Applied Power Announces Record Fourth Quarter Results.MILWAUKEE--(BUSINESS WIRE)--Oct. 4, 1999-- Applied Power Inc. (APW-NYSE) announced today record results for its fourth quarter and fiscal year ended August 31, 1999. Fourth quarter net earnings were $23.2 million, or $0.58 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, versus $21.3 million, or $0.53 per share, in the prior year fourth quarter excluding a fourth quarter restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. . Adjusted earnings per diluted share, which excludes non-cash amortization, were $0.75 in the fiscal 1999 fourth quarter, an increase of 17% over the prior year period of $0.64, exclusive of fiscal 1998 one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges. Sales increased 22% to a record $452.9 million in the fiscal 1999 fourth quarter. Fiscal 1999 net earnings were $84.1 million or $2.10 per diluted share, an increase of 13% over fiscal 1998 net earnings of $74.7 million or $1.86 per diluted share, exclusive of one-time items in both periods. Including one-time items, net earnings for fiscal year 1999 were a record $79.4 million or $1.98 per diluted share. Exclusive of one-time items, fiscal 1999 adjusted earnings per diluted share were $2.73, a strong 26% improvement over fiscal 1998. Fiscal 1999 sales increased 42% to $1.75 billion from 1998. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for fiscal 1999 was $150.4 million, a 16% increase over 1998. Primary working capital continued to improve, down to 11.0% of sales in the fourth quarter versus 12.4% in same time period of the previous year. Year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. debt was $808.7 million, a reduction of $88 million from the peak level last December December: see month. immediately after the Rubicon Rubicon (r  `bĭkŏn), Lat. Rubico, small stream that flows into the Adriatic and in Roman times marked the boundary between Cisalpine Gaul and ancient Italy. In 49 B.C. acquisition. This debt reduction occurred despite investing
approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $20 million in acquisitions in the fourth quarter and does not include the $22 million in cash on the balance sheet at year-end. In the Industrial segment, sales and earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
The Electronics segment had sales and EBITDA of $282 million and $37 million, respectively, in the fourth quarter. For the full year, Electronics sales grew 78% to $1.06 billion. Internal growth and acquisitions drove this sales growth. Full year fiscal 1999 EBITDA grew 36% to $141 million. Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a G. Sim (1) (Society for Information Management, Chicago, IL, www.simnet.org) Founded in 1968 as the Society for MIS, it is a membership organization made up of corporate and division heads of IT organizations. , Chairman and Chief Executive Officer of Applied Power, commented, "1999 was a great year for Applied Power in terms of financial performance and the strategic repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. of the Company. Industrial's results were excellent and reflected the benefits of a wide array of new product and operational improvement projects we have undertaken over the last few years. We expect continued improvement in Industrial during fiscal 2000. During the last three years, however, Applied Power has been investing preferentially pref·er·en·tial adj. 1. Of, relating to, or giving advantage or preference: preferential treatment. 2. in APW APW All Pro Wrestling APW Altmar Parish Williamstown (School District; Parish, New York) APW Add-Printer Wizard (Microsoft Windows) APW Augmented Plane Wave APW Apparent Polar Wander Electronics. APW Electronics, at slightly over $1 billion in sales, is the most vertically integrated and largest electronic enclosure enclosure (inclosure) n. land bounded by a fence, wall, hedge, ditch or other physical evidence of boundary. Unfortunately, too often these creations are not included among the actual legally-described boundaries and cause legal problems. ENCLOSURE. company in the world. The market opportunity for APW Electronics is over $60 billion and growing. The second quarter of 1999 was the first full quarter that included the results of the three major acquisitions we made in calendar year 1998. The results we posted in the third and fourth quarters of 1999 relative to the second quarter are evidence that our strategy is paying off in sales growth and associated earnings growth. We expect that fiscal year 2000, allowing for seasonal fluctuation Fluctuation A price or interest rate change. , will continue to demonstrate the unique value creation opportunity which is intrinsic intrinsic /in·trin·sic/ (in-trin´sik) situated entirely within or pertaining exclusively to a part. in·trin·sic adj. 1. Of or relating to the essential nature of a thing. 2. in our leading position in this high growth, expansive market. Given our confidence in the future of APW Electronics, we recently announced a decision to explore the sale of Industrial. The proposed sale of Industrial will allow us to focus all of our energy and capital towards the APW Electronics opportunity. This decision, once implemented, will complete the transition of Applied Power in four years from being a pure industrial market business to a pure electronics market company. We believe that these actions will enhance shareholder value." Applied Power Inc., headquartered in Milwaukee, Wisconsin For other places with the same name, see Milwaukee (disambiguation). Milwaukee is the largest city within the state of Wisconsin and 25th largest (by population) in the United States. , is a global company comprised of two business segments. Electronics supplies electronic enclosures, power supplies, thermal thermal /ther·mal/ (ther´m'l) pertaining to or characterized by heat. ther·mal adj. 1. Of, relating to, using, producing, or caused by heat. 2. systems, backplanes, and cabling either as products or integrated as a system supplied along with new product design, supply chain management, assembly and test services. Industrial is composed of standard and customized OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and products sold to a wide array of end users through distribution or directly into a variety of niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. . For further information contact: Applied Power Inc. Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. C. Arzbaecher Sr. Vice President & Chief Financial Officer 414-523-7600 www.apw-inc.com Certain of the above comments represent forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. made pursuant to the provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Management cautions that these projections 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. Applied Power's results are also subject to continued market acceptance of the Company's new product introductions, the successful integration of recent acquisitions, operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: risk due to competitive pricing, foreign currency fluctuations and interest rate risk. TABLES FOLLOW
Applied Power Inc.
Comparative Statement of Earnings
(In Thousands, Except per Share Amounts)
Three Months Ended August 31,
1999 1998
--------- ---------
Net sales $ 452,922 $ 371,975
Cost of products sold 310,998 275,250
--------- ---------
Gross Profit 141,924 96,725
Engineering, selling and
administrative expenses 79,296 82,924
Amortization of intangible assets 8,025 10,436
Restructuring charges - 20,298
Merger related expenses - 9,276
--------- ---------
Operating Earnings 54,603 (26,209)
Other Expense (Income):
Net financing costs 17,495 10,525
Other 71 (1,958)
--------- ---------
Earnings before Income Taxes 37,037 (34,776)
Income Tax Expense 13,856 (3,461)
--------- ---------
Net Earnings $ 23,181 $ (31,315)
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Basic Earnings per Share:
Earnings per Share $ 0.59 $ (0.81)
========= =========
Weighted Average Common Shares
Outstanding (000's) 38,960 38,565
========= =========
Diluted Earnings per Share:
Earnings per Share $ 0.58 $ (0.78)
========= =========
Weighted Average Common and Equivalent
Shares Outstanding (000's) 40,179 40,260
========= =========
Applied Power Inc.
Comparative Statement of Earnings
(In Thousands, Except per Share Amounts)
Year Ended August 31,
1999 1998
--------- ---------
Net sales $ 1,751,042 $ 1,230,689
Cost of products sold 1,206,605 835,716
--------- ---------
Gross Profit 544,437 394,973
Engineering, selling and
administrative expenses 317,286 269,227
Amortization of intangible
assets 29,624 20,353
Provision for estimated loss
on sale of subsidiary - 4,500
Restructuring charges - 20,298
Merger related expenses - 9,276
Contract termination costs 7,824 -
--------- ---------
Operating Earnings 189,703 71,319
Other Expense (Income):
Net financing costs 63,888 28,531
Life insurance gain - (1,709)
Gain on sale of property - (9,815)
Other - net (936) (3,073)
--------- ---------
Earnings before Income Taxes 126,751 57,385
Income Tax Expense 47,354 30,698
--------- ---------
Net Earnings $ 79,397 $ 26,687
========= =========
Basic Earnings per Share:
Earnings per Share $ 2.04 $ 0.70
========= =========
Weighted Average Common Shares
Outstanding (000's) 38,825 38,380
========= =========
Diluted Earnings per Share:
Earnings per Share $ 1.98 $ 0.66
========= =========
Weighted Average Common and Equivalent
Shares Outstanding (000's) 40,200 40,174
========= =========
Applied Power Inc.
Comparative Balance Sheet
(Dollars in Thousands)
August 31, August 31,
1999 1998
--------- ----------
ASSETS
Current Assets
Cash and cash equivalents $ 22,258 $ 6,349
Accounts receivable 149,525 147,380
Inventories 207,518 164,786
Prepaid expenses 29,735 46,049
--------- ---------
Total Current Assets 409,036 364,564
Other assets 53,586 42,119
Goodwill 845,704 499,973
Intangible assets 42,618 42,896
Property, Plant & Equipment
Gross Property, Plant & Equipment 549,112 418,215
Less: Accumulated Depreciation (275,210) (193,045)
--------- ---------
Net Property, Plant
& Equipment 273,902 225,170
--------- ---------
Total Assets $ 1,624,846 $ 1,174,722
========= ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ 230 $ 91
Trade accounts payable 157,515 127,470
Accrued compensation and benefits 47,089 45,457
Income taxes payable 36,491 12,898
Other current liabilities 82,340 74,792
--------- ---------
Total Current Liabilities 323,665 260,708
Long-term Debt 808,438 512,557
Deferred Income Taxes 15,869 23,065
Other Deferred Liabilities 59,045 36,510
--------- ---------
Total Liabilities 1,207,017 832,840
Shareholders' Equity 417,829 341,882
--------- ---------
Total Liabilities and
Shareholders' Equity $ 1,624,846 $ 1,174,722
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