Actuant Corp. has a market cap of $1.25 billion; its shares were traded at around $18.45 with a P/E ratio of 20.7 and P/S ratio of 1. The dividend yield of Actuant Corp. stocks is 0.2%. Actuant Corp. had an annual average earning growth of 1.5% over the past 10 years.ATU is in the portfolios of First Pacific Advisors of First Pacific Advisors, LLC, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:Fiscal 2010 third quarter Industrial segment net sales increased by $17 million (27%) to $80 million, while year-to-date net sales decreased by $11 million (5%) to $214 million. Foreign currency rate changes favorably impacted sales comparisons for the three and nine months ended May 31, 2010 by $1 million and $8 million, respectively. Excluding foreign currency rate changes and sales from acquired businesses, core sales increased 20% for the three months ended May 31, 2010 and decreased 9% for the nine months ended May 31, 2010. Sequentially, sales levels and the core sales trend improved significantly during the third quarter, primarily the result of increasing demand globally and comparatively lower sales levels in the prior year period (due to the impact of the global economic recession in fiscal 2009). End markets in the Industrial segment were not significantly impacted by the global economic environment until the second quarter of fiscal 2009, and therefore nine month year-over-year comparisons remain unfavorable.
Electrical segment third quarter net sales increased by $2 million (3%) to $86 million in 2010. However, during the nine months ended May 31, 2010, Electrical segment net sales decreased by $21 million (8%) to $255 million. Foreign currency rate changes favorably impacted sales comparisons for the three and nine months ended May 31, 2010 by $1 million and $7 million, respectively. Excluding foreign currency rate changes and sales from the divested European Electrical product line, year over year core sales increased 8% during the third quarter of fiscal 2010 (compared to a decline of 9% in the second quarter of 2010). The sequential improvement in core sales was driven by improved demand in early cycle markets including the marine and global retail DIY markets. The core sales trend declined 8% for the nine months ended May 31, 2010, reflecting lower demand in the first half of fiscal 2010 across all end markets, especially in European DIY, commercial construction and utility markets.
Engineered Solutions segment third quarter net sales increased by $36 million (46%) to $112 million in 2010. Excluding the favorable impact of foreign currency rate changes, core sales grew 43% in the third quarter of fiscal 2010 due to strong demand in the Vehicle Systems product line (new automotive platforms, growth in China and Europe truck shipments and substantially higher recreational vehicle OEM production). During the nine months ended May 31, 2010, Engineered Solutions segment net sales increased by $37 million (15%), to $290 million. Excluding the $6 million favorable impact of foreign currency rate changes and sales of acquired businesses, core sales increased 9% for the nine months ended May 31, 2010, reflecting improved end market conditions in the Vehicle Systems product line and the impact of prior year inventory destocking by OEMs.
Industrial segment operating profit increased by $6 million (39%) to $21 million for the three months ended May 31, 2010. Despite unfavorable acquisition mix, quarterly operating profit margins (excluding restructuring costs) improved on both a sequential and year-over-year basis as a result of the sharp increase in sales levels and restructuring related savings. For the nine months ended May 31, 2010, Industrial segment operating profit decreased by $11 million (20%) to $45 million, primarily due to lower sales levels (especially in the first half of fiscal 2010), $4 million of incremental restructuring costs in the current year (related to the consolidation of facilities) and higher annual incentive compensation costs.
Electrical segment operating profit increased $12 million and $10 million for the three and nine months ended May 31, 2010, primarily as a result of prior year periods including a $5 million non-cash asset impairment charge related to the harsh environmental electrical business. In addition, the operating loss for the three and nine months ended May 31, 2009 also included an incremental $5 million and $2 million, respectively of restructuring costs relative to the current year. Excluding these charges, the improvement in operating profit primarily reflected restructuring related cost savings as we realized the benefits of facility consolidations, reduced headcount and the movement of production and product sourcing to low cost countries.
Total restructuring costs (including those reported in Cost of Products Sold) were $2 million and $15 million for the three and nine months ended May 31, 2010, respectively and $11 million and $14 million for the comparable prior year periods. We expect to incur approximately $3 million of additional restructuring costs during the remainder of fiscal 2010 to complete our restructuring activities. We believe that these actions will better align our resources with strategic growth opportunities, optimize existing manufacturing capabilities, improve our overall cost structure and deliver increased free cash flow and profitability. See Note 4, Restructuring in the notes to the condensed consolidated financial statements for further discussion.
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