MILWAUKEE--(BUSINESS WIRE)--Actuant Corporation (NYSE:ATU) announced today that its Board of Directors has authorized a plan to commence a divestiture process for its Electrical segment. Actuant has retained Robert W. Baird & Company to advise on the process and plans to reclassify the segment to discontinued operations in the third quarter of fiscal 2013.
"The sale of Electrical allows Actuant to streamline our strategy and refocus on the remaining businesses in a way that better positions the Company to take advantage of our core competencies, current business model and global growth trends,” said Robert C. Arzbaecher, Chairman and Chief Executive Officer. “We’ve outlined four areas of emphasis for growth, through both organic and acquisition strategies, which include energy, infrastructure, farm productivity and natural resources & sustainability. Actuant’s three remaining segments are well positioned to build on these secular growth trends, further expand into emerging markets, and deliver superior long-term returns.”
"The Electrical segment has a variety of premium brands and is a valuable asset." Arzbaecher continued. "We believe the sale of the segment would provide a buyer the opportunity to fully leverage the market leading positions and depth and breadth of the segment’s diverse electrical products and technologies. We will continue to operate the business, including executing its existing plans to grow revenues and profitability, during the divestiture process.”
Actuant intends to redeploy the proceeds from the sale to fund acquisitions and to return capital to shareholders in the form of common stock share repurchases. The Company expects to complete the sale during fiscal 2014.
In conjunction with the reclassification of the Electrical segment to discontinued operations; Actuant announced it expects to record a non-cash, after-tax charge of approximately $150 million from the write-down of the net assets held for sale to their net realizable value in the third quarter. As a result of this charge and the reclassification of Electrical segment results out of continuing operations, actual reported results for the third quarter will not be comparable to the sales and diluted earnings per share (EPS) guidance provided in Actuant’s March 20, 2013 second quarter earnings release. On a comparable basis, the company affirmed its prior third quarter guidance, which included sales of $410-420 million and EPS of $0.63-0.68.
Historical operating results, adjusted to reclassify the Electrical segment from continuing operations, are included in the attachment to this press release. A more comprehensive review of third quarter fiscal 2013 results will be discussed in the Company's third quarter earnings release and conference call scheduled for June 19, 2013.
The Electrical segment primarily serves the retail do-it-yourself, marine, industrial OEM and wholesale electrical markets with a variety of products under the Gardner Bender, Marinco, Mastervolt, Acme and Turner Electric brand names. In 2012, it had sales of approximately $325 million. The segment employs approximately 1,000 and operates from six locations across the globe with its headquarters in Menomonee Falls, Wisconsin.
Conference Call and Webcast
Actuant management will host a conference call today, June 3, 2013, at 11:00 A.M. Eastern Time (10:00 A.M. Central Time) to discuss the proposed divestiture. Slides accompanying the call will be available on the Company's website at: http://www.actuant.com approximately one half hour before the call.
To participate on the conference call, please dial 1-212-271-4657. A live audio webcast will also be available on the Company's website at www.actuant.com.
About Actuant
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.
Safe Harbor
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, the completion of the Electrical segment sale, 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.
| Actuant Corporation | |||||||||||||||||||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||||||||||||||||||
| (Dollars in thousands except per share amounts) | |||||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||||
| Three Months Ended |
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Three Months Ended |
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Twelve |
Six |
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Months Ended |
Months Ended |
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| November 30, | February 29, | May 31, | August 31, | August 31, | November 30, | February 28, | February 28, | ||||||||||||||||||||
| 2011 | 2012 | 2012 | 2012 | 2012 | 2012 | 2013 | 2013 | ||||||||||||||||||||
| Net sales | $ | 309,966 | $ | 300,919 | $ | 343,268 | $ | 322,368 | $ | 1,276,521 | $ | 307,809 | $ | 300,468 | $ | 608,277 | |||||||||||
| Cost of products sold | 182,951 | 184,836 | 204,514 | 192,760 | 765,061 | 183,441 | 184,290 | 367,731 | |||||||||||||||||||
| Gross profit | 127,015 | 116,083 | 138,754 | 129,608 | 511,460 | 124,368 | 116,178 | 240,546 | |||||||||||||||||||
| Selling, administrative and engineering expenses | 69,306 | 67,160 | 74,341 | 74,114 | 284,921 | 74,860 | 73,339 | 148,199 | |||||||||||||||||||
| Amortization of intangible assets | 5,405 | 5,268 | 5,563 | 5,789 | 22,025 | 6,034 | 5,968 | 12,002 | |||||||||||||||||||
| Operating profit | 52,304 | 43,655 | 58,850 | 49,705 | 204,514 | 43,474 | 36,871 | 80,345 | |||||||||||||||||||
| Financing costs, net | 8,222 | 7,821 | 7,236 | 6,281 | 29,560 | 6,322 | 6,260 | 12,582 | |||||||||||||||||||
| Debt refinancing costs | - | - | 16,830 | - | 16,830 | - | - | - | |||||||||||||||||||
| Other (income) expense, net | 665 | 42 | 2,591 | 196 | 3,494 | 644 | (36 | ) | 608 | ||||||||||||||||||
| Earnings from operations before income | |||||||||||||||||||||||||||
| tax expense | 43,417 | 35,792 | 32,193 | 43,228 | 154,630 | 36,508 | 30,647 | 67,155 | |||||||||||||||||||
| Income tax expense | 9,447 | 8,139 | 4,456 | 7,312 | 29,354 | 5,957 | 4,813 | 10,770 | |||||||||||||||||||
| Earnings from continuing operations | 33,970 | 27,653 | 27,737 | 35,916 | 125,276 | 30,551 | 25,834 | 56,385 | |||||||||||||||||||
| Income (loss) from Discontinued Operations, net of tax | 3,204 | 4,522 | 6,664 | (52,376 | ) | (37,986 | ) | 5,792 | 2,601 | 8,393 | |||||||||||||||||
| Net earnings (loss) | $ | 37,174 | $ | 32,175 | $ | 34,401 | $ | (16,460 | ) | $ | 87,290 | $ | 36,343 | $ | 28,435 | $ | 64,778 | ||||||||||
| Earnings from continuing operations per share | |||||||||||||||||||||||||||
| Basic | $ | 0.50 | $ | 0.41 | $ | 0.39 | $ | 0.49 | $ | 1.79 | $ | 0.42 | $ | 0.35 | $ | 0.77 | |||||||||||
| Diluted | 0.46 | 0.37 | 0.36 | 0.48 | 1.68 | 0.41 | 0.35 | 0.76 | |||||||||||||||||||
| Earnings (loss) per share | |||||||||||||||||||||||||||
| Basic | $ | 0.54 | $ | 0.47 | $ | 0.48 | $ | (0.23 | ) | $ | 1.25 | $ | 0.50 | $ | 0.39 | $ | 0.89 | ||||||||||
| Diluted | 0.50 | 0.43 | 0.45 | (0.22 | ) | 1.17 | 0.49 | 0.38 | 0.87 | ||||||||||||||||||
| Weighted average common shares outstanding | |||||||||||||||||||||||||||
| Basic | 68,421 | 68,064 | 71,083 | 72,846 | 70,099 | 72,791 | 72,946 | 72,869 | |||||||||||||||||||
| Diluted | 75,142 | 75,105 | 75,371 | 74,158 | 74,940 | 74,271 | 74,416 | 74,343 | |||||||||||||||||||
| 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 | ||||||||||||||
| ENGINEERED SOLUTIONS SEGMENT | 129,292 | 123,640 | 136,767 | 118,364 | 508,063 | 115,918 | 120,675 | 236,593 | ||||||||||||||
| TOTAL | $ 309,966 | $ 300,919 | $ 343,268 | $ 322,368 | $ 1,276,521 | $ 307,809 | $ 300,468 | $ 608,277 | ||||||||||||||
| % SALES GROWTH | ||||||||||||||||||||||
| INDUSTRIAL SEGMENT | 15% | 11% | 2% | 2% | 7% | 1% | 1% | 1% | ||||||||||||||
| ENERGY SEGMENT | 14% | 28% | 24% | 13% | 19% | 13% | 2% | 8% | ||||||||||||||
| ENGINEERED SOLUTIONS SEGMENT | 23% | 12% | 8% | -10% | 7% | -10% | -2% | -6% | ||||||||||||||
| TOTAL | 18% | 16% | 10% | 0% | 10% | -1% | 0% | 0% | ||||||||||||||
| 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 | ||||||||||||||
| 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) | (7,431) | (13,975) | ||||||||||||||
| TOTAL | $ 52,304 | $ 43,655 | $ 58,850 | $ 49,705 | $ 204,514 | $ 43,474 | $ 36,871 | $ 80,345 | ||||||||||||||
| 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% | ||||||||||||||
| ENGINEERED SOLUTIONS SEGMENT | 14.7% | 10.7% | 13.5% | 8.5% | 12.0% | 6.6% | 6.9% | 6.7% | ||||||||||||||
| TOTAL (INCLUDING CORPORATE) | 16.9% | 14.5% | 17.1% | 15.4% | 16.0% | 14.1% | 12.3% | 13.2% | ||||||||||||||
| 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 | ||||||||||||||
| 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 | $ 62,459 | $ 54,000 | $ 67,198 | $ 60,959 | $ 244,616 | $ 54,579 | $ 48,778 | $ 103,357 | ||||||||||||||
| 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% | ||||||||||||||
| ENGINEERED SOLUTIONS SEGMENT | 17.2% | 13.6% | 15.7% | 11.8% | 14.6% | 10.4% | 10.5% | 10.4% | ||||||||||||||
| TOTAL (INCLUDING CORPORATE) | 20.2% | 17.9% | 19.6% | 18.9% | 19.2% | 17.7% | 16.2% | 17.0% | ||||||||||||||
| 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 | |||||||||||||||||||
| DISCONTINUED OPERATIONS, NET OF INCOME TAX | (3,204 | ) | (4,522 | ) | (6,664 | ) | 52,376 | 37,986 | (5,792 | ) | (2,601 | ) | (8,393 | ) | ||||||||||||||||||||||
| EARNINGS FROM CONTINUING OPERATIONS | 33,970 | 27,653 | 27,737 | 35,916 | 125,276 | 30,551 | 25,834 | 56,385 | ||||||||||||||||||||||||||||
| DEBT REFINANCING CHARGES, NET OF INCOME TAX | - | - | 10,482 | - | 10,482 | - | - | - | ||||||||||||||||||||||||||||
| TOTAL | $ | 33,970 | $ | 27,653 | $ | 38,219 | $ | 35,916 | $ | 135,758 | $ | 30,551 | $ | 25,834 | $ | 56,385 | ||||||||||||||||||||
| DILUTED EARNINGS (LOSS) PER SHARE, BEFORE | ||||||||||||||||||||||||||||||||||||
| SPECIAL ITEMS (1) | ||||||||||||||||||||||||||||||||||||
| NET EARNINGS (LOSS) | $ | 0.50 | $ | 0.43 | $ | 0.45 | $ | (0.22 | ) | $ | 1.17 | $ | 0.49 | $ | 0.38 | $ | 0.87 | |||||||||||||||||||
| DISCONTINUED OPERATIONS, NET OF INCOME TAX | (0.04 | ) | (0.06 | ) | (0.09 | ) | 0.70 | 0.51 | (0.08 | ) | (0.03 | ) | (0.11 | ) | ||||||||||||||||||||||
| EARNINGS FROM CONTINUING OPERATIONS | 0.46 | 0.37 | 0.36 | 0.48 | 1.68 | 0.41 | 0.35 | 0.76 | ||||||||||||||||||||||||||||
| DEBT REFINANCING CHARGES, NET OF INCOME TAX | - | - | 0.15 | - | 0.15 | - | - | - | ||||||||||||||||||||||||||||
| TOTAL | $ | 0.46 | $ | 0.37 | $ | 0.51 | $ | 0.48 | $ | 1.83 | $ | 0.41 | $ | 0.35 | $ | 0.76 | ||||||||||||||||||||
| EBITDA (2) | ||||||||||||||||||||||||||||||||||||
| NET EARNINGS (LOSS) (GAAP MEASURE) | $ | 37,174 | $ | 32,175 | $ | 34,401 | $ | (16,460 | ) | $ | 87,290 | $ | 36,343 | $ | 28,435 | $ | 64,778 | |||||||||||||||||||
| DISCONTINUED OPERATIONS, NET OF INCOME TAX | (3,204 | ) | (4,522 | ) | (6,664 | ) | 52,376 | 37,986 | (5,792 | ) | (2,601 | ) | (8,393 | ) | ||||||||||||||||||||||
| EARNINGS FROM CONTINUING OPERATIONS | 33,970 | 27,653 | 27,737 | 35,916 | 125,276 | 30,551 | 25,834 | 56,385 | ||||||||||||||||||||||||||||
| FINANCING COSTS, NET | 8,222 | 7,821 | 24,066 | 6,281 | 46,390 | 6,322 | 6,260 | 12,582 | ||||||||||||||||||||||||||||
| INCOME TAX EXPENSE | 9,447 | 8,139 | 4,456 | 7,312 | 29,354 | 5,957 | 4,813 | 10,770 | ||||||||||||||||||||||||||||
| DEPRECIATION & AMORTIZATION | 10,820 | 10,387 | 10,939 | 11,450 | 43,596 | 11,749 | 11,871 | 23,620 | ||||||||||||||||||||||||||||
| EBITDA - EXCLUDING DISCONTINUED OPERATIONS (NON-GAAP MEASURE) | $ | 62,459 | $ | 54,000 | $ | 67,198 | $ | 60,959 | $ | 244,616 | $ | 54,579 | $ | 48,778 | $ | 103,357 | ||||||||||||||||||||
| 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 discontinued operations), 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 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, discontinued operations 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 Operations 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. | |||||||||||||||||||||||||||||||||||
