EX-99.1 2 a5298107ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 Actuant Announces Record First Quarter Sales and Earnings MILWAUKEE--(BUSINESS WIRE)--Dec. 20, 2006--Actuant Corporation (NYSE: ATU) today announced record results for its first quarter ended November 30, 2006. First quarter fiscal 2007 net earnings and diluted earnings per share ("EPS") were $25.1 million and $0.81, respectively, which compares favorably to net earnings and EPS of $21.3 million and $0.70, respectively, for the first quarter of fiscal 2006. Fiscal 2007 first quarter sales and EPS increased approximately 21% and 16%, respectively, over the comparable prior year period. First quarter sales increased to $343 million from $284 million in the prior year, driven by strong base business growth and approximately $25 million of sales from acquired businesses. Excluding foreign currency exchange rate changes and sales from acquired businesses, first quarter fiscal 2007 sales increased approximately 9% from the comparable prior year period. This increase was driven by growth in all four reportable segments, including strong growth in the Industrial and Actuation Systems segments. Robert C. Arzbaecher, President and CEO of Actuant, commented, "Actuant is off to a solid start in Fiscal 2007 with 9% core sales growth, which was slightly ahead of our expectations. Additionally, first quarter EPS increased approximately 16% from last year, driven by higher sales and the benefit of prior year acquisitions." Arzbaecher continued, "We were especially pleased with the performance of our Industrial segment, which generated strong increases in both core sales and profit margins. Our overall profit margins were down year-over-year as a result of unfavorable sales mix and lower Actuation System and Electrical segment profitability. Our previously announced European Electrical restructuring activities continue on plan, although there was limited financial impact this quarter." He added, "We are also pleased with our acquisition progress, both in integrating previously announced acquisitions and in identifying new acquisition opportunities. We've had success in supplementing our core revenue growth with acquisitions, and this combination has helped Actuant double its sales over the last three years." The Company also announced sales and earnings guidance for the second quarter of fiscal 2007 and confirmed its full year guidance. Arzbaecher stated, "We expect second quarter sales and EPS to be lower than the first quarter due to normal seasonality, but do anticipate year-over-year growth. Excluding acquisition activity and European Electrical restructuring costs, we are projecting second quarter sales and EPS to be in the range of $320-325 million, and $0.67-0.71 per share, respectively. Full year fiscal 2007 sales and earnings guidance, excluding future acquisitions and European Electrical restructuring costs, remains unchanged from our previous ranges of $1.325-1.345 billion and $3.20-3.40 per share, respectively. This translates to 10-17% EPS growth over the $2.90 fiscal 2006 EPS, excluding 2006 tax gains and European Electrical restructuring costs. Net debt (total debt of $482 million less approximately $27 million of cash) was $455 million, unchanged from the beginning of the quarter. Consistent with prior years, Actuant's first quarter cash flow was impacted by seasonal trends including working capital growth and employee incentive compensation payments for the prior year. Industrial Segment Results ---------------------------------------------------------------------- (US $ in millions) Three Months Ended November 30, ------------------ 2006 2005 -------- -------- Sales $100.9 $75.8 Operating Profit $28.7 $20.2 Operating Profit as a % of Sales 28.4% 26.6% The Industrial segment is comprised of the Enerpac and Hydratight businesses. First quarter fiscal 2007 Industrial sales increased 33% to $101 million, resulting from increased demand, price increases, foreign currency rate changes, and sales from the April 2006 acquisitions of Precision Sure-Lock and D.L. Ricci. Excluding foreign currency exchange rate changes and sales from acquired businesses, Industrial segment sales increased approximately 11% from the comparable prior year period, driven by continued strong demand across both the hydraulic tool and joint integrity product lines, and price increases. Operating profit margins in Industrial increased to 28.4% in the first quarter of fiscal 2007 from 26.6% in the comparable prior year period due to higher production levels, acquisitions and operating efficiencies. Electrical Segment Results ---------------------------------------------------------------------- (US $ in millions) Three Months Ended November 30, ------------------ 2006 2005 -------- -------- Sales $122.0 $105.5 Operating Profit $9.4 $10.2 Operating Profit as a % of Sales 7.7% 9.7% The Electrical segment consists of the Company's Gardner Bender, Professional Electrical, European Electrical and Specialty Electrical business units. Fiscal 2007 first quarter Electrical segment sales increased approximately 16% to $122 million from approximately $106 million in the prior year. Higher sales resulted from 3% core sales growth, foreign currency exchange rate changes and the fiscal 2006 acquisitions of BEP Marine and Actown. Electrical operating profit margins declined from 9.7% in the first quarter of fiscal 2006 to 7.7% in fiscal 2007 due primarily to approximately $1.0 million of downsizing costs (unrelated to the previously announced European Electrical restructuring, but rather costs incurred to close three other Electrical locations), sales mix and acquisitions. The Company made progress on restructuring activities in its European Electrical business during the quarter, and is on track with its previously announced plans to downsize the operation to improve profitability. The Company has incurred a total of approximately $5 million of pre-tax European Electrical restructuring costs over the past six months, and expects to recognize an additional $12-15 million of related costs (pre-tax) by the end of calendar 2007. Actuation Systems Segment Results ---------------------------------------------------------------------- (US $ in millions) Three Months Ended November 30, ------------------ 2006 2005 -------- -------- Sales $105.7 $88.7 Operating Profit $8.6 $10.0 Operating Profit as a % of Sales 8.2% 11.3% The Company's Automotive, Truck (Gits and Power Packer), Recreational Vehicle ("RV"), and Elliott businesses are included in its Actuation Systems segment. Actuation Systems first quarter fiscal 2007 sales increased 19% to $106 million from approximately $89 million in the comparable prior year period. Excluding foreign currency exchange rate changes, Actuation Systems core sales increased 16%, with growth in all three major product lines - automotive actuation systems, RV actuation systems and truck actuation systems. Automotive convertible top sales increased 45% year-over-year due to the continued impact of new convertible auto platform introductions. The higher truck actuation system sales resulted from strong customer pre-buy demand in advance of more stringent North American diesel engine emissions standard that takes effect on January 1, 2007. Actuation Systems operating profit margins declined to 8.2% in the first quarter of fiscal 2007, due primarily to unfavorable product line sales mix, overtime expense, material cost increases, and other manufacturing variances. Engineered Products Segment Results ---------------------------------------------------------------------- (US $ in millions) Three Months Ended November 30, ------------------ 2006 2005 -------- -------- Sales $14.4 $13.9 Operating Profit $1.9 $1.7 Operating Profit as a % of Sales 13.4% 12.4% The Engineered Products segment includes the Company's Acme Aerospace, Turner, Milwaukee Cylinder, and Nielsen-Sessions operations. Fiscal 2007 first quarter Engineered Products sales increased approximately 4% year-over-year due to increased economic activity. Operating profit margins increased to 13.4% from 12.4% in the prior year first quarter, reflecting the benefits of low cost country component sourcing as well as operating efficiencies. 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, foreign currency fluctuations and interest rate risk. See the Company's registration statements filed with the Securities and Exchange Commission for further information regarding risk factors. An investor conference call is scheduled for 11am ET today, December 20, and may be listened to via webcast on Actuant's Web site at www.actuant.com. About Actuant Actuant, headquartered in Butler, Wisconsin, is a diversified industrial company with operations in more than 30 countries. The Actuant businesses are market leaders in highly engineered position and motion control systems and branded hydraulic and electrical tools and supplies. Since its creation through a spin-off in 2000, Actuant has grown its sales from $482 million to over $1 billion and its market capitalization from $113 million to over $1.4 billion. The Company employs a workforce of more than 6,300 worldwide. Actuant Corporation trades on the NYSE under the symbol ATU. For further information on Actuant and its business units, visit the Company's Web site at www.actuant.com. Actuant Corporation Condensed Consolidated Balance Sheets (Dollars in thousands) (Unaudited) November 30, August 31, 2006 2006 ---------------- ---------------- ASSETS Current assets Cash and cash equivalents $26,586 $25,659 Accounts receivable, net 186,709 171,262 Inventories, net 174,355 165,760 Deferred income taxes 21,824 18,796 Other current assets 11,603 9,448 ---------------- ---------------- Total current assets 421,077 390,925 Property, plant and equipment, net 92,737 94,544 Goodwill 509,848 505,428 Other intangible assets, net 208,859 210,899 Other long-term assets 10,294 11,579 ---------------- ---------------- Total assets $1,242,815 $1,213,375 ================ ================ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Short-term borrowings $720 $- Trade accounts payable 118,423 122,164 Accrued compensation and benefits 32,325 43,983 Income taxes payable 27,591 21,852 Current maturities of long-term debt 28,274 18,896 Other current liabilities 58,447 57,499 ---------------- ---------------- Total current liabilities 265,780 264,394 Long-term debt, less current maturities 452,680 461,356 Deferred income taxes 68,070 70,184 Pension and postretirement benefit accruals 36,750 36,606 Other long-term liabilities 22,517 17,870 Shareholders' equity Capital stock 5,479 5,460 Additional paid-in capital (354,542) (360,353) Accumulated other comprehensive income (loss) (1,448) (4,581) Stock held in trust (1,648) (1,355) Deferred compensation liability 1,648 1,355 Retained earnings 747,529 722,439 ---------------- ---------------- Total shareholders' equity 397,018 362,965 ---------------- ---------------- Total liabilities and shareholders' equity $1,242,815 $1,213,375 ================ ================ Actuant Corporation Condensed Consolidated Statements of Earnings (Dollars in thousands except per share amounts) (Unaudited) Three Months Ended November 30, -------------------- 2006 2005 -------------------- Net sales $342,983 $283,876 Cost of products sold 229,938 184,398 -------------------- Gross profit 113,045 99,478 Selling, administrative and engineering expenses 67,263 59,482 Amortization of intangible assets 2,253 1,785 -------------------- Operating profit 43,529 38,211 Financing costs, net 6,841 6,067 Other expense, net 217 698 -------------------- Earnings from operations before income tax expense and minority interest 36,471 31,446 Income tax expense 11,379 10,220 Minority interest, net of income taxes (10) (42) -------------------- Net earnings $25,102 $21,268 ==================== Earnings per share Basic $0.92 $0.79 Diluted 0.81 0.70 Weighted average common shares outstanding Basic 27,300 27,037 Diluted 31,717 31,453 Actuant Corporation Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three Months Ended November 30, --------------------------------- 2006 2005 ---------------- ---------------- Operating Activities Net earnings $25,102 $21,268 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 7,877 6,521 Amortization of debt issuance costs 382 360 Stock-based compensation expense 1,417 1,066 Provision for deferred income taxes (2,917) 57 Loss/(gain) on disposal of assets 122 (66) Changes in operating assets and liabilities, excluding the effects of the business acquisitions: Accounts receivable (14,210) (21,182) Increase in AR securitization program 3,152 2,736 Inventories (6,357) (5,745) Prepaid expenses and other assets (1,372) (1,184) Trade accounts payable (5,755) 6,707 Income taxes payable 5,377 5,493 Accrued compensation and benefits (8,472) 602 Other accrued liabilities 3,397 4,390 ---------------- ---------------- Net cash provided by operating activities 7,743 21,023 Investing Activities Proceeds from sale of property, plant and equipment 2,789 115 Capital expenditures (6,516) (5,075) Other 273 - ---------------- ---------------- Net cash used in investing activities (3,454) (4,960) Financing Activities Net borrowings (repayments) on revolving credit facilities and short-term borrowings (1,860) (17,103) Cash dividend (2,187) (2,165) Stock option exercises and other 114 616 ---------------- ---------------- Net used in financing activities (3,933) (18,652) Effect of exchange rate changes on cash 571 (297) ---------------- ---------------- Net increase in cash and cash equivalents 927 (2,886) Cash and cash equivalents - beginning of period 25,659 10,356 ---------------- ---------------- Cash and cash equivalents - end of period $26,586 $7,470 ================ ================ ACTUANT CORPORATION SUPPLEMENTAL UNAUDITED DATA (Dollars in thousands) FISCAL 2006 --------------------------------------------------- Q1 Q2 Q3 Q4 TOTAL --------------------------------------------------- SALES INDUSTRIAL SEGMENT $75,846 $68,907 $83,131 $96,804 $324,688 ELECTRICAL SEGMENT 105,460 105,670 109,449 111,907 432,486 ACTUATION SYSTEMS SEGMENT 88,678 87,779 109,099 100,687 386,243 ENGINEERED PRODUCTS SEGMENT 13,892 13,663 14,983 15,203 57,741 --------------------------------------------------- TOTAL $283,876 $276,019 $316,662 $324,601 $1,201,158 =================================================== % SALES GROWTH INDUSTRIAL SEGMENT 81% 51% 44% 33% 49% ELECTRICAL SEGMENT 50% 14% 9% 11% 19% ACTUATION SYSTEMS SEGMENT 9% 1% 9% 23% 10% ENGINEERED PRODUCTS SEGMENT 149% 41% 15% 16% 40% TOTAL 42% 17% 17% 20% 23% OPERATING PROFIT INDUSTRIAL SEGMENT $20,201 $16,595 $21,307 $27,408 $85,511 ELECTRICAL SEGMENT 10,215 10,760 11,172 9,583 41,730 ACTUATION SYSTEMS SEGMENT 10,034 9,297 12,203 8,846 40,380 ENGINEERED PRODUCTS SEGMENT 1,728 1,834 2,139 2,020 7,721 CORPORATE / GENERAL (3,967) (3,632) (3,981) (4,787) (16,367) --------------------------------------------------- TOTAL - EXCLUDING RESTRUCTURING CHARGE $38,211 $34,854 $42,840 $43,070 $158,975 EUROPEAN ELECTRICAL RESTRUCTURING CHARGE - - - (4,910) (4,910) --------------------------------------------------- TOTAL $38,211 $34,854 $42,840 $38,160 $154,065 =================================================== OPERATING PROFIT % INDUSTRIAL SEGMENT 26.6% 24.1% 25.6% 28.3% 26.3% ELECTRICAL SEGMENT 9.7% 10.2% 10.2% 8.6% 9.6% ACTUATION SYSTEMS SEGMENT 11.3% 10.6% 11.2% 8.8% 10.5% ENGINEERED PRODUCTS SEGMENT 12.4% 13.4% 14.3% 13.3% 13.4% TOTAL (INCLUDING CORPORATE) - EXCLUDING RESTRUCTURING CHARGE 13.5% 12.6% 13.5% 13.3% 13.2% EBITDA INDUSTRIAL SEGMENT $21,626 $18,050 $22,752 $29,644 $92,072 ELECTRICAL SEGMENT 11,904 12,818 12,643 11,496 48,861 ACTUATION SYSTEMS SEGMENT 12,063 11,823 14,913 11,555 50,354 ENGINEERED PRODUCTS SEGMENT 2,042 2,145 2,435 2,324 8,946 CORPORATE / GENERAL (3,601) (3,586) (3,881) (4,487) (15,555) --------------------------------------------------- TOTAL - EXCLUDING RESTRUCTURING CHARGE $44,034 $41,250 $48,862 $50,532 $184,678 EUROPEAN ELECTRICAL RESTRUCTURING CHARGE - - - (4,910) (4,910) --------------------------------------------------- TOTAL $44,034 $41,250 $48,862 $45,622 $179,768 =================================================== EBITDA % INDUSTRIAL SEGMENT 28.5% 26.2% 27.4% 30.6% 28.4% ELECTRICAL SEGMENT 11.3% 12.1% 11.6% 10.3% 11.3% ACTUATION SYSTEMS SEGMENT 13.6% 13.5% 13.7% 11.5% 13.0% ENGINEERED PRODUCTS SEGMENT 14.7% 15.7% 16.3% 15.3% 15.5% TOTAL (INCLUDING CORPORATE) - EXCLUDING RESTRUCTURING CHARGE 15.5% 14.9% 15.4% 15.6% 15.4% FISCAL 2007 --------------------------------------------------- Q1 Q2 Q3 Q4 TOTAL --------------------------------------------------- SALES INDUSTRIAL SEGMENT $100,867 $100,867 ELECTRICAL SEGMENT 122,017 122,017 ACTUATION SYSTEMS SEGMENT 105,654 105,654 ENGINEERED PRODUCTS SEGMENT 14,445 14,445 --------------------------------------------------- TOTAL $342,983 $342,983 =================================================== % SALES GROWTH INDUSTRIAL SEGMENT 33% 33% ELECTRICAL SEGMENT 16% 16% ACTUATION SYSTEMS SEGMENT 19% 19% ENGINEERED PRODUCTS SEGMENT 4% 4% TOTAL 21% 21% OPERATING PROFIT INDUSTRIAL SEGMENT $28,680 $28,680 ELECTRICAL SEGMENT 9,357 9,357 ACTUATION SYSTEMS SEGMENT 8,614 8,614 ENGINEERED PRODUCTS SEGMENT 1,931 1,931 CORPORATE / GENERAL (4,944) (4,944) --------------------------------------------------- TOTAL - EXCLUDING RESTRUCTURING CHARGE $43,638 $43,638 EUROPEAN ELECTRICAL RESTRUCTURING CHARGE (109) (109) --------------------------------------------------- TOTAL $43,529 $43,529 =================================================== OPERATING PROFIT % INDUSTRIAL SEGMENT 28.4% 28.4% ELECTRICAL SEGMENT 7.7% 7.7% ACTUATION SYSTEMS SEGMENT 8.2% 8.2% ENGINEERED PRODUCTS SEGMENT 13.4% 13.4% TOTAL (INCLUDING CORPORATE) - EXCLUDING RESTRUCTURING CHARGE 12.7% 12.7% EBITDA INDUSTRIAL SEGMENT $31,022 $31,022 ELECTRICAL SEGMENT 11,543 11,543 ACTUATION SYSTEMS SEGMENT 11,339 11,339 ENGINEERED PRODUCTS SEGMENT 2,238 2,238 CORPORATE / GENERAL (4,844) (4,844) --------------------------------------------------- TOTAL - EXCLUDING RESTRUCTURING CHARGE $51,298 $51,298 EUROPEAN ELECTRICAL RESTRUCTURING CHARGE (109) (109) --------------------------------------------------- TOTAL $51,189 $51,189 =================================================== EBITDA % INDUSTRIAL SEGMENT 30.8% 30.8% ELECTRICAL SEGMENT 9.5% 9.5% ACTUATION SYSTEMS SEGMENT 10.7% 10.7% ENGINEERED PRODUCTS SEGMENT 15.5% 15.5% TOTAL (INCLUDING CORPORATE) - EXCLUDING RESTRUCTURING CHARGE 15.0% 15.0% ACTUANT CORPORATION Reconciliation of GAAP measures to non-GAAP measures (Dollars in thousands, except for per share amounts) FISCAL 2006 --------------------------------------------------- Q1 Q2 Q3 Q4 TOTAL --------------------------------------------------- NET EARNINGS EXCLUDING RESTRUCTURING CHARGE AND TAX ADJUSTMENTS (1) NET EARNINGS (GAAP MEASURE) $21,268 $19,298 $26,787 $25,235 $92,588 RESTRUCTURING CHARGES, NET OF TAX BENEFIT - - - 4,499 4,499 TAX ADJUSTMENTS - - (2,597) (5,374) (7,971) --------------------------------------------------- TOTAL (NON-GAAP MEASURE) $21,268 $19,298 $24,190 $24,360 $89,116 =================================================== DILUTED EARNINGS PER SHARE EXCLUDING RESTRUCTURING CHARGE AND TAX ADJUSTMENTS (1) NET EARNINGS (GAAP MEASURE) $0.70 $0.63 $0.86 $0.82 $3.01 RESTRUCTURING CHARGES, NET OF TAX BENEFIT - - - 0.14 0.14 TAX ADJUSTMENTS - - (0.08) (0.17) (0.25) --------------------------------------------------- TOTAL (NON-GAAP MEASURE) $0.70 $0.63 $0.78 $0.79 $2.90 =================================================== EBITDA (2) NET EARNINGS (GAAP MEASURE) $21,268 19,298 26,787 25,235 $92,588 FINANCING COSTS, NET 6,067 6,084 6,786 7,209 26,146 INCOME TAX EXPENSE 10,220 9,159 8,636 5,371 33,386 DEPRECIATION & AMORTIZATION 6,521 6,721 6,680 7,851 27,773 MINORITY INTEREST, NET OF INCOME TAX (42) (12) (27) (44) (125) --------------------------------------------------- EBITDA (NON- GAAP MEASURE) $44,034 $41,250 $48,862 $45,622 $179,768 EUROPEAN ELECTRICAL RESTRUCTURING CHARGE - - - 4,910 4,910 --------------------------------------------------- EBITDA (NON- GAAP MEASURE) - EXCLUDING RESTRUCTURING CHARGE $44,034 $41,250 $48,862 $50,532 $184,678 =================================================== FISCAL 2007 --------------------------------------------------- Q1 Q2 Q3 Q4 TOTAL --------------------------------------------------- NET EARNINGS EXCLUDING RESTRUCTURING CHARGE AND TAX ADJUSTMENTS (1) NET EARNINGS (GAAP MEASURE) $25,102 $25,102 RESTRUCTURING CHARGES, NET OF TAX BENEFIT 109 $109 TAX ADJUSTMENTS - - --------------------------------------------------- TOTAL (NON-GAAP MEASURE) $25,211 $25,211 =================================================== DILUTED EARNINGS PER SHARE EXCLUDING RESTRUCTURING CHARGE AND TAX ADJUSTMENTS (1) NET EARNINGS (GAAP MEASURE) $0.81 $0.81 RESTRUCTURING CHARGES, NET OF TAX BENEFIT - - TAX ADJUSTMENTS - - --------------------------------------------------- TOTAL (NON-GAAP MEASURE) $0.81 $0.81 =================================================== EBITDA (2) NET EARNINGS (GAAP MEASURE) $25,102 $25,102 FINANCING COSTS, NET 6,841 6,841 INCOME TAX EXPENSE 11,379 11,379 DEPRECIATION & AMORTIZATION 7,877 7,877 MINORITY INTEREST, NET OF INCOME TAX (10) (10) --------------------------------------------------- EBITDA (NON- GAAP MEASURE) $51,189 $51,189 EUROPEAN ELECTRICAL RESTRUCTURING CHARGE 109 109 --------------------------------------------------- EBITDA (NON- GAAP MEASURE) - EXCLUDING RESTRUCTURING CHARGE $51,298 $51,298 =================================================== (1)Net earnings and diluted earnings per share excluding restructuring charges and income tax adjustments represent net earnings and diluted earnings per share per the Consolidated Statement 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 or diluted earnings per share as an indicator of the company's operating performance. However, this presentation is important to investors for understanding the operating results of the current portfolio of Actuant companies. (2)EBITDA represents net earnings before financing costs,net, income tax expense, depreciation & amortization and minority interest. EBITDA is not a calculation based upon generally accepted accounting principles (GAAP). The amounts included in the EBITDA calculation, however, are derived from amounts included in the Consolidated Statements of Earnings data. EBITDA should not be considered as an alternative to net earnings or operating profit as an indicator of the company's operating performance, or as an alternative to operating cash flows as a measure of liquidity. Actuant has presented EBITDA because it regularly reviews this as a measure of the company's ability to incur and service debt. In addition, EBITDA is used by many of our investors and lenders, and is presented as a convenience to them. However, the EBITDA measure presented may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation. CONTACT: Actuant Corporation Andrew Lampereur, 262-373-7401 Executive Vice President and CFO