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Actuant Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: April 6, 2012 06:27PM
Actuant Corp. (ATU) filed Quarterly Report for the period ended 2012-02-29. Actuant Corp has a market cap of $1.98 billion; its shares were traded at around $28.78 with a P/E ratio of 14.9 and P/S ratio of 1.4. The dividend yield of Actuant Corp stocks is 0.1%. Actuant Corp had an annual average earning growth of 3.9% over the past 10 years.
Highlight of Business Operations:Net sales increased 14% to $378 million for the second quarter and 19% to $771 for the six months ended February 29, 2012 compared to $331 million and $649 million for the same three and six month periods in the prior year. Changes in foreign currency exchange rates had a $2 million unfavorable impact on second quarter sales comparisons and benefited sales by $2 million on a year-to-date basis. Sales generated by businesses acquired since September 2010, were $25 million and $72 million, respectively, for the three and six month periods ended February 29, 2012. Consolidated core sales growth (growth excluding effects of foreign exchange, acquisitions owned less than one year and divestitures) was 8% in both the second quarter and year-to-date, the result of broad based improvement in the Companys served markets. Despite increased investments to support Growth + Innovation initiatives, consolidated operating profit margins expanded in both the second quarter and first half of fiscal 2012, the result of an improved cost structure, favorable product mix, various pricing actions, reduced incentive compensation costs and improved operating leverage on the higher sales volumes. The changes in sales and operating profit at the segment level are discussed in further detail below.
Fiscal 2012 second quarter net sales increased $9 million (11%) to $98 million compared to the prior year period, while year-to-date net sales increased $23 million (13%) to $199 million. Excluding the minor impact of changes in foreign currency rates, core sales growth was 11% for the second quarter and 12% year-to-date, the result of continued strong industrial demand across our served end markets and geographies. These increased sales volumes, favorable product mix and lower incentive compensation costs resulted in operating profit margin expansion during both the current quarter and on a year-to-date basis. Industrial segment operating profit increased for the three and six months ended February 29, 2012 by $7 million (32%) and $15 million (35%), respectively.
Energy segment net sales for the three and six months ended February 29, 2012 increased by $17 million (28%) and $27 million (20%), respectively, compared to the prior year periods. Excluding sales from the recently completed Jeyco acquisition and the impact of changes in foreign currency exchange rates, core sales grew 27% and 19% for the second quarter and first half of fiscal 2012, respectively. This core sales growth resulted from increased quoting and sales activity across nearly all of the segments primary markets, including capital project activity in the oil & gas market, maintenance related spending and strong sales to the North American power generation (nuclear) market. Energy segment operating profit increased by $5 million (4%) to $12 million for the second quarter of fiscal 2012 while year-to-date operating profit increased by $6 million (33%) to $25 million. Improved operating profit margins were driven by continued productivity improvements, increased operating leverage (driven by higher sales volumes) as well as a favorable adjustment to an acquisition earn-out provision.
Compared to prior year, Electrical segment net sales for the second quarter of fiscal 2012 increased $7 million (10%) to $77 million and increased $34 million (27%) to $160 million in the comparable six month period. Mastervolt sales were $16 million and $39 million for the three and six months ended February 29, 2012, respectively. Excluding sales from this acquisition and favorable changes in foreign currency exchange rates, core sales increased 14% and 11% for the three and six months ended February 29, 2012, the result of price increases and higher sales volumes in the retail, industrial, utility and marine markets. Electrical segment operating profit for the three and six months ended February 29, 2012 was $6 million and $11 million, respectively. Despite unfavorable acquisition mix, higher incentive compensation costs and $0.9 million of restructuring costs associated with plant closures, quarterly operating profit margin expansion was driven by increased sales volumes and favorable product mix.
Engineered Solutions segment second quarter net sales increased by $14 million (12%), from $110 million in the prior year to $124 million in fiscal 2012. During the first half of fiscal 2012, Engineered Solutions net sales also increased by $38 million (18%) from $215 million in the prior year to $253 million. Excluding foreign currency rate changes and sales from the acquired Weasler business ($25 million and $48 million, respectively for the three and six months ended February 29, 2012), core sales declined 9%, and 5% respectively, for the second quarter and first half of fiscal 2012. The core sales decline was the result of tougher prior year comparables and weaker European and China auto and truck demand as OEMS reduce production schedules. Engineered Solutions segment operating profit was $13 million and $32 million for the three and six month periods ended February 29, 2012. The decline in operating profit margin during the second quarter (a seasonally weak quarter) was due to lower absorption associated with reduced production levels, partially offset by favorable acquisition mix and reduced incentive compensation costs.
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