Actuant Announces Plans to Divest European Electrical Business; Expects to Report Comparable Fiscal 2010 Results above Prior Guidance
MILWAUKEE--(BUSINESS WIRE)-- Actuant Corporation (NYSE:ATU) today announced that it plans to divest its European Electrical business, which markets its products primarily under the Kopp brand name. The European Electrical business has previously been reported as part of the Company's Electrical segment. "This planned transaction reflects our proactive portfolio management efforts to focus on platforms where we can create the most shareholder value," said Robert C. Arzbaecher, Actuant Chairman and CEO.
European Electrical (consisting of Kopp and Dresco) designs, manufactures and markets electrical sockets, switches and other tools and consumables predominately for the European Do-It-Yourself (DIY) retail market. It has operations in Germany, Austria and Tunisia, and employs approximately 525 people. Its annual revenues approximate $105 million.
"The Kopp business has a strong brand and market position, a committed workforce, and prospects for future profitable growth," continued Arzbaecher. "However, we believe that future growth can be more fully realized with an owner focused on the European DIY market. I want to thank the employees for their many contributions under Actuant ownership. During the divestiture process, the European Electrical business will continue to focus on meeting and exceeding customer requirements for high quality electrical products."
As a result of its divestiture plans, Actuant has conducted an impairment analysis of European Electrical and expects to report a non-cash asset impairment charge in the range of $35-40 million in its fourth quarter operating results. Additionally, European Electrical's operating results have been removed from continuing operations in Actuant's Condensed Consolidated Statement of Operations. Historical operating results, adjusted to remove European Electrical from continuing operations, are included in the attachment to this press release.
Actuant will report its fourth quarter and full year 2010 results on September 29. As a result of the non-cash impairment charge and removal of European Electrical results from continuing operations, actual reported results will not be comparable to the sales and diluted earnings per share (EPS) guidance provided in Actuant's June 17, 2010 third quarter earnings release. On a comparable basis, fourth quarter and full year sales and EPS are expected to be slightly above the high end of the previous guidance range.
A more comprehensive review of fourth quarter and full year 2010 results will be discussed in the Company's fourth quarter earnings release and conference call scheduled for September 29, 2010.
About Actuant
Actuant Corporation is a diversified industrial company with operations in more than 30 countries. The Actuant businesses are leaders in a broad array of niche markets including branded hydraulic and electrical tools and supplies; specialized products and services for energy related industries and highly engineered position and motion control systems. The Company was founded in 1910 and is headquartered in Butler, 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, 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 Twelve Three Months Ended Nine
November February May 31, August Months Ended November February May 31, Months
30, 28, 31, 30, 28, Ended
2008 2009 2009 2009 August 31, 2009 2010 2010 May 31,
2009 2010
Net sales $ 335,274 $ 263,709 $ 257,620 $ 261,022 $ 1,117,625 $ 272,640 $ 267,438 $ 310,068 $ 850,146
Cost of 213,340 175,405 167,861 172,792 729,398 172,517 171,075 193,882 537,474
products sold
Gross profit 121,934 88,304 89,759 88,230 388,227 100,123 96,363 116,186 312,672
Selling,
administrative
and 66,366 66,559 57,522 59,557 250,004 65,303 64,257 69,452 199,012
engineering
expenses
Restructuring 674 2,564 8,218 8,074 19,530 2,777 9,276 1,356 13,409
charges
Impairment 26,553 - 4,768 - 31,321 - - - -
charges
Amortization
of intangible 4,211 4,963 5,112 5,358 19,644 5,435 5,351 5,285 16,071
assets
Operating 24,130 14,218 14,139 15,241 67,728 26,608 17,479 40,093 84,180
profit
Financing 12,235 9,904 9,026 10,684 41,849 8,538 7,798 7,779 24,115
costs, net
Other expense (1,220 ) (779 ) 1,087 198 (714 ) 281 (234 ) 315 362
(income), net
Earnings from
continuing
operations 13,115 5,093 4,026 4,359 26,593 17,789 9,915 31,999 59,703
before income
tax expense
(benefit)
Income tax
expense 1,487 (15 ) (1,284 ) 423 611 4,529 2,020 3,706 10,255
(benefit)
Earnings from
continuing 11,628 5,108 5,310 3,936 25,982 13,260 7,895 28,293 49,448
operations
Earnings
(loss) from
discontinued (30 ) (1,864 ) (22,945 ) 12,580 (12,259 ) (1,406 ) (738 ) (6,458 ) (8,602 )
operations,
net of income
taxes
Net earnings $ 11,598 $ 3,244 $ (17,635 ) $ 16,516 $ 13,723 $ 11,854 $ 7,157 $ 21,835 $ 40,846
(loss)
Earnings from
continuing
operations per
share
Basic $ 0.21 $ 0.09 $ 0.09 $ 0.06 $ 0.45 $ 0.20 $ 0.12 $ 0.42 $ 0.73
Diluted 0.19 0.09 0.09 0.06 0.43 0.19 0.11 0.39 0.69
Earnings
(loss) per
share
Basic $ 0.21 $ 0.06 $ (0.31 ) $ 0.26 $ 0.24 $ 0.18 $ 0.11 $ 0.32 $ 0.60
Diluted 0.19 0.06 (0.27 ) 0.24 0.24 0.17 0.10 0.30 0.57
Weighted
average common
shares
outstanding
Basic 56,022 56,170 56,252 63,742 58,047 67,542 67,595 67,642 67,593
Diluted 64,395 64,256 64,051 71,554 66,064 74,012 74,068 74,389 74,156
ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA FROM CONTINUING OPERATIONS
(Dollars in thousands)
FISCAL 2009 FISCAL 2010
Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 TOTAL
SALES
INDUSTRIAL $ 90,524 $ 71,682 $ 62,843 $ 61,802 $ 286,851 $ 65,308 $ 69,235 $ 79,744 $ 214,287
SEGMENT
ENERGY SEGMENT 73,982 59,526 62,251 63,731 259,490 64,065 53,862 56,645 174,572
ELECTRICAL 67,383 59,629 56,218 58,758 241,988 54,065 54,927 61,967 170,959
SEGMENT
ENGINEERED
SOLUTIONS 103,385 72,872 76,308 76,731 329,296 89,202 89,414 111,712 290,328
SEGMENT
TOTAL $ 335,274 $ 263,709 $ 257,620 $ 261,022 $ 1,117,625 $ 272,640 $ 267,438 $ 310,068 $ 850,146
% SALES GROWTH
INDUSTRIAL 4 % -18 % -38 % -37 % -23 % -28 % -3 % 27 % -5 %
SEGMENT
ENERGY SEGMENT 49 % 37 % 7 % 5 % 22 % -13 % -10 % -9 % -11 %
ELECTRICAL -22 % -29 % -34 % -21 % -27 % -20 % -8 % 10 % -7 %
SEGMENT
ENGINEERED
SOLUTIONS -23 % -44 % -47 % -37 % -38 % -14 % 23 % 46 % 15 %
SEGMENT
TOTAL -6 % -23 % -34 % -26 % -23 % -19 % 1 % 20 % -1 %
OPERATING
PROFIT (LOSS)
INDUSTRIAL $ 26,107 $ 15,972 $ 15,597 $ 13,692 $ 71,368 $ 13,854 $ 15,847 $ 20,703 $ 50,404
SEGMENT
ENERGY SEGMENT 15,647 5,895 11,772 11,801 45,115 11,502 5,615 7,326 24,443
ELECTRICAL 4,935 2,663 3,856 3,559 15,012 4,073 5,539 7,309 16,921
SEGMENT
ENGINEERED
SOLUTIONS 7,865 (2,735 ) 991 342 6,463 5,481 6,007 13,554 25,042
SEGMENT
CORPORATE / (3,197 ) (5,013 ) (4,815 ) (5,042 ) (18,066 ) (5,471 ) (5,561 ) (7,351 ) (18,383 )
GENERAL
TOTAL -
EXCLUDING $ 51,357 $ 16,782 $ 27,401 $ 24,352 $ 119,892 $ 29,439 $ 27,447 $ 41,541 $ 98,427
RESTRUCTURING
CHARGES
IMPAIRMENT (26,553 ) - (4,768 ) - (31,321 ) - - - -
CHARGES
RESTRUCTURING (674 ) (2,564 ) (8,494 ) (9,111 ) (20,843 ) (2,831 ) (9,968 ) (1,448 ) (14,247 )
CHARGES
TOTAL $ 24,130 $ 14,218 $ 14,139 $ 15,241 $ 67,728 $ 26,608 $ 17,479 $ 40,093 $ 84,180
OPERATING
PROFIT %
INDUSTRIAL 28.8 % 22.3 % 24.8 % 22.2 % 24.9 % 21.2 % 22.9 % 26.0 % 23.5 %
SEGMENT
ENERGY SEGMENT 21.1 % 9.9 % 18.9 % 18.5 % 17.4 % 18.0 % 10.4 % 12.9 % 14.0 %
ELECTRICAL 7.3 % 4.5 % 6.9 % 6.1 % 6.2 % 7.5 % 10.1 % 11.8 % 9.9 %
SEGMENT
ENGINEERED
SOLUTIONS 7.6 % -3.8 % 1.3 % 0.4 % 2.0 % 6.1 % 6.7 % 12.1 % 8.6 %
SEGMENT
TOTAL
(INCLUDING
CORPORATE) - 15.3 % 6.4 % 10.6 % 9.3 % 10.7 % 10.8 % 10.3 % 13.4 % 11.6 %
EXCLUDING
RESTRUCTURING
CHARGES
EBITDA
INDUSTRIAL $ 27,139 $ 17,058 $ 18,208 $ 15,322 $ 77,727 $ 15,633 $ 16,639 $ 21,632 $ 53,904
SEGMENT
ENERGY SEGMENT 21,671 11,492 15,080 16,235 64,478 15,493 10,072 11,353 36,918
ELECTRICAL 6,438 4,113 5,494 5,186 21,231 5,675 6,988 8,632 21,295
SEGMENT
ENGINEERED
SOLUTIONS 12,417 1,274 3,879 4,953 22,524 8,981 10,168 17,373 36,522
SEGMENT
CORPORATE / (3,110 ) (4,058 ) (4,237 ) (4,196 ) (15,601 ) (4,771 ) (4,339 ) (6,542 ) (15,652 )
GENERAL
TOTAL -
EXCLUDING $ 64,555 $ 29,879 $ 38,424 $ 37,500 $ 170,358 $ 41,011 $ 39,528 $ 52,448 $ 132,986
RESTRUCTURING
CHARGES
IMPAIRMENT (26,553 ) - (4,768 ) - (31,321 ) - - - -
CHARGES
RESTRUCTURING (674 ) (2,564 ) (8,494 ) (9,111 ) (20,843 ) (2,831 ) (9,968 ) (1,448 ) (14,247 )
CHARGES
TOTAL $ 37,328 $ 27,315 $ 25,162 $ 28,389 $ 118,194 $ 38,180 $ 29,560 $ 51,000 $ 118,739
EBITDA %
INDUSTRIAL 30.0 % 23.8 % 29.0 % 24.8 % 27.1 % 23.9 % 24.0 % 27.1 % 25.2 %
SEGMENT
ENERGY SEGMENT 29.3 % 19.3 % 24.2 % 25.5 % 24.8 % 24.2 % 18.7 % 20.0 % 21.1 %
ELECTRICAL 9.6 % 6.9 % 9.8 % 8.8 % 8.8 % 10.5 % 12.7 % 13.9 % 12.5 %
SEGMENT
ENGINEERED
SOLUTIONS 12.0 % 1.7 % 5.1 % 6.5 % 6.8 % 10.1 % 11.4 % 15.6 % 12.6 %
SEGMENT
TOTAL
(INCLUDING
CORPORATE) - 19.3 % 11.3 % 14.9 % 14.4 % 15.2 % 15.0 % 14.8 % 16.9 % 15.6 %
EXCLUDING
RESTRUCTURING
CHARGES
ACTUANT
CORPORATION
RECONCILIATION OF
GAAP MEASURES TO
NON-GAAP MEASURES
(Dollars in
thousands,
except for per
share amounts)
FISCAL 2009 FISCAL 2010
Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 TOTAL
OPERATING PROFIT
(LOSS), EXCLUDING
RESTRUCTURING
CHARGES AND
IMPAIRMENT
CHARGES
INDUSTRIAL
SEGMENT
OPERATING
PROFIT (GAAP $ 26,007 $ 15,545 $ 14,633 $ 11,266 $ 67,451 $ 13,676 $ 10,937 $ 20,374 $ 44,987
MEASURE)
RESTRUCTURING 100 427 964 2,426 3,917 178 4,910 329 5,417
CHARGES
ADJUSTED
OPERATING
PROFIT $ 26,107 $ 15,972 $ 15,597 $ 13,692 $ 71,368 $ 13,854 $ 15,847 $ 20,703 $ 50,404
(NON-GAAP
MEASURE)
ENERGY SEGMENT
OPERATING
PROFIT (GAAP $ 15,533 $ 5,976 $ 11,508 $ 11,075 $ 44,092 $ 11,359 $ 3,922 $ 7,203 $ 22,484
MEASURE)
RESTRUCTURING 114 (81 ) 264 726 1,023 143 1,693 123 1,959
CHARGES
ADJUSTED
OPERATING
PROFIT $ 15,647 $ 5,895 $ 11,772 $ 11,801 $ 45,115 $ 11,502 $ 5,615 $ 7,326 $ 24,443
(NON-GAAP
MEASURE)
ELECTRICAL
SEGMENT
OPERATING
PROFIT (LOSS) $ 4,900 $ 1,959 $ (4,293 ) $ 762 $ 3,327 $ 2,186 $ 4,373 $ 6,775 $ 13,334
(GAAP MEASURE)
RESTRUCTURING 35 704 3,381 2,797 6,917 1,887 1,166 534 3,587
CHARGES
IMPAIRMENT - - 4,768 - 4,768 - - - -
CHARGE
ADJUSTED
OPERATING
PROFIT $ 4,935 $ 2,663 $ 3,856 $ 3,559 $ 15,012 $ 4,073 $ 5,539 $ 7,309 $ 16,921
(NON-GAAP
MEASURE)
ENGINEERED
SOLUTIONS
OPERATING
PROFIT (LOSS) $ (19,113 ) $ (3,985 ) $ (2,670 ) $ (2,664 ) $ (28,432 ) $ 5,053 $ 3,995 $ 13,170 $ 22,218
(GAAP MEASURE)
RESTRUCTURING 425 1,250 3,661 3,006 8,342 428 2,012 384 2,824
CHARGES
IMPAIRMENT 26,553 - - - 26,553 - - - -
CHARGE
ADJUSTED
OPERATING
PROFIT (LOSS) $ 7,865 $ (2,735 ) $ 991 $ 342 $ 6,463 $ 5,481 $ 6,007 $ 13,554 $ 25,042
(NON-GAAP
MEASURE)
CORPORATE
OPERATING LOSS $ (3,197 ) $ (5,277 ) $ (5,039 ) $ (5,198 ) $ (18,710 ) $ (5,666 ) $ (5,748 ) $ (7,429 ) $ (18,843 )
(GAAP MEASURE)
RESTRUCTURING - 264 224 156 644 195 187 78 460
CHARGES
ADJUSTED
OPERATING LOSS $ (3,197 ) $ (5,013 ) $ (4,815 ) $ (5,042 ) $ (18,066 ) $ (5,471 ) $ (5,561 ) $ (7,351 ) $ (18,383 )
(NON-GAAP
MEASURE)
NET EARNINGS
(LOSS), EXCLUDING
RESTRUCTURING
CHARGES,
IMPAIRMENT
CHARGES, INCOME
TAX ADJUSTMENTS,
DEBT
EXTINGUISHMENT
CHARGES AND
DISCONTINUED
OPERATIONS (2)
NET EARNINGS
(LOSS) (GAAP $ 11,598 $ 3,244 $ (17,635 ) $ 16,516 $ 13,723 $ 11,854 $ 7,157 $ 21,835 $ 40,846
MEASURE)
RESTRUCTURING
CHARGES, NET 481 1,553 4,920 6,055 13,009 1,804 6,863 1,069 9,736
OF TAX BENEFIT
IMPAIRMENT
CHARGES, NET 16,463 - 2,981 - 19,444 - - - -
OF TAX BENEFIT
INCOME TAX - - - - - - - 632 632
ADJUSTMENTS
DEBT
EXTINGUISHMENT (236 ) - - 1,303 1,067 - - - -
CHARGES, NET
OF TAX BENEFIT
DISCONTINUED
OPERATIONS, 30 1,864 22,945 (12,580 ) 12,259 1,406 738 1,853 3,997
NET OF TAX
BENEFIT
TOTAL
(NON-GAAP $ 28,336 $ 6,661 $ 13,211 $ 11,294 $ 59,502 $ 15,064 $ 14,758 $ 25,389 $ 55,211
MEASURE)
DILUTED EARNINGS
(LOSS) PER SHARE,
EXCLUDING
RESTRUCTURING
CHARGES,
IMPAIRMENT
CHARGES, INCOME
TAX ADJUSTMENTS,
DEBT
EXTINGUISHMENT
CHARGES AND
DISCONTINUED
OPERATIONS (2)
NET EARNINGS
(LOSS) (GAAP $ 0.19 0.06 (0.27 ) 0.24 $ 0.24 $ 0.17 $ 0.10 $ 0.30 $ 0.57
MEASURE)
RESTRUCTURING
CHARGES, NET 0.01 0.02 0.08 0.09 0.20 0.02 0.10 0.01 0.13
OF TAX BENEFIT
IMPAIRMENT
CHARGES, NET 0.26 - 0.05 - 0.29 - - - -
OF TAX BENEFIT
INCOME TAX - - - - - - - 0.01 0.01
ADJUSTMENTS
DEBT
EXTINGUISHMENT (0.00 ) - - 0.02 0.02 - - - -
CHARGES, NET
OF TAX BENEFIT
DISCONTINUED
OPERATIONS, - 0.03 0.36 (0.18 ) 0.19 0.02 0.01 0.03 0.05
NET OF TAX
BENEFIT
TOTAL
(NON-GAAP $ 0.45 $ 0.11 $ 0.22 $ 0.17 $ 0.94 $ 0.21 $ 0.21 $ 0.35 $ 0.76
MEASURE)
EBITDA (3)
NET EARNINGS
(LOSS) (GAAP $ 11,598 $ 3,244 $ (17,635 ) $ 16,516 $ 13,723 $ 11,854 $ 7,157 $ 21,835 $ 40,846
MEASURE)
FINANCING 12,235 9,904 9,026 10,684 41,849 8,538 7,798 7,779 24,115
COSTS, NET
INCOME TAX 1,487 (15 ) (1,284 ) 423 611 4,529 2,020 3,706 10,255
EXPENSE
DEPRECIATION & 11,978 12,318 12,110 13,346 49,752 11,853 11,847 11,222 34,922
AMORTIZATION
DISCONTINUED
OPERATIONS, 30 1,864 22,945 (12,580 ) 12,259 1,406 738 6,458 8,602
NET OF TAX
BENEFIT
EBITDA
(NON-GAAP $ 37,328 $ 27,315 $ 25,162 $ 28,389 $ 118,194 $ 38,180 $ 29,560 $ 51,000 $ 118,739
MEASURE)
IMPAIRMENT 26,553 - 4,768 - 31,321 - - - -
CHARGES
RESTRUCTURING 674 2,564 8,494 9,111 20,843 2,831 9,968 1,448 14,247
CHARGES
EBITDA
(NON-GAAP
MEASURE) -
EXCLUDING
DISCONTINUED $ 64,555 $ 29,879 $ 38,424 $ 37,500 $ 170,358 $ 41,011 $ 39,528 $ 52,448 $ 132,986
OPERATIONS,
IMPAIRMENT AND
RESTRUCTURING
CHARGES
ACTUANT CORPORATION
FOOTNOTES FOR SUPPLEMENTAL UNAUDITED DATA AND RECONCILIATION OF GAAP MEASURES TO
NON-GAAP MEASURES
(Dollars in thousands, except for per share amounts)
FOOTNOTES
NOTE: The total of the individual quarters may not equal the annual total due
to rounding.
(1) A summary of restructuring charges included in cost of products sold is
as follows:
FISCAL 2009 FISCAL 2010
Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 TOTAL
Restructuring
- cost of $ - $ - $ 276 $ 1,037 $ 1,313 $ 54 $ 692 $ 92 $ 839
products sold
Net earnings and diluted earnings per share excluding restructuring
charges, impairment charges, debt extinguishment charges and discontinued
operations represent net earnings and diluted earnings per share per the
Condensed Consolidated Statements of Earnings net of charges or credits
for items to be highlighted for comparability purposes. These measures
(2) should not be considered as an alternative to net earnings or diluted
earnings 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.
EBITDA represents net earnings before financing costs, net, income tax
expense, depreciation & amortization and discontinued operations. 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
Earnings data. EBITDA should not be considered as an alternative to net
earnings or operating profit as an indicator of the Company's operating
(3) 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.
The total of the individual quarters may not equal the annual total due
to rounding.
Source: Actuant Corporation
Released September 22, 2010