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Actuant Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: January 8, 2013 09:05AM
Actuant Corp. (ATU) filed Quarterly Report for the period ended 2012-11-30.
Highlight of Business Operations:Fiscal 2013 first quarter consolidated net sales were $377 million, 4% lower than the $393 million in the comparable prior year period. Excluding the $18 million year-over-year increase in sales from acquisitions and the $5 million unfavorable impact of foreign currency exchange rate changes, fiscal 2013 first quarter consolidated core sales declined 7% compared to the prior year. Operating profit for the first quarter of fiscal 2013 was $51 million, compared to $57 million in the prior year period. Reduced sales volumes, unfavorable product mix and investments in growth initiatives drove this year-over-year decline in operating profit. We were able to largely offset the decline in operating profit with lower borrowing costs and income taxes, resulting in net income and diluted earnings per share down only modestly from the prior year. The changes in sales and operating profit at the segment level are discussed in further detail below.
Energy segment net sales for the three months ended November 30, 2012 increased by $11 million (13%) to $91 million compared to the prior year period. Excluding sales from the Jeyco acquisition ($7 million), core sales grew 4% for the first quarter of fiscal 2013, the result of continued robust maintenance and capital spending in oil & gas, nuclear, power generation and other energy markets. Improved operating profit margins during the quarter were primarily driven by favorable sales mix.
Net sales in the Engineered Solutions segment decreased by $13 million (10%), from $129 million for the three months ended November 30, 2011 to $116 million for the three months ended November 30, 2012. Excluding the unfavorable impact of changes in foreign currency exchange rates ($3 million) and the $11 million of sales from recent acquisitions, core sales declined 17%. First quarter net sales levels reflect concerted actions by our OEM customers to reduce their inventory levels and production schedules in response to lower demand at the dealer level. Segment operating profit declined from the prior year period, as the impact of restructuring costs and the reduced volume (under-absorption of operating costs) was only partially offset by lower incentive compensation costs.
Cash flows from operating activities during the three months ended November 30, 2012 were $12 million, the result of net earnings, offset by the payment of $17 million of fiscal 2012 incentive compensation costs, reduced accounts payable and increased inventory levels. These operating cash flows funded the repurchase of approximately 0.3 million shares of the Companys common stock ($7 million) under the stock buyback program, our $3 million annual dividend and $8 million of capital expenditures.
Cash flows from operating activities during the three months ended November 30, 2011 were $20 million, the result of net earnings, offset by the payment of $28 million of fiscal 2011 incentive compensation costs and increased accounts receivable and inventory levels. These operating cash flows and borrowings under the Senior Credit Facility funded the repurchase of approximately 1 million shares of the Companys common stock ($20 million). Proceeds from the sale of property, plant and equipment (which included the sale-leaseback of certain equipment) more than offset the $6 million of capital expenditures during the first quarter of fiscal 2012.
Stocks Discussed: ATU,