Exhibit 99.1
Actuant Reports Record Third Quarter Sales and Earnings
MILWAUKEE--(BUSINESS WIRE)--June 18, 2003--Actuant Corporation
(NYSE:ATU) today announced results for its third quarter ended May 31,
2003. Sales increased approximately 23% to $147.2 million compared to
$120.0 million in the prior year. Current year results include those
from Heinrich Kopp AG ("Kopp"), which was acquired on September 3,
2002. Excluding Kopp and the impact of foreign currency exchange rate
changes on translated results, third quarter sales decreased
approximately 3%. Third quarter fiscal 2003 net earnings and diluted
earnings per share ("diluted EPS") were $10.0 million and $0.82 per
diluted share, respectively. This compares favorably to a net loss in
the third quarter of the prior year of $11.0 million, or $0.95 per
diluted share. The prior year loss included a $14.3 million pre-tax
charge for early extinguishment of debt ($9.3 million or $0.80 per
share, net of tax) and a net $10.0 million, or $0.86 per share,
discontinued operations charge. Excluding these two items, prior year
net earnings were $8.3 million, or $0.68 per diluted share.
Sales for the nine months ended May 31, 2003 were $437.1 million,
approximately 28% higher than the $341.6 million in the comparable
prior year period. Excluding Kopp and the impact of foreign currency
rate changes on translated results, sales for the year-to-date period
increased 1%. Net earnings for the nine months ended May 31, 2003 were
$18.9 million, or $1.55 per diluted share, compared to a loss of $9.6
million, or $0.96 per diluted share, for the comparable prior year
period. In fiscal 2003, the Company recorded net of tax special
charges of $1.3 million, or $0.10 per diluted share, related to the
early extinguishment of debt and $4.2 million, or $0.34 per diluted
share, related to litigation matters associated with businesses
divested prior to the spin-off in July 2000. In fiscal 2002 the
Company adopted Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets", which resulted in a net
cumulative effect of accounting change charge of $7.2 million, or
$0.72 per diluted share. Fiscal 2002 results also included the $14.3
million pre-tax early extinguishment of debt charge and the $10.0
million net discontinued operations charge discussed above. Excluding
these special charges, net earnings and diluted earnings per share for
the nine months ended May 31, 2003 were $24.4 million, or $2.00 per
diluted share, compared to $16.9 million, or $1.69 per diluted share,
respectively, in the prior year.
Commenting on the results, Robert C. Arzbaecher, Chairman,
President and CEO of Actuant, stated, "We are pleased to report
increased earnings for the third quarter. Business conditions were
especially challenging as a result of the war in Iraq, lower
recreational vehicle ("RV") production by OEM's in order to balance
dealer inventory, and the overall weak economy. Despite these
conditions, we were able to deliver satisfactory results by focusing
on our customers and aggressively managing our costs. Actuant's
year-to-date earnings per share excluding special items are 18% above
last year. Excluding the special items, Actuant has increased its
earnings per share in each of the last eight quarters."
He continued, "We are also happy to report that during the third
quarter we settled the litigation relating to a previously divested
business unit for less than the related charge we recorded in the
first quarter's results. This resulted in a $0.8 million, or $0.04 per
diluted share, non-operating gain during the third quarter. The
settlement will be paid in the fourth quarter. Third quarter cash flow
was strong as we reduced our total quarter-end borrowings to below
$190 million for the first time, despite a $7 million semi-annual bond
interest payment during the quarter.
"Given the economic environment, we continued to focus on cost
reductions during the quarter and commenced many of the actions we
announced last quarter to remain competitive in the marketplace. Such
initiatives resulted in pre-tax downsizing expenses in our third
quarter results of approximately $1.2 million ($0.06 per diluted
share), and included personnel reductions in a number of businesses,
as well as the consolidation of small production and distribution
facilities. These previously announced actions will continue into the
fourth quarter. Additionally, we completed the closure of one of
Kopp's German manufacturing plants and continue to work on additional
cost reductions to increase Kopp's profit margins."
Fiscal 2003 third quarter sales in the Tools & Supplies segment
were $91.4 million, or approximately 39% higher than last year's $65.7
million due primarily to the Kopp acquisition and foreign currency
rate changes. Excluding Kopp and the impact of foreign currency rate
changes, Tools & Supplies segment revenues were down 2% during the
quarter versus the comparable prior year period primarily due to the
weak U.S. economy. Current year third quarter sales in the Engineered
Solutions segment increased approximately 3% to $55.8 million,
compared to $54.3 million in the previous year. Excluding foreign
currency rate changes, Engineered Solutions sales decreased 5%,
reflecting the expected lower sales to RV OEM's.
Actuant's third quarter operating profit and EBITDA (net earnings
before interest, income taxes, depreciation, amortization and minority
interest deduction) were $19.4 million and $24.3 million, compared to
$19.7 million and $22.7 million, respectively, in the comparable prior
year period. EBITDA is an important non-GAAP financial metric used by
many investors to determine the Company's credit ratios and loan
covenant compliance. As previously noted, operating profit included
approximately $1.2 million of downsizing related costs, as well as the
results of recently acquired Kopp which currently generates a much
lower profit margin than Actuant's other units.
Net debt (total debt less cash) decreased approximately $7 million
during the quarter to $184.8 million at May 31, 2003. The Company
acquired a small hydraulics company in China during the quarter for
approximately $1.7 million, including assumed liabilities. Its impact
on third quarter operating results was nominal. Availability under the
Company's senior credit facility revolver was approximately $85
million at May 31, 2003.
Commenting on the outlook for the final quarter of fiscal 2003,
Arzbaecher said, "We expect fourth quarter results to be improved over
prior year results, despite our view that short term economic
conditions will remain weak and our expectation of incurring
additional downsizing costs in the fourth quarter. Specifically, we
are projecting fiscal fourth quarter sales in the $140-$145 million
range and earnings per share in the $0.75-$0.80 range. This would
equate to full year fiscal 2003 sales of $579-$584 million and diluted
EPS of $2.75-$2.80, excluding special charges. Looking ahead to fiscal
2004, our initial guidance anticipates modest improvements in the
economy, a continued low interest rate environment, and today's
accounting rules and currency rates. We expect diluted earnings to be
$3.10-$3.40 per share on sales of $610-$630 million. Provided we can
achieve these targeted earnings, it would be our third consecutive
year of double digit EPS growth, ignoring special charges and gains."
Actuant, headquartered in Milwaukee, Wisconsin, is a diversified
industrial company with operations in more than 20 countries. The
Actuant businesses are leading companies in highly engineered position
and motion control systems and branded tools. Products are offered
under such established brand names as Enerpac, Gardner Bender, Kopp,
Milwaukee Cylinder, Nielsen Sessions, Power-Packer, and Power Gear.
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 on the economy of terrorist attacks and other geopolitical
activity, the length of the current recession in the Company's
markets, continued market acceptance of the Company's new product
introductions, the successful integration of business unit
acquisitions and related 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 registration statements filed
with the Securities and Exchange Commission for further information
regarding risk factors.
For further information on Actuant and its business units, visit
the company's website at www.actuant.com.
(tables follow)
Actuant Corporation
Consolidated Balance Sheets
(Dollars in thousands)
May 31, August 31,
2003 2002
--------- ---------
ASSETS
Current assets
Cash and cash equivalents $4,502 $3,043
Accounts receivable, net 89,256 58,304
Inventories, net 70,119 54,898
Deferred income taxes 19,536 9,127
Other current assets 4,849 4,592
--------- ---------
Total Current Assets 188,262 129,964
Property, plant and equipment, net 64,197 36,828
Goodwill 101,670 101,361
Other intangible assets, net 19,673 18,466
Other long-term assets 8,724 7,992
--------- ---------
Total Assets $382,526 $294,611
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings $890 $2,993
Trade accounts payable 51,805 47,834
Accrued compensation and benefits 18,155 12,362
Income taxes payable 20,702 18,365
Current maturities of long-term debt 10,623 6,788
Other current liabilities 52,570 23,924
--------- ---------
Total Current Liabilities 154,745 112,266
Long-term debt, less current maturities 177,761 182,783
Deferred income taxes 7,294 4,409
Pension and postretirement benefit accruals 29,658 11,550
Other long-term liabilities 26,945 27,222
Minority interest in net equity of
consolidated affiliates 4,043 -
Shareholders' equity
Capital stock 2,344 2,319
Additional paid-in capital (521,519) (523,419)
Accumulated other comprehensive income (loss) (16,850) (21,675)
Stock held in trust (600) (511)
Deferred compensation liability 600 511
Retained earnings 518,105 499,156
--------- ---------
Total Shareholders' Deficit (17,920) (43,619)
--------- ---------
Total Liabilities and Shareholders' Equity $382,526 $294,611
========= =========
Actuant Corporation
Consolidated Statements of Earnings
(In thousands except per share amounts)
Three Months Ended Nine Months Ended
May 31, May 31,
------------------ ------------------
2003 2002 2003 2002
------------------ ------------------
Net Sales $147,189 $120,009 $437,146 $341,583
Cost of Products Sold 98,386 78,417 295,952 225,268
------------------ ------------------
Gross Profit 48,803 41,592 141,194 116,315
Selling, Administrative and
Engineering Expenses 28,880 21,308 85,834 62,294
Amortization of Intangible Assets 530 616 1,750 1,848
------------------ ------------------
Operating Profit 19,393 19,668 53,610 52,173
Net Financing Costs 5,177 6,914 16,282 26,611
Charge for Early Extinguishment
of Debt - 14,298 1,974 14,298
Litigation Charge (Benefit)
associated with Divested
Businesses (798) - 6,502 -
Other (Income) Expense, net (515) (57) (1,021) (798)
------------------ ------------------
Earnings (Loss) from Continuing
Operations Before Income
Taxes and Minority Interest 15,529 (1,487) 29,873 12,062
Income Tax Expense (Benefit) 5,482 (456) 10,574 4,494
Minority Interest, net of Income
Taxes 70 - 350 -
------------------ ------------------
Earnings (Loss) from Continuing
Operations 9,977 (1,031) 18,949 7,568
Discontinued Operations, net of
Income Taxes - (10,000) - (10,000)
Cumulative Effect of Change In
Accounting Principle, net of
Income Taxes - - - (7,200)
------------------ ------------------
Net Earnings (Loss) $9,977 $(11,031) $18,949 $(9,632)
================== ==================
Basic Earnings (Loss) per Share
Earnings (Loss) from
Continuing Operations $0.85 $(0.09) $1.63 $0.80
Discontinued Operations, net
of Income Taxes - (0.86) - (1.06)
Cumulative Effect of Change
in Accounting Principle,
net of Income Taxes - - - (0.76)
------------------ ------------------
Total $0.85 $(0.95) $1.63 $(1.02)
================== ==================
Diluted Earnings (Loss) per Share
Earnings (Loss) from
Continuing Operations $0.82 $(0.09) $1.55 $0.76
Discontinued Operations, net
of Income Taxes - (0.86) - (1.00)
Cumulative Effect of Change
in Accounting Principle,
net of Income Taxes - - - (0.72)
------------------ ------------------
Total $0.82 $(0.95) $1.55 $(0.96)
================== ==================
Weighted Average Common Shares
Outstanding (1)
Basic 11,690 11,587 11,645 9,454
Diluted 12,174 11,587 12,203 9,995
(1) The increase in weighted average number of shares outstanding for
the nine months ended May 31, 2003 as compared to the nine months
ended May 31, 2002, reflects the impact of the February 13, 2002
equity offering.
ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA
(US dollars, in thousands)
FISCAL 2002
---------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
---------------------------------------------
SALES
TOOLS & SUPPLIES
SEGMENT $64,067 $62,338 $65,746 $67,357 $259,508
ENGINEERED SOLUTIONS
SEGMENT 49,073 46,096 54,263 54,010 203,442
---------------------------------------------
TOTAL REPORTED SALES $113,140 $108,434 $120,009 $121,367 $462,950
=============================================
% SALES GROWTH
TOOLS & SUPPLIES
SEGMENT
ENGINEERED SOLUTIONS
SEGMENT
TOTAL REPORTED SALES
OPERATING PROFIT
TOOLS & SUPPLIES
SEGMENT $11,565 $11,030 $12,805 $11,997 $47,397
ENGINEERED SOLUTIONS
SEGMENT 7,036 4,984 8,317 8,436 28,773
CORPORATE / GENERAL (1,107) (1,003) (1,454) (1,474) (5,038)
---------------------------------------------
TOTAL REPORTED RESULTS $17,494 $15,011 $19,668 $18,959 $71,132
=============================================
OPERATING PROFIT %
TOOLS & SUPPLIES
SEGMENT 18.1% 17.7% 19.5% 17.8% 18.3%
ENGINEERED SOLUTIONS
SEGMENT 14.3% 10.8% 15.3% 15.6% 14.1%
TOTAL (INCL. CORPORATE) 15.5% 13.8% 16.4% 15.6% 15.4%
EBITDA (1)
TOOLS & SUPPLIES
SEGMENT $13,271 $13,213 $14,574 $13,862 $54,920
ENGINEERED SOLUTIONS
SEGMENT 8,014 6,776 8,997 8,900 32,687
CORPORATE / GENERAL (1,143) (798) (842) (471) (3,254)
---------------------------------------------
TOTAL RECURRING EBITDA 20,142 19,191 22,729 22,291 84,353
OTHER ITEMS (2) - - (14,298) (2,060) (16,358)
---------------------------------------------
TOTAL $20,142 $19,191 $8,431 $20,231 $67,995
=============================================
EBITDA %
TOOLS & SUPPLIES
SEGMENT 20.7% 21.2% 22.2% 20.6% 21.2%
ENGINEERED SOLUTIONS
SEGMENT 16.3% 14.7% 16.6% 16.5% 16.1%
TOTAL RECURRING
(INCL. CORPORATE) 17.8% 17.7% 18.9% 18.4% 18.2%
OTHER FINANCIAL DATA
DEPRECIATION & AMORTIZATION
TOOLS & SUPPLIES
SEGMENT $1,920 $1,978 $2,033 $2,051 $7,982
ENGINEERED SOLUTIONS
SEGMENT 979 990 849 1,080 3,898
CORPORATE / GENERAL 109 111 122 140 482
---------------------------------------------
TOTAL DEPRECIATION &
AMORTIZATION $3,008 $3,079 $3,004 $3,271 $12,362
=============================================
OTHER INCOME (EXPENSE)
TOOLS & SUPPLIES
SEGMENT $(214) $205 $(264) $(186) $(459)
ENGINEERED SOLUTIONS
SEGMENT (1) 802 (169) (616) 16
CORPORATE / GENERAL (145) 94 490 863 1,302
---------------------------------------------
TOTAL REPORTED RESULTS $(360) $1,101 $57 $61 $859
=============================================
LEVERAGE
NET DEBT (3) $306 $201 $212 $190
LEVERAGE RATIO (4) 3.5 2.3 2.5 2.3
ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA
(US dollars, in thousands)
(continued)
FISCAL 2003
---------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
---------------------------------------------
SALES
TOOLS & SUPPLIES
SEGMENT $92,014 $90,651 $91,386 $274,051
ENGINEERED SOLUTIONS
SEGMENT 55,844 51,448 55,803 163,095
---------------------------------------------
TOTAL REPORTED SALES $147,858 $142,099 $147,189 $ - $437,146
=============================================
% SALES GROWTH
TOOLS & SUPPLIES
SEGMENT 43.6% 45.4% 39.0% 42.6%
ENGINEERED SOLUTIONS
SEGMENT 13.8% 11.6% 2.8% 9.1%
TOTAL REPORTED SALES 30.7% 31.0% 22.6% 28.0%
OPERATING PROFIT
TOOLS & SUPPLIES
SEGMENT $12,818 $12,224 $13,702 $38,744
ENGINEERED SOLUTIONS
SEGMENT 6,616 5,760 7,648 20,024
CORPORATE / GENERAL (1,246) (1,955) (1,957) (5,158)
---------------------------------------------
TOTAL REPORTED
RESULTS $18,188 $16,029 $19,393 $ - $53,610
=============================================
OPERATING PROFIT %
TOOLS & SUPPLIES
SEGMENT 13.9% 13.5% 15.0% 14.1%
ENGINEERED SOLUTIONS
SEGMENT 11.8% 11.2% 13.7% 12.3%
TOTAL (INCL. CORPORATE) 12.3% 11.3% 13.2% 12.3%
EBITDA (1)
TOOLS & SUPPLIES
SEGMENT $15,126 $14,454 $16,829 $46,409
ENGINEERED SOLUTIONS
SEGMENT 7,666 7,501 8,739 23,906
CORPORATE / GENERAL (1,161) (1,354) (2,028) (4,543)
---------------------------------------------
TOTAL RECURRING EBITDA 21,631 20,601 23,540 - 65,772
OTHER ITEMS (2) (9,274) - 798 - (8,476)
---------------------------------------------
TOTAL $12,357 $20,601 $24,338 $ - $57,296
=============================================
EBITDA %
TOOLS & SUPPLIES
SEGMENT 16.4% 15.9% 18.4% 16.9%
ENGINEERED SOLUTIONS
SEGMENT 13.7% 14.6% 15.7% 14.7%
TOTAL RECURRING
(INCL. CORPORATE) 14.6% 14.5% 16.0% 15.0%
OTHER FINANCIAL DATA
DEPRECIATION & AMORTIZATION
TOOLS & SUPPLIES
SEGMENT $2,413 $2,433 $2,137 $6,983
ENGINEERED SOLUTIONS
SEGMENT 1,133 1,237 1,321 3,691
CORPORATE / GENERAL 143 150 174 467
---------------------------------------------
TOTAL DEPRECIATION &
AMORTIZATION $3,689 $3,820 $3,632 $ - $11,141
=============================================
OTHER INCOME (EXPENSE)
TOOLS & SUPPLIES
SEGMENT $(105) $(203) $990 $682
ENGINEERED SOLUTIONS
SEGMENT (83) 504 (230) 191
CORPORATE / GENERAL (58) 451 (245) 148
---------------------------------------------
TOTAL REPORTED RESULTS $(246) $752 $515 $ - $1,021
=============================================
LEVERAGE
NET DEBT (3) $204 $192 $185
LEVERAGE RATIO (4) 2.4 2.2 2.1
(1) EBITDA excludes discontinued operations and cumulative effect of
change in accounting principle. Segment EBITDA = segment operating
profit + segment depreciation & amortization + segment other
income - segment other expense
(2) Other items in the second and third quarters of 2002 include
charges associated with the early redemption of long-term debt.
First quarter 2003 other items include a $2.0 million charge
related to the early redemption of debt and a $7.3 million charge
related to litigation for business units divested prior to the
July 31, 2000 spin-off. Third quarter 2003 other items represents
an $0.8 million reversal of a portion of the $7.3 million first
quarter charge for the favorable settlement of such litigation.
(3) Net debt = long-term debt + current maturities of long-term debt +
short-term borrowings - cash and cash equivalents
(4) Leverage ratio = net debt / trailing four quarters total recurring
EBITDA
CONTACT: Actuant Corporation
Vice President & CFO
Andrew Lampereur, 414/352-4160