EXHIBIT 99.1 Actuant Raises 2004 Guidance, Reports Record Quarterly Earnings Prior to Refinancing Charge MILWAUKEE--(BUSINESS WIRE)--June 17, 2004--Actuant Corporation (NYSE:ATU) today announced results for its third quarter ended May 31, 2004. Third quarter sales increased approximately 33% to $196.5 million from $147.2 million in the comparable prior year period. 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 impact of acquisitions and foreign currency exchange rate changes, third quarter sales increased approximately 17%. Third quarter fiscal 2004 net earnings and diluted earnings per share ("diluted EPS") were $7.5 million and $0.30, respectively. These results include the previously announced $9.9 million pre-tax charge ($6.8 million net of tax, or $0.28 per share) attributable to the repurchase of 13% Notes during the quarter. Excluding this refinancing charge, third quarter fiscal 2004 net earnings and diluted EPS were $14.3 million and $0.58, respectively. This compares favorably to prior year third quarter net earnings and diluted EPS of $10.0 million and $0.41, respectively. Fiscal 2003 third quarter results included a $0.8 million pre-tax gain ($0.02 per diluted share) for the favorable settlement of litigation matters for amounts less than previously accrued. Excluding the refinancing charge in the current year and the litigation-related gain in the prior year, third quarter diluted EPS grew 49% from $0.39 to $0.58 (see attached reconciliation of earnings). Sales for the nine months ended May 31, 2004 were $539.1 million, approximately 23% higher than the $437.1 million in the comparable prior year period. Excluding the impact of acquisitions and foreign currency rate changes, sales for the nine-month period increased 8%. Net earnings for the nine months ended May 31, 2004 were $16.5 million, or $0.67 per diluted share, compared to $18.9 million, or $0.78 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 nine months of fiscal 2003 related to the early extinguishment of debt and $4.2 million, or $0.17 per diluted share, related to litigation matters associated with divested businesses. 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, $1.5 million, or $0.06 per diluted share, in the second quarter and $6.8 million or $0.28 per diluted share in the third quarter, for the early extinguishment of debt. Excluding all of these special charges, net earnings and diluted EPS for the first nine months of fiscal 2004 were $34.6 million and $1.40, compared to $24.4 million and $1.00, respectively, in the comparable prior year period (see attached reconciliation of earnings). Commenting on the results, Robert C. Arzbaecher, President and CEO, stated, "Actuant's third quarter results exceeded our expectations in terms of sales, earnings and cash flow. Core sales grew 17% over the prior year due to the continued improvement in the North American economy and the 75% core sales increase in convertible top actuation systems which reflected increased production of newly introduced convertible automobiles. This represents the twelfth consecutive quarter of year-over-year diluted EPS improvement, excluding special items, and reflected higher sales volume and margin expansion in a number of operations, along with the continued benefit of lower interest expense. "Both of this year's acquisitions - Kwikee and Dresco - were accretive to third quarter earnings, and we made progress during the quarter integrating them with existing operations. Additionally, our automotive margins improved during the quarter as had been forecasted due to improved manufacturing efficiencies in our plants in both the U.S. and The Netherlands. "We were also pleased to reduce the 13% Notes outstanding by repurchasing approximately $32 million of notes during the quarter. With only $29 million remaining of the original $200 million 13% Notes issued, the related interest expense has declined further and will help drive future earnings and cash flow growth. Despite the premiums paid to repurchase the 13% Notes during the quarter, cash flow was exceptionally strong, leading to debt reduction of $19 million. "We are three-fourths of the way through fiscal 2004, and Actuant remains on track for record fiscal year sales and earnings, excluding refinancing costs. We are raising our full year sales guidance from $695-705 million to $710-715 million, and our diluted EPS guidance before refinancing charges from $1.75-1.85 per share to $1.85-1.90 per share. The projected full year 30-35% diluted EPS growth exceeds our annual goal of 15-20% due to the combination of significant automotive sales growth and interest expense reduction, which are not expected to improve at the same pace as we move forward. Our preliminary fiscal 2005 guidance is for sales in the $725-750 million range, and diluted EPS in the $2.15-2.25 per share range. The guidance assumes conservative economic growth, continued commodity pricing pressure, increased interest rates, relatively stable foreign currency exchange rates, and no acquisitions or divestitures. We are excited about Actuant's prospects for the future and its chances of delivering 15-20% EPS improvement in fiscal 2005." Fiscal 2004 third quarter sales in the Tools & Supplies segment were $109.9 million, or approximately 20% higher than last year's $91.4 million, due to core sales growth, foreign currency rate changes and the impact of the Dresco acquisition. Excluding foreign currency and acquisition impacts, core Tools & Supplies revenues were up 5% over the prior year, with growth in both the hydraulic high force tools and electrical markets. Third quarter sales in the Engineered Solutions segment increased approximately 55% over the prior year to $86.6 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 Kwikee acquisition, segment sales increased 35%. Actuant's third quarter operating profit increased 30% over the prior year, due to corresponding sales growth. Third quarter operating profit as a percentage of sales declined slightly from 13.2% in the prior year to 12.8% in the current year, primarily the result of higher corporate expenses. Tools & Supplies operating profit margins improved from 15.0% to 16.0% year-over-year due to increased manufacturing absorption and cost reductions. Engineered Solutions operating profit margins declined year-over-year from 13.7% to 13.2%, but improved from the second quarter due to improved manufacturing efficiencies in the automotive business. Total debt was reduced during the quarter as a result of strong operating cash flow, declining to $212 million at May 31, 2004 from $231 million at the beginning of the quarter. Liquidity remains strong with approximately $220 million of availability under the Company's $250 million revolver. Third quarter net financing costs declined 44% due to lower interest rates on funded debt, primarily reflecting fewer 13% 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 of geopolitical activity on the economy, 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 selling 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 EDT today to discuss third 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) (Unaudited) May 31, August 31, 2004 2003 ---------- ---------- ASSETS Current assets Cash and cash equivalents $ 4,751 $ 4,593 Accounts receivable, net 98,602 81,825 Inventories, net 84,501 67,640 Deferred income taxes 15,137 14,727 Other current assets 5,854 3,977 ---------- ---------- Total Current Assets 208,845 172,762 Property, plant and equipment, net 50,292 59,197 Goodwill 145,432 101,680 Other intangible assets, net 23,005 19,521 Other long-term assets 9,834 8,493 ---------- ---------- Total Assets $437,408 $361,653 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Short-term borrowings $ 329 $ 1,224 Trade accounts payable 63,079 53,045 Accrued compensation and benefits 21,859 16,773 Income taxes payable 13,898 21,444 Current maturities of long-term debt 3,951 8,918 Other current liabilities 37,624 40,753 ---------- ---------- Total Current Liabilities 140,740 142,157 Long-term debt, less current maturities 207,543 159,692 Deferred income taxes 12,398 8,841 Pension and postretirement benefit accruals 30,940 29,430 Other long-term liabilities 32,195 29,042 Minority interest in net equity of consolidated affiliates 96 4,117 Shareholders' equity Capital stock 4,751 4,702 Additional paid-in capital (518,585) (522,627) Accumulated other comprehensive income (loss) (17,309) (21,823) Stock held in trust (765) (636) Deferred compensation liability 765 636 Retained earnings 544,639 528,122 ---------- ---------- Total Shareholders' Equity (Deficit) 13,496 (11,626) ---------- ---------- Total Liabilities and Shareholders' Equity $437,408 $361,653 ========== ========== Actuant Corporation Consolidated Statements of Earnings (In thousands except per share amounts) (Unaudited) Three Months Ended Nine Months Ended May 31, May 31, ------------------ ------------------ 2004 2003 2004 2003 ------------------ ------------------ Net Sales $196,481 $147,189 $539,087 $437,146 Cost of Products Sold 134,766 98,386 367,959 295,952 ------------------ ------------------ Gross Profit 61,715 48,803 171,128 141,194 Selling, Administrative and Engineering Expenses 35,943 28,880 103,328 85,834 Amortization of Intangible Assets 594 530 1,728 1,750 ------------------ ------------------ Operating Profit 25,178 19,393 66,072 53,610 Net Financing Costs 2,900 5,177 11,168 16,282 Charge for Early Extinguishment of Debt 9,940 - 27,277 1,974 Litigation Charge (Benefit) associated with Divested Businesses - (798) - 6,502 Other (Income) Expense, net 505 (515) 1,596 (1,021) ------------------ ------------------ Earnings from Continuing Operations Before Income Taxes and Minority Interest 11,833 15,529 26,031 29,873 Income Tax Expense 4,428 5,482 9,371 10,574 Minority Interest, net of Income Taxes (61) 70 143 350 ------------------ ------------------ Net Earnings $ 7,466 $ 9,977 $ 16,517 $ 18,949 ================== ================== Earnings per Share Basic $ 0.31 $ 0.43 $ 0.70 $ 0.81 Diluted 0.30 0.41 0.67 0.78 Weighted Average Common Shares Outstanding Basic 23,703 23,380 23,615 23,290 Diluted 24,514 24,348 24,719 24,406 Actuant Corporation Consolidated Statements of Cash Flows (Unaudited) Three Months Ended Nine Months Ended May 31, May 31, ------------------------------------ 2004 2003 2004 2003 -------- -------- -------- -------- Operating Activities Net earnings $ 7,466 $ 9,977 $16,517 $18,949 Adjustments to reconcile earnings to net cash provided by operating activities: Depreciation and amortization 4,066 3,628 12,254 11,139 Amortization of debt discount and debt issuance costs 284 368 1,126 1,112 Write-off of debt discount and debt issuance costs in conjunction with early extinguishment of debt 880 - 4,445 317 Provision (benefit) for deferred income taxes 2,004 (220) 1,788 476 Loss on sale of assets - 42 137 67 Changes in operating assets and liabilities, excluding the effects of business acquisitions: Accounts receivable 2,061 188 (2,885) (880) Inventories (2,983) 718 (4,244) 4,728 Prepaid expenses and other assets (305) 2,674 (1,357) 3,678 Trade accounts payable 6,264 (2,671) 2,717 (5,422) Income taxes payable 312 4,644 (4,334) 1,348 Accrued interest (2,986) (3,798) (4,642) (3,798) Other accrued liabilities 4,947 (4,729) 1,885 (365) -------- -------- -------- -------- Net cash provided by operating activities (a) 22,010 10,821 23,407 31,349 Investing Activities Proceeds from sale of property, plant and equipment - 384 14,601 393 Capital expenditures (2,099) (3,792) (8,000) (10,342) Cash paid for business acquisitions, net of cash acquired - (444) (65,100) (9,174) -------- -------- -------- -------- Net cash used in investing activities (2,099) (3,852) (58,499) (19,123) Financing Activities Partial redemption of 13% senior subordinated notes (31,543) - (80,897) (9,425) Net proceeds from convertible senior subordinated note offering - - 144,994 - Extinguishment of former senior secured credit agreement - - (30,000) - Initial proceeds from new senior credit agreement - - 30,000 - Net (repayments) borrowings on revolving credit facilities and short-term borrowings 13,711 (5,597) (3,941) 3,262 Principal borrowings on term loans - - - 3,932 Principal payments on term loans (74) (1,007) (24,443) (11,673) (Payments) proceeds from early termination of interest rate swaps (1,016) 1,550 (1,016) 1,550 Other 590 440 296 1,184 -------- -------- -------- -------- Net cash (used in) provided by financing activities (18,332) (4,614) 34,993 (11,170) Effect of exchange rate changes on cash 45 220 257 403 -------- -------- -------- -------- Net increase in cash and cash equivalents 1,624 2,575 158 1,459 Cash and cash equivalents - beginning of period 3,127 1,927 4,593 3,043 -------- -------- -------- -------- Cash and cash equivalents - end of period $ 4,751 $ 4,502 $ 4,751 $ 4,502 ======== ======== ======== ======== (a) Includes cash paid in excess of face value on 13% senior subordinated note redemptions of $9.1 million for the three months ended May 31, 2004 and $22.8 million and $1.7 million for the nine months ended May 31, 2004 and 2003, respectively. 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 EXCLUDING SPECIAL ITEMS 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 (1,161) (1,354) (2,028) (375) (4,918) --------------------------------------------- EBITDA 21,631 20,601 23,540 24,318 90,090 SPECIAL ITEMS (1) (9,274) - 798 - (8,476) --------------------------------------------- EBITDA EXCLUDING SPECIAL ITEMS $ 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 EXCLUDING SPECIAL ITEMS (INCL. CORPORATE) 14.6% 14.5% 16.0% 16.4% 15.4% FISCAL 2004 --------------------------------------------- Q1 Q2 Q3 Q4 TOTAL --------------------------------------------- SALES TOOLS & SUPPLIES SEGMENT $ 96,335 $103,554 $109,930 $309,819 ENGINEERED SOLUTIONS SEGMENT 70,249 72,468 86,551 229,268 --------------------------------------------- TOTAL REPORTED SALES $166,584 $176,022 $196,481 $ - $539,087 ============================================= % SALES GROWTH TOOLS & SUPPLIES SEGMENT 4.7% 14.2% 20.3% 13.1% ENGINEERED SOLUTIONS SEGMENT 25.8% 40.9% 55.1% 40.6% TOTAL REPORTED SALES 12.7% 23.9% 33.5% 23.3% OPERATING PROFIT TOOLS & SUPPLIES SEGMENT $ 14,361 $ 15,714 $ 17,546 $ 47,621 ENGINEERED SOLUTIONS SEGMENT 8,775 7,257 11,415 27,447 CORPORATE / GENERAL (2,414) (2,799) (3,783) (8,996) --------------------------------------------- TOTAL REPORTED RESULTS $ 20,722 $ 20,172 $ 25,178 $ - $ 66,072 ============================================= OPERATING PROFIT % TOOLS & SUPPLIES SEGMENT 14.9% 15.2% 16.0% 15.4% ENGINEERED SOLUTIONS SEGMENT 12.5% 10.0% 13.2% 12.0% TOTAL (INCL. CORPORATE) 12.4% 11.5% 12.8% 12.3% EBITDA EXCLUDING SPECIAL ITEMS TOOLS & SUPPLIES SEGMENT $ 16,668 $ 17,511 $ 19,618 $ 53,797 ENGINEERED SOLUTIONS SEGMENT 9,921 8,986 12,753 31,660 CORPORATE / GENERAL (2,386) (2,709) (3,632) (8,727) --------------------------------------------- EBITDA 24,203 23,788 28,739 - 76,730 SPECIAL ITEMS (1) (15,069) (2,268) (9,940) (27,277) --------------------------------------------- EBITDA EXCLUDING SPECIAL ITEMS $ 9,134 $ 21,520 $ 18,799 $ - $ 49,453 ============================================= EBITDA % TOOLS & SUPPLIES SEGMENT 17.3% 16.9% 17.8% 17.4% ENGINEERED SOLUTIONS SEGMENT 14.1% 12.4% 14.7% 13.8% TOTAL EXCLUDING SPECIAL ITEMS (INCL. CORPORATE) 14.5% 13.5% 14.6% 14.2% (1) First quarter 2003 special 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 special 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 and third quarter 2004 special items represents charges related to the early redemption of debt. Second quarter 2004 special 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. ACTUANT CORPORATION Reconciliation of GAAP measures to non-GAAP measures (In thousands, except per share amounts) FISCAL 2003 --------------------------------------------- Q1 Q2 Q3 Q4 TOTAL --------------------------------------------- NET EARNINGS EXCLUDING SPECIAL ITEMS (1) NET EARNINGS (GAAP MEASURE) $ 1,856 $ 7,116 $ 9,977 $ 10,017 $ 28,966 DEBT EXTINGUISHMENT COSTS (NET OF TAX) 1,273 - - - 1,273 LITIGATION MATTERS RELATED TO BUSINESSES DIVESTED PRIOR TO THE SPIN-OFF OF APW LTD. (NET OF TAX) 4,708 - (516) - 4,192 --------------------------------------------- NET EARNINGS EXCLUDING SPECIAL ITEMS (NON-GAAP MEASURE) $ 7,837 $ 7,116 $ 9,461 $ 10,017 $ 34,431 ============================================= DILUTED EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS (1) NET EARNINGS (GAAP MEASURE) $ 0.08 $ 0.29 $ 0.41 $ 0.41 $ 1.18 DEBT EXTINGUISHMENT COSTS (NET OF TAX) 0.05 - - - 0.05 LITIGATION MATTERS RELATED TO BUSINESSES DIVESTED PRIOR TO THE SPIN-OFF OF APW LTD. (NET OF TAX) 0.19 - (0.02) - 0.17 --------------------------------------------- NET EARNINGS EXCLUDING SPECIAL ITEMS (NON-GAAP MEASURE) $ 0.32 $ 0.29 $ 0.39 $ 0.41 $ 1.40 ============================================= EBITDA EXCLUDING SPECIAL ITEMS (2) NET EARNINGS (GAAP MEASURE) $ 1,856 $ 7,116 $ 9,977 $ 10,017 $ 28,966 NET FINANCING COSTS 5,662 5,443 5,177 5,148 21,430 INCOME TAX EXPENSE 1,067 4,025 5,482 5,350 15,924 DEPRECIATION & AMORTIZATION 3,689 3,820 3,632 3,926 15,067 MINORITY INTEREST 83 197 70 (123) 227 --------------------------------------------- EBITDA (NON-GAAP MEASURE) $ 12,357 $ 20,601 $ 24,338 $ 24,318 $ 81,614 SPECIAL ITEMS (3) 9,274 - (798) - 8,476 --------------------------------------------- EBITDA EXCLUDING SPECIAL ITEMS (NON-GAAP MEASURE) $ 21,631 $ 20,601 $ 23,540 $ 24,318 $ 90,090 ============================================= FISCAL 2004 --------------------------------------------- Q1 Q2 Q3 Q4 TOTAL --------------------------------------------- NET EARNINGS EXCLUDING SPECIAL ITEMS (1) NET EARNINGS (GAAP MEASURE) $ 293 $ 8,758 $ 7,466 $ 16,517 DEBT EXTINGUISHMENT COSTS (NET OF TAX) 9,795 1,479 6,791 18,065 LITIGATION MATTERS RELATED TO BUSINESSES DIVESTED PRIOR TO THE SPIN-OFF OF APW LTD. (NET OF TAX) - - - - --------------------------------------------- NET EARNINGS EXCLUDING SPECIAL ITEMS (NON-GAAP MEASURE) $ 10,088 $ 10,237 $ 14,257 $ - $ 34,582 ============================================= DILUTED EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS (1) NET EARNINGS (GAAP MEASURE) $ 0.01 $ 0.35 $ 0.30 $ 0.67 DEBT EXTINGUISHMENT COSTS (NET OF TAX) 0.40 0.06 0.28 0.73 LITIGATION MATTERS RELATED TO BUSINESSES DIVESTED PRIOR TO THE SPIN-OFF OF APW LTD. (NET OF TAX) - - - - --------------------------------------------- NET EARNINGS EXCLUDING SPECIAL ITEMS (NON-GAAP MEASURE) $ 0.41 $ 0.41 $ 0.58 $ - $ 1.40 ============================================= EBITDA EXCLUDING SPECIAL ITEMS (2) NET EARNINGS (GAAP MEASURE) $ 293 $ 8,758 $ 7,466 $ 16,517 NET FINANCING COSTS 4,391 3,877 2,900 11,168 INCOME TAX EXPENSE 283 4,660 4,428 9,371 DEPRECIATION & AMORTIZATION 3,934 4,254 4,066 12,254 MINORITY INTEREST 233 (29) (61) 143 --------------------------------------------- EBITDA (NON-GAAP MEASURE) $ 9,134 $ 21,520 $ 18,799 $ - $ 49,453 SPECIAL ITEMS (3) 15,069 2,268 9,940 27,277 --------------------------------------------- EBITDA EXCLUDING SPECIAL ITEMS (NON-GAAP MEASURE) $ 24,203 $ 23,788 $ 28,739 $ - $ 76,730 ============================================= (1) Net earnings and diluted earnings per share excluding special items represent net earnings and diluted earnings per share per the Consolidated Statement of Earnings net of charges or credits for special items that are not representative of the normal recurring operations of the current portfolio of Actuant companies. These items include expenses recorded to extinguish debt entered into at the time of the spin-off and litigation charges related to matters associated with businesses divested prior to the spin-off. These measures should not be considered as an alternative to net earnings or diluted earnings per share as an indicator of the company's operating performance. However, this presentation is important to investors for understanding the operating results of the current portfolio of Actuant companies. (2) EBITDA represents net earnings before net financing costs, income tax expense, depreciation & amortization and minority interest. EBITDA excluding special items represents EBITDA net of charges or credits that are not representative of the normal recurring operations of the current portfolio of Actuant companies. These special items include expenses recorded to extinguish debt entered into at the time of the spin-off and litigation charges related to matters associated with businesses divested prior to the spin-off. EBITDA is not a calculation based upon generally accepted accounting principles (GAAP). The amounts included in the EBITDA calculation, however, are derived from amounts included in the Consolidated Statements of Earnings data. EBITDA should not be considered as an alternative to net earnings or operating profit as an indicator of the company's operating performance, or as an alternative to operating cash flows as a measure of liquidity. Actuant has presented EBITDA because it regularly (3) First quarter 2003 special 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 special 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 and third quarter 2004 special items represents charges related to the early redemption of debt. Second quarter 2004 special 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