Actuant Reports 85% Decline in 2Q Net Income
Butler, Wis.-based Actuant Corp. reported an 85% decline in profit for its second quarter, ended Feb. 28, impacted by weak end-market demand, extended customer shutdowns and inventory reduction efforts.
The manufacturer of motion control systems and hydraulic and electrical tools and supplies reported second-quarter net income of $3.2 million compared with $22.4 million in the year-ago period while sales fell 25% to $300 million, from $400 million.
For the six months earnings declined 70% to $14.8 million versus $49.7 million the previous year and sales fell 17% to $680 million from $815 million.
Actuant’s RV interests that include leveling system maker Power Gear and component and step supplier Kwikee Products Inc. are now part of company’s engineered solutions segment as part of a restructuring initiative. The group showed a 42% decline in second-quarter sales reflecting “sharply lower demand from the vehicle end markets.” The segment incurred an operating loss of $2.1 during the period while also reducing headcount by 18% during the quarter.
“We have and will continue to implement aggressive restructuring and cost reduction actions to help offset the impact of weaker demand,” said Robert C. Arzbaecher, chairman and CEO. “We have reduced headcount, consolidated facilities, eliminated shifts and established short work-week schedules to better align our production, inventory and costs with lower customer demand. These actions drove a 10% headcount reduction in our second quarter alone.”
Looking ahead, Actuant sees continued weakness in core markets for the third quarter.
“While visibility remains low, we do not expect a rebound in consumer or industrial demand to materialize during the second half of our fiscal year,” Arzbaecher said. “We remain confident in the fundamental strength of the Actuant businesses, have the right long term growth strategies in place and maintain the confidence and operating experience to manage through this difficult current environment.”