−Removed: Actuant Corporation, doing business as Enerpac Tool Group, is a premier industrial tools and services company serving a broad and diverse set of customers in more than 90 countries.
+Added: Enerpac Tool Group Corp., formerly known as Actuant Corporation, is a premier industrial tools and services company serving a broad and diverse set of customers in more than 100 countries.
The Company is a global leader in the engineering and manufacturing of 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.
−Removed: During the fourth quarter of fiscal 2019, the Company’s financial reporting segments were modified to reflect changes in our reporting structure as a result of entering into a Securities Purchase Agreement ("SPA") to sell the remaining businesses within our legacy Engineered Components & Systems segment exclusive of Cortland U.S.
−Removed: The Company now has three operating segments;
−Removed: Industrial Tools & Services ("IT&S"), Other, and Engineered Components and Systems ("EC&S").
−Removed: The IT&S segment remains unchanged from our previous segment structure and represents the only reportable segment.
−Removed: All prior period disclosures have been adjusted to reflect the one reportable segment.
−Removed: The IT&S reportable segment is primarily engaged in the design, manufacture and distribution of branded hydraulic and mechanical tools as well as providing services and tool rentals to the industrial, maintenance, infrastructure, oil & gas, energy and other markets.
−Removed: The Other operating segment is comprised of Cortland U.S., along with the Viking business which was divested on the first day of the second quarter of fiscal 2018.
−Removed: These two operating segments represent continuing operations within our consolidated financial statements.
−Removed: The EC&S segment, after the change in reporting structure, represents the businesses currently subject to the SPA with an anticipated closure date in the fourth calendar quarter of 2019, as well as the Cortland Fibron and Precision Hayes International ("PHI") businesses which were divested in fiscal 2019.
−Removed: As the pending divestiture of the remaining businesses within the EC&S segment in combination with the divestiture of Cortland Fibron and PHI represent a strategic shift in our operations, the EC&S segment consists entirely of businesses that are considered discontinued operations.
−Removed: All prior period financial statements have been adjusted to reflect this change.
+Added: The Company has two operating segments, Industrial Tools & Service ("IT&S") and Other, with IT&S being the only reportable segment.
+Added: The IT&S segment is primarily engaged in the design, manufacture and distribution of branded hydraulic and mechanical tools, as well as providing services and tool rental to the industrial, maintenance, infrastructure, oil & gas, energy and other markets.
Financial information related to the Company's reportable segment is included in Note 15, "Business Segment, Geographic and Customer Information" in the notes to the consolidated financial statements.
+Added: During the fourth quarter of fiscal 2019, we entered into a Securities Purchase Agreement ("SPA") to sell the remaining businesses within our legacy Engineered Components & Systems ("EC&S") segment.
+Added: We closed the transaction during our first quarter of fiscal 2020.
+Added: The divestiture of the EC&S segment, along with the fiscal 2019 divestitures of the Cortland Fibron and Precision Hayes International ("PHI") businesses, were a part of our strategic shift to become a pure play industrial tools and services company.
+Added: As such, the results of the EC&S segment as well as the Cortland Fibron and PHI businesses are considered discontinued operations in all periods presented herein.
Our Business Model
−Removed: Our long-term goal is to grow diluted earnings per share faster than our peers.
−Removed: We intend to leverage our strong brand, our market positions, and our dealer and distribution networks to generate organic core sales growth that exceeds end-market growth rates.
−Removed: Organic growth is accomplished through a combination of share capture, product innovation and market expansion into emerging industries and geographic regions.
−Removed: In addition to organic growth, we also focus on profit margin expansion by utilizing continuous improvement techniques to drive productivity and lower costs and by enacting routine pricing initiatives to offset commodity and tariff increases.
−Removed: Finally, cash flow generation is critical to achieving our financial
−Removed: and long-term strategic objectives.
+Added: Our long-term goal is to create shareholder value and best in class returns through growth of our core businesses, driving efficiency and profitability, generating strong cash flow, and being disciplined in the deployment of our capital.We intend to leverage our strong brand, our market positions, and our dealer and distribution networks to generate organic core sales growth that exceeds end-market growth rates.
+Added: Organic growth is accomplished through a combination of market share capture and product innovation, as well as market expansion into emerging industries and geographic regions.
+Added: In addition to organic growth, we also focus on profit margin expansion by utilizing continuous improvement techniques to drive productivity and lower costs and by enacting routine pricing initiatives to generate price realization and to offset cost increases, such as commodity and tariff increases and general inflation.
+Added: Finally, cash flow generation is critical to achieving our financial and long-term strategic objectives.
Strong cash flow generation is achieved by maximizing returns on assets and minimizing primary working capital needs.
−Removed: The cash flow that results from efficient asset management, improved profitability and loyal customers is used to fund internal growth opportunities, strategic acquisitions and opportunistic common stock repurchases.
+Added: The cash flow that results from efficient asset management and improved profitability is used to fund internal growth opportunities, strategic acquisitions, paydown of debt and opportunistic common stock repurchases.
Description of Business Segments
Industrial Tools & Services Reportable Segment
−Removed: The IT&S segment is a global supplier of both products and services to a broad array of end markets, including industrial, energy, mining and production automation markets.
−Removed: Our primary products include branded tools, highly engineered heavy lifting technology solutions and hydraulic torque wrenches.
−Removed: On the services side of the segment, we provide energy maintenance and manpower services to meet customer-specific needs and rental capabilities for certain of our products.
−Removed: Our branded tools and services are primarily marketed primarily through the Enerpac, Hydratight, Larzep and Simplex brand names.
−Removed: Our IT&S segment includes high-force hydraulic and mechanical tools (cylinders, pumps, valves and specialty tools) which are designed to allow users to apply controlled force and motion to increase productivity, reduce labor costs and make work safer and easier to perform.
−Removed: Our products also include bolt tensioners and other miscellaneous products.
+Added: IT&S is a global supplier of both products and services to a broad array of end markets, including infrastructure, industrial maintenance, repair, and operations, oil & gas, mining and alternative energy and construction markets.
+Added: Our primary products include branded tools, cylinders, hydraulic torque wrenches and highly engineered heavy lifting technology solutions.
+Added: Examples of our products include high-forc e hydraulic and mechanical tools (cylinders, pumps, valves and specialty tools), which are designed to allow users to apply controlled force and motion to increase productivity, reduce labor costs and make work safer and easier to perform, bolt tensioners and other miscellaneous products.
These tools operate at very high pressures of approximately 5,000 to 12,000 pounds per square inch.
With our products used in a wide variety of end markets, they are often deployed in harsh operating conditions, such as oil & gas production, machining and infrastructure maintenance and repair, where safety is a key differentiator.
−Removed: As a result, we hold ourselves to a world class safety standard to ensure both our employees and our customers are safe.
−Removed: In addition to providing a comprehensive line of tools and other products, the IT&S segment sustains a services and rental network providing highly trained technicians to perform bolting, machining and joint integrity work for our customers.
+Added: As a result, we hold ourselves to a world-class safety standard to protect both our employees and those using our products and services.
+Added: On the services side of the segment, our highly trained technicians provide maintenance and manpower services on oil & gas assets to meet customer-specific needs including bolting, machining, and joint integrity.
+Added: We also provide rental capabilities for certain of our products.
+Added: Our branded tools and services are primarily marketed through the Enerpac, Hydratight, Larzep and Simplex brand names.
The segment delivers products and services primarily through our world-class, global network of distributors, as well as, direct sales to OEM's and select end users.
2 unchanged sentences
Other Operating Segment
−Removed: In light of the disposition of the Viking business during fiscal 2018, the remaining operations of the Other operating segment are those of our Cortland U.S.
+Added: The Other operating segment includes our Cortland U.S.
business, which primarily designs and manufactures high performance synthetic ropes and biomedical assemblies.
The Other operating segment does not meet the quantitative or qualitative thresholds to be considered a reportable segment.
−Removed: Therefore, the results are not disclosed separately as would be required if considered a reportable segment and as the business is not closely related to the IT&S segment, results are not aggregated to be included in the results of the IT&S reportable segment.
−Removed: Certain information related to the Other operating segment will be disclosed within Note 15, "Business Segment, Geographic, and Customer Information" in order to comply with US GAAP requirements to reconcile certain required disclosures to the Consolidated Financial Statements.
+Added: Therefore, the results are not disclosed separately as would be required if the Other operating segment were considered a reportable segment and as the business is not closely related to the IT&S segment, results are not aggregated to be included in the results of the IT&S reportable segment.
+Added: Certain information related to the Other operating segment is disclosed within Note 15, "Business Segment, Geographic, and Customer Information" in order to comply with U.S generally accepted accounting principles ("GAAP") requirements to reconcile certain required disclosures to the Consolidated Financial Statements.
Acquisitions and Divestitures
−Removed: For a summary of recent acquisition and divestiture transactions impacting continuing operations, see footnote 2 to the table included in Item 6 Financial Data , as well as Note 4, "Acquisitions" and Note 5, "Divestiture Activities" in the notes to the consolidated financial statements.
+Added: For a summary of recent acquisition and divestiture transactions impacting continuing operations, see footnote 2 to the table included in Item 6 Financial Data , as well as Note 4, "Acquisi tions" and Note 5, "Discontinued Operations and Other Divestiture Activities" in the notes to the consolidated financial statements.
International Business
−Removed: The products and services for our continuing operations are generally available globally, with our principal markets outside the United States being Europe and Asia.
−Removed: In fiscal 2019 , we derived 38% of our net sales from continuing operations from the United States, 20% from Europe, 13% from the Middle East, 12% from Asia and 17% from other geographic areas.
−Removed: We have operations around the world that allows us to draw on the skills of a global workforce, provides flexibility to our operations, allows us to drive economies of scale, provides revenue streams that may help offset economic trends that are specific to individual countries and offers us an opportunity to access new markets.
−Removed: Although international operations are subject to certain risks, we continue to believe that a global presence is key to maintaining strong relationships with many of our global customers.
+Added: Our products and services are generally available globally, with our principal markets outside the United States being Europe and Asia.
+Added: In fiscal 2020, we derived 37% of our net sales from the United States, 24% from Europe, 12% from the Middle East, 11% from Asia and 16% from other geographic areas.
+Added: We have operations around the world that allow us to draw on the skills of a global workforce, provide flexibility to our operations, allow us to drive economies of scale, provide revenue streams that may help offset economic trends that are specific to individual countries and offer us an opportunity to access new markets.
+Added: Although international operations are subject to certain risks, we continue to believe that a global presence is key to maintaining strong relationships with many of our global customers and suppliers.
Financial information related to the Company's geographic footprint of our continuing operations is included in Note 15, "Business Segment, Geographic and Customer Information" in the notes to the consolidated financial statements.
5 unchanged sentences
Research and development ("R&D") costs are expensed as incurred.
−Removed: For continuing operations, R&D costs were $9.3 million in fiscal 2019 , an increase of 7% from $8.7 million in fiscal 2018 and an increase of 5% from $8.9 million in fiscal 2017 .
−Removed: We target 10% of consolidated sales annually to be from new product development as a result of our research and development activities.
−Removed: We also incur costs in connection with fulfilling custom orders and developing unique solutions for distinct customer needs, which are not included in these expense totals.
+Added: R&D costs were $7.3 million in fiscal 2020, a decrease of 22% from $9.3 million in fiscal 2019 and a decrease of 16% from $8.7 million in fiscal 2018.
+Added: We target a minimum of 10% of consolidated product sales annually to be from new product development as a result of our research and development activities.
The Company holds numerous patents and trademarks;
3 unchanged sentences
Although we face larger competitors in several served markets, some of our competition is comprised of smaller companies which may lack the global footprint or financial resources to serve global customers.
−Removed: We compete for business principally on the basis of customer service, product quality and availability, engineering, along with research and development expertise.
+Added: We compete for business principally on the basis of customer service, product quality and availability, engineering and research and development expertise.
In addition, we believe that our cost structure, strategic global sourcing capabilities and global distribution support our competitive position.
8 unchanged sentences
Raw materials that go into the components we source, such as steel, aluminum and plastic resin, are subject to price fluctuations and tariffs, which could have an impact on our results.
−Removed: While no meaningful measures of inflation specific to our products are available because we have significant operations in countries with diverse rates of inflation and currency rate movements, we have more than offset the impact of inflation in recent years with manufacturing efficiencies, cost reductions and pricing actions.
−Removed: In addition, several of our products have components from China subject to tariffs, however, to date we have been able to offset the majority of additional costs from tariffs through price increases to portions of our customer base.
−Removed: Furthermore, some of our components not sourced in China but for products manufactured in China are subject to Chinese tariffs.
−Removed: We have activities underway to mitigate these additional costs through identification of local Chinese suppliers.
+Added: We have been able to offset the impact of inflation in recent years with manufacturing efficiencies, cost reductions and pricing actions.
+Added: In addition, several of our products have been subject to tariffs, but to date we have been able to offset the majority of additional costs from tariffs through price increases to our customer base.
+Added: We continue to manage our supply chain to mitigate ongoing risks associated with the evolving political environments.
Order Backlogs and Seasonality
−Removed: Our operating segments that make up continuing operations have a relatively short order-to-ship cycle.
−Removed: We had order backlogs from continuing operations of $42 million and $51 million at August 31, 2019 and 2018 , respectively.
+Added: Our operating segments have a relatively short order-to-ship cycle.
+Added: We had order backlogs of $31 million and $42 million at August 31, 2020 and 2019, respectively.
Substantially all orders are expected to be filled within twelve months.
While we typically experience a stronger second half to our fiscal year, our consolidated sales are not subject to significant seasonal fluctuations.
−Removed: Percentages of Sales from Continuing Operations by Fiscal Quarter
+Added: Results for the year ended August 31, 2020 were not consistent with historical trends due to the impacts from the COVID-19 pandemic which negatively impacted our results of operations in the third and fourth quarter of fiscal 2020.
+Added: Percentages of Sales by Fiscal Quarter
Quarter 1 (September - November) 30 % 24 %
2 unchanged sentences
Quarter 4 (June - August) 22 % 25 %
−Removed: At August 31, 2019 , we had approximately 4,700 employees, of which approximately 40% are expected to transition out of the Company as part of the EC&S divestiture.
−Removed: Our employees generally are not subject to collective bargaining agreements, with the exception of approximately 300 U.S.
−Removed: production employees and certain international employees covered by government mandated collective labor agreements.
+Added: At August 31, 2020, we had approximately 2,300 employees.
+Added: Our employees are not subject to collective bargaining agreements and we do not have any employees with government-mandated collective labor agreements other than certain industry agreements in the Netherlands and Spain.
We believe we have a good working relationship with our employees globally.
Environmental Matters
−Removed: Our operations, like those of most industrial businesses, are subject to federal, state, local and foreign laws and regulations relating to the protection of the environment, including those regulating discharges of hazardous materials into the air and water, the storage and disposal of such hazardous materials and the clean-up of soil and groundwater contamination.
+Added: Our operations, like those of most industrial businesses, are subject to federal, state, local and foreign laws and regulations relating to the protection of the environment, including those regulating air and wastewater discharges, the storage and disposal of hazardous materials and the clean-up of soil and groundwater contamination.
We believe that we are in material compliance with applicable environmental regulations.
2 unchanged sentences
Soil and groundwater contamination has been identified at certain facilities that we operate or formerly owned or operated.
−Removed: We are also a party to certain state and local environmental matters, have provided environmental indemnifications for certain divested businesses and retain responsibility for certain potential environmental liabilities.
+Added: We are also a party to certain state and local environmental matters and have provided environmental indemnifications for certain divested businesses.
Executive Officers of the Registrant
The names, ages and positions of all of the executive officers of the Company as of October 15, 2020 are listed below.
−Removed: President and Chief Executive Officer
−Removed: Executive Vice President and Chief Financial Officer
−Removed: Executive Vice President—General Counsel, Secretary and Global Human Resources
−Removed: Executive Vice President—Engineered Components & Systems Segment
−Removed: Jeffrey Schmaling
−Removed: Executive Vice President—Industrial Tools & Services Segment
−Removed: Executive Vice President—Chief Strategy Officer
+Added: Name Age Position
+Added: Baker 57 President and Chief Executive Officer
+Added: Dillon 49 Executive Vice President and Chief Financial Officer
+Added: Bolens 59 Executive Vice President and Chief Strategy Officer
+Added: Rasetti 54 Executive Vice President—General Counsel, Secretary and Global Human Resources
+Added: Jeffrey Schmaling 61 Executive Vice President and Chief Operating Officer
Baker, President, Chief Executive Officer.
13 unchanged sentences
Dillon served as Vice President-Business Planning and Analysis and Vice President-Controller and Chief Accounting Officer at Newell Brands, and Vice President-Controller and Chief Accounting Officer at Briggs & Stratton Corporation.
−Removed: Rasetti, Executive Vice President—General Counsel, Secretary and Global Human Resources, joined Actuant in May 2018 from Boart Longyear where he held the position of Senior Vice President, General Counsel and Secretary since 2006.
+Added: Bolens, Executive Vice President and Chief Strategy Officer, joined the Company in August 2018 as Vice President of Investor Relations and Corporate Strategy and was appointed Executive Vice President and Chief Strategy Officer in October 2019.
+Added: Prior to joining the Company, Ms.
+Added: Bolens spent over six years at Komatsu Mining Corporation (formerly Joy Global Inc.) as its VP and Treasurer.
+Added: Prior to Komatsu, she held financial leadership positions of progressive responsibility at several other multinational corporations as well as early career leadership roles in sales and marketing.
+Added: Rasetti, Executive Vice President—General Counsel, Secretary and Global Human Resources, joined the Company in May 2018 from Boart Longyear where he held the position of Senior Vice President, General Counsel and Secretary since 2006.
For the ten years prior he worked at SPX Corporation in roles of increasing responsibility including Segment General Counsel & Vice President, Business Development, Flow Segment.
Earlier in his career he worked in private law practice.
−Removed: Roundhouse, Executive Vice President—Engineered Components & Systems segment.
−Removed: Roundhouse joined the Company in 2014, from General Cable, where he most recently held the position of Senior Vice President and General Manager Utility Products.
−Removed: Roundhouse brings extensive automotive, industrial and OEM knowledge, as well as over 20
−Removed: years of experience with global operations and mergers & acquisitions.
−Removed: Upon completion of the EC&S divestiture, Mr.
−Removed: Roundhouse will be transitioning out of the Company.
−Removed: Jeffrey Schmaling, Executive Vice President—Industrial Tools & Services segment, joined Actuant in his current role in February 2018.
−Removed: Prior to Actuant he held the position of President, North America for Komatsu Mining Corporation (formerly Joy Global Inc.) since 2010.
+Added: Jeffrey Schmaling, Executive Vice President and Chief Operating Officer, joined the Company in February 2018.
+Added: Prior to joining the Company, he held the position of President, North America for Komatsu Mining Corporation (formerly Joy Global Inc.) since 2010.
Prior to that, he served as Senior Director Dealer Development and Account Management at Case International Harvester, a Division of Fiat S.p.A.
Earlier in his 30-plus-year career he held various sales, marketing and product development roles.
−Removed: Bolens, Executive Vice President—Chief Strategy Officer, joined the Company in August 2018 as Vice President of Investor Relations and Corporate Strategy and was appointed Executive Vice President—Chief Strategy Officer in October 2019.
−Removed: Prior to joining the Company, Ms.
−Removed: Bolens spent over six years at Komatsu Mining Corporation (formerly Joy Global Inc.) as its VP and Treasurer.
−Removed: Prior to Komatsu, she held financial leadership positions of progressive responsibility at several other multinational corporations as well as early career leadership roles in sales and marketing.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.