Enerpac Tool Group Reports Fourth Quarter 2019 Results

Enerpac Tool Group, which is the doing business name of Actuant Corporation, (NYSE: ATU) (the “Company”) today announced results for its fiscal 2019 fourth quarter ended August 31, 2019.

“Fiscal 2019 has been a year of transformation for our organization with the announcement of the EC&S divestiture, which is instrumental in advancing our strategy as a pure play industrial tools and services company, and the recent launch of our new business name, Enerpac Tool Group. As planned, our portfolio optimization continued as we exited certain unprofitable parts of the service business in the quarter, which we expect will result in incremental profitability. We also continued to execute on our capital allocation strategy in the quarter, as demonstrated by our share repurchases and additional debt reduction, while ensuring we retain the balance sheet flexibility to support organic growth and acquisition opportunities,” commented Randy Baker, Enerpac Tool Group’s President and CEO.

Mr. Baker continued, “Consistent with most global industrial economic indicators, we saw a softening top line in the fourth quarter which caused our results to be below expectations. We believe the strategic growth and cost actions we are taking position us well for the future despite moderating market conditions.”

Consolidated Results from Continuing Operations
(US$ in millions)
	Three Months Ended August 31										Twelve Months Ended August 31
	2019					2018					2019						2018
Net Sales	$158.3					$166.5					$654.8						$641.3
Net (Loss) Income	($0.6)					$11.3					$8.1						$4.7
(Loss) Earnings Per Share	($0.01)					$0.18					$0.13						$0.08
Adjusted Earnings Per Share	$0.21					$0.21					$0.73						$0.49

• Consolidated net sales from continuing operations for the fourth quarter were $158.3 million, compared to $166.5 million in the prior year fourth quarter. Core sales declined 3% year-over-year, while foreign currency rate changes decreased net sales by 2%.
• Consolidated net sales from continuing operations for the twelve months ended August 31, 2019 were $654.8 million, compared to $641.3 million in the prior year period. Core sales improved 4% year-over-year while foreign currency rates decreased net sales by 2%.
• Fiscal 2019 fourth quarter net loss and EPS from continuing operations were ($0.6) million and a loss of ($0.01), respectively, compared to net income and EPS from continuing operations of $11.3 million and $0.18, respectively, in the fourth quarter of fiscal 2018. Fiscal 2019 fourth quarter earnings from continuing operations included:
  • Impairment and other divestiture charges of $6.2 million ($4.3 million, or $0.07 per share after tax);
  • Restructuring and other exit charges of $4.8 million ($6.3 million, or $0.10 per share after tax), related to the planned exits of certain unprofitable service offerings; and
  • $2.7 million ($0.05 per share) of charges primarily related to an adjustment to the original provision for U.S. tax reform.
• Fiscal 2018 fourth quarter earnings from continuing operations included restructuring charges of $0.7 million ($0.2 million or $0.01 per share, after tax), a $0.6 million or $0.01 per share benefit related to the impact of the U.S. tax reform and a $0.8 million charge ($0.6 million or $0.01 per share, after tax) associated with the acceleration of debt issuance costs resulting from the intentional reduction in the borrowing capacity under our credit facility.
• Net income from continuing operations and EPS from continuing operations for the twelve month period ended August 31, 2019 were $8.1 million and $0.13, respectively, compared to a net income from continuing operations and EPS from continuing operations of $4.7 million and $0.08, respectively, in the comparable prior year period.
• Excluding impairment, other divestiture, restructuring and other exit charges, adjusted EPS from continuing operations was $0.21 for the fourth quarter of both fiscal 2019 and 2018 and $0.73 and $0.49 for the twelve months ended August 31, 2019 and 2018, respectively.

Industrial Tools & Services (“IT&S”)
(US$ in millions)
	Three Months Ended August 31				Twelve Months Ended August 31
	2019		2018		2019		2018
Sales	$144.6		$153.4		$609.5		$591.1
Operating Profit	$13.6		$28.0		$101.4		$99.4
Adjusted Op Profit (1)	$27.3		$28.8		$116.2		$103.7
Adjusted Op Profit % (1)	18.8%		18.8%		19.1%		17.5%
(1) Excludes $4.8 million and $6.0 million of restructuring and other exit charges in the three and twelve months ended August 31, 2019, respectively, along with $8.8 million of impairment charges in the fourth quarter and twelve months ended August 31, 2019. Excludes $0.8 million and $4.3 million of restructuring charges in the three and twelve months ended August 31, 2018, respectively.

• Fourth quarter fiscal 2019 net sales were $144.6 million, 6% lower than the prior year’s fiscal fourth quarter. Core sales decreased 4% and the impact of foreign currency exchange rates decreased net sales by 2% year-over-year.
• The decrease in revenue is attributable to the intentional exit of certain unprofitable portions of the business along with global economic uncertainty that created additional headwinds, which were most pronounced in Europe.
• Adjusted operating profit margin of 18.8% in the quarter was flat year-over-year due to decreased sales volume offset by continued product margin expansion and lower incentive compensation expense.

Corporate Expenses and Income Taxes (excluding one-time tax items)

• Corporate expenses from continuing operations for the fourth quarter of fiscal 2019 were $9.7 million, $0.6 million higher than the comparable prior year period, primarily resulting from higher insurance costs. Corporate costs included $3.3 million and $3.8 million of costs previously allocated to the EC&S segment in the fourth quarters of fiscal 2019 and 2018, respectively.
• The fourth quarter effective income tax rate from continuing operations of approximately (5%) was lower than the prior year rate of 0.5%.

Discontinued Operations

Discontinued operations represent the operating results for the EC&S segment, excluding Cortland U.S. and the previously divested Viking business, for all periods presented. The fourth quarter of fiscal 2019 includes a $265 million non-cash, after-tax impairment charge reflecting both the write-down of the net assets held for sale to their net realizable value and the reserve of the accumulation of currency translation losses associated with the EC&S businesses being divested.

Balance Sheet and Leverage
(US$ in millions)
	Period Ended
	August 31, 2019		May 31, 2019		August 31, 2018
Cash Balance	$211.2		$201.3		$250.5
Debt Balance	$460.4		$475.2		$532.7
Net Debt to Adjusted EBITDA**	1.7		1.8		1.9

Net debt at August 31, 2019 was approximately $249 million (total debt of $460 million less $211 million of cash), which decreased approximately $33 million from the end of fiscal 2018. Net Debt to Adjusted EBITDA was 1.7x at August 31, 2019.

**Adjusted EBITDA is calculated for the twelve months then ended.

Outlook

Mr. Baker said, “With our transformation to Enerpac Tool Group we are creating a very high quality company with market leading products, top tier margins and a commitment to growth. In fiscal 2020, we will continue to focus on our growth initiatives, building on our premier Enerpac brand. We will also continue taking strategic actions to exit low margin product lines, and have already completed one small product line divestiture in fiscal 2020 and expect to complete another by the end of the first quarter. We expect these actions will provide significant improvement to our bottom line. While our fiscal 2020 outlook reflects our cautious view of the year given current economic uncertainty in our end-markets, we are confident in the decisive actions we are taking and our ability to execute on our strategy to create shareholder value.”

The company provides the following outlook for continuing operations for fiscal 2020***:

Sales range of $575 to $600 million which assumes:

• Strategic exits (including product line divestitures and service restructuring) of approximately $55 million;
• Foreign currency impact from stronger dollar of approximately $7 million; and
• New product development and other commercial actions partially offset by a tepid market environment.

EBITDA range of $94 to $104 million, which is an approximate 17% EBITDA margin and greater than a 200bp improvement from fiscal year 2019, which assumes:

• Benefit from strategic exits and approximately $9 million reduction of corporate overhead costs previously allocated to the EC&S segment
• Partially offset by certain expenses to be incurred in the year as well as the impact of the stronger dollar

EPS range of $0.68 to $0.81/share
Full year free cash flow of $50 to $75 million

For the first quarter 2020, we expect:

• Net sales: $135 to $144 million;
• Adjusted EBITDA: $17.5 to $20.5 million; and
• Adjusted EPS: $0.08 to $0.12.

All guidance excludes restructuring, impairment and divestiture charges, one-time tax adjustments and the impact of potential future acquisitions, dispositions, share repurchases and tariffs.

***See the Fourth Quarter Earnings presentation included on the Company’s website for further details on fiscal 2020 guidance

EC&S Divestiture Process

As previously announced, the Company signed a definitive agreement with One Rock Capital Partners in July 2019 to sell the EC&S segment and continues to expect to close the transaction in the fourth quarter of calendar 2019.

Conference Call Information

An investor conference call is scheduled for 10am CT today, September 26, 2019. Webcast information and conference call materials are available on the Enerpac Tool Group company website (www.enerpactoolgroup.com).

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. Among other risks and factors, Enerpac Tool Group’s results are 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, tax reform, foreign currency fluctuations and interest rate risk. See Actuant Corporation’s Form 10-K for the fiscal year ended August 31, 2018 filed with the Securities and Exchange Commission for further information regarding risk factors. Enerpac Tool Group disclaims any obligation to publicly update or revise any forward-looking statements as a result of new information, future events or any other reason.

Non-GAAP Financial Information

This press release contains financial measures that are not measures presented in conformity with GAAP. They include EBITDA from continuing operations, adjusted EBITDA from continuing operations, adjusted EPS from continuing operations, adjusted operating profit from continuing operations, free cash flow and net debt. This press release includes reconciliations of these non-GAAP measures to the most comparable GAAP measure, including in the tables attached to this press release. Management believes these non-GAAP measures are commonly used financial measures for investors to evaluate Enerpac Tool Group’s operating performance and financial position with respect to the periods presented and, when read in conjunction with the condensed consolidated financial statements, present a useful tool to evaluate ongoing operations and provide investors with metrics they can use to evaluate aspects of the Company’s performance from period to period. In addition, these are some of the factors management uses in internal evaluations of the overall performance of the Company’s business. Management acknowledges that there are many items that impact a company’s reported results and the adjustments reflected in these non-GAAP measures are not intended to present all items that may have impacted these results. In addition, these non-GAAP measures are not necessarily comparable to similarly-titled measures used by other companies.

About Enerpac Tool Group

Enerpac Tool Group is a premier industrial tools and services company serving a broad and diverse set of customers in more than 90 countries. The Company’s businesses are global leaders in high pressure hydraulic tools, controlled force products and solutions for precise positioning of heavy loads that help customers safely and reliably tackle some of the most challenging jobs around the world. The Company was founded in 1910 and is headquartered in Menomonee Falls, Wisconsin. Enerpac Tool Group will trade on the NYSE under the symbol EPAC beginning on October 7, 2019. Until then, our NYSE symbol is ATU. Although the Company has adopted the business name “Enerpac Tool Group” its legal corporate name continues to be Actuant Corporation pending amendment to its corporate organizational documents, which is subject to shareholder approval. For further information on Enerpac Tool Group and its businesses, visit the Company's website at www.enerpactoolgroup.com.

(tables follow)

Actuant Corporation
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
							August 31,				August 31,
								2019				2018
ASSETS
Current assets
	Cash and cash equivalents						$	211,151			$	250,490
	Accounts receivable, net							125,883				123,261
	Inventories, net							77,187				72,020
	Assets from discontinued operations							285,578				571,157
	Other current assets							30,526				32,530
		Total current assets						730,325				1,049,458
Property, plant and equipment, net								56,729				54,974
Goodwill								260,415				280,132
Other intangible assets, net								52,375				71,657
Other long-term assets								24,430				25,115
		Total assets					$	1,124,274			$	1,481,336
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
	Trade accounts payable						$	76,914			$	69,584
	Accrued compensation and benefits							26,421				35,992
	Current maturities of debt							7,500				30,000
	Income taxes payable							4,838				4,091
	Liabilities from discontinued operations							143,763				160,573
	Other current liabilities							40,965				53,768
		Total current liabilities						300,401				354,008
Long-term debt, net								452,945				502,695
Deferred income taxes								1,564				68
Pension and postretirement benefit liabilities								20,213				13,957
Other long-term liabilities								47,972				51,896
		Total liabilities						823,095				922,624
Shareholders' equity
	Capital stock							16,384				16,285
	Additional paid-in capital							181,213				167,448
	Treasury stock							(640,212	)			(617,731	)
	Retained earnings							915,466				1,166,955
	Accumulated other comprehensive loss							(171,672	)			(174,245	)
	Stock held in trust							(3,070	)			(2,450	)
	Deferred compensation liability							3,070				2,450
		Total shareholders' equity						301,179				558,712
		Total liabilities and shareholders' equity					$	1,124,274			$	1,481,336

Actuant Corporation
Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
(Unaudited)
				Three Months Ended							Twelve Months Ended
				August 31,			August 31,				August 31,			August 31,
				2019			2018				2019			2018
Net sales				$	158,324		$	166,468			$	654,758		$	641,303
Cost of products sold					89,254			93,108				362,106			358,019
	Gross profit				69,070			73,360				292,652			283,284
Selling, administrative and engineering expenses					49,866			50,881				209,231			210,256
Amortization of intangible assets					1,933			2,343				8,922			9,280
Restructuring charges					3,025			742				4,156			10,555
Impairment & divestiture charges					6,227			-				22,827			2,987
	Operating profit				8,019			19,394				47,516			50,206
Financing costs, net					6,563			8,417				28,163			30,872
Other expense (income), net					394			(252	)			629			138
	Income before income tax expense (benefit)				1,062			11,229				18,724			19,196
Income tax expense (benefit)					1,626			(99	)			10,657			14,450
(Loss) earnings from continuing operations					(564	)		11,328				8,067			4,746
	Loss from discontinued operations, net of income taxes				(266,300	)		(48,992	)			(257,212	)		(26,394	)
Net loss				$	(266,864	)	$	(37,664	)		$	(249,145	)	$	(21,648	)
(Loss) earnings from continuing operations per share
	Basic			$	(0.01	)	$	0.19			$	0.13		$	0.08
	Diluted				(0.01	)		0.18				0.13			0.08
Loss from discontinued operations
	Basic			$	(4.37	)	$	(0.80	)		$	(4.21	)	$	(0.44	)
	Diluted				(4.37	)		(0.80	)			(4.18	)		(0.43	)
Loss per share
	Basic			$	(4.38	)	$	(0.62	)		$	(4.07	)	$	(0.36	)
	Diluted				(4.38	)		(0.61	)			(4.04	)		(0.35	)
Weighted average common shares outstanding
	Basic				60,907			60,893				61,151			60,441
	Diluted				60,907			61,561				61,607			61,028

Actuant Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
		Twelve Months Ended
		August 31,				August 31,
		2019				2018
Operating Activities
Cash provided by operating activities		$	53,845			$	106,093
Investing Activities
Capital expenditures			(26,755	)			(20,870	)
Proceeds from sale of property, plant and equipment			1,642				153
Rental asset buyout for Viking divestiture			-				(27,718	)
Proceeds from sale of business, net of transaction costs			36,159				8,902
Cash paid for business acquisitions, net of cash acquired			-				(23,218	)
Cash provided by (used in) investing activities			11,046				(62,751	)
Financing Activities
Payment for redemption of term loan			(200,000	)			-
Proceeds from issuance of term loan			200,000				-
Principal repayments on term loan			(72,500	)			(30,000	)
Purchase of treasury shares			(22,481	)			-
Taxes paid related to the net share settlement of equity awards			(1,872	)			(1,284	)
Stock option exercises & other			1,900				15,681
Payment of cash dividend			(2,439	)			(2,390	)
Payment of debt issuance costs			(2,125	)			-
Cash used in financing activities			(99,517	)			(17,993	)
Effect of exchange rate changes on cash			(4,713	)			(4,430	)
Net (decrease) increase in cash and cash equivalents			(39,339	)			20,919
Cash and cash equivalents - beginning of period			250,490				229,571
Cash and cash equivalents - end of period		$	211,151			$	250,490

ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA
	(Dollars in thousands)
			FISCAL 2018																FISCAL 2019
			Q1			Q2			Q3			Q4			TOTAL				Q1			Q2			Q3			Q4			TOTAL
SALES
	INDUSTRIAL TOOLS & SERVICES SEGMENT		$	141,991		$	136,986		$	158,735		$	153,373		$	591,085			$	148,655		$	149,521		$	166,732		$	144,607		$	609,515
	OTHER			13,776			11,615			11,731			13,095			50,218				9,896			10,267			11,363			13,717			45,243
		TOTAL	$	155,767		$	148,601		$	170,466		$	166,468		$	641,303			$	158,551		$	159,788		$	178,095		$	158,324		$	654,758
% SALES GROWTH
	INDUSTRIAL TOOLS & SERVICES SEGMENT			2	%		5	%		8	%		12	%		7	%			5	%		9	%		5	%		-6	%		3	%
	OTHER			-12	%		-30	%		-27	%		-17	%		-22	%			-28	%		-12	%		-3	%		5	%		-10	%
		TOTAL		1	%		1	%		4	%		9	%		4	%			2	%		8	%		4	%		-5	%		2	%
OPERATING PROFIT (LOSS)
	INDUSTRIAL TOOLS & SERVICES SEGMENT		$	22,218		$	20,510		$	32,206		$	28,783		$	103,718			$	26,345		$	26,596		$	35,992		$	27,252		$	116,185
	OTHER			(864	)		123			189			443			(109	)			(484	)		1,091			1,787			1,515			3,910
	CORPORATE / GENERAL			(9,421	)		(8,503	)		(11,995	)		(9,090	)		(39,012	)			(10,967	)		(11,659	)		(9,481	)		(9,679	)		(41,787	)
		ADJUSTED OPERATING PROFIT	$	11,933		$	12,130		$	20,400		$	20,136		$	64,597			$	14,894		$	16,028		$	28,298		$	19,088		$	78,308
	IMPAIRMENT & DIVESTITURE CHARGES			-			(2,987	)		-			-			(2,987	)			(23,477	)		(6,112	)		12,988			(6,227	)		(22,827	)
	RESTRUCTURING & OTHER EXIT CHARGES (1)			(6,331	)		(3,527	)		(805	)		(742	)		(11,404	)			29			(46	)		(1,115	)		(4,842	)		(5,973	)
	DEBT MODIFICATION COSTS			-			-			-			-			-				-			-			(288	)		-			(288	)
	DEPRECIATION & AMORTIZATION TRUE UP (2)			-			-			-			-			-				-			-			(1,704	)		-			(1,704	)
		OPERATING PROFIT (LOSS)	$	5,602		$	5,616		$	19,595		$	19,394		$	50,206			$	(8,554	)	$	9,870		$	38,179		$	8,019		$	47,516
ADJUSTED OPERATING PROFIT %
	INDUSTRIAL TOOLS & SERVICES SEGMENT			15.6	%		15.0	%		20.3	%		18.8	%		17.5	%			17.7	%		17.8	%		21.6	%		18.8	%		19.1	%
	OTHER			-6.3	%		1.1	%		1.6	%		3.4	%		-0.2	%			-4.9	%		10.6	%		15.7	%		11.0	%		8.6	%
		ADJUSTED OPERATING PROFIT %		7.7	%		8.2	%		12.0	%		12.1	%		10.1	%			9.4	%		10.0	%		15.9	%		12.1	%		12.0	%
EBITDA
	INDUSTRIAL TOOLS & SERVICES SEGMENT		$	25,567		$	24,594		$	36,394		$	32,763		$	119,318			$	30,038		$	30,153		$	40,015		$	29,964		$	130,171
	OTHER			(111	)		826			985			1,250			2,951				337			1,087			1,786			2,395			5,605
	CORPORATE / GENERAL			(8,906	)		(8,964	)		(11,067	)		(8,466	)		(37,405	)			(10,930	)		(11,422	)		(8,311	)		(8,919	)		(39,584	)
		ADJUSTED EBITDA	$	16,550		$	16,456		$	26,312		$	25,547		$	84,864			$	19,445		$	19,818		$	33,490		$	23,440		$	96,192
	IMPAIRMENT & DIVESTITURE CHARGES			-			(2,987	)		-			-			(2,987	)			(23,477	)		(6,112	)		12,988			(6,227	)		(22,827	)
	RESTRUCTURING & OTHER EXIT CHARGES (1)			(6,331	)		(3,527	)		(805	)		(742	)		(11,404	)			29			(46	)		(1,115	)		(4,842	)		(5,973	)
	DEBT MODIFICATION COSTS			-			-			-			-			-				-			-			(288	)		-			(288	)
		EBITDA	$	10,219		$	9,942		$	25,507		$	24,805		$	70,473			$	(4,003	)	$	13,660		$	45,075		$	12,371		$	67,104
ADJUSTED EBITDA %
	INDUSTRIAL TOOLS & SERVICES SEGMENT			18.0	%		18.0	%		22.9	%		21.4	%		20.2	%			20.2	%		20.2	%		24.0	%		20.7	%		21.4	%
	OTHER			-0.8	%		7.1	%		8.4	%		9.5	%		5.9	%			3.4	%		10.6	%		15.7	%		17.5	%		12.4	%
		ADJUSTED EBITDA %		10.6	%		11.1	%		15.4	%		15.3	%		13.2	%			12.3	%		12.4	%		18.8	%		14.8	%		14.7	%
	Notes: (1) Approximately $1.8 million of the Q4 fiscal 2019 and $0.8 million of the Q2 fiscal 2018 restructuring & exit charges were recorded in cost of products sold. De minimis restructuring charges were also recorded in cost of products sold in Q3 fiscal 2018. (2) Represents the depreciation and amortization expense true up for the Cortland business assets that were reclassified out of held for sale in Q3 fiscal 2019, as though the assets had never been classified as held for sale.

ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
	(Dollars in thousands, except for per share amounts)
					FISCAL 2018																				FISCAL 2019
					Q1				Q2				Q3				Q4				TOTAL				Q1				Q2				Q3				Q4				TOTAL
ADJUSTED EARNINGS (1)
	NET EARNINGS (LOSS) (GAAP MEASURE)				$	5,226			$	(18,221	)		$	29,012			$	(37,664	)		$	(21,648	)		$	(17,452	)		$	2,753			$	32,418			$	(266,864	)		$	(249,145	)
	DISCONTINUED OPERATIONS, NET OF INCOME TAX					8,066				3,347				11,185				(48,992	)			(26,394	)			(1,029	)			4,557				5,560				(266,300	)			(257,212	)
		EARNINGS (LOSS) FROM CONTINUING OPERATIONS			$	(2,840	)		$	(21,568	)		$	17,827			$	11,328			$	4,746			$	(16,423	)		$	(1,804	)		$	26,858			$	(564	)		$	8,067
	IMPAIRMENT & DIVESTITURE CHARGES, NET OF TAX EFFECT					-				12,385				-				-				12,385				23,477				6,112				(13,001	)			4,343				20,930
	RESTRUCTURING & OTHER EXIT CHARGES, NET OF TAX EFFECT					6,443				3,284				(850	)			237				9,113				(90	)			(148	)			(766	)			6,262				5,257
	ACCELERATED DEBT ISSUANCES & MODIFICATION COSTS,					-				-				-				601				601				-				-				358				-				358
		NET OF TAX EFFECT
	DEPRECIATION & AMORTIZATION TRUE UP, NET OF TAX EFFECT					-				-				-				-				-				-				-				1,302				-				1,302
	OTHER INCOME TAX EXPENSE (BENEFIT)					-				9,297				(6,719	)			564				3,142				-				3,160				3,076				2,709				8,945
		ADJUSTED EARNINGS FROM CONTINUING OPERATIONS			$	3,603			$	3,398			$	10,258			$	12,730			$	29,987			$	6,964			$	7,320			$	17,827			$	12,750			$	44,859
ADJUSTED DILUTED EARNINGS PER SHARE (1)
	NET EARNINGS (LOSS) (GAAP MEASURE)				$	0.09			$	(0.30	)		$	0.48			$	(0.61	)		$	(0.35	)		$	(0.29	)		$	0.04			$	0.52			$	(4.38	)		$	(4.04	)
	DISCONTINUED OPERATIONS, NET OF INCOME TAX					0.13				0.06				0.18				(0.80	)			(0.43	)			(0.02	)			0.07				0.09				(4.37	)			(4.18	)
		EARNINGS FROM CONTINUING OPERATIONS			$	(0.05	)		$	(0.36	)		$	0.29			$	0.18			$	0.08			$	(0.27	)		$	(0.03	)		$	0.43			$	(0.01	)		$	0.13
	IMPAIRMENT & DIVESTITURE CHARGES, NET OF TAX EFFECT					-				0.21				-				-				0.20				0.38				0.10				(0.21	)			0.07				0.34
	RESTRUCTURING & OTHER EXIT CHARGES, NET OF TAX EFFECT					0.11				0.06				(0.01	)			0.01				0.15				-				-				(0.01	)			0.10				0.09
	ACCELERATED DEBT ISSUANCES & MODIFICATION COSTS,					-				-				-				0.01				0.01				-				-				0.01				-				0.01
		NET OF TAX EFFECT
	DEPRECIATION & AMORTIZATION TRUE UP, NET OF TAX EFFECT					-				-				-				-				-				-				-				0.02				-				0.02
	OTHER INCOME TAX EXPENSE (BENEFIT)					-				0.15				(0.11	)			0.01				0.05				-				0.05				0.05				0.05				0.14
		ADJUSTED DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS			$	0.06			$	0.06			$	0.17			$	0.21			$	0.49			$	0.11			$	0.12			$	0.29			$	0.21			$	0.73
ADJUSTED EBITDA CONTINUING OPERATIONS (2)
	EARNINGS (LOSS) FROM CONTINUING OPERATIONS				$	(2,840	)		$	(21,568	)		$	17,827			$	11,328			$	4,746			$	(16,423	)		$	(1,804	)		$	26,858			$	(564	)		$	8,067
	FINANCING COSTS, NET					7,356				7,462				7,636				8,417				30,872				7,298				7,157				7,146				6,563				28,163
	INCOME TAX EXPENSE (BENEFIT)					763				18,956				(5,170	)			(99	)			14,450				66				4,002				4,962				1,626				10,657
	DEPRECIATION & AMORTIZATION					4,940				5,092				5,214				5,159				20,405				5,056				4,305				6,109				4,746				20,217
		EBITDA			$	10,219			$	9,942			$	25,507			$	24,805			$	70,473			$	(4,003	)		$	13,660			$	45,075			$	12,371			$	67,104
	IMPAIRMENT & OTHER DIVESTITURE CHARGES					-				2,987				-				-				2,987				23,477				6,112				(12,988	)			6,227				22,827
	RESTRUCTURING & OTHER EXIT CHARGES					6,331				3,527				805				742				11,404				(29	)			46				1,115				4,842				5,973
	DEBT MODIFICATION COSTS					-				-				-				-				-				-				-				288				-				288
		ADJUSTED EBITDA			$	16,550			$	16,456			$	26,312			$	25,547			$	84,864			$	19,445			$	19,818			$	33,490			$	23,440			$	96,192

FOOTNOTES

Note: The total of the individual quarters may not equal the annual or year-to-date total due to rounding. The continuing operations and discontinued operations earning (loss) per share may not equal total earning (loss) per share due to rounding.

(1)

Adjusted earnings from continuing operations and adjusted diluted earnings per share represent net earnings (loss) and diluted earnings (loss) per share per the Condensed Consolidated Statements of Operations net of charges or credits for items to be highlighted for comparability purposes. These measures are not calculated based upon generally accepted accounting principles (GAAP) and should not be considered as an alternative to net earnings (loss) or diluted earnings (loss) per share or 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. The total of the individual components may not equal due to rounding and the impact of share dilution on the calculation of the net loss per share and discontinued operations per share.

(2)

EBITDA represents net earnings (loss) from continuing operations before financing costs, net, income tax (benefit) expense, and depreciation & amortization. EBITDA is not a calculation based upon GAAP. The amounts included in the EBITDA and Adjusted EBITDA calculation, however, are derived from amounts included in the Condensed Consolidated Statements of Operations. EBITDA should not be considered as an alternative to net earnings (loss), operating profit (loss) or operating cash flows. Actuant has presented EBITDA because it regularly reviews this performance measure. In addition, EBITDA is used by many of our investors and lenders, and is presented as a convenience to them. 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.

ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA
RECONCILIATION OF GAAP TO NON-GAAP GUIDANCE
	(Dollars in millions, except for per share amounts)
				Q1 FISCAL 2020					FISCAL 2020
				LOW		HIGH			LOW		HIGH
RECONCILIATION OF CONTINUING OPERATIONS GAAP DILUTED EARNINGS
	PER SHARE TO ADJUSTED DILUTED EARNINGS PER SHARE GUIDANCE
	GAAP DILUTED EARNINGS PER SHARE			$	(0.02)	$	0.07		$	0.39	$	0.65
	IMPAIRMENT & OTHER DIVESTITURE CHARGES, NET OF TAX EFFECT			TBD		TBD			TBD		TBD
	RESTRUCTURING CHARGES, NET OF TAX EFFECT				0.10		0.05			0.29		0.16
	OTHER INCOME TAX (BENEFIT) EXPENSE			TBD		TBD			TBD		TBD
		ADJUSTED DILUTED EARNINGS PER SHARE GUIDANCE		$	0.08	$	0.12		$	0.68	$	0.81
RECONCILIATION OF CONTINUED OPERATIONS GAAP OPERATING PROFIT
	TO ADJUSTED EBITDA
	GAAP OPERATING PROFIT			$	5.0	$	12.0		$	43	$	63
	RESTRUCTURING CHARGES				8.0		4.0			22		12
		ADJUSTED OPERATING PROFIT		$	13.0	$	16.0		$	65	$	75
	OTHER EXPENSE (INCOME), NET				(0.5)		(0.5)			8		8
	DEPRECIATION & AMORTIZATION				5.0		5.0			21		21
		ADJUSTED EBITDA		$	17.5	$	20.5		$	94	$	104
RECONCILIATION OF GAAP CASH FLOW FROM OPERATIONS TO FREE CASH FLOW
	CASH FLOW FROM OPERATIONS								$	62	$	85
	CAPITAL EXPENDITURES									(12)		(10)
	OTHER									-		-
		FREE CASH FLOW GUIDANCE							$	50	$	75
FOOTNOTES
NOTE:		Management does not provide guidance on GAAP financial measures as we are unable to predict and estimate with certainty items such as potential impairments, refinancing costs, business divestiture gains/losses, discrete tax adjustments, or other items impacting GAAP financial metrics. As a result, we have included above only those items about which we are aware and are reasonably likely to occur during the guidance period covered.

 

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