Market Overview

Actuant Reports Second Quarter 2019 Results

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Second Quarter 2019 Highlights*

  • Completed sale of Precision-Hayes International business on December
    31, 2018.
  • Announced intent to divest EC&S segment on January 24, 2019.
  • Total net sales were $272 million for the quarter. Core sales
    increased 7% on a year-over-year basis net of the impact of foreign
    currency and divestitures, each of which decreased net sales by 4%.
  • The Industrial Tools & Services ("IT&S") segment achieved second
    quarter revenues of $150 million and delivered a core sales increase
    of 12% year-over-year.
  • The Engineered Components & Systems ("EC&S") segment achieved revenues
    of $122 million with flat core sales, net of divestitures.
  • GAAP Operating Margin was 6.0% versus 3.6% in second quarter 2018 (see
    Consolidated Results below, along with the attached reconciliation of
    earnings). Adjusted Operating Margin expanded 240bps over second
    quarter 2018, to 8.6% from 6.2%.
  • Adjusted EBITDA Margin increased by 140bps with significant
    improvement in operating leverage over the second quarter of 2018
    resulting in incremental margins in line with our expectations.
  • GAAP diluted earnings per share ("EPS") was $0.04 in the second
    quarter of fiscal 2019, versus a diluted loss per share of $0.30 in
    the comparable period in 2018. Adjusted EPS was $0.19, a 46%
    improvement over second quarter 2018 adjusted EPS of $0.13.
  • Significant year-over-year reduction of leverage (Net Debt to Adjusted
    EBITDA) from 3.0x at the end of second quarter 2018 to 2.1x at the end
    of second quarter 2019.

*This news release contains non-GAAP financial measures in addition
to the financial measures in accordance with GAAP.
Reconciliations
of the GAAP to non-GAAP financial measures can be found in the footnotes
to this release.

Actuant Corporation (NYSE:ATU) today announced results for its fiscal
2019 second quarter ended February 28, 2019.

"We continued to execute successfully against our strategic plan, as
demonstrated by the strong 12% core growth in our IT&S segment despite
weather related challenges in the quarter," said Randy Baker, President
and CEO. "The investments we have made in our commercial processes are
yielding results, and we believe IT&S is well positioned for continued
growth. Additionally, the restructuring actions we took in 2018, along
with the decision to focus solely on standard product in our Heavy
Lifting product offering, have provided improved profitability in the
current fiscal year. EC&S had a solid quarter as well, driven by solid
execution of their plan, core sales growth in the Americas and strong
profit improvement."

Mr. Baker continued, "As we plan for our future as a pure-play
industrial tool company, we are focused on delivering world class
operating margins aligned with our strategy. To further that objective,
we are initiating a restructuring program centered on achieving savings
both from the integration of the Enerpac and Hydratight businesses and
in our corporate structure by better leveraging and consolidating
certain global support functions, facilities and spend. We expect to
achieve $12-$15 million of annual savings and anticipate completing
these actions within 18-24 months. The one-time total cost of these
actions is projected to be $15-$20 million. Additionally, during the
quarter, we made significant progress toward optimizing our portfolio of
businesses with the announcement of our intent to divest the EC&S
segment and closing the sale of Precision-Hayes International and
Cortland Fibron. We are confident that focusing on growing our high
quality and high margin IT&S business and pursuing this sale is the best
way to maximize value for Actuant's shareholders while securing a
positive future for EC&S and its talented employees around the world."

Consolidated Results

(US$ in millions)

  Three Months Ended Feb 28   Six Months Ended Feb 28
2019   2018 2019   2018
Sales $271.9 $275.2 $564.4 $564.1
Operating Profit $16.4 $9.8 $7.0 $24.5
Adjusted Op Profit $23.3 $17.1 $50.8 $38.4
Adjusted Op Profit % 8.6% 6.2% 9.0% 6.8%
Earnings (Loss) per Share $0.04 $(0.30) $(0.24) $(0.22)
Adjusted Earnings per Share $0.19 $0.13 $0.46 $0.31
Net Income (Loss) $2.8 $(18.2) $(14.7) $(13.0)
EBITDA $23.1 $19.5 $21.8 $44.0
Adjusted EBITDA $30.1 $26.8 $65.6 $57.9
EBITDA % 8.5% 7.1% 3.9% 7.8%
Adjusted EBITDA % 11.1% 9.7% 11.6% 10.3%

  • Consolidated net sales for the second quarter were $271.9 million,
    slightly lower than the $275.2 million recorded in the comparable
    prior year quarter. Core sales improved 7% year-over-year, while
    foreign currency rate changes decreased net sales by 4% and the impact
    of divestitures (Precision-Hayes International and Cortland Fibron)
    also reduced net sales by 4%.
  • Fiscal 2019 second quarter net income and EPS were $2.8 million and
    $0.04, compared to a net loss of $(18.2) million and EPS of $(0.30),
    respectively, in the comparable prior year quarter.
    • Fiscal 2019 second quarter earnings included impairment and other
      divestiture charges of $6.9 million ($6.7 million, or $0.11 per
      share, after tax) related to the Precision-Hayes International,
      Cortland and EC&S divestitures, along with $2.0 million ($0.04 per
      share) of charges primarily related to U.S. tax reform.
  • Fiscal 2018 second quarter earnings included restructuring charges of
    $4.3 million ($3.8 million, or $0.06 per share, after tax), impairment
    and other 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.
  • Excluding impairment, other divestiture and restructuring charges,
    adjusted EPS for the second quarter of fiscal 2019 was $0.19, compared
    to $0.13 in the comparable prior year period (see attached
    reconciliation of earnings).
  • Consolidated net sales for the six months ended February 28, 2019 were
    $564.4 million, compared to $564.1 in the prior year period. Core
    sales improved 4% year-over-year while foreign currency rates
    decreased net sales 3% and the net impact of acquisitions and
    divestitures decreased net sales by 1%.
  • Fiscal 2019's first half net loss and EPS were $(14.7) million and
    $(0.24), respectively, compared to a net loss and EPS of $(13.0)
    million and $(0.22), respectively, in the comparable prior year period.

Segment Results

Industrial Tools & Services Segment (IT&S)

(US$ in millions)

  Three Months Ended Feb 28   Six Months Ended Feb 28
2019   2018 2019   2018
Sales $149.5 $137.0 $298.2 $279.0
Operating Profit $26.5 $19.0 $52.9 $39.8
Adjusted Op Profit (1) $26.6 $20.5 $52.9 $42.7
Adjusted Op Profit % (1) 17.8% 15.0% 17.8% 15.3%

(1) Excludes minimal restructuring charges in fiscal 2019
compared to $1.5 million in the second quarter of fiscal 2018 and $2.9
million in the six months ended February 28, 2018.

  • Second quarter fiscal 2019 IT&S segment net sales were $149.5 million,
    9% higher than the prior year. Core sales increased 12% and the impact
    of foreign currency exchange rates decreased net sales by 3%
    year-over-year.
  • Solid top line growth in both product and service resulted from the
    continued strength of our end markets and commercial investments. The
    Americas and the Middle East each experienced double digit top line
    growth in product and service, respectively.
  • Adjusted operating profit improved as a result of increased sales
    volume and product margin expansion as well as improved profitability
    within Heavy Lifting due to our focus on standard product.

Engineered Components & Systems Segment (EC&S)

(US$ in millions)

  Three Months Ended Feb 28   Six Months Ended Feb 28
2019   2018 2019   2018
Sales $122.4 $138.2 $266.3 $285.1
Operating Profit (Loss) $(1.4) $(4.4) $(29.7) $(0.4)
Adjusted Op Profit (2) $5.5 $1.2 $14.1 $6.3
Adjusted Op Profit % (2) 4.5% 0.9% 5.3% 2.2%

(2) The second quarter of fiscal 2019 excludes $6.9 million
of impairment and other divestiture charges. The second quarter of 2018
excludes $3.0 million of impairment and other divestiture charges, along
with $2.6 million of restructuring charges. The six months ended
February 28, 2019 excludes restructuring charges of $0.4 million and
impairment and other divestiture charges of $43.3 million. The six
months ended February 28, 2018 excludes restructuring charges of $3.7
million and $3.0 million of impairment and other divestiture charges.

  • Second quarter fiscal 2019 EC&S segment net sales were $122.4 million,
    an 11% decrease from the prior year. The divestiture of
    Precision-Hayes International and Cortland Fibron resulted in a
    decrease in net sales of $11.8 million (9%) and the strengthening of
    the US dollar reduced net sales an additional 2%.
  • Core sales were flat due to the ramp up of new platform wins and price
    realization, which were offset by slightly lower volume in on and
    off-highway vehicle products and reduced demand in the industrial
    ropes market. China truck demand stabilized in the quarter, as
    expected.
  • Adjusted operating profit margin improved due to pricing and operating
    efficiencies.

Corporate Expenses and Income Taxes

  • Corporate expenses for the second quarter of fiscal 2019 were $8.8
    million, $4.2 million higher than the comparable prior year period,
    primarily resulting from increased medical, stock compensation and
    consulting expenses.
  • The second quarter effective income tax rate of approximately 26% was
    in line with expectations but higher than the prior year rate of 14%.

Balance Sheet and Leverage

(US$ in millions)

  Period Ending
Feb 28, 2019   Aug 31, 2018   Feb 28, 2018
Cash Balance $170.4 $250.5 $153.6
Debt Balance $485.6 $532.7 $547.3
Net Debt to Adjusted EBITDA 2.1 1.9 3.0
  • Net debt at February 28, 2019 was approximately $315 million (total
    debt of $486 million less $170 million of cash), which decreased
    approximately $7 million from the prior quarter and $79 million from
    second quarter of fiscal 2018. The company paid $40 million of
    principal against its Term Loan facility during the quarter. Net Debt
    to Adjusted EBITDA was 2.1x at February 28, 2019.

Outlook

Mr. Baker concluded, "We are pleased with the strong results we achieved
in the first half of fiscal 2019. Going forward, we expect that our
ongoing actions to become a world class tool company along with cost
reductions achieved through our restructuring program will enable us to
drive growth and top-tier profitability. We are also continuing to
invest strategically in new product development, commercial
effectiveness and operational excellence to further drive value and
profitability. We are confident that our strategies will unlock enhanced
shareholder value."

The Company reaffirms its outlook for fiscal year 2019 and provides the
following outlook for third quarter 2019:

  • Annual sales: $1.15 to $1.19 billion, with annual core sales growth
    between 3% and 5%;
  • Full year adjusted EPS: between $1.09 and $1.20, which includes an
    expected tax rate of 20%;
  • Full year free cash flow: $80 to $85 million;
  • Third quarter sales: $295 to $305 million; and
  • Third quarter adjusted EPS: range of $0.40 to $0.45.

All guidance excludes restructuring, impairment and divestiture charges,
one-time tax adjustments and the impact of potential future
acquisitions, dispositions, share repurchases and tariffs.

Conference Call Information

An investor conference call is scheduled for 10am CT today, March 21,
2019. 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. Among other risks and factors, Actuant's results are
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, tax reform, foreign currency
fluctuations and interest rate risk. See the Company's Form 10-K for the
fiscal year ended August 31, 2018 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.

Non-GAAP Financial Information

This press release contains financial measures that are not measures
presented in conformity with GAAP. They include EBITDA, Adjusted EBITDA,
Adjusted EPS, Adjusted Operating Profit, Free Cash Flow and Net Debt.
This press release includes reconciliations of these non-GAAP measures
to the most comparable GAAP measure, including in the tables attached to
this press release. Management believes these non-GAAP measures are
commonly used financial measures for investors to evaluate Actuant's
operating performance and financial position with respect to the periods
presented and, when read in conjunction with the condensed consolidated
financial statements, present a useful tool to evaluate ongoing
operations and provide investors with metrics they can use to evaluate
aspects of the Company's performance from period to period. In addition,
these are some of the factors management uses in internal evaluations of
the overall performance of the Company's business. Management
acknowledges that there are many items that impact a company's reported
results and the adjustments reflected in these non-GAAP measures are not
intended to present all items that may have impacted these results. In
addition, these non-GAAP measures are not necessarily comparable to
similarly-titled measures used by other companies.

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,
2019 2018
 
ASSETS
Current assets
Cash and cash equivalents $ 170,388 $ 250,490
Accounts receivable, net 210,174 187,749
Inventories, net 161,646 156,356
Assets held for sale 56,113 23,573
Other current assets   54,863     42,732  
Total current assets 653,184 660,900
 
Property, plant and equipment, net 83,132 90,220
Goodwill 480,208 512,412
Other intangible assets, net 150,035 181,037
Other long-term assets   36,498     36,769  
 
Total assets $ 1,403,057   $ 1,481,338  
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable $ 122,486 $ 130,838
Accrued compensation and benefits 37,402 54,508
Current maturities of debt 30,000 30,000
Income taxes payable 8,548 4,091
Liabilities held for sale 20,820 44,225
Other current liabilities   58,871     67,299  
Total current liabilities 278,127 330,961
 
Long-term debt, net 455,573 502,695
Deferred income taxes 18,973 21,933
Pension and postretirement benefit liabilities 14,371 14,869
Other long-term liabilities   50,383     52,168  
Total liabilities 817,427 922,626
 
Shareholders' equity
Capital stock 16,364 16,285
Additional paid-in capital 174,418 167,448
Treasury stock (617,731 ) (617,731 )
Retained earnings 1,152,331 1,166,955
Accumulated other comprehensive loss (139,752 ) (174,245 )
Stock held in trust (2,989 ) (2,450 )
Deferred compensation liability   2,989     2,450  
Total shareholders' equity   585,630     558,712  
 
Total liabilities and shareholders' equity $ 1,403,057   $ 1,481,338  

       
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,
2019 2018 2019 2018
 
Net sales $ 271,907 $ 275,165 $ 564,438 $ 564,120
Cost of products sold   174,421   185,469     361,944     373,513  
Gross profit 97,486 89,696 202,494 190,607
 
Selling, administrative and engineering expenses 70,745 68,287 143,936 142,765
Amortization of intangible assets 3,441 5,168 7,720 10,299
Restructuring charges 60 3,450 463 10,079
Impairment & divestiture charges   6,886   2,987     43,339     2,987  
Operating profit 16,354 9,804 7,036 24,477
 
Financing costs, net 7,153 7,604 14,448 15,118
Other expense, net   656   582     1,568     911  
Income (loss) before income tax expense 8,545 1,618 (8,980 ) 8,448
 
Income tax expense   5,792   19,839     5,719     21,443  
Net earnings (loss) $ 2,753 $ (18,221 ) $ (14,699 ) $ (12,995 )
 
Earnings (loss) per share
Basic $ 0.04 $ (0.30 ) $ (0.24 ) $ (0.22 )
Diluted 0.04 (0.30 ) (0.24 ) (0.22 )
 
Weighted average common shares outstanding
Basic 61,243 60,318 61,137 60,095
Diluted 61,607 60,318 61,137 60,095

       
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,
2019 2018 2019 2018
 
Operating Activities
Net earnings (loss) $ 2,753 $ (18,221 ) $ (14,699 ) $ (12,995 )
Adjustments to reconcile net earnings (loss) to net cash used in
operating activities:
Impairment & divestiture charges, net of tax effect 6,688 12,385 40,524 12,385
Depreciation and amortization 7,451 10,295 16,341 20,385
Stock-based compensation expense 3,568 2,872 7,162 8,292
Benefit for deferred income taxes (302 ) (6,817 ) (1,445 ) (7,124 )
Amortization of debt issuance costs 301 413 602 826
Other non-cash adjustments (67 ) 87 63 200
Changes in components of working capital and other, excluding
acquisitions and divestitures:
Accounts receivable (18,760 ) (5,394 ) (36,436 ) (16,872 )
Inventories (6,973 ) (6,805 ) (24,797 ) (18,433 )
Trade accounts payable (3,861 ) (7,957 ) (2,810 ) (1,753 )
Prepaid expenses and other assets (4,423 ) 2,875 (9,421 ) (9,168 )
Income tax accounts 467 19,219 1,531 17,505
Accrued compensation and benefits 104 2,629 (16,440 ) (9,959 )
Other accrued liabilities   (9,150 )   (7,229 )   (11,489 )   (5,395 )
Cash used in operating activities (22,204 ) (1,648 ) (51,314 ) (22,106 )
 
Investing Activities
Capital expenditures (8,001 ) (4,643 ) (15,667 ) (12,547 )
Proceeds from sale of property, plant and equipment 41 81 52 113
Rental asset buyout for Viking divestiture - - - (27,718 )
Proceeds from sale of business, net of transaction costs 36,159 8,780 36,159 8,780
Cash paid for business acquisitions, net of cash acquired   -     (16,517 )   -     (16,517 )
Cash provided by (used in) investing activities 28,199 (12,299 ) 20,544 (47,889 )
 
Financing Activities
Principal repayments on term loan (40,000 ) (7,500 ) (47,500 ) (15,000 )

Stock option exercises & other

479 8,074 1,031 10,305
Taxes paid related to the net share settlement of equity awards (1,288 ) (825 ) (1,489 ) (1,107 )
Cash dividend   -     -     (2,439 )   (2,390 )
Cash used in financing activities (40,809 ) (251 ) (50,397 ) (8,192 )
 
Effect of exchange rate changes on cash   1,759     2,743     1,065     2,211  
Net decrease in cash and cash equivalents (33,055 ) (11,455 ) (80,102 ) (75,976 )
Cash and cash equivalents - beginning of period   203,443     165,050     250,490     229,571  
Cash and cash equivalents - end of period $ 170,388   $ 153,595   $ 170,388   $ 153,595  

                           

ACTUANT CORPORATION

SUPPLEMENTAL UNAUDITED DATA

(Dollars in thousands)

 
FISCAL 2018 FISCAL 2019
Q1   Q2   Q3   Q4   TOTAL Q1   Q2   Q3   Q4   TOTAL
SALES
INDUSTRIAL TOOLS & SERVICES SEGMENT $ 141,991 $ 136,986 $ 158,735 $ 153,373 $ 591,085 $ 148,655 $ 149,521 $ - $ - $ 298,176
ENGINEERED COMPONENTS & SYSTEMS SEGMENT   146,964       138,179       158,361       148,022       591,526     143,876       122,386       -     -     266,262  
TOTAL $ 288,955     $ 275,165     $ 317,096     $ 301,395     $ 1,182,611   $ 292,531     $ 271,907     $ -   $ -   $ 564,438  
 
% SALES GROWTH
INDUSTRIAL TOOLS & SERVICES SEGMENT 2 % 5 % 8 % 12 % 7 % 5 % 9 % - - 7 %
ENGINEERED COMPONENTS & SYSTEMS SEGMENT 16 % 7 % 7 % 6 % 9 % -2 % -11 % - - -7 %
TOTAL 9 % 6 % 7 % 9 % 8 % 1 % -1 % - - 0 %
 
OPERATING PROFIT (LOSS)
INDUSTRIAL TOOLS & SERVICES SEGMENT $ 22,218 $ 20,510 $ 32,206 $ 28,783 $ 103,718 $ 26,345 $ 26,596 $ - $ - $ 52,941
ENGINEERED COMPONENTS & SYSTEMS SEGMENT 5,107 1,177 9,714 8,789 24,787 8,593 5,484 - - 14,077
CORPORATE / GENERAL   (6,023 )     (4,612 )     (8,042 )     (5,298 )     (23,976 )   (7,400 )     (8,780 )     -     -     (16,180 )
ADJUSTED OPERATING PROFIT $ 21,302 $ 17,075 $ 33,878 $ 32,274 $ 104,529 $ 27,538 $ 23,300 $ - $ - $ 50,838
IMPAIRMENT & DIVESTITURE CHARGES - (2,987 ) - (70,071 ) (73,058 ) (36,453 ) (6,886 ) - - (43,339 )
RESTRUCTURING CHARGES (1)   (6,629 )     (4,284 )     (1,186 )     (746 )     (12,845 )   (403 )     (60 )     -     -     (463 )
OPERATING PROFIT (LOSS) $ 14,673     $ 9,804     $ 32,692     $ (38,543 )   $ 18,626   $ (9,318 )   $ 16,354     $ -   $ -   $ 7,036  
 
ADJUSTED OPERATING PROFIT %
INDUSTRIAL TOOLS & SERVICES SEGMENT 15.6 % 15.0 % 20.3 % 18.8 % 17.5 % 17.7 % 17.8 % - - 17.8 %
ENGINEERED COMPONENTS & SYSTEMS SEGMENT 3.5 % 0.9 % 6.1 % 5.9 % 4.2 % 6.0 % 4.5 % - - 5.3 %
ADJUSTED OPERATING PROFIT % 7.4 % 6.2 % 10.7 % 10.7 % 8.8 % 9.4 % 8.6 % - - 9.0 %
 
EBITDA
INDUSTRIAL TOOLS & SERVICES SEGMENT $ 25,567 $ 24,594 $ 36,394 $ 32,763 $ 119,318 $ 30,038 $ 30,153 $ - $ - $ 60,191
ENGINEERED COMPONENTS & SYSTEMS SEGMENT 11,004 7,267 15,093 15,114 48,478 12,841 8,486 - - 21,327
CORPORATE / GENERAL   (5,508 )     (5,073 )     (7,113 )     (4,672 )     (22,366 )   (7,362 )     (8,544 )     -     -     (15,907 )
ADJUSTED EBITDA $ 31,063 $ 26,788 $ 44,374 $ 43,205 $ 145,430 $ 35,517 $ 30,095 $ - $ - $ 65,611
IMPAIRMENT & DIVESTITURE CHARGES - (2,987 ) - (70,071 ) (73,058 ) (36,453 ) (6,886 ) - - (43,339 )
RESTRUCTURING CHARGES (1)   (6,629 )     (4,284 )     (1,186 )     (746 )     (12,845 )   (403 )     (60 )     -     -     (463 )
EBITDA $ 24,434     $ 19,517     $ 43,188     $ (27,612 )   $ 59,527   $ (1,339 )   $ 23,149     $ -   $ -   $ 21,809  
 
ADJUSTED EBITDA %
INDUSTRIAL TOOLS & SERVICES SEGMENT 18.0 % 18.0 % 22.9 % 21.4 % 20.2 % 20.2 % 20.2 % - - 20.2 %
ENGINEERED COMPONENTS & SYSTEMS SEGMENT 7.5 % 5.3 % 9.5 % 10.2 % 8.2 % 8.9 % 6.9 % - - 8.0 %
ADJUSTED EBITDA % 10.8 % 9.7 % 14.0 % 14.3 % 12.3 % 12.1 % 11.1 % - - 11.6 %
 
Note: (1) Approximately $0.8 million of the Q2 fiscal 2018
restructuring charges were recorded in cost of products sold. De
minimis restructuring charges were also recorded in cost of products
sold in Q3 fiscal 2018.

                       

ACTUANT CORPORATION

SUPPLEMENTAL UNAUDITED DATA

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

(Dollars in thousands, except for per share amounts)

 
 
FISCAL 2018 FISCAL 2019
Q1   Q2   Q3   Q4   TOTAL Q1   Q2   Q3   Q4   TOTAL
ADJUSTED EARNINGS (1)
NET EARNINGS (LOSS) (GAAP MEASURE) $ 5,226 $ (18,221 ) $ 29,012 $ (37,664 ) $ (21,648 ) $ (17,452 ) $ 2,753 $ - $ - $ (14,699 )
IMPAIRMENT & DIVESTITURE CHARGES, NET OF TAX EFFECT - 12,385 - 62,949 75,334 33,836 6,688 - - 40,524
RESTRUCTURING CHARGES, NET OF TAX EFFECT (1) 6,254 3,784 (249 ) (337 ) 9,452 300 (191 ) - - 109
ACCELERATED DEBT ISSUANCES COSTS, NET OF TAX EFFECT - - - 601 601 - - - - -
OTHER INCOME TAX (BENEFIT) EXPENSE   -     9,705       (4,891 )     (1,831 )     2,983     -       2,258       -     -     2,258  
ADJUSTED EARNINGS $ 11,480   $ 7,653     $ 23,872     $ 23,718     $ 66,722   $ 16,684     $ 11,508     $ -   $ -   $ 28,192  
 
ADJUSTED DILUTED EARNINGS PER SHARE (2)
NET EARNINGS (LOSS) (GAAP MEASURE) $ 0.09 $ (0.30 ) $ 0.48 $ (0.62 ) $ (0.36 ) $ (0.29 ) $ 0.04 $ - $ - $ (0.24 )
IMPAIRMENT & DIVESTITURE CHARGES, NET OF TAX EFFECT - 0.21 - 1.03 1.24 0.55 0.11 - - 0.66
RESTRUCTURING CHARGES, NET OF TAX EFFECT (1) 0.10 0.06 - (0.01 ) 0.15 0.01 - - - -
ACCELERATED DEBT ISSUANCES COSTS, NET OF TAX EFFECT - - - 0.01 0.01 - - - - -
OTHER INCOME TAX (BENEFIT) EXPENSE   -     0.16       (0.09 )     (0.02 )     0.05     -       0.04       -     -     0.04  
ADJUSTED DILUTED EARNINGS PER SHARE $ 0.19   $ 0.13     $ 0.39     $ 0.39     $ 1.09   $ 0.27     $ 0.19     $ -   $ -   $ 0.46  
 
ADJUSTED EBITDA (3)
NET EARNINGS (LOSS) (GAAP MEASURE) $ 5,226 $ (18,221 ) $ 29,012 $ (37,664 ) $ (21,648 ) $ (17,452 ) $ 2,753 $ - $ - $ (14,699 )
FINANCING COSTS, NET 7,514 7,604 7,756 8,617 31,491 7,295 7,153 - - 14,448
INCOME TAX (BENEFIT) EXPENSE 1,604 19,839 (3,995 ) (8,472 ) 8,976 (72 ) 5,792 - - 5,719
DEPRECIATION & AMORTIZATION   10,090     10,295       10,415       9,907       40,708     8,890       7,451       -     -     16,341  
EBITDA $ 24,434 $ 19,517 $ 43,188 $ (27,612 ) $ 59,527 $ (1,339 ) $ 23,149 $ - $ - $ 21,809
IMPAIRMENT & OTHER DIVESTITURE CHARGES - 2,987 - 70,071 73,058 36,453 6,886 - - 43,339
RESTRUCTURING CHARGES   6,629     4,284       1,186       746       12,845     403       60       -     -     463  
ADJUSTED EBITDA $ 31,063   $ 26,788     $ 44,374     $ 43,205     $ 145,430   $ 35,517     $ 30,095     $ -   $ -   $ 65,611  
 
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. De minimis restructuring
charges were also recorded in cost of products sold in Q3 fiscal
2018.
 
(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 2019 FISCAL 2019
LOW HIGH LOW HIGH
RECONCILIATION OF GAAP DILUTED EARNINGS PER SHARE TO ADJUSTED
DILUTED EARNINGS PER SHARE GUIDANCE
GAAP DILUTED EARNINGS PER SHARE $ 0.40 $ 0.45 $ 1.09 $ 1.20

IMPAIRMENT & OTHER DIVESTITURE CHARGES, NET OF TAX EFFECT

TBD TBD TBD TBD
RESTRUCTURING CHARGES, NET OF TAX EFFECT TBD TBD TBD TBD
OTHER INCOME TAX (BENEFIT) EXPENSE TBD   TBD TBD   TBD
ADJUSTED DILUTED EARNINGS PER SHARE GUIDANCE $ 0.40   $ 0.45 $ 1.09     $ 1.20  
 
 
RECONCILIATION OF GAAP CASH FLOW FROM OPERATIONS TO FREE CASH FLOW
CASH FLOW FROM OPERATIONS $ 105 $ 115
CAPITAL EXPENDITURES (25 ) (30 )
OTHER   -       -  
FREE CASH FLOW GUIDANCE $ 80     $ 85  
 
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.

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