Exhibit 99.1
Actuant Reports Second Quarter Results; Adjusts Fiscal 2018 Guidance
MILWAUKEE--(BUSINESS WIRE)--March 21, 2018--Actuant Corporation (NYSE: ATU) today announced results for its second quarter ended February 28, 2018.
Highlights
- Consolidated sales increased 6% over the comparable prior year quarter with a 5% benefit from foreign currency rate changes and a 2% reduction associated with net acquisitions and divestitures. Second quarter core sales (total sales excluding the impact of acquisitions, divestitures and foreign currency rate changes) increased 3% on a year-over-year basis with strong volumes in both the Engineered Solutions and Industrial segments.
- GAAP diluted loss per share (“EPS”) was $(0.30) in the second quarter of fiscal 2018 versus earnings of $0.08 in the prior year. Excluding second quarter fiscal 2018 one-time items totaling $0.43 per share, adjusted EPS was $0.13 (see Consolidated Results below, along with the attached reconciliation of earnings).
- During the fiscal 2018 second quarter, the company recognized a net provisional one-time adjustment to income tax expense of $8.4 million, or $0.14 per share related to U.S. Tax Reform.
- Restructuring activities related to aligning the cost structure continue to be executed with total charges of approximately $4.3 million in the second quarter.
- Increased full year sales guidance to $1.140-1.160 billion, however modestly reduced the expected adjusted EPS range to $1.00-1.10 from $1.05-1.15 per share (excluding one-time items).
Randy Baker, President and CEO of Actuant commented, “Actuant delivered solid sales growth in the second quarter, but regrettably we continue to experience margin pressures resulting from longstanding specialty projects along with increasing production, commercial and engineering expenses to support high service levels and growth. Many of the core base businesses are seeing good profit traction; however we are disappointed in the number and scale of operational, mix and other issues that are largely offsetting these improvements. We continue to diligently pursue the restructuring and portfolio management actions that are anticipated to simplify and improve the fundamental operating performance of Actuant. In summary, while I am clearly dissatisfied in the pace of overall improvement, I am encouraged that we are getting these issues behind us and that we have a roadmap to ultimately turn the corner and fully capitalize on the broad based strong economic backdrop. I remain appreciative of the commitment and efforts of the Actuant teams across the globe.”
Consolidated Results
Consolidated sales for the second quarter were $275 million, 6% higher than the $259 million in the comparable prior year quarter. Core sales improved 3% year-over-year while foreign currency rate changes increased sales 5% and the net impact from the Mirage acquisition net of the Viking divestiture reduced sales by 2%. Fiscal 2018 second quarter net loss and EPS were $(18.2) million, or $(0.30), compared to $5.1 million or $0.08, respectively, in the comparable prior year quarter. Fiscal 2018 second quarter earnings included restructuring charges of $4.3 million ($3.8 million or $0.06 per share after tax), impairment & divestiture charges of $3.0 million ($12.4 million or $0.21 per share after tax), $8.4 million ($0.14 per share) related to U.S. tax reform and $1.4 million ($0.02 per share) for equity compensation deferred tax adjustments. Second quarter 2017 results included $2.1 million ($1.5 million or $0.03 per share after tax) of restructuring charges. Excluding these items, adjusted EPS for the second quarter of fiscal 2018 was $0.13 compared to $0.11 in the comparable prior year period (see attached reconciliation of earnings).
Consolidated sales for the six months ended February 28, 2018 were $564 million, 8% higher than the $525 million in the comparable prior year period. Core sales improved 5% year-over-year while foreign currency rate changes increased sales 4%, and the net impact of acquisitions and divestitures reduced sales by 1%. Fiscal 2018’s first half net loss and EPS were $(13.0 million), or $(0.22), compared to earnings and EPS of $10.0 million and $0.17, respectively, in the comparable prior year period. Fiscal 2018 included restructuring charges of $10.9 million ($10.0 million or $0.16 per share after tax) along with the aforementioned impairment & divestiture, tax reform and equity compensation items. First half 2017 results included $5.0 million ($3.7 million or $0.07 per share after tax) of restructuring charges and $7.8 million ($4.9 million or $0.08 per share after tax) of director and officer transition charges. Excluding these items, adjusted EPS for the first half of fiscal 2018 was $0.31 which is consistent with the comparable prior year period (see attached reconciliation of earnings).
Tax Reform
As a result of the U.S. Tax Reform signed into law in December 2017, Actuant recognized a one-time tax charge of $8 million in the second quarter of fiscal 2018. This charge is comprised of approximately $16 million in repatriation tax (aka toll charge) on accumulated overseas earnings offset by an $8 million net benefit associated with balance sheet revaluation. These impacts from Tax Reform should be considered provisional and may be subject to further adjustment.
Segment Results
Industrial Segment
(US $ in millions)
| Three Months Ended Feb 28, | | Six Months Ended Feb 28, |
| 2018 | | 2017 | | 2018 | | 2017 |
| Sales | $99.1 | | $91.6 | | $196.0 | | $178.9 |
| Operating Profit | $16.8 | | $18.3 | | $35.0 | | $37.1 |
| Adjusted Op Profit (1) | $18.5 | | $19.0 | | $38.0 | | $38.5 |
| Adjusted Op Profit % (1) | 18.7% | | 20.8% | | 19.4% | | 21.5% |
(1) 2018 excludes $1.7 and $3.0 of restructuring charges in the second quarter and first half, respectively. 2017 excludes $0.7 and $1.4 of restructuring charges in the second quarter and first half, respectively.
Second quarter fiscal 2018 Industrial segment sales were $99 million or 8% higher than the prior year. The impact of foreign currency exchange rates was a 4% benefit resulting in a 4% year-over-year core sales increase. Overall demand for standard industrial tools remained strong globally and across the diverse set of end markets served, with particular strength in the bolting and OEM service tool categories. Their double digit growth represents both broad market strength and the impact of new product and commercial coverage activities. The segment’s overall core growth rate includes lower heavy lifting technology and concrete tensioning volumes which both declined in the mid-teens on a percentage basis. Second quarter adjusted operating profit margin declined to 18.7% as the incremental volumes were more than offset by approximately $2 million in specialty heavy lifting project cost overruns, production inefficiencies and lower volumes in concrete tensioning, and higher year-over-year commercial and engineering investments to support growth.
Energy Segment
(US $ in millions)
| Three Months Ended Feb 28, | | Six Months Ended Feb 28, |
| 2018 | | 2017 | | 2018 | | 2017 |
| Sales | $66.0 | | $72.9 | | $141.8 | | $157.5 |
| Operating (Loss) Profit | $(4.5) | | $(0.6) | | $(4.2) | | $2.6 |
| Adjusted Op (Loss) Profit (2) | $0.7 | | $(0.6) | | $2.0 | | $2.7 |
| Adjusted Op (Loss) Profit % (2) | 1.1% | | (0.9)% | | 1.4% | | 1.7% |
(2) 2018 excludes $2.3 and $3.2 of restructuring charges in the second quarter and first half, respectively. Both 2018 periods also exclude $3.0 in impairment & divestiture charges. 2017 excludes $0.1 of restructuring charges in the first half.
Fiscal 2018 second quarter Energy segment sales declined 9% year-over-year to $66 million. Excluding the 4% favorable impact of the weaker US dollar and 5% headwind from the net of the Viking divestiture and Mirage acquisition, core sales declined 8%. Hydratight continued to experience maintenance deferrals and scope reductions; however the core sales rate of change improved sequentially. The weakness remains most pronounced in the Asia Pacific region with modestly improving activity levels within the Middle East region. Cortland sales grew mid-single digits on higher medical demand along with improving offshore oil & gas rope and cable activity. Energy segment adjusted operating profit margin was 1.1% in the seasonally weak second quarter on lower Hydratight volumes partially offset by the absence of Viking losses and the benefit of cost reductions actions.
Engineered Solutions Segment
(US $ in millions)
| Three Months Ended Feb 28, | | Six Months Ended Feb 28, |
| 2018 | | 2017 | | 2018 | | 2017 |
| Sales | $110.1 | | $94.3 | | $226.3 | | $188.2 |
| Operating Profit (Loss) | $2.2 | | $1.8 | | $8.5 | | $2.6 |
| Adjusted Op Profit (3) | $2.4 | | $3.3 | | $9.0 | | $6.1 |
| Adjusted Op Profit % (3) | 2.2% | | 3.5% | | 4.0% | | 3.2% |
(3) 2018 excludes $0.2 and $0.5 of restructuring charges in the second quarter and first half, respectively. 2017 excludes $1.5 and $3.5 of restructuring charges in the second quarter and first half, respectively.
Second quarter fiscal 2018 Engineered Solutions segment sales were $110 million or 17% above the prior year. Excluding the 7% benefit of the weaker US dollar, year-over-year core sales increased 10%. Strong sales growth continued across the agriculture and other off-highway equipment markets globally, while truck sales were modestly higher as growth in Europe production was partially offset by anticipated lower China volumes. Second quarter adjusted operating profit margin declined 130 basis points from the comparable prior year quarter as the higher volumes were more than offset by warranty costs, unfavorable mix, material and labor inflation and higher engineering expenses.
Corporate Expenses and Income Taxes (excluding restructuring, transition, and one-time tax items)
Corporate expenses for the second quarter of fiscal 2018 were $4.8 million, or $1.6 million lower than the comparable prior year period due primarily to the benefit of cost reduction actions and lower incentive compensation. The effective income tax rate of approximately 14% was in line with expectations and modestly higher than the prior year’s 10% rate.
Financial Position
Net debt at February 28, 2018 was approximately $394 million (total debt of $548 million less $154 million of cash) essentially unchanged from the prior quarter end and represents a net debt to proforma EBITDA leverage ratio of approximately 3.0 times.
Outlook
Baker continued, "Actuant’s commercial actions including investing in organic growth, new products and sales coverage are delivering the intended results. This, combined with improving market conditions, is translating to strong top line performance. However, this has also put pressure on margins from commercial & engineering investments, raw material inflation, and other costs related to maintaining service levels with higher-than-expected demand including overtime and wage inflation, and expedited freight. We must continue to put the longstanding issues behind us, and aggressively pursue the restructuring, operational and portfolio actions necessary to improve the overall trajectory of the earnings.
For the full year, we are increasing our sales guidance to the $1.140-1.160 billion range with core sales growth now anticipated at 2-4%, along with the benefit of increased tailwind from currency translation. However, we are modestly lowering the full year adjusted EPS guidance to a range of $1.00-1.10 reflective of the legacy cost issues and incremental margin performance to date. This adjusted EPS guidance includes an unchanged expected effective income tax rate in the 5-10% range for the year. Free cash flow is now expected to be in the $70-75 million range. The free cash flow reduction reflects lower earnings combined with modestly higher levels of working capital to support the sales growth.
We expect third quarter sales to be in the $300-310 million range, with adjusted EPS of $0.33-0.38. The third quarter outlook incorporates the normal seasonal sequential improvement across the portfolio.
All guidance excludes restructuring, divestiture & impairment charges, one-time tax adjustments as well as the impact of potential future acquisitions and share repurchases.
Baker concluded, “The majority of our markets continue to show strength, and our growth initiatives are taking hold. By working on the new product and lean revitalization initiatives, we have put the foundation in place to generate further margin improvement. I believe these actions and the portfolio simplification plans we have in place, will ultimately result in strengthening margins as we move in a disciplined manner to our 2021 vision."
Conference Call Information
An investor conference call is scheduled for 10am CT today, March 21, 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. 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, 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.
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) |
| | | | | | | | | | |
| | | | | | | February 28, | | August 31, |
| | | | | | | 2018 | | 2017 |
| | | | | | | | | |
| ASSETS | | | | | | | |
| Current assets | | | | | |
| Cash and cash equivalents | | $ | 153,595 | | | $ | 229,571 | |
| Accounts receivable, net | | | 210,650 | | | | 190,206 | |
| Inventories, net | | | 166,227 | | | | 143,651 | |
| Assets held for sale | | | - | | | | 21,835 | |
| Other current assets | | | 60,569 | | | | 61,663 | |
| | Total current assets | | | 591,041 | | | | 646,926 | |
| | | | | | | | | |
| Property, plant and equipment, net | | | 102,411 | | | | 94,521 | |
| Goodwill | | | | | | 546,135 | | | | 530,081 | |
| Other intangible assets, net | | | 216,370 | | | | 220,489 | |
| Other long-term assets | | | 24,348 | | | | 24,938 | |
| | | | | | | | | |
| | Total assets | | $ | 1,480,305 | | | $ | 1,516,955 | |
| | | | | | | | | |
| | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | |
| Current liabilities | | | | | |
| Trade accounts payable | | $ | 136,941 | | | $ | 133,387 | |
| Accrued compensation and benefits | | | 41,518 | | | | 50,939 | |
| Current maturities of debt and short-term borrowings | | | 30,000 | | | | 30,000 | |
| Income taxes payable | | | 7,687 | | | | 6,080 | |
| Liabilities held for sale | | | - | | | | 101,083 | |
| Other current liabilities | | | 58,368 | | | | 57,445 | |
| | Total current liabilities | | | 274,514 | | | | 378,934 | |
| | | | | | | | | |
| Long-term debt, net | | | 517,318 | | | | 531,940 | |
| Deferred income taxes | | | 23,262 | | | | 29,859 | |
| Pension and postretirement benefit liabilities | | | 19,338 | | | | 19,862 | |
| Other long-term liabilities | | | 56,592 | | | | 55,821 | |
| | Total liabilities | | | 891,024 | | | | 1,016,416 | |
| | | | | | | | | |
| Shareholders' equity | | | | |
| Capital stock | | | | 16,218 | | | | 16,040 | |
| Additional paid-in capital | | | 155,974 | | | | 138,449 | |
| Treasury stock | | | (617,731 | ) | | | (617,731 | ) |
| Retained earnings | | | 1,178,047 | | | | 1,191,042 | |
| Accumulated other comprehensive loss | | | (143,227 | ) | | | (227,261 | ) |
| Stock held in trust | | | (2,848 | ) | | | (2,696 | ) |
| Deferred compensation liability | | | 2,848 | | | | 2,696 | |
| | Total shareholders' equity | | | 589,281 | | | | 500,539 | |
| | | | | | | | | |
| | Total liabilities and shareholders' equity | | $ | 1,480,305 | | | $ | 1,516,955 | |
| | | | | | | | | | |
| Actuant Corporation |
| Condensed Consolidated Statements of Operations |
| (Dollars in thousands, except per share amounts) |
| (Unaudited) |
| | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | February 28, | | February 28, | | February 28, | | February 28, |
| | | 2018 | | 2017 | | 2018 | | 2017 |
| | | | | | | | | |
| Net sales | $ | 275,165 | | | $ | 258,869 | | $ | 564,120 | | | $ | 524,662 | |
| Cost of products sold | | 185,469 | | | | 171,543 | | | 373,513 | | | | 344,269 | |
| Gross profit | | 89,696 | | | | 87,326 | | | 190,607 | | | | 180,393 | |
| | | | | | | | | |
| Selling, administrative and engineering expenses | | 68,502 | | | | 66,957 | | | 142,980 | | | | 135,561 | |
| Amortization of intangible assets | | 5,168 | | | | 5,069 | | | 10,299 | | | | 10,330 | |
| Director & officer transition charges | | - | | | | - | | | - | | | | 7,784 | |
| Restructuring charges | | 3,450 | | | | 2,101 | | | 10,079 | | | | 5,048 | |
| Impairment & divestiture charges | | 2,987 | | | | - | | | 2,987 | | | | - | |
| Operating profit | | 9,589 | | | | 13,199 | | | 24,262 | | | | 21,670 | |
| | | | | | | | | |
| Financing costs, net | | 7,604 | | | | 7,334 | | | 15,118 | | | | 14,467 | |
| Other expense (income), net | | 367 | | | | 591 | | | 696 | | | | (38 | ) |
| Earnings before income tax expense (benefit) | | 1,618 | | | | 5,274 | | | 8,448 | | | | 7,241 | |
| | | | | | | | | |
| Income tax expense (benefit) | | 19,839 | | | | 200 | | | 21,443 | | | | (2,798 | ) |
| Net (loss) earnings | $ | (18,221 | ) | | $ | 5,074 | | $ | (12,995 | ) | | $ | 10,039 | |
| | | | | | | | | |
| (Loss) earnings per share | | | | | | | |
| Basic | $ | (0.30 | ) | | $ | 0.09 | | $ | (0.22 | ) | | $ | 0.17 | |
| Diluted | | (0.30 | ) | | | 0.08 | | | (0.22 | ) | | | 0.17 | |
| | | | | | | | | |
| Weighted average common shares outstanding | | | | | | | |
| Basic | | 60,318 | | | | 59,368 | | | 60,095 | | | | 59,170 | |
| Diluted | | 60,318 | | | | 60,146 | | | 60,095 | | | | 59,881 | |
| | | | | | | | |
| Actuant Corporation |
| Condensed Consolidated Statements of Cash Flows |
| (In thousands) |
| (Unaudited) |
| | | | | | | |
| | | | | | | |
| Three Months Ended | | Six Months Ended |
| February 28, | | February 28, | | February 28, | | February 28, |
| 2018 | | 2017 | | 2018 | | 2017 |
| | | | | | | |
| Operating Activities | | | | | | | |
| Net (loss) earnings | $ | (18,221 | ) | | $ | 5,074 | | | $ | (12,995 | ) | | $ | 10,039 | |
| Adjustments to reconcile net (loss) earnings to net cash (used in) | | | | | | | |
| provided by operating activities: | | | | | | | |
| Impairment & other divestiture charges, including tax expense | | 12,385 | | | | - | | | | 12,385 | | | | - | |
| Depreciation and amortization | | 10,295 | | | | 10,729 | | | | 20,385 | | | | 21,625 | |
| Stock-based compensation expense | | 2,872 | | | | 2,623 | | | | 8,292 | | | | 12,177 | |
| (Benefit) expense for deferred income taxes | | (6,817 | ) | | | 3,416 | | | | (7,124 | ) | | | 551 | |
| Amortization of debt issuance costs | | 413 | | | | 413 | | | | 826 | | | | 826 | |
| Other non-cash adjustments | | 87 | | | | 251 | | | | 200 | | | | 715 | |
| Changes in components of working capital and other: | | | | | | | |
| Accounts receivable | | (5,394 | ) | | | (12,645 | ) | | | (16,872 | ) | | | (20,897 | ) |
| Inventories | | (6,805 | ) | | | 7,748 | | | | (18,433 | ) | | | (394 | ) |
| Trade accounts payable | | (7,957 | ) | | | 5,508 | | | | (1,753 | ) | | | 12,276 | |
| Prepaid expenses and other assets | | 2,875 | | | | (5,334 | ) | | | (9,168 | ) | | | (10,819 | ) |
| Income tax accounts | | 19,219 | | | | (4,972 | ) | | | 17,505 | | | | (6,918 | ) |
| Accrued compensation and benefits | | 2,629 | | | | (947 | ) | | | (9,959 | ) | | | (3,704 | ) |
| Other accrued liabilities | | (7,229 | ) | | | (9,645 | ) | | | (5,395 | ) | | | (795 | ) |
| Cash (used in) provided by operating activities | | (1,648 | ) | | | 2,219 | | | | (22,106 | ) | | | 14,682 | |
| | | | | | | |
| Investing Activities | | | | | | | |
| Capital expenditures | | (4,643 | ) | | | (9,556 | ) | | | (12,547 | ) | | | (14,695 | ) |
| Proceeds from sale of property, plant and equipment | | 81 | | | | 114 | | | | 113 | | | | 244 | |
| Rental asset buyout for Viking divestiture | | - | | | | - | | | | (27,718 | ) | | | - | |
| Proceeds from sale of business, net of transaction costs | | 8,780 | | | | - | | | | 8,780 | | | | - | |
| Cash paid for business acquisitions, net of cash acquired | | (16,517 | ) | | | - | | | | (16,517 | ) | | | - | |
| Cash used in investing activities | | (12,299 | ) | | | (9,442 | ) | | | (47,889 | ) | | | (14,451 | ) |
| | | | | | | |
| Financing Activities | | | | | | | |
| Principal repayments on term loan | | (7,500 | ) | | | (3,750 | ) | | | (15,000 | ) | | | (7,500 | ) |
| Stock option excercises & other | | 8,074 | | | | 4,985 | | | | 10,305 | | | | 5,949 | |
| Taxes paid related to the net share settlement of equity awards | | (825 | ) | | | (697 | ) | | | (1,107 | ) | | | (920 | ) |
| Cash dividend | | - | | | | - | | | | (2,390 | ) | | | (2,358 | ) |
| Cash (used in) provided by financing activities | | (251 | ) | | | 538 | | | | (8,192 | ) | | | (4,829 | ) |
| | | | | | | |
| Effect of exchange rate changes on cash | | 2,743 | | | | 1,704 | | | | 2,211 | | | | (3,116 | ) |
| Net decrease in cash and cash equivalents | | (11,455 | ) | | | (4,981 | ) | | | (75,976 | ) | | | (7,714 | ) |
| Cash and cash equivalents - beginning of period | | 165,050 | | | | 176,871 | | | | 229,571 | | | | 179,604 | |
| Cash and cash equivalents - end of period | $ | 153,595 | | | $ | 171,890 | | | $ | 153,595 | | | $ | 171,890 | |
| | | | | | | | | | | | | | | |
| ACTUANT CORPORATION |
| SUPPLEMENTAL UNAUDITED DATA |
| (Dollars in thousands) |
| | | | | | | | | | | | | | | | | |
| | | FISCAL 2017 | | FISCAL 2018 |
| | | Q1 | Q2 | Q3 | Q4 | TOTAL | | Q1 | Q2 | | Q3 | | Q4 | | TOTAL |
| SALES | | | | | | | | | | | | | | |
| INDUSTRIAL SEGMENT | $ | 87,290 | | $ | 91,648 | | $ | 100,503 | | $ | 100,315 | | $ | 379,756 | | | $ | 96,916 | | $ | 99,081 | | | $ | - | | $ | - | | $ | 195,997 | |
| ENERGY SEGMENT | | 84,646 | | | 72,884 | | | 83,480 | | | 68,584 | | | 309,594 | | | | 75,841 | | | 65,992 | | | | - | | | - | | | 141,833 | |
| ENGINEERED SOLUTIONS SEGMENT | | 93,857 | | | 94,337 | | | 111,444 | | | 106,796 | | | 406,434 | | | | 116,198 | | | 110,092 | | | | - | | | - | | | 226,290 | |
| | TOTAL | $ | 265,793 | | $ | 258,869 | | $ | 295,427 | | $ | 275,695 | | $ | 1,095,784 | | | $ | 288,955 | | $ | 275,165 | | | $ | - | | $ | - | | $ | 564,120 | |
| | | | | | | | | | | | | | | | |
| % SALES GROWTH | | | | | | | | | | | | | | |
| INDUSTRIAL SEGMENT | | -2 | % | | 13 | % | | 5 | % | | 7 | % | | 6 | % | | | 11 | % | | 8 | % | | | - | | | - | | | 10 | % |
| ENERGY SEGMENT | | -26 | % | | -15 | % | | -18 | % | | -25 | % | | -21 | % | | | -10 | % | | -9 | % | | | - | | | - | | | -10 | % |
| ENGINEERED SOLUTIONS SEGMENT | | -8 | % | | -2 | % | | 3 | % | | 18 | % | | 2 | % | | | 24 | % | | 17 | % | | | - | | | - | | | 20 | % |
| | TOTAL | | -13 | % | | -2 | % | | -3 | % | | 0 | % | | -5 | % | | | 9 | % | | 6 | % | | | - | | | - | | | 8 | % |
| | | | | | | | | | | | | | | | |
| OPERATING PROFIT (LOSS) | | | | | | | | | | | | | | |
| INDUSTRIAL SEGMENT | $ | 19,491 | | $ | 19,037 | | $ | 24,019 | | $ | 24,076 | | $ | 86,623 | | | $ | 19,482 | | $ | 18,493 | | | $ | - | | $ | - | | $ | 37,975 | |
| ENERGY SEGMENT | | 3,328 | | | (647 | ) | | 895 | | | (3,675 | ) | | (99 | ) | | | 1,224 | | | 747 | | | | - | | | - | | | 1,971 | |
| ENGINEERED SOLUTIONS SEGMENT | | 2,834 | | | 3,282 | | | 8,174 | | | 6,069 | | | 20,359 | | | | 6,618 | | | 2,409 | | | | - | | | - | | | 9,027 | |
| CORPORATE / GENERAL | | (6,450 | ) | | (6,372 | ) | | (5,372 | ) | | (6,935 | ) | | (25,128 | ) | | | (6,022 | ) | | (4,789 | ) | | | - | | | - | | | (10,811 | ) |
| | ADJUSTED OPERATING PROFIT | $ | 19,203 | | $ | 15,300 | | $ | 27,716 | | $ | 19,535 | | $ | 81,755 | | | $ | 21,302 | | $ | 16,860 | | | $ | - | | $ | - | | $ | 38,162 | |
| IMPAIRMENT & DIVESTITURE CHARGES | | - | | | - | | | - | | | (116,979 | ) | | (116,979 | ) | | | - | | | (2,987 | ) | | | - | | | - | | | (2,987 | ) |
| RESTRUCTURING CHARGES (1) | | (2,948 | ) | | (2,101 | ) | | (384 | ) | | (1,795 | ) | | (7,228 | ) | | | (6,629 | ) | | (4,284 | ) | | | - | | | - | | | (10,913 | ) |
| DIRECTOR & OFFICER TRANSITION CHARGES | | (7,784 | ) | | - | | | - | | | - | | | (7,784 | ) | | | - | | | - | | | | - | | | - | | | - | |
| | OPERATING PROFIT (LOSS) | $ | 8,471 | | $ | 13,199 | | $ | 27,332 | | $ | (99,239 | ) | $ | (50,236 | ) | | $ | 14,673 | | $ | 9,589 | | | $ | - | | $ | - | | $ | 24,262 | |
| | | | | | | | | | | | | | | | |
| ADJUSTED OPERATING PROFIT % | | | | | | | | | | | | | | |
| INDUSTRIAL SEGMENT | | 22.3 | % | | 20.8 | % | | 23.9 | % | | 24.0 | % | | 22.8 | % | | | 20.1 | % | | 18.7 | % | | | - | | | - | | | 19.4 | % |
| ENERGY SEGMENT | | 3.9 | % | | -0.9 | % | | 1.1 | % | | -5.4 | % | | 0.0 | % | | | 1.6 | % | | 1.1 | % | | | - | | | - | | | 1.4 | % |
| ENGINEERED SOLUTIONS SEGMENT | | 3.0 | % | | 3.5 | % | | 7.3 | % | | 5.7 | % | | 5.0 | % | | | 5.7 | % | | 2.2 | % | | | - | | | - | | | 4.0 | % |
| | ADJUSTED OPERATING PROFIT % | | 7.2 | % | | 5.9 | % | | 9.4 | % | | 7.1 | % | | 7.5 | % | | | 7.4 | % | | 6.1 | % | | | - | | | - | | | 6.8 | % |
| | | | | | | | | | | | | | | | |
| EBITDA | | | | | | | | | | | | | | |
| INDUSTRIAL SEGMENT | $ | 21,217 | | $ | 21,064 | | $ | 25,575 | | $ | 25,851 | | $ | 93,707 | | | $ | 21,202 | | $ | 21,034 | | | $ | - | | $ | - | | $ | 42,236 | |
| ENERGY SEGMENT | | 9,108 | | | 2,943 | | | 4,633 | | | 142 | | | 16,826 | | | | 5,125 | | | 4,533 | | | | - | | | - | | | 9,658 | |
| ENGINEERED SOLUTIONS SEGMENT | | 6,281 | | | 7,277 | | | 11,716 | | | 9,533 | | | 34,807 | | | | 10,254 | | | 6,020 | | | | - | | | - | | | 16,274 | |
| CORPORATE / GENERAL | | (5,879 | ) | | (5,846 | ) | | (4,868 | ) | | (6,637 | ) | | (23,230 | ) | | | (5,518 | ) | | (4,799 | ) | | | - | | | - | | | (10,317 | ) |
| | ADJUSTED EBITDA | $ | 30,727 | | $ | 25,438 | | $ | 37,056 | | $ | 28,889 | | $ | 122,110 | | | $ | 31,063 | | $ | 26,788 | | | $ | - | | $ | - | | $ | 57,851 | |
| IMPAIRMENT & DIVESTITURE CHARGES | | - | | | - | | | - | | | (116,979 | ) | | (116,979 | ) | | | - | | | (2,987 | ) | | | - | | | - | | | (2,987 | ) |
| RESTRUCTURING CHARGES (1) | | (2,948 | ) | | (2,101 | ) | | (384 | ) | | (1,795 | ) | | (7,228 | ) | | | (6,629 | ) | | (4,284 | ) | | | - | | | - | | | (10,913 | ) |
| DIRECTOR & OFFICER TRANSITION CHARGES | | (7,784 | ) | | - | | | - | | | - | | | (7,784 | ) | | | - | | | - | | | | - | | | - | | | - | |
| | EBITDA | $ | 19,995 | | $ | 23,337 | | $ | 36,672 | | $ | (89,885 | ) | $ | (9,881 | ) | | $ | 24,434 | | $ | 19,517 | | | $ | - | | $ | - | | $ | 43,951 | |
| | | | | | | | | | | | | | | | |
| ADJUSTED EBITDA % | | | | | | | | | | | | | | |
| INDUSTRIAL SEGMENT | | 24.3 | % | | 23.0 | % | | 25.4 | % | | 25.8 | % | | 24.7 | % | | | 21.9 | % | | 21.2 | % | | | - | | | - | | | 21.5 | % |
| ENERGY SEGMENT | | 10.8 | % | | 4.0 | % | | 5.5 | % | | 0.2 | % | | 5.4 | % | | | 6.8 | % | | 6.9 | % | | | - | | | - | | | 6.8 | % |
| ENGINEERED SOLUTIONS SEGMENT | | 6.7 | % | | 7.7 | % | | 10.5 | % | | 8.9 | % | | 8.6 | % | | | 8.8 | % | | 5.5 | % | | | - | | | - | | | 7.2 | % |
| | ADJUSTED EBITDA % | | 11.6 | % | | 9.8 | % | | 12.5 | % | | 10.5 | % | | 11.1 | % | | | 10.8 | % | | 9.7 | % | | | - | | | - | | | 10.3 | % |
| Note: (1) Approximately $0.8 million of the Q2 fiscal 2018 restructuring charges were recorded in cost of products sold |
| |
| ACTUANT CORPORATION |
| SUPPLEMENTAL UNAUDITED DATA |
| RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES |
| (Dollars in thousands, except for per share amounts) |
| | | | | | | | | | | | | | | | | | |
| | | | FISCAL 2017 | | FISCAL 2018 |
| | | | Q1 | Q2 | Q3 | Q4 | TOTAL | | Q1 | Q2 | | Q3 | | Q4 | | TOTAL |
| ADJUSTED EARNINGS (1) | | | | | | | | | | | | | | |
| NET EARNINGS (LOSS) (GAAP MEASURE) | $ | 4,965 | | $ | 5,074 | | $ | 22,511 | | $ | (98,764 | ) | $ | (66,213 | ) | | $ | 5,226 | | $ | (18,221 | ) | | $ | - | | $ | - | | $ | (12,995 | ) |
| IMPAIRMENT & DIVESTITURE CHARGES | | - | | | - | | | - | | | 116,979 | | | 116,979 | | | | - | | | 2,987 | | | | - | | | - | | | 2,987 | |
| INCOME TAX (BENEFIT) EXPENSE ON IMPAIRMENT & DIVESTITURE CHARGES | | - | | | - | | | - | | | (8,119 | ) | | (8,119 | ) | | | - | | | 9,398 | | | | - | | | - | | | 9,398 | |
| DIRECTOR & OFFICER TRANSITION CHARGES | | 7,784 | | | - | | | - | | | - | | | 7,784 | | | | - | | | - | | | | - | | | - | | | - | |
| INCOME TAX BENEFIT ON DIRECTOR & OFFICER TRANSITION CHARGES | | (2,880 | ) | | - | | | - | | | - | | | (2,880 | ) | | | - | | | - | | | | - | | | - | | | - | |
| RESTRUCTURING CHARGES (1) | | 2,948 | | | 2,101 | | | 384 | | | 1,795 | | | 7,228 | | | | 6,629 | | | 4,284 | | | | - | | | - | | | 10,913 | |
| INCOME TAX BENEFIT ON RESTRUCTURING CHARGES | | (777 | ) | | (564 | ) | | (124 | ) | | (494 | ) | | (1,959 | ) | | | (375 | ) | | (500 | ) | | | - | | | - | | | (875 | ) |
| INCOME TAX EXPENSE FROM U.S. TAX REFORM | | - | | | - | | | - | | | - | | | - | | | | - | | | 8,367 | | | | - | | | - | | | 8,367 | |
| INCOME TAX EXPENSE FROM EQUITY VESTING/EXERCISES | | - | | | - | | | - | | | - | | | - | | | | - | | | 1,338 | | | | - | | | - | | | 1,338 | |
| OTHER INCOME TAX BENEFIT | | - | | | - | | | (3,193 | ) | | - | | | (3,193 | ) | | | - | | | - | | | | - | | | - | | | - | |
| | ADJUSTED EARNINGS | $ | 12,040 | | $ | 6,611 | | $ | 19,578 | | $ | 11,397 | | $ | 49,627 | | | $ | 11,480 | | $ | 7,653 | | | $ | - | | $ | - | | $ | 19,133 | |
| | | | | | | | | | | | | | | | | |
| ADJUSTED DILUTED EARNINGS PER SHARE (2) | | | | | | | | | | | | | | |
| NET EARNINGS (LOSS) (GAAP MEASURE) | $ | 0.08 | | $ | 0.08 | | $ | 0.37 | | $ | (1.65 | ) | $ | (1.11 | ) | | $ | 0.09 | | $ | (0.30 | ) | | $ | - | | $ | - | | $ | (0.22 | ) |
| IMPAIRMENT & DIVESTITURE CHARGES | | - | | | - | | | - | | | 1.96 | | | 1.96 | | | | - | | | 0.05 | | | | - | | | - | | | 0.05 | |
| INCOME TAX (BENEFIT) EXPENSE ON IMPAIRMENT & DIVESTITURE CHARGES | | - | | | - | | | - | | | (0.14 | ) | | (0.14 | ) | | | - | | | 0.16 | | | | - | | | - | | | 0.16 | |
| DIRECTOR & OFFICER TRANSITION CHARGES | | 0.13 | | | - | | | - | | | - | | | 0.13 | | | | - | | | - | | | | - | | | - | | | - | |
| INCOME TAX BENEFIT ON DIRECTOR & OFFICER TRANSITION CHARGES | | (0.05 | ) | | - | | | - | | | - | | | (0.05 | ) | | | - | | | - | | | | - | | | - | | | - | |
| RESTRUCTURING CHARGES (1) | | 0.05 | | | 0.04 | | | 0.01 | | | 0.03 | | | 0.12 | | | | 0.11 | | | 0.07 | | | | - | | | - | | | 0.18 | |
| INCOME TAX BENEFIT ON RESTRUCTURING CHARGES | | (0.01 | ) | | (0.01 | ) | | (0.01 | ) | | (0.01 | ) | | (0.03 | ) | | | (0.01 | ) | | (0.01 | ) | | | - | | | - | | | (0.02 | ) |
| INCOME TAX EXPENSE FROM US TAX REFORM | | - | | | - | | | - | | | - | | | - | | | | - | | | 0.14 | | | | - | | | - | | | 0.14 | |
| INCOME TAX EXPENSE FROM EQUITY VESTING/EXERCISES | | - | | | - | | | - | | | - | | | - | | | | - | | | 0.02 | | | | - | | | - | | | 0.02 | |
| OTHER INCOME TAX BENEFIT | | - | | | - | | | (0.05 | ) | | - | | | (0.05 | ) | | | - | | | - | | | | - | | | - | | | - | |
| | ADJUSTED DILUTED EARNINGS PER SHARE | $ | 0.20 | | $ | 0.11 | | $ | 0.32 | | $ | 0.19 | | $ | 0.83 | | | $ | 0.19 | | $ | 0.13 | | | $ | - | | $ | - | | $ | 0.31 | |
| | | | | | | | | | | | | | | | | |
| ADJUSTED EBITDA (3) | | | | | | | | | | | | | | |
| NET EARNINGS (LOSS) (GAAP MEASURE) | $ | 4,965 | | $ | 5,074 | | $ | 22,511 | | $ | (98,764 | ) | $ | (66,213 | ) | | $ | 5,226 | | $ | (18,221 | ) | | $ | - | | $ | - | | $ | (12,995 | ) |
| FINANCING COSTS, NET | | 7,132 | | | 7,334 | | | 7,553 | | | 7,683 | | | 29,703 | | | | 7,514 | | | 7,604 | | | | - | | | - | | | 15,118 | |
| INCOME TAX (BENEFIT) EXPENSE | | (2,998 | ) | | 200 | | | (4,029 | ) | | (9,651 | ) | | (16,478 | ) | | | 1,604 | | | 19,839 | | | | - | | | - | | | 21,443 | |
| DEPRECIATION & AMORTIZATION | | 10,896 | | | 10,729 | | | 10,637 | | | 10,847 | | | 43,108 | | | | 10,090 | | | 10,295 | | | | - | | | - | | | 20,385 | |
| | EBITDA | $ | 19,995 | | $ | 23,337 | | $ | 36,672 | | $ | (89,885 | ) | $ | (9,881 | ) | | $ | 24,434 | | $ | 19,517 | | | $ | - | | $ | - | | $ | 43,951 | |
| IMPAIRMENT & OTHER DIVESTITURE CHARGES | | - | | | - | | | - | | | 116,979 | | | 116,979 | | | | - | | | 2,987 | | | | - | | | - | | | 2,987 | |
| DIRECTOR & OFFICER TRANSITION CHARGES | | 7,784 | | | - | | | - | | | - | | | 7,784 | | | | - | | | - | | | | - | | | - | | | - | |
| RESTRUCTURING CHARGES | | 2,948 | | | 2,101 | | | 384 | | | 1,795 | | | 7,228 | | | | 6,629 | | | 4,284 | | | | - | | | - | | | 10,913 | |
| | ADJUSTED EBITDA | $ | 30,727 | | $ | 25,438 | | $ | 37,056 | | $ | 28,889 | | $ | 122,110 | | | $ | 31,063 | | $ | 26,788 | | | $ | - | | $ | - | | $ | 57,851 | |
| 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. |
| | |
| (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) | | | | | |
| | | | | | | |
| | | | | | |
| | Q3 FISCAL 2018 | | FISCAL 2018 |
| | LOW | HIGH | | LOW | HIGH |
| RECONCILIATION OF GAAP DILUTED EARNINGS PER SHARE TO ADJUSTED | | | | | |
| DILUTED EARNINGS PER SHARE GUIDANCE | | | | | |
| GAAP DILUTED EARNINGS PER SHARE | $ | 0.31 | $ | 0.36 | | $ | 0.47 | | $ | 0.57 | |
| IMPAIRMENT & DIVESTITURE CHARGES | | - | | - | | | 0.21 | | | 0.21 | |
| RESTRUCTURING CHARGES | | 0.02 | | 0.02 | | | 0.16 | | | 0.16 | |
| INCOME TAX EXPENSE FROM U.S. TAX REFORM | | - | | - | | | 0.14 | | | 0.14 | |
| INCOME TAX EXPENSE FROM EQUITY VESTING/EXERCISES | | - | | - | | | 0.02 | | | 0.02 | |
| ADJUSTED DILUTED EARNINGS PER SHARE GUIDANCE | $ | 0.33 | $ | 0.38 | | $ | 1.00 | | $ | 1.10 | |
| | | | | | |
| | | | | | |
| RECONCILIATION OF GAAP CASH FLOW FROM OPERATIONS TO FREE CASH FLOW | | | | | |
| CASH FLOW FROM OPERATIONS | | | | $ | 90 | | $ | 95 | |
| CAPITAL EXPENDITURES | | | | | (30 | ) | | (30 | ) |
| OTHER | | | | | 10 | | | 10 | |
| FREE CASH FLOW GUIDANCE | | | | $ | 70 | | $ | 75 | |
| 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:
Actuant Corporation
Karen Bauer
Communications & Investor Relations Leader
262-293-1562
