Exhibit 99.1
Actuant Announces Record Second Quarter Results
MILWAUKEE--(BUSINESS WIRE)--March 22, 2006--Actuant Corporation (NYSE:ATU)
today announced results for its second quarter ended February 28, 2006. Second
quarter fiscal 2006 net earnings and diluted earnings per share ("EPS") were
$19.3 million and $0.63, respectively versus comparable prior year period net
earnings and EPS of $15.2 million and $0.52, respectively. This represents 21%
year-over-year EPS growth in the second quarter. Net earnings for the six-months
ended February 28, 2006 were $40.6 million, or $1.33 per diluted share, compared
to $32.1 million, or $1.13 per diluted share for the prior year period.
Second quarter sales increased approximately 17% to $276.0 million compared
to $235.3 million in the prior year. Current year results include those from Key
Components, Inc. ("KCI"), Hedley Purvis Ltd., Hydratight Sweeney, and B.E.P.
Marine Limited, which were acquired in the second quarter of fiscal 2005 or
later. Excluding the impact of foreign currency exchange rate changes, second
quarter core sales (year-over-year sales growth in both existing and acquired
businesses) increased approximately 6% over the comparable prior year period.
Sales for the quarter, excluding acquisitions and foreign currency rate changes,
increased 8%. Sales for the six months ended February 28, 2006 were $559.9
million, approximately 29% higher than the $434.9 million in the comparable
prior year period. Excluding the impact of foreign currency rate changes, core
sales and sales excluding acquisitions for the six-month period both increased
3%.
Robert C. Arzbaecher, President and CEO of Actuant, commented, "We are
pleased with second quarter results, including the 17% sales and 21% EPS growth.
In addition to 6% core sales growth in the quarter, we had sizeable margin
expansion with operating margins up 120 basis points from the prior year."
Arzbaecher continued, "On a segment basis, Tools & Supplies posted strong
second quarter results, driven by robust demand in the industrial tools and
North American electrical markets. Excluding the impact of foreign currency
exchange rate changes, our Engineered Solutions segment core sales declined 1%
from a year ago, a significant sequential improvement from the 11%
year-over-year sales decline in the first quarter. The improvement was driven by
a year-over-year rebound in automotive sales, which were up 5% in the second
quarter compared to a 29% year-over-year decline in the first quarter. This
improvement had been anticipated due to the launch of four new convertible top
platforms in the last six months. End-market diversity is a critical part of the
Actuant strategy - we continue to generate increased sales and earnings in
total, despite headwinds in a few markets."
Actuant's operating profit in the second quarter of fiscal 2006 was $34.9
million, or 30% higher than the $26.9 million in the comparable prior year
period. Operating profit margin increased 120 basis points from 11.4% in the
second quarter of last year to 12.6% in the current year. This increase was
driven by higher production volumes, favorable sales mix, and continued efforts
across all businesses to drive LEAD (Lean Enterprise Across Disciplines)
initiatives, including low cost country sourcing.
Second quarter fiscal 2006 sales for the Tools & Supplies segment increased
approximately 26% to $174.6 million, compared to $138.5 million in the previous
year. Excluding the impact of foreign currency rate changes, year-over-year
second quarter Tools & Supplies segment core sales increased 11% and sales
excluding acquisitions increased 14%. Second quarter fiscal 2006 Engineered
Solutions segment sales increased approximately 5% to $101.4 million, compared
to $96.7 million in the previous year. Excluding the impact of foreign currency
rate changes, second quarter Engineered Solutions core sales and sales excluding
acquisitions both decreased 1%, the result of lower sales to the recreational
vehicle market due to weak consumer demand.
Total debt at February 28, 2006 was approximately $428 million. Net debt
(total debt less approximately $11 million of cash) was $417 million, compared
to $418 million at the beginning of the quarter. Excluding the approximate $9
million of cash used for acquisition related activities and a $2 million decline
in accounts receivable securitization, Actuant generated approximately $12
million of cash flow in the second quarter, which is a seasonally weak cash-flow
period. The Company had availability under its revolving credit facility of $225
million at February 28, 2006.
The Company also announced sales and earnings guidance for the third
quarter and full year of fiscal 2006. Arzbaecher stated, "We expect third
quarter sales and EPS to increase as compared to the first two quarters due to
normal seasonality as well as accelerating automotive convertible top sales. We
are projecting third quarter sales and EPS to be in the range of $300 - $310
million and $0.73 - $0.78 per share, respectively. We are raising the lower end
of our full year fiscal 2006 sales and EPS ranges, resulting in updated guidance
of $1.155 - $1.175 billion and $2.80 - $3.00 per share, respectively."
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 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.
An investor conference call is scheduled for 11am ET today, March 22, and
may be listened to via web cast on Actuant's website at www.actuant.com.
About Actuant
Actuant, headquartered in Glendale, Wisconsin, is a diversified industrial
company with operations in more than 30 countries. The Actuant businesses are
market leaders in highly engineered position and motion control systems and
branded hydraulic and electrical tools and supplies. Since its creation through
a spin-off in 2000, Actuant has grown its sales from $482 million to over $1
billion and its market capitalization from $113 million to over $1.5 billion.
The company employs a workforce of approximately 6,000 worldwide. Actuant
Corporation trades on the NYSE under the symbol ATU. For further information on
Actuant and its business units, visit the Company's website at www.actuant.com.
(tables follow)
Actuant Corporation
Condensed Consolidated Balance Sheets
(Dollars in thousands)
February 28, August 31,
2006 2005
------------- -------------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $10,979 $10,356
Accounts receivable, net 147,657 131,185
Inventories, net 141,543 135,960
Deferred income taxes 14,803 14,974
Other current assets 7,957 6,838
------------- -------------
Total current assets 322,939 299,313
Property, plant and equipment, net 83,652 83,879
Goodwill 431,149 428,285
Other intangible assets, net 168,763 175,001
Other long-term assets 11,831 9,857
------------- -------------
Total assets $1,018,334 $996,335
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings $2,532 $21
Trade accounts payable 90,812 89,506
Accrued compensation and benefits 31,483 32,663
Income taxes payable 16,645 15,049
Current maturities of long-term debt 131 136
Other current liabilities 45,596 51,360
------------- -------------
Total current liabilities 187,199 188,735
Long-term debt, less current maturities 425,031 442,661
Deferred income taxes 59,982 58,783
Pension and postretirement benefit accruals 40,795 41,192
Other long-term liabilities 18,310 20,131
Shareholders' equity
Capital stock 5,436 5,410
Additional paid-in capital (364,259) (370,875)
Accumulated other comprehensive
income (loss) (25,022) (20,282)
Restricted stock awards (1,736) (1,452)
Stock held in trust (1,362) (1,166)
Deferred compensation liability 1,362 1,166
Retained earnings 672,598 632,032
------------- -------------
Total shareholders' equity 287,017 244,833
------------- -------------
Total liabilities and shareholders' equity $1,018,334 $996,335
============= =============
Actuant Corporation
Condensed Consolidated Statements of Earnings
(Dollars in thousands except per share amounts)
Three Months Ended Six Months Ended
February 28, February 28,
-------------------- --------------------
2006 2005 2006 2005
-------------------- --------------------
(Unaudited) (Unaudited)
Net sales $276,019 $235,267 $559,895 $434,944
Cost of products sold 184,958 160,877 369,356 296,753
-------------------- --------------------
Gross profit 91,061 74,390 190,539 138,191
Selling, administrative and
engineering expenses 54,433 46,177 113,915 82,977
Amortization of intangible
assets 1,774 1,275 3,559 1,866
-------------------- --------------------
Operating profit 34,854 26,938 73,065 53,348
Financing costs, net 6,084 3,907 12,151 5,845
Other (income) expense, net 325 40 1,023 (1,179)
-------------------- --------------------
Earnings from operations
before income tax expense
and minority interest 28,445 22,991 59,891 48,682
Income tax expense 9,159 8,022 19,379 16,828
Minority interest, net of
income taxes (12) (229) (54) (285)
-------------------- --------------------
Net earnings $19,298 $15,198 $40,566 $32,139
==================== ====================
Earnings per share
Basic $0.71 $0.58 $1.50 $1.29
Diluted 0.63 0.52 1.33 1.13
Weighted average common
shares outstanding
Basic 27,084 26,103 27,060 25,003
Diluted 31,568 30,642 31,539 29,516
Actuant Corporation
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
Three Months Ended Six Months Ended
February 28, February 28,
--------------------- ---------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
(Unaudited) (Unaudited)
Operating Activities
Net earnings $19,298 $15,198 $40,566 $32,139
Adjustments to reconcile
net earnings to net cash
used in operating
activities:
Depreciation and
amortization 6,721 5,699 13,242 9,797
Amortization of debt
discount and debt
issuance costs 361 332 721 577
Stock-based compensation
expense 1,103 1,025 2,172 1,940
Provision for deferred
income taxes 446 (1,036) 503 (791)
Gain on disposal of assets 136 (117) 70 (296)
Changes in operating
assets and liabilities,
excluding the effects of
the business acquisition:
Accounts receivable 4,531 3,790 (16,651) (7,244)
(Decrease) increase in
accounts receivable
securitization
program (2,294) 19,280 442 19,280
Inventories 432 (4,711) (5,313) (10,038)
Prepaid expenses
and other assets (46) (1,049) (1,230) 2,736
Trade accounts
payable (4,194) (2,362) 2,513 (4,302)
Income taxes payable (3,843) 645 1,650 2,472
Reimbursement of tax
refund to former
subsidiary - - - (15,837)
Other accrued
liabilities (8,673) (3,053) (3,684) (6,494)
---------- ---------- ---------- ----------
Net cash from operating
activities 13,978 33,641 35,001 23,939
Investing Activities
Proceeds from sale of
property, plant and
equipment - 2,482 115 2,839
Capital expenditures (4,824) (4,764) (9,899) (7,947)
Cash paid for business
acquisitions, net of cash
acquired (9,337) (278,195) (9,337) (287,147)
---------- ---------- ---------- ----------
Net cash used in investing
activities (14,161) (280,477) (19,121) (292,255)
Financing Activities
Net borrowings
(repayments) on revolving
credit facilities and
short-term borrowings 2,018 (53,769) (15,085) (36,144)
Proceeds from issuance of
term loans - 250,000 - 250,000
Principal payments on term
loans - (2,127) - (2,218)
Retirement of KCI 10.5% Bonds - (82,800) - (82,800)
Debt issuance costs - (2,300) - (2,300)
Net proceeds from Class A
common stock offering - 134,360 - 134,360
Cash dividend - - (2,165) -
Tax benefit from stock-
based compensation 472 165 660 3,548
Stock option exercises and
other 1,049 323 1,477 1,556
---------- ---------- ---------- ----------
Net cash provided by (used
in) financing activities 3,539 243,852 (15,113) 266,002
Effect of exchange rate
changes on cash 153 (35) (144) 350
---------- ---------- ---------- ----------
Net increase (decrease) in
cash and cash equivalents 3,509 (3,019) 623 (1,964)
Cash and cash equivalents
- beginning of period 7,470 7,088 10,356 6,033
---------- ---------- ---------- ----------
Cash and cash equivalents
- end of period $10,979 $4,069 $10,979 $4,069
========== ========== ========== ==========
ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA
(Dollars in thousands)
FISCAL 2005
---------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
---------------------------------------------
SALES
TOOLS & SUPPLIES
SEGMENT $112,537 $138,546 $158,211 $174,250 $583,544
ENGINEERED SOLUTIONS
SEGMENT 87,140 96,721 113,522 95,139 392,522
---------------------------------------------
TOTAL $199,677 $235,267 $271,733 $269,389 $976,066
=============================================
% SALES GROWTH
TOOLS & SUPPLIES
SEGMENT 16.8% 33.8% 43.9% 63.9% 40.2%
ENGINEERED SOLUTIONS
SEGMENT 24.0% 33.5% 31.2% 16.8% 26.3%
TOTAL 19.9% 33.7% 38.3% 43.5% 34.3%
OPERATING PROFIT
TOOLS & SUPPLIES
SEGMENT $17,493 $19,621 $21,924 $28,537 $87,575
ENGINEERED SOLUTIONS
SEGMENT 12,080 10,803 16,091 10,792 49,766
CORPORATE / GENERAL (3,163) (3,486) (4,137) (4,064) (14,850)
---------------------------------------------
TOTAL $26,410 $26,938 $33,878 $35,265 $122,491
=============================================
OPERATING PROFIT %
TOOLS & SUPPLIES
SEGMENT 15.5% 14.2% 13.9% 16.4% 15.0%
ENGINEERED SOLUTIONS
SEGMENT 13.9% 11.2% 14.2% 11.3% 12.7%
TOTAL (INCLUDING
CORPORATE) 13.2% 11.4% 12.5% 13.1% 12.5%
EBITDA
TOOLS & SUPPLIES
SEGMENT $19,262 $22,560 $25,619 $31,877 $99,318
ENGINEERED SOLUTIONS
SEGMENT 13,384 13,345 18,143 13,150 58,022
CORPORATE / GENERAL (919) (3,308) (3,871) (4,186) (12,284)
---------------------------------------------
TOTAL $31,727 $32,597 $39,891 $40,841 $145,056
=============================================
EBITDA %
TOOLS & SUPPLIES
SEGMENT 17.1% 16.3% 16.2% 18.3% 17.0%
ENGINEERED SOLUTIONS
SEGMENT 15.4% 13.8% 16.0% 13.8% 14.8%
TOTAL (INCLUDING
CORPORATE) 15.9% 13.9% 14.7% 15.2% 14.9%
FISCAL 2006
---------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
---------------------------------------------
SALES
TOOLS & SUPPLIES
SEGMENT $181,306 $174,577 $355,883
ENGINEERED SOLUTIONS
SEGMENT 102,570 101,442 204,012
---------------------------------------------
TOTAL $283,876 $276,019 $- $- $559,895
=============================================
% SALES GROWTH
TOOLS & SUPPLIES
SEGMENT 61.1% 26.0% 41.7%
ENGINEERED SOLUTIONS
SEGMENT 17.7% 4.9% 11.0%
TOTAL 42.2% 17.3% 28.7%
OPERATING PROFIT
TOOLS & SUPPLIES
SEGMENT $30,416 $27,355 $57,771
ENGINEERED SOLUTIONS
SEGMENT 11,762 11,131 22,893
CORPORATE / GENERAL (3,967) (3,632) (7,599)
---------------------------------------------
TOTAL $38,211 $34,854 $- $- $73,065
=============================================
OPERATING PROFIT %
TOOLS & SUPPLIES
SEGMENT 16.8% 15.7% 16.2%
ENGINEERED SOLUTIONS
SEGMENT 11.5% 11.0% 11.2%
TOTAL (INCLUDING
CORPORATE) 13.5% 12.6% 13.0%
EBITDA
TOOLS & SUPPLIES
SEGMENT $33,530 $30,868 $64,398
ENGINEERED SOLUTIONS
SEGMENT 14,105 13,968 28,073
CORPORATE / GENERAL (3,601) (3,586) (7,187)
---------------------------------------------
TOTAL $44,034 $41,250 $- $- $85,284
=============================================
EBITDA %
TOOLS & SUPPLIES
SEGMENT 18.5% 17.7% 18.1%
ENGINEERED SOLUTIONS
SEGMENT 13.8% 13.8% 13.8%
TOTAL (INCLUDING
CORPORATE) 15.5% 14.9% 15.2%
ACTUANT CORPORATION
Reconciliation of GAAP measures to non-GAAP measures
(Dollars in thousands)
FISCAL 2005
-----------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-----------------------------------------
EBITDA (1)
NET EARNINGS $16,941 $15,198 $19,997 $19,115 $71,251
FINANCING COSTS, NET 1,938 3,907 4,936 6,146 16,927
INCOME TAX EXPENSE 8,806 8,022 8,744 9,440 35,012
DEPRECIATION & AMORTIZATION 4,098 5,699 6,448 6,176 22,421
MINORITY INTEREST, NET OF
INCOME TAX (56) (229) (234) (36) (555)
-----------------------------------------
EBITDA (NON-GAAP MEASURE) $31,727 $32,597 $39,891 $40,841 $145,056
=========================================
FISCAL 2006
-----------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-----------------------------------------
EBITDA (1)
NET EARNINGS $21,268 19,298 $40,566
FINANCING COSTS, NET 6,067 6,084 12,151
INCOME TAX EXPENSE 10,220 9,159 19,379
DEPRECIATION & AMORTIZATION 6,521 6,721 13,242
MINORITY INTEREST, NET OF
INCOME TAX (42) (12) (54)
-----------------------------------------
EBITDA (NON-GAAP MEASURE) $44,034 $41,250 $- $- $85,284
=========================================
(1) EBITDA represents net earnings before financing costs,net, income tax
expense, depreciation & amortization and minority interest. 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 Consolidated Statements of Earnings 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.
CONTACT: Actuant Corporation
Andrew Lampereur, 414-352-4160