EXHIBIT 99.1 Actuant Raises 2004 Guidance, Reports 41% Increase in Second Quarter Diluted EPS Prior to Refinancing Charge MILWAUKEE--(BUSINESS WIRE)--March 17, 2004--Actuant Corporation (NYSE:ATU) today announced results for its second quarter ended February 29, 2004. Second quarter sales increased approximately 24% to $176.0 million compared to $142.1 million in the prior year. Current year results include those from Kwikee Products Company Inc. ("Kwikee") and Dresco B.V. ("Dresco"), which were acquired on September 3, 2003 and December 30, 2003, respectively. Excluding the acquisition impacts of Kwikee and Dresco and the favorable impact of foreign currency exchange rate changes on translated results, second quarter sales increased approximately 6%. Second quarter fiscal 2004 net earnings and diluted earnings per share ("diluted EPS") were $8.8 million and $0.35 per diluted share, respectively. Such results include the previously announced $2.3 million pre-tax charge ($1.5 million net of tax, or $0.06 per diluted share) attributable to the write-off of remaining debt issuance costs associated with the senior secured credit facility that was replaced during February 2004. Excluding this charge, second quarter fiscal 2004 net earnings and diluted EPS were $10.2 million and $0.41 per share, respectively. This compares favorably to prior year second quarter net earnings and diluted EPS of $7.1 million and $0.29 per diluted share, respectively, representing increases of 44% and 41%, respectively. Sales for the six months ended February 29, 2004 were $342.6 million, approximately 18% higher than the $290.0 million in the comparable prior year period. Excluding the impact of the Dresco and Kwikee acquisitions, as well as the impact of foreign currency rate changes on translated results, sales for the six-month period increased 3%. Net earnings for the six-months ended February 29, 2004 were $9.1 million, or $0.36 per diluted share, compared to $9.0 million, or $0.37 per diluted share for the comparable prior year period. The Company recorded net of tax special charges of $1.3 million, or $0.05 per diluted share, in the first quarter of fiscal 2003 related to the early extinguishment of debt and $4.7 million, or $0.19 per diluted share, related to litigation matters associated with businesses divested prior to the spin-off of APW Ltd. in July 2000. In addition, the Company recorded net of tax special charges of $9.8 million or $0.40 per diluted share, in the first quarter of fiscal 2004 and $1.5 million, or $0.06 per diluted share, in the current quarter, related to the early extinguishment of debt. Excluding all of these special charges, net earnings and diluted EPS for the first half of fiscal 2004 were $20.3 million and $0.82 per diluted share, compared to $15.0 million and $0.61 per diluted share, respectively, in the prior year. Commenting on the results, Robert C. Arzbaecher, President and CEO of Actuant, stated, "We are pleased with second quarter results, especially the 41% increase in diluted earnings per share before the refinancing charge. Earnings improved primarily as a result of higher sales, lower financing costs, improved economic conditions, and the continued weakening of the U.S. dollar. Additionally, we saw earnings contributions from both Kwikee and Dresco, which were acquired this fiscal year, as well as solid margins at Kopp, which was acquired last year. "Profit margins increased in all major operations other than automotive, which continued to be adversely impacted by inefficiencies and manufacturing variances resulting from the production start-ups of new convertible top platforms and the recent launch of production at our North America automotive plant. While these challenges continue, we are confident that we will see automotive margin improvement in the near future. "Actuant is off to a strong fiscal 2004 with first half diluted earnings per share before special charges of $0.82 per share, or 34% higher than last year. This exceeds our long-term goal of increasing earnings by 15-20% annually. Despite increases in commodity costs such as steel, plastic resin and copper, we are raising our previous sales and earnings estimates for fiscal 2004 to reflect our current outlook. We are projecting full year sales of $695-705 million, and diluted earnings per share excluding debt extinguishment charges of $1.75-1.85 per share. Based on today's exchange rates, we are expecting third quarter sales to be approximately $180-$185 million and diluted EPS of between $0.48-0.53 per share. Given our present cost structure, the future benefit of completed acquisitions and an improved economic outlook, Actuant is positioned for continued profitable growth." Fiscal 2004 second quarter sales in the Tools & Supplies segment were $103.6 million, or approximately 14% higher than last year's $90.7 million, primarily due to foreign currency rate changes and the impact of the Dresco acquisition. Excluding these factors, Tools & Supplies segment revenues were relatively unchanged, reflecting higher North American sales offset by lower European sales. Second quarter sales in the Engineered Solutions segment increased approximately 41% over the prior year to $72.5 million, reflecting higher shipments in all major markets, the Kwikee acquisition and the favorable impact of foreign currency. Excluding foreign currency rate changes and the impact of the Kwikee acquisition, segment sales increased 18%. Actuant's second quarter operating profit increased 26% from $16.0 million in 2003 to $20.2 million this year, reflecting 24% sales growth and higher overall profit margins. Second quarter EBITDA (earnings before interest, income taxes, depreciation, amortization and minority interest), before special charges, was $23.8 million, or 15% higher than the $20.6 million last year, reflecting sales growth and increased operating profit margins, offset by foreign currency transaction losses. EBITDA is a key financial metric of the Company and its investors in measuring performance prior to capitalization and income tax charges. (See attached supplemental schedule for calculation.) Total debt at February 29, 2004 was $231 million, compared to approximately $254 million at the beginning of the second quarter. The decline in debt resulted from strong second quarter operating cash flow and the approximate $15 million proceeds from the sale/leaseback of a German facility in December. Cash balances declined from approximately $33 million at the beginning of the quarter to $3 million at February 29, 2004, reflecting the use of approximately $32 million of cash to fund the Dresco acquisition. Liquidity remains strong with only $12 million of the Company's $250 million revolver drawn at quarter-end. Second quarter net financing costs declined 29% year-over-year due to lower interest rates on funded debt, primarily reflecting fewer 13% Senior Subordinated Notes outstanding compared to the prior year. Safe Harbor Statement Certain of the above comments represent forward-looking statements made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. Management cautions that these statements 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. Actuant's results are also subject to general economic conditions, variation in demand from customers, the impact on the economy of terrorist attacks and other geopolitical activity, continued market acceptance of the Company's new product introductions, the successful integration of business unit acquisitions and related restructuring, operating margin risk due to competitive pricing and operating efficiencies, supply chain risk, material and labor cost increases, foreign currency fluctuations and interest rate risk. See the Company's registration statements filed with the Securities and Exchange Commission for further information regarding risk factors. Actuant, headquartered in Milwaukee, Wisconsin, is a diversified industrial company with operations in more than 20 countries. The Actuant businesses are leading companies in highly engineered position and motion control systems and branded tools. Products are offered under such established brand names as Dresco, Enerpac, Gardner Bender, Kopp, Kwikee, Milwaukee Cylinder, Nielsen Sessions, Power-Packer, and Power Gear. The Company will be conducting an investor conference call at 11:00 EST today to discuss second quarter results. For further information on Actuant and its business units, and to listen to today's conference call, visit the Company's website at www.actuant.com. Actuant Corporation Consolidated Balance Sheets (Dollars in thousands) February 29, August 31, 2004 2003 ------------ ----------- (Unaudited) ASSETS Current assets Cash and cash equivalents $3,127 $4,593 Accounts receivable, net 102,000 81,825 Inventories, net 82,530 67,640 Deferred income taxes 15,676 14,727 Other current assets 5,687 3,977 ------------ ----------- Total Current Assets 209,020 172,762 Property, plant and equipment, net 54,427 59,197 Goodwill 145,817 101,680 Other intangible assets, net 24,036 19,521 Other long-term assets 10,514 8,493 ------------ ----------- Total Assets $443,814 $361,653 ============ =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Short-term borrowings $2,188 $1,224 Trade accounts payable 57,360 53,045 Accrued compensation and benefits 19,106 16,773 Income taxes payable 13,841 21,444 Current maturities of long-term debt 4,120 8,918 Other current liabilities 42,430 40,753 ------------ ----------- Total Current Liabilities 139,045 142,157 Long-term debt, less current maturities 225,066 159,692 Deferred income taxes 11,808 8,841 Pension and postretirement benefit accruals 31,276 29,430 Other long-term liabilities 30,263 29,042 Minority interest in net equity of consolidated affiliates 161 4,117 Shareholders' equity Capital stock 4,730 4,702 Additional paid-in capital (520,552) (522,627) Accumulated other comprehensive income (loss) (15,156) (21,823) Stock held in trust (724) (636) Deferred compensation liability 724 636 Retained earnings 537,173 528,122 ------------ ----------- Total Shareholders' Equity (Deficit) 6,195 (11,626) ------------ ----------- Total Liabilities and Shareholders' Equity $443,814 $361,653 ============ =========== Actuant Corporation Consolidated Statements of Earnings (In thousands except per share amounts) (Unaudited) Three Months Ended Six Months Ended ------------------------- ------------------------- February 29, February 28, February 29, February 28, 2004 2003 2004 2003 ------------------------- ------------------------- Net Sales $176,022 $142,099 $342,606 $289,957 Cost of Products Sold 121,227 95,610 233,193 197,566 ------------------------- ------------------------- Gross Profit 54,795 46,489 109,413 92,391 Selling, Administrative and Engineering Expenses 34,036 29,867 67,385 56,954 Amortization of Intangible Assets 587 593 1,134 1,220 ------------------------- ------------------------- Operating Profit 20,172 16,029 40,894 34,217 Net Financing Costs 3,877 5,443 8,268 11,105 Charge for Early Extinguishment of Debt 2,268 - 17,337 1,974 Litigation Charge associated with Divested Businesses - - - 7,300 Other (Income) Expense, net 638 (752) 1,091 (506) ------------------------- ------------------------- Earnings from Continuing Operations Before Income Taxes and Minority Interest 13,389 11,338 14,198 14,344 Income Tax Expense 4,660 4,025 4,943 5,092 Minority Interest, net of Income Taxes (29) 197 204 280 ------------------------- ------------------------- Net Earnings $8,758 $7,116 $9,051 $8,972 ========================= ========================= Earnings per Share Basic $0.37 $0.31 $0.38 $0.39 Diluted 0.35 0.29 0.36 0.37 Weighted Average Common Shares Outstanding Basic 23,601 23,283 23,580 23,259 Diluted 24,912 24,466 24,825 24,451 ACTUANT CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three Months Ended ------------------------- February 29, February 28, 2004 2003 ------------ ------------ Operating Activities - -------------------- Net earnings $8,758 $7,116 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 4,255 3,822 Amortization of debt discount and debt issuance costs 468 367 Write-off of debt discount and debt issuance costs in conjunction with early extinguishment of debt 2,180 -- (Benefit) provision for deferred income taxes (1,036) 330 Loss on disposal of assets 67 -- Changes in operating assets and liabilities, excluding the effects of the business acquisitions: Accounts receivable 3,409 5,313 Inventories 1,152 2,095 Trade accounts payable (3,411) (130) Other (825) (2,373) ------------ ------------ Net cash provided by operating activities 15,017 16,540 Investing Activities - -------------------- Proceeds from sale of property, plant and equipment 14,601 5 Capital expenditures (3,016) (3,158) Cash paid for business acquisitions, net of cash acquired (31,903) -- ------------ ------------ Net cash used in investing activities (20,318) (3,153) Financing Activities - -------------------- Extinguishment of senior secured credit agreement (30,000) -- Initial proceeds from senior credit agreement 30,000 -- Net repayments on revolving credit facilities and short-term borrowings (16,467) (7,081) Principal payments on term loans (6,968) (8,804) Debt issuance costs (1,123) -- Other 249 446 ------------ ------------ Net cash used in financing activities (24,309) (15,439) Effect of exchange rate changes on cash 45 180 ------------ ------------ Net decrease in cash and cash equivalents (29,565) (1,872) Cash and cash equivalents - beginning of period 32,692 3,799 ------------ ------------ Cash and cash equivalents - end of period $3,127 $1,927 ============ ============ ACTUANT CORPORATION SUPPLEMENTAL UNAUDITED DATA (US dollars, in thousands) FISCAL 2003 --------------------------------------------- Q1 Q2 Q3 Q4 TOTAL --------------------------------------------- SALES TOOLS & SUPPLIES SEGMENT $92,014 $90,651 $91,386 $92,433 $366,484 ENGINEERED SOLUTIONS SEGMENT 55,844 51,448 55,803 55,814 218,909 --------------------------------------------- TOTAL REPORTED SALES $147,858 $142,099 $147,189 $148,247 $585,393 ============================================= % SALES GROWTH TOOLS & SUPPLIES SEGMENT 43.6% 45.4% 39.0% 37.2% 41.2% ENGINEERED SOLUTIONS SEGMENT 13.8% 11.6% 2.8% 3.3% 7.6% TOTAL REPORTED SALES 30.7% 31.0% 22.6% 22.1% 26.4% OPERATING PROFIT TOOLS & SUPPLIES SEGMENT $12,818 $12,224 $13,702 $13,417 $52,161 ENGINEERED SOLUTIONS SEGMENT 6,616 5,760 7,648 7,571 27,595 CORPORATE / GENERAL (1,246) (1,955) (1,957) (1,813) (6,971) --------------------------------------------- TOTAL REPORTED RESULTS $18,188 $16,029 $19,393 $19,175 $72,785 ============================================= OPERATING PROFIT % TOOLS & SUPPLIES SEGMENT 13.9% 13.5% 15.0% 14.5% 14.2% ENGINEERED SOLUTIONS SEGMENT 11.8% 11.2% 13.7% 13.6% 12.6% TOTAL (INCL. CORPORATE) 12.3% 11.3% 13.2% 12.9% 12.4% EBITDA (1) TOOLS & SUPPLIES SEGMENT $15,126 $14,454 $16,829 $15,746 $62,155 ENGINEERED SOLUTIONS SEGMENT 7,666 7,501 8,739 8,947 32,853 CORPORATE / GENERAL (2) (1,161) (1,354) (2,028) (375) (4,918) --------------------------------------------- TOTAL RECURRING EBITDA 21,631 20,601 23,540 24,318 90,090 OTHER ITEMS (3) (9,274) - 798 - (8,476) --------------------------------------------- TOTAL $12,357 $20,601 $24,338 $24,318 $81,614 ============================================= EBITDA % TOOLS & SUPPLIES SEGMENT 16.4% 15.9% 18.4% 17.0% 17.0% ENGINEERED SOLUTIONS SEGMENT 13.7% 14.6% 15.7% 16.0% 15.0% TOTAL RECURRING (INCL. CORPORATE) 14.6% 14.5% 16.0% 16.4% 15.4% OTHER FINANCIAL DATA DEPRECIATION & AMORTIZATION TOOLS & SUPPLIES SEGMENT $2,413 $2,433 $2,137 $2,380 $9,363 ENGINEERED SOLUTIONS SEGMENT 1,133 1,237 1,321 1,367 5,058 CORPORATE / GENERAL 143 150 174 179 646 --------------------------------------------- TOTAL DEPRECIATION & AMORTIZATION $3,689 $3,820 $3,632 $3,926 $15,067 ============================================= OTHER INCOME (EXPENSE) TOOLS & SUPPLIES SEGMENT $(105) $(203) $990 $(51) $631 ENGINEERED SOLUTIONS SEGMENT (83) 504 (230) 9 200 CORPORATE / GENERAL (58) 451 (245) 1,259 1,407 --------------------------------------------- TOTAL REPORTED RESULTS $(246) $752 $515 $1,217 $2,238 ============================================= FISCAL 2004 --------------------------------------------- Q1 Q2 Q3 Q4 TOTAL --------------------------------------------- SALES TOOLS & SUPPLIES SEGMENT $96,335 $103,554 $199,889 ENGINEERED SOLUTIONS SEGMENT 70,249 72,468 142,717 --------------------------------------------- TOTAL REPORTED SALES $166,584 $176,022 $- $- $342,606 ============================================= % SALES GROWTH TOOLS & SUPPLIES SEGMENT 4.7% 14.2% 9.4% ENGINEERED SOLUTIONS SEGMENT 25.8% 40.9% 33.0% TOTAL REPORTED SALES 12.7% 23.9% 18.2% OPERATING PROFIT TOOLS & SUPPLIES SEGMENT $14,361 $15,714 $30,075 ENGINEERED SOLUTIONS SEGMENT 8,775 7,257 16,032 CORPORATE / GENERAL (2,414) (2,799) (5,213) --------------------------------------------- TOTAL REPORTED RESULTS $20,722 $20,172 $- $- $40,894 ============================================= OPERATING PROFIT % TOOLS & SUPPLIES SEGMENT 14.9% 15.2% 15.0% ENGINEERED SOLUTIONS SEGMENT 12.5% 10.0% 11.2% TOTAL (INCL. CORPORATE) 12.4% 11.5% 11.9% EBITDA (1) TOOLS & SUPPLIES SEGMENT $16,668 $17,511 $34,179 ENGINEERED SOLUTIONS SEGMENT 9,921 8,986 18,907 CORPORATE / GENERAL (2) (2,386) (2,709) (5,095) --------------------------------------------- TOTAL RECURRING EBITDA 24,203 23,788 - - 47,991 OTHER ITEMS (3) (15,069) (2,268) (17,337) --------------------------------------------- TOTAL $9,134 $21,520 $- $- $30,654 ============================================= EBITDA % TOOLS & SUPPLIES SEGMENT 17.3% 16.9% 17.1% ENGINEERED SOLUTIONS SEGMENT 14.1% 12.4% 13.2% TOTAL RECURRING (INCL. CORPORATE) 14.5% 13.5% 14.0% OTHER FINANCIAL DATA DEPRECIATION & AMORTIZATION TOOLS & SUPPLIES SEGMENT $2,083 $2,261 $4,344 ENGINEERED SOLUTIONS SEGMENT 1,666 1,805 3,471 CORPORATE / GENERAL 185 188 373 --------------------------------------------- TOTAL DEPRECIATION & AMORTIZATION $3,934 $4,254 $- $- $8,188 ============================================= OTHER INCOME (EXPENSE) TOOLS & SUPPLIES SEGMENT $224 $(464) $(240) ENGINEERED SOLUTIONS SEGMENT (520) (76) (596) CORPORATE / GENERAL (157) (98) (255) --------------------------------------------- TOTAL REPORTED RESULTS $(453) $(638) $- $- $(1,091) ============================================= (1) Segment EBITDA = segment operating profit + segment depreciation & amortization + segment other income (expense) (2) Corporate / general EBITDA in the fourth quarter of fiscal 2003 includes a $1.2 million foreign currency gain recognized upon substantial liquidation of a Mexican subsidiary. (3) First quarter 2003 other items include a $2.0 million charge related to the early redemption of debt and a $7.3 million charge related to litigation for business units divested prior to the July 31, 2000 spin-off. Third quarter 2003 other items represents an $0.8 million reversal of a portion of the $7.3 million first quarter charge for the favorable settlement of such litigation. First quarter 2004 other items represents charges related to the early redemption of debt. Second quarter 2004 other items represents the non-cash charge attributable to the write-off of remaining debt issuance costs associated with the senior secured credit facility that was replaced during February 2004. CONTACT: Actuant Corporation Andrew Lampereur, 414-352-4160