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Actuant Reports Second Quarter Results; Updates Fiscal 2015 Guidance; Announces Additional Share Repurchase Authorization

MILWAUKEE--(BUSINESS WIRE)--Mar. 18, 2015-- Actuant Corporation (NYSE: ATU) today announced results for its second quarter ended February 28, 2015.

Highlights

  • Primarily reflecting the dramatic strengthening of the US dollar, total sales declined 8% year-over-year. Core sales were down 2% (total sales excluding the impact of acquisitions, divestitures and foreign currency rate changes), net acquisitions and divestitures were neutral, and unfavorable currency translation reduced sales 6%.
  • Excluding an asset impairment charge of $1.33 per share related to adverse conditions in upstream oil & gas markets, diluted earnings per share from continuing operations (“EPS”) were $0.28, compared to $0.30 in the prior year, (see “Consolidated Results” below and attached reconciliation of earnings).
  • Repurchased 2.9 million shares of common stock for $76 million in the quarter. Actuant’s Board of Directors approved a new seven million share repurchase authorization this week following the buy-back of approximately 11 million shares, or 15% of the Company’s stock over the past twelve months.
  • Updated full year sales and EPS guidance (excluding the impairment charge), now expected to be in the range of $1.245-1.265 billion and $1.65-1.75 per share, respectively.

Mark E. Goldstein, President and CEO of Actuant commented, “In addition to normal seasonality, the second quarter proved challenging given the further strengthening of the US dollar, low oil & gas prices and weak conditions across a number of end markets. The Energy segment’s results were in line with expectations, including 2% core sales growth which reflected robust Viking performance partially offset by accelerating weakness in other upstream markets, most notably in the North Sea. We were pleased with Industrial’s 2% core growth, yet demand remains inconsistent. Within Engineered Solutions, moderating agriculture demand, weak auto volumes and last year’s truck pre-buy drove an 8% core sales decline. Given these mixed end market dynamics and currency headwinds, we are executing a number of actions to better align and resize our organization.”

Consolidated Results

Continuing Operations

During the quarter, the Company performed an interim impairment test of goodwill and intangible assets for its Energy segment in light of the recent abrupt change in global oil & gas markets. This resulted in an $84 million ($1.33 per share) non-cash impairment charge related to the upstream oil & gas exposure within Cortland and Viking. While challenging market conditions are expected to continue to impact the Energy segment for the foreseeable future, its cost structure is being reduced accordingly and the Company remains positive on its secular focus on energy.

Consolidated sales for the second quarter were $301 million, 8% lower than the $328 million in the comparable prior year quarter. Core sales declined 2%, unfavorable foreign currency exchange rate changes lowered sales by 6% and the net impact of acquisitions and divestitures was neutral. Fiscal 2015 second quarter net loss from continuing operations was $64.8 million or $1.05 per diluted share. Excluding the impairment charge, net earnings and EPS were $17.8 million, or $0.28 per share, compared to $22.3 million and $0.30 per share, respectively, in the comparable prior year quarter (see attached reconciliation of earnings).

Sales for the six months ended February 28, 2015 were $629 million, 6% lower than the $667 million in the comparable prior year period. Excluding the 4% decline from the stronger US dollar and neutral impact of acquisitions and divestitures, year-to-date core sales declined 2%. Fiscal 2015 year-to-date net loss from continuing operations was $40.2 million or $0.64 per diluted share. Excluding the impairment charge, net earnings and EPS for the six months ended February 28, 2015 were $42.5 million, or $0.66 per diluted share, compared to $55.3 million, or $0.74 per diluted share for the comparable prior year period (see attached reconciliation of earnings).

New Seven Million Share Repurchase Authorization

The Company also announced that its Board of Directors approved an additional seven million share repurchase program earlier this week. At the end of the second quarter, the Company had 2.5 million shares remaining under prior authorizations. When combined with the newly approved seven million shares, the total available shares authorized for repurchase increases to 9.5 million. Given that current debt leverage is within its targeted 1.5-2.5x net debt to EBITDA range, the Company expects to spread these repurchases over the next few years. Goldstein added, “Our capital allocation priorities remain consistent. Our top priority is to execute attractive tuck-in acquisitions to strengthen our existing platforms. However, we will continue to use opportunistic buy-backs to return excess cash to shareholders.”

Segment Results

Industrial Segment
(US $ in millions)

          Three Months Ended       Six Months Ended
February 28, February 28,
2015     2014 2015     2014
Sales $96.5 $93.6 $198.9 $192.2
Operating Profit $23.5 $26.5 $50.2 $53.4
Operating Profit % 24.4% 28.3% 25.2% 27.8%
 

Second quarter fiscal 2015 Industrial segment sales were $96 million, 3% higher than the prior year. The Hayes Industries acquisition contributed 6% to total sales growth while unfavorable currency translation was a 5% headwind, resulting in a 2% core sales increase. Integrated Solutions activity continued its slow pace as global customers defer the start of larger projects due to economic uncertainty. Industrial Tool demand improved sequentially on a year-over-year basis, most notably in North America, but continues at a tepid and uneven pace. Second quarter operating profit margin of 24.4% reflected unfavorable product and acquisition mix as well as expedited freight costs associated with US west coast port issues.

Energy Segment
(US $ in millions)

          Three Months Ended       Six Months Ended
February 28, February 28,
2015     2014 2015     2014
Sales $100.2 $106.0 $211.7 $214.0
Operating (Loss) Profit $(75.7) $9.5 $(63.3) $18.4
Adjusted Operating Profit (1) $8.7 $9.5 $21.1 $18.4
Adjusted Operating Profit % (1) 8.7% 9.0% 10.0% 8.6%
 

(1) Excludes second quarter fiscal 2015 asset impairment charge of $84.4 million.

 

Fiscal 2015 second quarter year-over-year Energy segment sales declined 5% to $100 million. Excluding the unfavorable 7% foreign currency headwind, core sales increased 2% from the prior year. Viking revenues were again sharply higher on a year-over-year basis due to strong activity levels in Australia/Southeast Asia, despite weakening North Sea activity. Hydratight’s core sales grew reflecting higher maintenance activity in all served regions other than the North Sea, while Cortland declined significantly due to lower customer upstream capital spending. Second quarter adjusted operating profit margin declined modestly as downsizing costs and lower production levels in Cortland’s manufacturing facilities were partially offset by lower acquisition retention costs at Viking and favorable mix. Energy segment employment levels have declined 5% year-to-date and are targeted to reach 10% by fiscal year end.

Engineered Solutions Segment
(US $ in millions)

          Three Months Ended       Six Months Ended
February 28, February 28,
2015     2014 2015     2014
Sales $104.3 $128.2 $218.1 $261.2
Operating Profit $2.0 $9.5 $8.3 $22.7
Operating Profit % 1.9% 7.4% 3.8% 8.7%
 

Second quarter fiscal 2015 Engineered Solutions segment sales were $104 million, 19% below the prior year. Excluding the 5% decline from the RV product line divestiture last June and 6% decrease from the stronger US Dollar, core sales were 8% lower year-over-year. This sales decline reflects a difficult comparison from last year’s strong European heavy-duty truck production (pre-buy impact of Euro 6 emissions standards change). In addition, sales in the convertible auto and off-highway equipment markets declined year-over-year. Overall agriculture sales weakened in the quarter, most notably in our display and seeder product lines which are used on higher priced OEM equipment. Demand for driveline products used in farm implements grew during the quarter (both OEM and aftermarket) but are expected to continue to moderate during the balance of the year. Second quarter operating profit margin declined due to unfavorable product mix, expedited freight (US west coast port issues), unfavorable material cost variances at international locations resulting from the stronger US dollar, and reduced absorption on lower production volumes.

Corporate and Income Taxes

Corporate expenses for the second quarter of fiscal 2015 were $6.3 million, essentially unchanged from the comparable prior year period. Excluding the impact of the impairment charge, the effective income tax rate of 17% for the quarter was lower than the 29% rate in the prior year due to the benefit of certain tax reduction initiatives.

Financial Position

Net debt at February 28, 2015 was $499 million (total debt of $586 million less $87 million of cash), or $72 million higher than the prior quarter end. During the quarter, $76 million of cash was used to repurchase 2.9 million shares of common stock. Second quarter free cash flow essentially offset the impact of unfavorable foreign currency movements on net debt. At February 28, 2015, the Company had a net debt to EBITDA leverage ratio of 2.2, and nearly $400 million in revolver availability.

Outlook

Goldstein continued, "We have seen a dramatic strengthening of the US dollar, as well as increased headwinds in the oil & gas, mining, and agriculture markets, and lack of momentum in general industrial end markets since we provided guidance to investors in December. The currency impact to the December guidance reduces sales by approximately $55-65 million and EPS by $0.15-0.18 per share, based on our current foreign exchange rate assumptions. Additionally, the lack of visibility around future oil prices and related capital spending has caused us to increase cautiousness in our outlook, despite the fact that our Energy segment met performance expectations in the second quarter.

In response to these changes, we have been actively managing our cost structure, including executing additional employment reductions. Given our strong balance sheet and the Company’s recent stock price, we have also been aggressively buying back shares. Our priority for capital deployment remains to pursue accretive, tuck-in acquisitions for each of our segments. However, we have remained disciplined, and walked away from transactions that did not clear our return hurdles.

Our revised fiscal 2015 outlook is for full year sales in the $1.245-1.265 billion range, and EPS (excluding the impairment charge) of $1.65-1.75 per share. This reflects a consolidated core sales decline of 3-4%, and free cash flow conversion in excess of net income - in the $110-120 million range. We anticipate fiscal third quarter sales and EPS of $315-325 million and $0.52-0.57 per share, respectively. Consistent with our normal practice, no future stock buybacks or acquisitions are incorporated in this guidance.

We remain positive on the long term prospects for energy and our three other targeted secular growth laneways (food/farm productivity, infrastructure, natural resources), despite their current challenges. We are laser focused on driving long term shareholder value – customer satisfaction, sales growth initiatives, operational execution, robust cash flow generation and smart capital deployment.”

Conference Call Information

An investor conference call is scheduled for 10am CT today, March 18, 2015. 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

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,
2015 2014
 
ASSETS
Current assets
Cash and cash equivalents $ 87,497 $ 109,012
Accounts receivable, net 204,062 227,008
Inventories, net 162,784 162,620
Deferred income taxes 10,613 11,050
Other current assets   48,275     33,300  
Total current assets 513,231 542,990
 
Property, plant and equipment, net 153,178 169,101
Goodwill 615,953 742,770
Other intangible assets, net 324,867 365,177
Other long-term assets   29,590     36,841  
 
Total assets $ 1,636,819   $ 1,856,879  
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable $ 126,884 $ 145,798
Accrued compensation and benefits 41,789 52,964
Current maturities of debt and short-term borrowings 6,750 4,500
Income taxes payable 602 38,347
Other current liabilities   56,680     57,512  
Total current liabilities 232,705 299,121
 
Long-term debt 580,000 385,500
Deferred income taxes 87,971 96,970
Pension and postretirement benefit accruals 13,616 15,699
Other long-term liabilities   55,802     57,878  
Total liabilities 970,094 855,168
 
Shareholders' equity
Capital stock 15,776 15,695
Additional paid-in capital 98,712 93,449
Treasury stock (569,139 ) (388,627 )
Retained earnings 1,309,495 1,349,602
Accumulated other comprehensive loss (188,119 ) (68,408 )
Stock held in trust (4,145 ) (4,083 )
Deferred compensation liability   4,145     4,083  
Total shareholders' equity   666,725     1,001,711  
 
Total liabilities and shareholders' equity $ 1,636,819   $ 1,856,879  

 
 
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,
2015   2014 2015   2014
 
Net sales $ 301,005 $ 327,770 $ 628,770 $ 667,326
Cost of products sold   191,244       203,323   392,033       411,099
Gross profit 109,761 124,447 236,737 256,227
 
Selling, administrative and engineering expenses 75,768 79,240 158,240 161,158
Amortization of intangible assets 6,087 6,226 12,373 12,441
Impairment charge   84,353       -   84,353       -
Operating profit (loss) (56,447 ) 38,981 (18,229 ) 82,628
 
Financing costs, net 7,030 6,262 13,221 13,012
Other (income) expense, net   (619 )     1,326   (1,058 )     2,467
Earnings (loss) from continuing operations before income tax expense (62,858 ) 31,393 (30,392 ) 67,149
 
Income tax expense   1,980       9,089   9,772       11,840
Earnings (loss) from continuing operations (64,838 ) 22,304 (40,164 ) 55,309
Earnings from discontinued operations, net of income taxes   -       19,088   -       22,120
Net earnings (loss) $ (64,838 )   $ 41,392 $ (40,164 )   $ 77,429
 
Earnings (loss) from continuing operations per share
Basic $ (1.05 ) $ 0.31 $ (0.64 ) $ 0.76
Diluted (1.05 ) 0.30 (0.64 ) 0.74
 
Earnings (loss) per share
Basic $ (1.05 ) $ 0.57 $ (0.64 ) $ 1.07
Diluted (1.05 ) 0.56 (0.64 ) 1.04
 
Weighted average common shares outstanding
Basic 61,759 72,227 63,045 72,656
Diluted 61,759 73,773 63,045 74,392

 
 
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,
2015 2014 2015 2014
 
Operating Activities
Net (loss) earnings $ (64,838 ) $ 41,392 $ (40,164 ) $ 77,429

Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:

Depreciation and amortization 13,232 15,761 26,940 31,965
Net gain on disposal of businesses - (26,339 ) - (26,339 )
Stock-based compensation expense 2,327 6,509 5,873 10,612
Benefit for deferred income taxes (541 ) (2,656 ) (1,893 ) (11,064 )
Impairment charge 84,353 - 84,353 -
Amortization of debt discount and debt issuance costs 423 423 846 983
Other non-cash adjustments 311 124 457 (743 )
Changes in components of working capital and other: -
Accounts receivable 9,533 (2,271 ) 5,904 4,769
Inventories (4,662 ) (10,149 ) (11,162 ) (21,783 )
Prepaid expenses and other assets (2,655 ) 1,978 (13,353 ) (1,071 )
Trade accounts payable (5,009 ) (15,395 ) (12,407 ) (12,835 )
Income taxes payable (10,026 ) (10,210 ) (38,033 ) (13,399 )
Accrued compensation and benefits (2,800 ) 6,268 (12,763 ) 3,673
Other accrued liabilities   (4,149 )   (1,498 )   (4,217 )   (5,314 )
Cash provided by (used in) operating activities 15,499 3,937 (9,619 ) 36,883
 
Investing Activities
Proceeds from sale of property, plant and equipment 482 95 707 2,008
Proceeds from sale of businesses, net of transaction costs - 243,386 - 243,386
Capital expenditures   (4,891 )   (10,969 )   (12,877 )   (22,226 )
Cash (used in) provided by investing activities (4,409 ) 232,512 (12,170 ) 223,168
 
Financing Activities
Net borrowings (repayments) on revolving credit facilities and other debt 72,881 (113,000 ) 196,750 (125,000 )
Purchase of treasury shares (76,097 ) (93,743 ) (180,512 ) (109,095 )
Payment of contingent acquisition consideration - (339 ) - (753 )
Stock option exercises and related tax benefits 2,466 15,241 4,753 25,803
Cash dividend   -     -     (2,598 )   (2,919 )
Cash (used in) provided by financing activities (750 ) (191,841 ) 18,393 (211,964 )
 
Effect of exchange rate changes on cash   (10,118 )   867     (18,119 )   2,944  
Net increase (decrease) in cash and cash equivalents 222 45,475 (21,515 ) 51,031
Cash and cash equivalents - beginning of period   87,275     109,542     109,012     103,986  
Cash and cash equivalents - end of period $ 87,497   $ 155,017   $ 87,497   $ 155,017  

 
 
ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA FROM CONTINUING OPERATIONS
(Dollars in thousands)
                                 
FISCAL 2014 FISCAL 2015
Q1   Q2   Q3   Q4   TOTAL Q1   Q2     Q3     Q4     TOTAL
SALES
INDUSTRIAL SEGMENT $ 98,641 $ 93,571 $ 109,809 $ 111,880 $ 413,901 $ 102,413 $ 96,488 $ 198,901
ENERGY SEGMENT 107,925 106,031 125,231 123,181 462,368 111,522 100,211 211,733
ENGINEERED SOLUTIONS SEGMENT   132,990       128,168       143,147       119,288       523,593     113,830       104,306                     218,136  
TOTAL $ 339,556     $ 327,770     $ 378,187     $ 354,349     $ 1,399,862   $ 327,765     $ 301,005                   $ 628,770  
 
% SALES GROWTH
INDUSTRIAL SEGMENT -2 % -5 % -1 % 1 % -2 % 4 % 3 % 3 %
ENERGY SEGMENT 19 % 31 % 26 % 33 % 27 % 3 % -5 % -1 %
ENGINEERED SOLUTIONS SEGMENT 15 % 6 % 7 % -3 % 6 % -14 % -19 % -16 %
TOTAL 10 % 9 % 10 % 8 % 9 % -3 % -8 % -6 %
 
OPERATING PROFIT (LOSS)
INDUSTRIAL SEGMENT $ 26,897 $ 26,477 $ 34,123 $ 32,752 $ 120,249 $ 26,705 $ 23,517 $ 50,222
ENERGY SEGMENT 8,923 9,504 19,936 18,049 56,412 12,442 8,680 21,122
ENGINEERED SOLUTIONS SEGMENT 13,190 9,548 13,560 5,638 41,936 6,278 2,010 8,288
CORPORATE / GENERAL   (5,363 )     (6,548 )     (8,839 )     (8,234 )     (28,984 )   (7,207 )     (6,301 )                   (13,508 )
TOTAL - EXCLUDING GAIN ON PRODUCT LINE DIVESTITURE AND IMPAIRMENT CHARGE $ 43,647 $ 38,981 $ 58,780 $ 48,205 $ 189,613 $ 38,218 $ 27,906 $ 66,124
GAIN ON PRODUCT LINE DIVESTITURE - - - 13,495 13,495 - - -
IMPAIRMENT CHARGE   -       -       -       -       -     -       (84,353 )                   (84,353 )
TOTAL $ 43,647     $ 38,981     $ 58,780     $ 61,700     $ 203,108   $ 38,218     $ (56,447 )                 $ (18,229 )
 
OPERATING PROFIT %
INDUSTRIAL SEGMENT 27.3 % 28.3 % 31.1 % 29.3 % 29.1 % 26.1 % 24.4 % 25.2 %
ENERGY SEGMENT 8.3 % 9.0 % 15.9 % 14.7 % 12.2 % 11.2 % 8.7 % 10.0 %
ENGINEERED SOLUTIONS SEGMENT 9.9 % 7.4 % 9.5 % 4.7 % 8.0 % 5.5 % 1.9 % 3.8 %
TOTAL (INCLUDING CORPORATE) - EXCLUDING GAIN ON PRODUCT LINE DIVESTITURE AND IMPAIRMENT CHARGE 12.9 % 11.9 % 15.5 % 13.6 % 13.5 % 11.7 % 9.3 % 10.5 %
 
EBITDA
INDUSTRIAL SEGMENT $ 28,657 $ 27,907 $ 35,426 $ 35,017 $ 127,007 $ 28,715 $ 25,534 $ 54,249
ENERGY SEGMENT 17,923 18,130 27,898 24,809 88,760 20,011 15,732 35,743
ENGINEERED SOLUTIONS SEGMENT 17,365 13,581 18,464 9,046 58,456 11,514 5,603 17,117
CORPORATE / GENERAL   (5,235 )     (6,202 )     (8,659 )     (7,916 )     (28,012 )   (7,875 )     (5,111 )                   (12,986 )
TOTAL - EXCLUDING GAIN ON PRODUCT LINE DIVESTITURE AND IMPAIRMENT CHARGE $ 58,710 $ 53,416 $ 73,129 $ 60,956 $ 246,211 $ 52,365 $ 41,758 $ 94,123
GAIN ON PRODUCT LINE DIVESTITURE - - - 13,495 13,495 - - -
IMPAIRMENT CHARGE   -       -       -       -       -     -       (84,353 )                   (84,353 )
TOTAL $ 58,710     $ 53,416     $ 73,129     $ 74,451     $ 259,706   $ 52,365     $ (42,595 )                 $ 9,770  
 
EBITDA %
INDUSTRIAL SEGMENT 29.1 % 29.8 % 32.3 % 31.3 % 30.7 % 28.0 % 26.5 % 27.3 %
ENERGY SEGMENT 16.6 % 17.1 % 22.3 % 20.1 % 19.2 % 17.9 % 15.7 % 16.9 %
ENGINEERED SOLUTIONS SEGMENT 13.1 % 10.6 % 12.9 % 7.6 % 11.2 % 10.1 % 5.4 % 7.8 %
TOTAL (INCLUDING CORPORATE) - EXCLUDING GAIN ON PRODUCT LINE DIVESTITURE AND IMPAIRMENT CHARGE 17.3 % 16.3 % 19.3 % 17.2 % 17.6 % 16.0 % 13.9 % 15.0 %

 
 
ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA
RECONCILIATION OF GAAP MEASURE TO NON-GAAP MEASURES
(Dollars in thousands, except for per share amounts)
                               
 
FISCAL 2014 FISCAL 2015
Q1   Q2   Q3   Q4   TOTAL Q1   Q2     Q3     Q4     TOTAL
EARNINGS (LOSS) BEFORE SPECIAL ITEMS (1)
NET EARNINGS (LOSS) $ 36,037 $ 41,392 $ 50,557 $ 35,587 $ 163,573 $ 24,674 $ (64,838 ) $ (40,164 )
EARNINGS FROM DISCONTINUED OPERATIONS, NET OF INCOME TAX   (3,032 )     (19,088 )     -     -       (22,120 )   -     -                     -  
EARNINGS (LOSS) FROM CONTINUING OPERATIONS 33,005 22,304 50,557 35,587 141,453 24,674 (64,838 ) (40,164 )
GAIN ON PRODUCT LINE DIVESTITURE, NET OF INCOME TAX - - - (2,813 ) (2,813 ) - - -
IMPAIRMENT CHARGE, NET OF INCOME TAX   -       -       -     -       -     -     82,636                     82,636  
TOTAL $ 33,005     $ 22,304     $ 50,557   $ 32,774     $ 138,640   $ 24,674   $ 17,798                   $ 42,472  
 

DILUTED EARNINGS (LOSS) PER SHARE, BEFORE SPECIAL ITEMS (1)

NET EARNINGS (LOSS) $ 0.48 $ 0.56 $ 0.70 $ 0.51 $ 2.26 $ 0.38 $ (1.05 ) $ (0.64 )
EARNINGS FROM DISCONTINUED OPERATIONS, NET OF INCOME TAX   (0.04 )     (0.26 )     -     -       (0.31 )   -     -                     -  
EARNINGS (LOSS) FROM CONTINUING OPERATIONS 0.44 0.30 0.70 0.51 1.95 0.38 (1.05 ) (0.64 )
GAIN ON PRODUCT LINE DIVESTITURE, NET OF INCOME TAX - - - (0.04 ) (0.04 ) - - -
IMPAIRMENT CHARGE, NET OF INCOME TAX   -       -       -     -       -     -     1.33                     1.30  
TOTAL $ 0.44     $ 0.30     $ 0.70   $ 0.47     $ 1.91   $ 0.38   $ 0.28                   $ 0.66  
 
 
EBITDA (2)
NET EARNINGS (LOSS) (GAAP MEASURE) $ 36,037 $ 41,392 $ 50,557 $ 35,587 $ 163,573 $ 24,674 $ (64,838 ) $ (40,164 )
EARNINGS FROM DISCONTINUED OPERATIONS, NET OF INCOME TAX   (3,032 )     (19,088 )     -     -       (22,120 )   -     -                     -  
EARNINGS (LOSS) FROM CONTINUING OPERATIONS 33,005 22,304 50,557 35,587 141,453 24,674 (64,838 ) (40,164 )
FINANCING COSTS, NET 6,750 6,262 5,932 6,101 25,045 6,191 7,030 13,221
INCOME TAX EXPENSE 2,751 9,089 1,671 19,062 32,573 7,792 1,980 9,772
DEPRECIATION & AMORTIZATION   16,204       15,761       14,969     13,701       60,635     13,708     13,233                     26,941  
EBITDA - EXCLUDING DISCONTINUED OPERATIONS (NON-GAAP MEASURE) $ 58,710 $ 53,416 $ 73,129 $ 74,451 $ 259,706 $ 52,365 $ (42,595 ) $ 9,770
GAIN ON PRODUCT LINE DIVESTITURE - - - (13,495 ) (13,495 ) - - -
IMPAIRMENT CHARGE   -       -       -     -       -     -     84,353                     84,353  
EBITDA - EXCLUDING GAIN ON PRODUCT LINE DIVESTITURE AND IMPAIRMENT CHARGE (NON-GAAP MEASURE) $ 58,710     $ 53,416     $ 73,129   $ 60,956     $ 246,211   $ 52,365   $ 41,758                   $ 94,123  
 
FOOTNOTES
 
NOTE: The total of the individual quarters may not equal the annual total due to rounding.
 
(1) Earnings and diluted earnings per share, excluding special items (discontinued operations, gain on product line divestiture and impairment charge), 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 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.
 
(2) EBITDA represents net earnings before financing costs, net, income tax expense, discontinued operations and depreciation & amortization. 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 Operations data. EBITDA should not be considered as an alternative to net earnings (loss) or operating profit (loss) 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.

Source: Actuant Corporation

Actuant Corporation
Karen Bauer
Communications & Investor Relations Leader
262-293-1562