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Actuant Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: July 9, 2012 01:13PM
Actuant Corp. (ATU) filed Quarterly Report for the period ended 2012-05-31. Actuant Corporation has a market cap of $1.88 billion; its shares were traded at around $27.26 with a P/E ratio of 13.6 and P/S ratio of 1.3. The dividend yield of Actuant Corporation stocks is 0.2%. Actuant Corporation had an annual average earning growth of 3.9% over the past 10 years.
Highlight of Business Operations:Net sales increased 9% to $429 million for the third quarter and 15% to $1,200 million for the nine months ended May 31, 2012 compared to $393 million and $1,042 million for the comparable three and nine month periods in the prior year. Changes in foreign currency exchange rates (most notably the Euro) had a $12 million and $8 million unfavorable impact on third quarter and year-to-date sales comparisons, respectively. Sales generated by businesses acquired since September 1, 2010, were $32 million and $139 million, respectively, for the three and nine months ended May 31, 2012. Consolidated core sales growth (growth excluding the effects of foreign exchange and acquisitions) was 4% and 6% on a quarterly and year-to-date basis, respectively, the result of broad based improvement in most of the Companys served markets. Consolidated operating profit margins expanded in both the third quarter and year-to-date, the result of an improved cost structure, favorable product mix, selective price increases, 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 third quarter net sales increased $2 million (2%) to $110 million compared to the prior year period, while year-to-date net sales increased $25 million (9%) to $309 million. Changes in foreign currency exchange rates negatively impacted sales comparisons by $3 million and $2 million for the three and nine month periods, respectively. Core sales growth was 5% for the third quarter and 9% year-to-date, driven by strong 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 third quarter and on a year-to-date basis. Industrial segment operating profit increased for the three and nine months ended May 31, 2012 by $1 million (4%) and $15 million (22%), respectively.
Energy segment net sales for the three and nine months ended May 31, 2012 increased $18 million (24%) and $46 million (22%), respectively, compared to the prior year periods. Excluding sales from the recently completed Jeyco acquisition and the impact of foreign currency exchange rates (which unfavorably impacted sales comparisons by $2 million and $1 million in the current quarter and year-to-date periods, respectively), core sales grew 23% and 21%, respectively in the three and nine months ended May 31, 2012. Core sales growth reflects higher activity levels across the segments diverse end markets, including maintenance spending in oil & gas, strong sales to the North American power generation (nuclear) market and capital project activity in offshore energy. Energy segment operating profit increased by $5 million (37%) to $19 million for the third quarter compared to a year-to-date increase of $11 million (35%) to $43 million. Improved year-to-date 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.
Fiscal 2012 third quarter Electrical segment net sales increased $6 million (7%) to $86 million. Excluding the $2 million unfavorable impact of changes in foreign currency exchange rates, core sales growth was 10%, the result of price increases and higher sales volumes in the retail, industrial, utility and solar markets. Electrical segment net sales for the nine months ended May 31, 2012 were $246 million, a $40 million (19%) improvement over the prior year period. Excluding sales from the Mastervolt acquisition and changes in foreign currency exchange rates, core sales growth for the nine months ended May 31, 2012 was 8%. Electrical segment operating profit for the three and nine months ended May 31, 2012 was $9 million and $20 million, respectively. Despite unfavorable acquisition mix, higher incentive compensation costs and $0.5 million of restructuring costs associated with plant closures, quarterly operating profit increased due to higher sales volumes and favorable product mix.
Engineered Solutions segment third quarter net sales increased $10 million (8%) from $127 million in the prior year to $137 million in fiscal 2012. During the nine months ended May 31, 2012, year-over-year net sales increased $48 million (14%) to $390 million. Excluding foreign currency rate changes and sales from acquired businesses, core sales declined 11%, and 7% respectively, for the third quarter and first nine months of fiscal 2012. The impact of sales from acquired businesses was $29 million and $77 million in the three and nine months ended May 31, 2012, respectively. The decline in core sales was due to a reduction in OEM production schedules for convertible auto as well as China and European heavy-duty trucks. Segment operating profit declined from the prior year periods as the impact of the reduced volume and related under-absorption of operating costs was only partially offset by lower incentive compensation costs and favorable segment mix.
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