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TWST: We would like to begin with a brief historical sketch of Actuant
and a picture of the things you are doing at the present time.
Mr. Arzbaecher: The company's heritage begins with a company called
Applied Power. In 2000, the electronic businesses were spun out of
Applied Power, leaving the industrial businesses that were renamed
Actuant Corporation. At that time, it was about $480 million in sales
and $400 million of debt, or about 4 times debt-to-EBITDA leverage. We
focused primarily on debt reduction during the first few years after the
spinoff until leverage was at a reasonable level. Since then, we've
focused on growth. Today, the company is about $1.3 billion, and debt
leverage is down to 2.5 times. We have two major platforms: Tools and
Supplies, which focuses on branded tools, both electrical and
industrial; and Engineered Solutions, which focuses on position and
motion control actuation systems. TWST: What are the steps that you took over the last five years to go
forward?
Mr. Arzbaecher: The key in the first three years after the spinoff was
to get the debt down and get the balance sheet healthy. A key attribute
about Actuant is that we generate a lot of free cash flow. We used that
free cash flow to pay down debt. We did a secondary equity offering,
which allowed us to redeem a portion of our 13% bonds. By 2003, the
balance sheet was healthy and we started growing both from acquisitions
and internal growth. We have been quite acquisitive since then,
targeting $100 to $150 million of acquisitions per year.
Tickers included in this excerpt: ATU
For more information call (212) 952 7433. The
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not make stock recommendations.
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