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Actuant Reports Third Quarter Results; Updates Fiscal 2018 Guidance

MILWAUKEE--(BUSINESS WIRE)--Jun. 20, 2018-- Actuant Corporation (NYSE: ATU) today announced results for its third quarter ended May 31, 2018.

Highlights

  • Consolidated sales increased 7% over the comparable prior year quarter with a 4% benefit from foreign currency rate changes and a 1% reduction associated with net acquisitions and divestitures. Third quarter core sales (total sales excluding the impact of acquisitions, divestitures and foreign currency rate changes) increased 4% on a year-over-year basis with strong volumes in both the Engineered Solutions and Industrial segments.
  • GAAP diluted earnings per share (“EPS”) was $0.48 in the third quarter of fiscal 2018 versus $0.37 in the prior year. Excluding third quarter fiscal 2018 one-time items, adjusted EPS was $0.39 (see Consolidated Results below, along with the attached reconciliation of earnings).
  • Strong operating cash flow generation and reduction in net leverage improves capital allocation liquidity.
  • Acquired Equalizer, a small tool product line tuck-in to expand pipe and flange alignment capabilities.
  • Full year fiscal 2018 sales and adjusted EPS guidance updated to $1.17-1.18 billion and $1.03-1.08 (excluding one-time items), respectively.

Randy Baker, President and CEO of Actuant commented, “I’m pleased with Actuant’s performance in the third quarter, delivering both solid sales and earnings growth. We continue to see strong momentum in the industrial tools and OEM component businesses, and global Energy maintenance activity appears to have stabilized. While we continue to experience some pressures from inflation along with commercial and engineering investments to support high service levels and growth, we are realizing the incremental margin benefits of higher volumes and restructuring actions. In summary, I am encouraged by this quarter’s performance and our team’s ability to capitalize on the broad based strong economic backdrop. I want to thank our employees across the globe for their continued commitment and execution.”

Consolidated Results

Consolidated sales for the third quarter were $317 million, 7% higher than the $295 million in the comparable prior year quarter. Core sales improved 4% year-over-year while foreign currency rate changes increased sales 4% and the net impact from the Mirage acquisition net of the Viking divestiture reduced sales by 1%. Fiscal 2018 third quarter net earnings and EPS were $29.0 million, or $0.48, compared to $22.5 million, or $0.37, respectively, in the comparable prior year quarter. Fiscal 2018 third quarter earnings included restructuring charges of $1.2 million (benefit of $0.2 million and zero EPS, after tax) and a $4.9 million ($0.09 per share) benefit related to an adjustment to the original provision for U.S. tax reform based on further IRS clarification. (Note that impacts from tax reform remain provisional and subject to further adjustment.) Third quarter 2017 results included $0.4 million ($0.2 million and zero EPS, after tax) of restructuring charges and a $3.2 million income tax benefit ($0.05 per share). Excluding these items, adjusted EPS for the third quarter of fiscal 2018 was $0.39 compared to $0.32 in the comparable prior year period (see attached reconciliation of earnings).

Consolidated sales for the nine months ended May 31, 2018 were $881 million, 7% higher than the $820 million in the comparable prior year period. Core sales improved 5% year-over-year while foreign currency rate changes increased sales 3%, and the net impact of acquisitions and divestitures reduced sales by 1%. Fiscal 2018’s year-to-date net earnings and EPS were $16.0 million, or $0.26, compared to earnings and EPS of $32.6 million, and $0.54, respectively, in the comparable prior year period. Fiscal 2018 year-to-date results include restructuring charges of $12.1 million ($9.8 million or $0.16 per share, after tax) along with impairment & divestiture, tax reform and equity compensation items. Fiscal 2017 comparable results included $5.4 million ($4.0 million or $0.07 per share, after tax) of restructuring charges along with director and officer transition charges and an income tax benefit. Excluding these items, adjusted EPS for the first nine months of fiscal 2018 was $0.71 compared to $0.64 in the comparable prior year period (see attached reconciliation of earnings).

Segment Results

Industrial Segment

(US $ in millions)

     
                 
          Three Months Ended May 31,     Nine Months Ended May 31,
          2018   2017     2018   2017
Sales         $108.3   $100.5     $304.3   $279.4
Operating Profit         $26.0   $23.7     $61.0   $60.8
Adjusted Op Profit (1)         $25.8   $24.0     $63.8   $62.5
Adjusted Op Profit % (1)         23.9%   23.9%     21.0%   22.4%

(1) 2018 excludes $(0.2) and $2.8 of restructuring charges in the third quarter and nine months, respectively. 2017 excludes $0.3 and $1.7 of restructuring charges in the third quarter and nine months, respectively.

Third quarter fiscal 2018 Industrial segment sales were $108 million, or 8% higher than the prior year. The impact of foreign currency exchange rates was a 4% benefit resulting in a 4% year-over-year core sales increase. Sales of standard industrial tools remained strong, growing double digits on a global basis with broad demand across the diverse set of end markets served despite tougher comparables. The segment’s overall core sales growth rate includes significantly lower heavy lifting technology sales and a modest decline in concrete tensioning volumes. Third quarter adjusted operating profit margin was level with the prior year and improved 520 basis points sequentially. Strong incremental profits within the industrial tool channel were partially offset by continued costs associated with heavy lifting specialty projects and concrete tensioning production inefficiencies, although less severe than prior quarters.

 

Energy Segment

(US $ in millions)

                 
          Three Months Ended May 31,     Nine Months Ended May 31,
          2018   2017     2018   2017
Sales         $83.9   $83.5     $225.7   $241.0
Operating Profit         $6.2   $0.9     $2.0   $3.6
Adjusted Op Profit (2)         $7.0   $0.9     $9.0   $3.6
Adjusted Op Profit % (2)         8.4%   1.1%     4.0%   1.5%

(2) 2018 excludes $0.8 and $4.0 of restructuring charges in the third quarter and nine months, respectively. 2018 nine month results also exclude $3.0 in impairment & divestiture charges.

Fiscal 2018 third quarter Energy segment sales were approximately level with the prior year at $84 million. The 3% favorable impact of the weaker US dollar was offset by the 2% headwind from the net of the Viking divestiture and Mirage acquisition, while core sales declined 1%. Hydratight’s global maintenance activity levels stabilized, with improvements in the Middle East and North Sea offset by declines in certain other regions. Cortland sales grew slightly on higher medical product demand along with improving offshore oil & gas seismic and cable activity. Energy segment adjusted operating profit margin improved substantially both year-over-year and sequentially due to the benefits of restructuring and service excellence actions, favorable sales mix, and the absence of Viking losses.

                 

Engineered Solutions Segment

(US $ in millions)

                 
          Three Months Ended May 31,     Nine Months Ended May 31,
          2018   2017     2018   2017
Sales         $124.9   $111.4     $351.2   $299.6
Operating Profit         $9.0   $8.1     $17.6   $10.7
Adjusted Op Profit (3)         $9.0   $8.2     $18.1   $14.3
Adjusted Op Profit % (3)         7.2%   7.3%     5.1%   4.8%

(3) 2018 excludes $0.5 of restructuring charges for the nine months. 2017 excludes $0.1 and $3.6 of restructuring charges in the third quarter and nine months, respectively.

Third quarter fiscal 2018 Engineered Solutions segment sales were $125 million or 12% above the prior year. Excluding the 5% benefit of the weaker US dollar, year-over-year core sales increased 7%. Strong sales growth continued across the agriculture and other off-highway equipment markets globally, while truck sales were modestly higher as growth in Europe production was partially offset by anticipated lower China volumes. Third quarter adjusted operating profit margin was about level with the comparable prior year quarter as the higher volumes were offset by higher engineering expenses to support growth, material and labor inflation and unfavorable mix.

Corporate Expenses and Income Taxes (excluding restructuring, transition, and one-time tax items)

Corporate expenses for the third quarter of fiscal 2018 were $8.1 million, or $2.7 million greater than the comparable prior year period due primarily to higher incentive compensation and outside services costs. The effective income tax rate of approximately 9% was modestly above expectations and higher than the prior year’s -4% rate.

Financial Position

Net debt at May 31, 2018 was approximately $351 million (total debt of $540 million less $189 million of cash) which declined approximately $43 million from the prior quarter end. Strong cash flow was used to reduce net debt and the Company deployed approximately $6 million on a small tool product line acquisition. The net debt to proforma EBITDA leverage ratio declined to 2.6 times.

Outlook

Baker continued, "I believe our third quarter results demonstrate that we are on the path toward higher structural sales and margin performance, and we expect to further build on these solid results. This underlying performance, combined with anticipated improvement in energy maintenance activity levels, effectively managing the inflationary environment and our expected continued progress in new product launches, we believe positions us well to deliver on our 2018 full year guidance.

With one quarter to go in the fiscal year, we are increasing our full year sales guidance and narrowing our adjusted EPS guidance range to reflect our performance to date and the latest outlook for the remainder of the year. For the fourth quarter, we anticipate sales will be in the $290-300 million range reflecting normal seasonal moderation from the third quarter. Fourth quarter adjusted EPS is expected to be in the range of $0.32-0.37. This includes core sales growth of approximately 3-5% and a mid-single digit effective income tax rate. This would bring our full year sales and adjusted EPS guidance to a range of $1.17-1.18 billion and $1.03-1.08, respectively. Free cash flow is expected to be in the $70-75 million range and would represent greater than 100% earnings conversion.”

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

Baker concluded, “The global economy and our markets continue to show strength, and our growth initiatives are taking hold. By working to improve our commercial effectiveness and speed to market, enhance our lean execution and complete critical portfolio management actions, we believe we will be well positioned to drive significant long-term value for our customers, employees and shareholders.”

Conference Call Information

An investor conference call is scheduled for 10am CT today, June 20, 2018. 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. 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, tax reform, 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.

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Actuant Corporation
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
                       
                  May 31,   August 31,
                  2018   2017
                       
ASSETS                  
Current assets              
  Cash and cash equivalents       $ 189,490     $ 229,571  
  Accounts receivable, net         212,284       190,206  
  Inventories, net         167,317       143,651  
  Assets held for sale         -       21,835  
  Other current assets         58,732       61,663  
    Total current assets         627,823       646,926  
                       
Property, plant and equipment, net         100,765       94,521  
Goodwill         538,792       530,081  
Other intangible assets, net         210,160       220,489  
Other long-term assets         27,245       24,938  
                       
    Total assets       $ 1,504,785     $ 1,516,955  
                       
                       
LIABILITIES AND SHAREHOLDERS' EQUITY            
Current liabilities            
  Trade accounts payable       $ 142,199     $ 133,387  
  Accrued compensation and benefits         48,093       50,939  
  Current maturities of debt and short-term borrowings         30,000       30,000  
  Income taxes payable         17,605       6,080  
  Liabilities held for sale         -       101,083  
  Other current liabilities         63,437       57,445  
    Total current liabilities         301,334       378,934  
                       
Long-term debt, net         510,007       531,940  
Deferred income taxes         19,491       29,859  
Pension and postretirement benefit liabilities         18,692       19,862  
Other long-term liabilities         54,233       55,821  
    Total liabilities         903,757       1,016,416  
                       
Shareholders' equity            
  Capital stock           16,227       16,040  
  Additional paid-in capital         159,653       138,449  
  Treasury stock         (617,731 )     (617,731 )
  Retained earnings         1,207,059       1,191,042  
  Accumulated other comprehensive loss         (164,180 )     (227,261 )
  Stock held in trust         (2,594 )     (2,696 )
  Deferred compensation liability         2,594       2,696  
    Total shareholders' equity         601,028       500,539  
                       
    Total liabilities and shareholders' equity       $ 1,504,785     $ 1,516,955  

 

 
 
Actuant Corporation
Condensed Consolidated Statements of Earnings
(Dollars in thousands, except per share amounts)
(Unaudited)
                         
                         
          Three Months Ended     Nine Months Ended
          May 31,   May 31,     May 31,   May 31,
          2018   2017     2018   2017
                         
Net sales     $ 317,096     $ 295,427       $ 881,216   $ 820,089  
Cost of products sold       200,587       192,623         574,100     536,892  
  Gross profit       116,509       102,804         307,116     283,197  
                         
Selling, administrative and engineering expenses       77,570       70,051         220,550     205,609  
Amortization of intangible assets       5,184       5,037         15,483     15,368  
Director & officer transition charges       -       -         -     7,784  
Restructuring charges       1,170       384         11,249     5,433  
Impairment & divestiture charges       -       -         2,987     -  
  Operating profit       32,585       27,332         56,847     49,003  
                         
Financing costs, net       7,756       7,553         22,874     22,019  
Other (income) expense, net       (188 )     1,297         508     1,260  
  Earnings before income tax (benefit) expense       25,017       18,482         33,465     25,724  
                         
Income tax (benefit) expense       (3,995 )     (4,029 )       17,448     (6,827 )
Net earnings     $ 29,012     $ 22,511       $ 16,017   $ 32,551  
                         
Earnings per share                    
  Basic     $ 0.48     $ 0.38       $ 0.27   $ 0.55  
  Diluted       0.48       0.37         0.26     0.54  
                         
Weighted average common shares outstanding                    
  Basic       60,683       59,675         60,291     59,339  
  Diluted       61,064       60,402         60,850     60,055  

 

 
 
Actuant Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
                     
                     
        Three Months Ended   Nine Months Ended
        May 31,   May 31,   May 31,   May 31,
        2018   2017   2018   2017
                     
Operating Activities                    
Net earnings       $ 29,012     $ 22,511     $ 16,017     $ 32,551  
Adjustments to reconcile net earnings to net cash                    
provided by operating activities:                    
Impairment & other divestiture charges, including tax expense         -       -       12,385       -  
Depreciation and amortization         10,415       10,637       30,800       32,262  
Stock-based compensation expense         3,659       2,675       11,951       14,852  
(Benefit) expense for deferred income taxes         (3,455 )     813       (10,579 )     1,364  
Amortization of debt issuance costs         413       418       1,239       1,244  
Other non-cash adjustments         147       308       347       1,023  
Changes in components of working capital and other:                    
Accounts receivable         (4,584 )     (1,721 )     (21,456 )     (22,618 )
Inventories         (4,157 )     75       (22,590 )     (319 )
Trade accounts payable         6,915       1,181       5,162       13,457  
Prepaid expenses and other assets         (4,524 )     3,707       (13,692 )     (7,112 )
Income tax accounts         8,484       (12,355 )     25,989       (19,273 )
Accrued compensation and benefits         7,778       7,473       (2,181 )     3,769  
Other accrued liabilities         7,592       1,658       2,197       862  
Cash provided by operating activities         57,695       37,380       35,589       52,062  
                     
Investing Activities                    
Capital expenditures         (6,169 )     (8,224 )     (18,716 )     (22,919 )
Proceeds from sale of property, plant and equipment         35       -       148       244  
Rental asset buyout for Viking divestiture         -       -       (27,718 )     -  
Proceeds from sale of business, net of transaction costs         -       -       8,780       -  
Cash paid for business acquisitions, net of cash acquired         (5,809 )     -       (22,326 )     -  
Cash used in investing activities         (11,943 )     (8,224 )     (59,832 )     (22,675 )
                     
Financing Activities                    
Principal repayments on term loan         (7,500 )     (3,750 )     (22,500 )     (11,250 )
Stock option excercises & other         130       1,365       10,435       7,314  
Redemption of 5.625% senior notes         -       (500 )     -       (500 )
Taxes paid related to the net share settlement of equity awards         (172 )     (79 )     (1,279 )     (999 )
Payment of deferred acquisition consideration         -       (742 )     -       (742 )
Cash dividend         -       -       (2,390 )     (2,358 )
Cash used in financing activities         (7,542 )     (3,706 )     (15,734 )     (8,535 )
                     
Effect of exchange rate changes on cash         (2,315 )     1,614       (104 )     (1,502 )
Net increase (decrease) in cash and cash equivalents         35,895       27,064       (40,081 )     19,350  
Cash and cash equivalents - beginning of period         153,595       171,890       229,571       179,604  
Cash and cash equivalents - end of period       $ 189,490     $ 198,954     $ 189,490     $ 198,954  

 

 
 
ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA
(Dollars in thousands)
                                             
        FISCAL 2017   FISCAL 2018
        Q1   Q2   Q3   Q4   TOTAL   Q1   Q2   Q3   Q4   TOTAL
SALES                                        
  INDUSTRIAL SEGMENT   $ 87,290     $ 91,648     $ 100,503     $ 100,315     $ 379,756     $ 96,916     $ 99,081     $ 108,297     $ -   $ 304,294  
  ENERGY SEGMENT     84,646       72,884       83,480       68,584       309,594       75,841       65,992       83,857       -     225,690  
  ENGINEERED SOLUTIONS SEGMENT     93,857       94,337       111,444       106,796       406,434       116,198       110,092       124,942       -     351,232  
    TOTAL   $ 265,793     $ 258,869     $ 295,427     $ 275,695     $ 1,095,784     $ 288,955     $ 275,165     $ 317,096     $ -   $ 881,216  
                                             
% SALES GROWTH                                        
  INDUSTRIAL SEGMENT     -2 %     13 %     5 %     7 %     6 %     11 %     8 %     8 %     -     9 %
  ENERGY SEGMENT     -26 %     -15 %     -18 %     -25 %     -21 %     -10 %     -9 %     0 %     -     -6 %
  ENGINEERED SOLUTIONS SEGMENT     -8 %     -2 %     3 %     18 %     2 %     24 %     17 %     12 %     -     17 %
    TOTAL     -13 %     -2 %     -3 %     0 %     -5 %     9 %     6 %     7 %     -     7 %
                                             
OPERATING PROFIT (LOSS)                                        
  INDUSTRIAL SEGMENT   $ 19,491     $ 19,037     $ 24,019     $ 24,076     $ 86,623     $ 19,482     $ 18,493     $ 25,845     $ -   $ 63,820  
  ENERGY SEGMENT     3,328       (647 )     895       (3,675 )     (99 )     1,224       747       7,033       -     9,004  
  ENGINEERED SOLUTIONS SEGMENT     2,834       3,282       8,174       6,069       20,359       6,618       2,409       9,038       -     18,065  
  CORPORATE / GENERAL     (6,450 )     (6,372 )     (5,372 )     (6,935 )     (25,128 )     (6,022 )     (4,789 )     (8,145 )     -     (18,956 )
    ADJUSTED OPERATING PROFIT   $ 19,203     $ 15,300     $ 27,716     $ 19,535     $ 81,755     $ 21,302     $ 16,860     $ 33,771     $ -   $ 71,933  
  IMPAIRMENT & DIVESTITURE CHARGES     -       -       -       (116,979 )     (116,979 )     -       (2,987 )     -       -     (2,987 )
  RESTRUCTURING CHARGES (1)     (2,948 )     (2,101 )     (384 )     (1,795 )     (7,228 )     (6,629 )     (4,284 )     (1,186 )     -     (12,099 )
  DIRECTOR & OFFICER TRANSITION CHARGES     (7,784 )     -       -       -       (7,784 )     -       -       -       -     -  
    OPERATING PROFIT (LOSS)   $ 8,471     $ 13,199     $ 27,332     $ (99,239 )   $ (50,236 )   $ 14,673     $ 9,589     $ 32,585     $ -   $ 56,847  
                                             
ADJUSTED OPERATING PROFIT %                                        
  INDUSTRIAL SEGMENT     22.3 %     20.8 %     23.9 %     24.0 %     22.8 %     20.1 %     18.7 %     23.9 %     -     21.0 %
  ENERGY SEGMENT     3.9 %     -0.9 %     1.1 %     -5.4 %     0.0 %     1.6 %     1.1 %     8.4 %     -     4.0 %
  ENGINEERED SOLUTIONS SEGMENT     3.0 %     3.5 %     7.3 %     5.7 %     5.0 %     5.7 %     2.2 %     7.2 %     -     5.1 %
    ADJUSTED OPERATING PROFIT %     7.2 %     5.9 %     9.4 %     7.1 %     7.5 %     7.4 %     6.1 %     10.7 %     -     8.2 %
                                             
EBITDA                                        
  INDUSTRIAL SEGMENT   $ 21,217     $ 21,064     $ 25,575     $ 25,851     $ 93,707     $ 21,202     $ 21,034     $ 27,823     $ -   $ 70,059  
  ENERGY SEGMENT     9,108       2,943       4,633       142       16,826       5,125       4,533       11,554       -     21,212  
  ENGINEERED SOLUTIONS SEGMENT     6,281       7,277       11,716       9,533       34,807       10,254       6,020       12,566       -     28,840  
  CORPORATE / GENERAL     (5,879 )     (5,846 )     (4,868 )     (6,637 )     (23,230 )     (5,518 )     (4,799 )     (7,569 )     -     (17,886 )
    ADJUSTED EBITDA   $ 30,727     $ 25,438     $ 37,056     $ 28,889     $ 122,110     $ 31,063     $ 26,788     $ 44,374     $ -   $ 102,225  
  IMPAIRMENT & DIVESTITURE CHARGES     -       -       -       (116,979 )     (116,979 )     -       (2,987 )     -       -     (2,987 )
  RESTRUCTURING CHARGES (1)     (2,948 )     (2,101 )     (384 )     (1,795 )     (7,228 )     (6,629 )     (4,284 )     (1,186 )     -     (12,099 )
  DIRECTOR & OFFICER TRANSITION CHARGES     (7,784 )     -       -       -       (7,784 )     -       -       -       -     -  
    EBITDA   $ 19,995     $ 23,337     $ 36,672     $ (89,885 )   $ (9,881 )   $ 24,434     $ 19,517     $ 43,188     $ -   $ 87,139  
                                             
ADJUSTED EBITDA %                                        
  INDUSTRIAL SEGMENT     24.3 %     23.0 %     25.4 %     25.8 %     24.7 %     21.9 %     21.2 %     25.7 %     -     23.0 %
  ENERGY SEGMENT     10.8 %     4.0 %     5.5 %     0.2 %     5.4 %     6.8 %     6.9 %     13.8 %     -     9.4 %
  ENGINEERED SOLUTIONS SEGMENT     6.7 %     7.7 %     10.5 %     8.9 %     8.6 %     8.8 %     5.5 %     10.1 %     -     8.2 %
    ADJUSTED EBITDA %     11.6 %     9.8 %     12.5 %     10.5 %     11.1 %     10.8 %     9.7 %     14.0 %     -     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 2017   FISCAL 2018
          Q1 Q2 Q3 Q4 TOTAL   Q1 Q2 Q3 Q4 TOTAL
ADJUSTED EARNINGS (1)                        
  NET EARNINGS (LOSS) (GAAP MEASURE)   $ 4,965   $ 5,074   $ 22,511   $ (98,764 ) $ (66,213 )   $ 5,226   $ (18,221 ) $ 29,012   $ - $ 16,017  
  IMPAIRMENT & DIVESTITURE CHARGES     -     -     -     116,979     116,979       -     2,987     -     -   2,987  
  INCOME TAX (BENEFIT) EXPENSE ON IMPAIRMENT & DIVESTITURE CHARGES     -     -     -     (8,119 )   (8,119 )     -     9,398     -     -   9,398  
  DIRECTOR & OFFICER TRANSITION CHARGES     7,784     -     -     -     7,784       -     -     -     -   -  
  INCOME TAX BENEFIT ON DIRECTOR & OFFICER TRANSITION CHARGES     (2,880 )   -     -     -     (2,880 )     -     -     -     -   -  
  RESTRUCTURING CHARGES (1)     2,948     2,101     384     1,795     7,228       6,629     4,284     1,186     -   12,099  
  INCOME TAX BENEFIT ON RESTRUCTURING CHARGES     (777 )   (564 )   (124 )   (494 )   (1,959 )     (375 )   (500 )   (1,435 )   -   (2,310 )
  INCOME TAX EXPENSE (BENEFIT) FROM U.S. TAX REFORM     -     -     -     -     -       -     8,367     (4,891 )   -   3,476  
  INCOME TAX EXPENSE FROM EQUITY VESTING/EXERCISES     -     -     -     -     -       -     1,338     -     -   1,338  
  OTHER INCOME TAX BENEFIT     -     -     (3,193 )   -     (3,193 )     -     -     -     -   -  
    ADJUSTED EARNINGS   $ 12,040   $ 6,611   $ 19,578   $ 11,397   $ 49,627     $ 11,480   $ 7,653   $ 23,872   $ - $ 43,005  
                               
ADJUSTED DILUTED EARNINGS PER SHARE (2)                        
  NET EARNINGS (LOSS) (GAAP MEASURE)   $ 0.08   $ 0.08   $ 0.37   $ (1.65 ) $ (1.11 )   $ 0.09   $ (0.30 ) $ 0.48   $ - $ 0.26  
  IMPAIRMENT & DIVESTITURE CHARGES     -     -     -     1.96     1.96       -     0.05     -     -   0.05  
  INCOME TAX (BENEFIT) EXPENSE ON IMPAIRMENT & DIVESTITURE CHARGES     -     -     -     (0.14 )   (0.14 )     -     0.16     -     -   0.16  
  DIRECTOR & OFFICER TRANSITION CHARGES     0.13     -     -     -     0.13       -     -     -     -   -  
  INCOME TAX BENEFIT ON DIRECTOR & OFFICER TRANSITION CHARGES     (0.05 )   -     -     -     (0.05 )     -     -     -     -   -  
  RESTRUCTURING CHARGES (1)     0.05     0.04     0.01     0.03     0.12       0.11     0.07     0.02     -   0.20  
  INCOME TAX BENEFIT ON RESTRUCTURING CHARGES     (0.01 )   (0.01 )   (0.01 )   (0.01 )   (0.03 )     (0.01 )   (0.01 )   (0.02 )   -   (0.04 )
  INCOME TAX EXPENSE (BENEFIT) FROM U.S. TAX REFORM     -     -     -     -     -       -     0.14     (0.09 )   -   0.06  
  INCOME TAX EXPENSE FROM EQUITY VESTING/EXERCISES     -     -     -     -     -       -     0.02     -     -   0.02  
  OTHER INCOME TAX BENEFIT     -     -     (0.05 )   -     (0.05 )     -     -     -     -   -  
    ADJUSTED DILUTED EARNINGS PER SHARE   $ 0.20   $ 0.11   $ 0.32   $ 0.19   $ 0.83     $ 0.19   $ 0.13   $ 0.39   $ - $ 0.71  
                               
ADJUSTED EBITDA (3)                        
  NET EARNINGS (LOSS) (GAAP MEASURE)   $ 4,965   $ 5,074   $ 22,511   $ (98,764 ) $ (66,213 )   $ 5,226   $ (18,221 ) $ 29,012   $ - $ 16,017  
  FINANCING COSTS, NET     7,132     7,334     7,553     7,683     29,703       7,514     7,604     7,756     -   22,874  
  INCOME TAX (BENEFIT) EXPENSE     (2,998 )   200     (4,029 )   (9,651 )   (16,478 )     1,604     19,839     (3,995 )   -   17,448  
  DEPRECIATION & AMORTIZATION     10,896     10,729     10,637     10,847     43,108       10,090     10,295     10,415     -   30,800  
    EBITDA   $ 19,995   $ 23,337   $ 36,672   $ (89,885 ) $ (9,881 )   $ 24,434   $ 19,517   $ 43,188   $ - $ 87,139  
  IMPAIRMENT & OTHER DIVESTITURE CHARGES     -     -     -     116,979     116,979       -     2,987     -     -   2,987  
  DIRECTOR & OFFICER TRANSITION CHARGES     7,784     -     -     -     7,784       -     -     -     -   -  
  RESTRUCTURING CHARGES     2,948     2,101     384     1,795     7,228       6,629     4,284     1,186     -   12,099  
    ADJUSTED EBITDA   $ 30,727   $ 25,438   $ 37,056   $ 28,889   $ 122,110     $ 31,063   $ 26,788   $ 44,374   $ - $ 102,225  
                               
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 Earnings 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 Earnings. 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)
                       
                       
              Q4 FISCAL 2018   FISCAL 2018
              LOW HIGH   LOW HIGH
RECONCILIATION OF GAAP DILUTED EARNINGS PER SHARE TO ADJUSTED                
  DILUTED EARNINGS PER SHARE GUIDANCE                
  GAAP DILUTED EARNINGS PER SHARE       $ 0.32 $ 0.37   $ 0.58   $ 0.63  
  IMPAIRMENT & DIVESTITURE CHARGES, NET OF TAX         -   -     0.21     0.21  
  RESTRUCTURING CHARGES, NET OF TAX         -   -     0.16     0.16  
  INCOME TAX EXPENSE FROM U.S. TAX REFORM         -   -     0.06     0.06  
  INCOME TAX EXPENSE FROM EQUITY VESTING/EXERCISES         -   -     0.02     0.02  
    ADJUSTED DILUTED EARNINGS PER SHARE GUIDANCE       $ 0.32 $ 0.37   $ 1.03   $ 1.08  
                       
                       
RECONCILIATION OF GAAP CASH FLOW FROM OPERATIONS TO FREE CASH FLOW                
  CASH FLOW FROM OPERATIONS             $ 85   $ 90  
  CAPITAL EXPENDITURES               (25 )   (25 )
  OTHER                 10     10  
    FREE CASH FLOW GUIDANCE             $ 70   $ 75  
                       
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.

 

Source: Actuant Corporation

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