Menomonee Falls-based Actuant Corp. announced three new board members Wednesday, including two as part of an agreement with one of the company’s largest shareholders.
Tennessee-based Southeastern Asset Management, which holds about 9.8 percent of Actuant’s common stock, updated its filings with the Securities and Exchange Commission in February to allow for “more direct conversations with the company about its board and governance.”
“Southeastern is supportive of the course CEO Randy Baker and Actuant’s executive team are pursuing, and we feel this filing change will allow us to work collaboratively with management and the board to evaluate the board and identify the best possible directors and governance practices to support the long-term business plan,” the filing said.
Baker became Actuant’s president and chief executive officer of Actuant in March 2016. The company provides hydraulic tools and solutions for a number of industries including energy and industrial. Baker has sought to emphasize investments in more profitable portions of the business.
On Wednesday, Actuant announced it had reached an agreement with Southeastern to put two new directors on the board in exchange for Southeastern not calling a special meeting of stockholders until after the company’s 2019 annual meeting.
Southeastern also agreed to not nominate its own directors, submit its own proposals or campaign for shareholders to vote a certain way if another entity called a special meeting.
Baker said the agreement was the result of “very constructive dialogue” with Southeastern over the last month. Southeastern did not immediately respond to requests for comment.
The two new directors include J. Palmer Clarkson and Sidney Simmons.
Clarkson is the founder, president and CEO of Bridgestone HosePower LLC, the largest U.S. based service provider of hydraulic and industrial hoses used in construction machinery, mining, oil field equipment and general industrial applications.
Simmons is a corporate attorney focusing on business development, mergers and acquisitions and capital restructuring as part of an independent practice.
As part of its routing succession and governance planning, Actuant also named Alfredo Altavilla to the board. Altavilla is chief operating officer of Europe, Africa and the Middle East and head of business development for Fiat Chrysler Automobiles.
The three directors leaving the board are Gurminder Bedi, R. Alan Hunter Jr. and Dennis Williams. The three had been directors since 2008, 2007 and 2006 respectively.
The company also reported second quarter results, including a 6.3 percent increase in revenue to $275.2 million. Net income, however, declined to an $18.2 million loss from a $5.1 million profit last year. The results included an $8.4 million charge related to tax reform.
Adjusted earnings, which in addition to tax reform included divestiture and restructuring charges, improved from $6.6 million to $7.7 million.
“Many of the core base businesses are seeing good profit traction,” Baker said. “However we are disappointed in the number and scale of operational, mix and other issues that are largely offsetting these improvements. We continue to diligently pursue the restructuring and portfolio management actions that are anticipated to simplify and improve the fundamental operating performance of Actuant.”
The company also estimated it could see a $5 million increase in costs annually from the steel and aluminum tariffs recently introduced by President Donald Trump. Rick Dillion, Actuant chief financial officer, emphasized that was a worst-case scenario estimate and the company believes it will be able to pass costs on to customers.