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Actuant Corp. reported Thursday (Dec. 18) that fiscal first-quarter profit fell nearly 58%, aggravated by impairment charge related to the company’s RV product line.
The Butler, Wis.-based manufacturer of motion control systems and hydraulic and electrical tools and supplies reported net income for the quarter, ended Nov. 30, was $11.6 million compared with $27.4 million a year ago. Sales for the quarter declined 8% to $379.98 million compared with $415.14 million in the previous year.
“We experienced a challenging first quarter as the speed and magnitude of declining end market demand was extraordinary,” said Robert Arzbaecher, chairman and CEO of Actuant.
Sales in the company’s Actuation Systems segment, which includes leveling system maker Power Gear and component and step supplier Kwikee Products Inc., declined 24% to $85 million reflecting sharply lower demand from the company’s RV, European truck and automotive customers.
The company said it recorded a non-cash asset impairment charge (primarily goodwill) in the first quarter of fiscal 2009 related to the RV product line, which currently generates approximately 2% of consolidated revenues. Sales to the motorhome industry’s three largest OEMs declined approximately 75% during the quarter, reflecting lower retail sell-through and dealer inventory reduction efforts.
Actuant said given current credit market conditions and low consumer confidence levels it does not expect RV demand will improve in the near term.
“We are taking actions to further reduce costs and optimize cash flow in response to market challenges,” Arzbaecher said. “We believe our financial liquidity and variable cost structure provide us with ample flexibility to navigate these challenging times and capitalize on growth opportunities.”