8

%

 

21.6

%

 

                    -  

 

19.1

%

ENGINEERED COMPONENTS & SYSTEMS SEGMENT

 

3.5

%

 

0.9

%

 

6.1

%

 

5.9

%

 

4.2

%

 

6.0

%

 

4.5

%

 

8.3

%

 

                    -  

 

6.3

%

ADJUSTED OPERATING PROFIT %

 

7.4

%

 

6.2

%

 

10.7

%

 

10.7

%

 

8.8

%

 

9.4

%

 

8.6

%

 

13.5

%

 

                    -  

 

10.6

%

 
EBITDA  
INDUSTRIAL TOOLS & SERVICES SEGMENT

 $

          25,567

 

 $

          24,594

 

 $

          36,394

 

 $

          32,763

 

 $

        119,318

 

 $

          30,038

 

 $

          30,153

 

 $

          40,015

 

 $

                 -  

 $

        100,206

 

ENGINEERED COMPONENTS & SYSTEMS SEGMENT

 

             11,004

 

 

               7,267

 

 

             15,093

 

 

             15,114

 

 

             48,478

 

 

             12,841

 

 

               8,486

 

 

             12,651

 

 

                    -  

 

             33,978

 

CORPORATE / GENERAL

 

             (5,508

)

 

             (5,073

)

 

             (7,113

)

 

             (4,672

)

 

            (22,366

)

 

             (7,362

)

 

             (8,544

)

 

             (5,615

)

 

                    -  

 

            (21,521

)

ADJUSTED EBITDA

 $

          31,063

 

 $

          26,788

 

 $

          44,374

 

 $

          43,205

 

 $

        145,430

 

 $

          35,517

 

 $

          30,095

 

 $

          47,051

 

 $

                 -  

 $

        112,663

 

IMPAIRMENT & DIVESTITURE CHARGES

 

                    -  

 

 

             (2,987

)

 

                    -  

 

 

            (70,071

)

 

            (73,058

)

 

            (36,453

)

 

             (6,886

)

 

             10,597

 

 

                    -  

 

            (32,742

)

RESTRUCTURING CHARGES (1)

 

             (6,629

)

 

             (4,284

)

 

             (1,186

)

 

                (746

)

 

            (12,845

)

 

                (403

)

 

                  (60

)

 

             (1,115

)

 

                    -  

 

             (1,578

)

DEBT MODIFICATION COSTS

 

                    -  

 

 

                    -  

 

 

                    -  

 

 

                    -  

 

 

                    -  

 

 

                    -  

 

 

                    -  

 

 

                (288

)

 

                    -  

 

                (288

)

EBITDA

 $

          24,434

 

 $

          19,517

 

 $

          43,188

 

 $

         (27,612

)

 $

          59,527

 

 $

           (1,339

)

 $

          23,149

 

 $

          56,245

 

 $

                 -  

 $

          78,055

 

 
ADJUSTED EBITDA % 
INDUSTRIAL TOOLS & SERVICES SEGMENT

 

18.0

%

 

18.0

%

 

22.9

%

 

21.4

%

 

20.2

%

 

20.2

%

 

20.2

%

 

24.0

%

 

                    -  

 

21.6

%

ENGINEERED COMPONENTS & SYSTEMS SEGMENT

 

7.5

%

 

5.3

%

 

9.5

%

 

10.2

%

 

8.2

%

 

8.9

%

 

6.9

%

 

9.8

%

 

                    -  

 

8.6

%

ADJUSTED EBITDA %

 

10.8

%

 

9.7

%

 

14.0

%

 

14.3

%

 

12.3

%

 

12.1

%

 

11.1

%

 

15.9

%

 

                    -  

 

13.1

%

 
Notes:
(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.
(2) Represents the depreciation and amortization expense true up for the Cortland business assets that were reclassified out of held for sale in Q3 fiscal 2019, as though the assets had never been classified as held for sale.

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

)

$

2,753

 

$

32,418

 

$

-

$

17,719

 

IMPAIRMENT & DIVESTITURE CHARGES, NET OF TAX EFFECT

 

-

 

12,385

 

 

-

 

 

62,949

 

 

75,334

 

 

33,836

 

 

6,688

 

 

(11,162

)

 

-

 

29,362

 

RESTRUCTURING CHARGES, NET OF TAX EFFECT (1)

 

6,254

 

3,784

 

 

(249

)

 

(337

)

 

9,452

 

 

300

 

 

(191

)

 

(749

)

 

-

 

(640

)

ACCELERATED DEBT ISSUANCES & MODIFICATION COSTS,

 

-

 

-

 

 

-

 

 

601

 

 

601

 

 

-

 

 

-

 

 

358

 

 

-

 

358

 

NET OF TAX EFFECT
DEPRECIATION & AMORTIZATION TRUE UP, NET OF TAX EFFECT

 

-

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

1,302

 

 

-

 

1,302

 

OTHER INCOME TAX (BENEFIT) EXPENSE

 

-

 

9,705

 

 

(4,891

)

 

(1,831

)

 

2,983

 

 

-

 

 

2,258

 

 

5,412

 

 

-

 

7,670

 

ADJUSTED EARNINGS

$

11,480

$

7,653

 

$

23,872

 

$

23,718

 

$

66,722

 

$

16,684

 

$

11,508

 

$

27,579

 

$

-

$

55,771

 

 
ADJUSTED DILUTED EARNINGS PER SHARE (2)
NET EARNINGS (LOSS) (GAAP MEASURE)

$

0.09

$

(0.30

)

$

0.48

 

$

(0.62

)

$

(0.36

)

$

(0.29

)

$

0.04

 

$

0.52

 

$

-

$

0.29

 

IMPAIRMENT & DIVESTITURE CHARGES, NET OF TAX EFFECT

 

-

 

0.21

 

 

-

 

 

1.03

 

 

1.24

 

 

0.55

 

 

0.11

 

 

(0.18

)

 

-

 

0.47

 

RESTRUCTURING CHARGES, NET OF TAX EFFECT (1)

 

0.10

 

0.06

 

 

-

 

 

(0.01

)

 

0.15

 

 

0.01

 

 

-

 

 

(0.01

)

 

-

 

(0.01

)

ACCELERATED DEBT ISSUANCES & MODIFICATION COSTS,

 

-

 

-

 

 

-

 

 

0.01

 

 

0.01

 

 

-

 

 

-

 

 

0.01

 

 

-

 

0.01

 

NET OF TAX EFFECT
DEPRECIATION & AMORTIZATION TRUE UP, NET OF TAX EFFECT

 

-

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

0.02

 

 

-

 

0.02

 

OTHER INCOME TAX (BENEFIT) EXPENSE

 

-

 

0.16

 

 

(0.09

)

 

(0.02

)

 

0.05

 

 

-

 

 

0.04

 

 

0.09

 

 

-

 

0.12

 

ADJUSTED DILUTED EARNINGS PER SHARE

$

0.19

$

0.13

 

$

0.39

 

$

0.39

 

$

1.09

 

$

0.27

 

$

0.19

 

$

0.45

 

$

-

$

0.90

 

 
ADJUSTED EBITDA (3)
NET EARNINGS (LOSS) (GAAP MEASURE)

$

5,226

$

(18,221

)

$

29,012

 

$

(37,664

)

$

(21,648

)

$

(17,452

)

$

2,753

 

$

32,418

 

$

-

$

17,719

 

FINANCING COSTS, NET

 

7,514

 

7,604

 

 

7,756

 

 

8,617

 

 

31,491

 

 

7,295

 

 

7,153

 

 

7,255

 

 

-

 

21,703

 

INCOME TAX (BENEFIT) EXPENSE

 

1,604

 

19,839

 

 

(3,995

)

 

(8,472

)

 

8,976

 

 

(72

)

 

5,792

 

 

7,309

 

 

-

 

13,029

 

DEPRECIATION & AMORTIZATION

 

10,090

 

10,295

 

 

10,415

 

 

9,907

 

 

40,708

 

 

8,890

 

 

7,451

 

 

9,263

 

 

-

 

25,604

 

EBITDA

$

24,434

$

19,517

 

$

43,188

 

$

(27,612

)

$

59,527

 

$

(1,339

)

$

23,149

 

$

56,245

 

$

-

$

78,055

 

IMPAIRMENT & OTHER DIVESTITURE CHARGES

 

-

 

2,987

 

 

-

 

 

70,071

 

 

73,058

 

 

36,453

 

 

6,886

 

 

(10,597

)

 

-

 

32,742

 

RESTRUCTURING CHARGES

 

6,629

 

4,284

 

 

1,186

 

 

746

 

 

12,845

 

 

403

 

 

60

 

 

1,115

 

 

-

 

1,578

 

DEBT MODIFICATION COSTS

 

-

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

288

 

 

-

 

288

 

ADJUSTED EBITDA

$

31,063

$

26,788

 

$

44,374

 

$

43,205

 

$

145,430

 

$

35,517

 

$

30,095

 

$

47,051

 

$

-

$

112,663

 

 
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 Earnings. 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)
 
Q4 FISCAL 2019FISCAL 2019
LOWHIGHLOWHIGH
RECONCILIATION OF GAAP DILUTED EARNINGS PER SHARE TO ADJUSTED
DILUTED EARNINGS PER SHARE GUIDANCE
GAAP DILUTED EARNINGS PER SHARE

$

0.14

$

0.22

$

0.43

 

$

0.51

 

IMPAIRMENT & OTHER DIVESTITURE CHARGES, NET OF TAX EFFECTTBDTBD

 

0.47

 

 

0.47

 

RESTRUCTURING CHARGES, NET OF TAX EFFECT

 

0.11

 

0.09

 

0.10

 

 

0.08

 

ACCELERATED DEBT ISSUANCES & MODIFICATION COSTS, NET OF TAX EFFECT

 

-

 

-

 

0.01

 

 

0.01

 

DEPRECIATION & AMORTIZATION TRUE UP, NET OF TAX EFFECT

 

-

 

-

 

0.02

 

 

0.02

 

OTHER INCOME TAX (BENEFIT) EXPENSETBDTBD

 

0.12

 

 

0.12

 

ADJUSTED DILUTED EARNINGS PER SHARE GUIDANCE

$

0.25

$

0.31

$

1.15

 

$

1.21

 

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

$

87

 

$

100

 

CAPITAL EXPENDITURES

 

(25

)

 

(30

)

OTHER

 

-

 

 

-

 

FREE CASH FLOW GUIDANCE

$

62

 

$

70

 

 
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.

 

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

Source: Actuant Corporation