Exhibit 99.1 Actuant Announces Record First Quarter Sales and Earnings MILWAUKEE--(BUSINESS WIRE)--Dec. 21, 2005--Actuant Corporation (NYSE:ATU) today announced record results for its first quarter ended November 30, 2005. First quarter fiscal 2006 net earnings and diluted earnings per share ("EPS") were $21.3 million and $0.70, respectively. This compares favorably to net earnings and EPS of $16.9 million and $0.62, respectively, for the first quarter of fiscal 2005 which included a $2.0 million pre-tax gain ($1.3 million after tax or $0.05 per diluted share), for the favorable settlement of a liability to a former subsidiary. First quarter sales increased approximately 42% to $284 million compared to $200 million in the prior year. Current year results include those from Key Components, Inc., Hydratight Sweeney, Hedley Purvis Holdings Limited, and A.W. Sperry Instruments, Inc., which were acquired during the second and third quarters of fiscal 2005. Excluding the impact of foreign currency exchange rate changes, first quarter core sales (year-over-year sales in both existing and acquired businesses) increased approximately 1%. Sales from businesses owned at least twelve months were flat compared to the prior year, excluding foreign currency rate changes. The increase in core sales resulted from strong industrial and North American electrical sales, partially offset by declines in the recreational vehicle ("RV") and automotive convertible top markets. Robert C. Arzbaecher, President and CEO of Actuant, commented, "I am pleased with the strong start to fiscal 2006 and better than forecasted first quarter results. Of particular note was the improvement in year-over-year sales growth excluding foreign currency exchange rate changes from businesses owned at least twelve months, which improved from -5% in the fourth quarter of fiscal 2005 to flat in the first quarter of fiscal 2006." Arzbaecher continued, "Tools & Supplies performance exceeded our expectations, especially the industrial and electrical units, which more than offset the expected declines in the automotive convertible top and RV businesses. This favorable sales mix also benefited margins and earnings. Engineered Solutions segment results were in line with our expectations. We anticipate improvement in this segment as the year progresses, reflecting sales growth from new convertible top platform launches and improved RV market conditions. Late in the first quarter, we started actuation system production for two new retractable hard top convertibles, and are scheduled to start shipping systems for two additional new models in the next ninety days. Meanwhile, we believe RV market conditions will improve as production levels better match retail demand." Actuant's operating profit in the first quarter of fiscal 2006 was $38.2 million, or 45% higher than the $26.4 million in the first quarter of last year, due to operating profit from companies acquired subsequent to the first quarter of fiscal 2005, and improvement in operating profit margins. Operating profit margins expanded to 13.5% in the first quarter of fiscal 2006 from 13.2% and 12.5% in the first and fourth quarters of fiscal 2005, respectively, reflecting favorable sales mix, increased low cost country sourcing, price increases and cost reductions. Fiscal 2006 first quarter Tools & Supplies segment sales were $181 million, a 61% increase over last year. Excluding the impact of foreign currency rate changes, year-over-year first quarter Tools & Supplies segment core sales increased 9% and sales from businesses owned at least twelve months increased 11%. First quarter fiscal 2006 Engineered Solutions segment sales increased approximately 18% to $103 million, compared to $87 million in the previous year. Excluding the impact of foreign currency rate changes, first quarter Engineered Solutions core sales decreased 11% and sales from businesses owned at least twelve months decreased 14%, both the result of lower sales to automotive convertible top and RV motorhome original equipment manufacturers ("OEMs"). Total debt at November 30, 2005 was approximately $425 million. Net debt (total debt less approximately $7 million of cash) was $418 million, compared to $432 million at the beginning of the quarter. This $14 million reduction resulted from strong first quarter cash flow even after considering the seasonal working capital increases in the business. The Company also announced sales and earnings guidance for the second quarter of fiscal 2006 and confirmed its full year guidance. Arzbaecher stated, "We expect second quarter sales and EPS to be lower than the first quarter due to normal seasonality, but expect year-over year core sales and earnings growth compared to the prior year period. We are projecting second quarter sales and EPS to be in the range of $270 - $275 million and $0.58 - $0.63 per share, respectively. Full year fiscal 2006 sales and earnings guidance remains unchanged from our previous ranges of $1.150 - $1.175 billion and $2.75 - $3.00 per share, respectively." 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 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. About Actuant Actuant, headquartered in Glendale, Wisconsin, is a diversified industrial company with operations in 31 countries. The Actuant businesses are market leaders in highly engineered position and motion control systems and branded hydraulic and electrical tools and supplies. Formerly known as Applied Power Inc., Actuant was created in 2000 after the spin-off of Applied Power's electronics business segment into a separate public company. Since 2000, Actuant has grown its sales from $482 million to over $1 billion and its market capitalization from $113 million to over $1 billion. The Company employs a workforce of approximately 6,000 worldwide. Actuant Corporation trades on the New York Stock Exchange under the symbol ATU. For further information on Actuant and its business units, visit the Company's website at www.actuant.com. The Company will be conducting an investor conference call at 11:00 EST Wednesday, December 21 to discuss first quarter results. To listen to the live web cast of the call visit the Company's website at www.actuant.com. Actuant Corporation Condensed Consolidated Balance Sheets (Dollars in thousands) November 30, August 31, 2005 2005 ------------ ------------- (Unaudited) ASSETS Current assets Cash and cash equivalents $7,470 $10,356 Accounts receivable, net 146,642 131,185 Inventories, net 139,633 135,960 Deferred income taxes 14,786 14,974 Other current assets 7,732 6,838 ------------ ------------- Total current assets 316,263 299,313 Property, plant and equipment, net 82,336 83,879 Goodwill 422,952 428,285 Other intangible assets, net 170,591 175,001 Other long-term assets 11,835 9,857 ------------ ------------- Total assets $1,003,977 $996,335 ============ ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Short-term borrowings $3,492 $21 Trade accounts payable 94,416 89,506 Accrued compensation and benefits 30,648 32,663 Income taxes payable 20,338 15,049 Current maturities of long-term debt 130 136 Other current liabilities 49,945 51,360 ------------ ------------- Total current liabilities 198,969 188,735 Long-term debt, less current maturities 421,996 442,661 Deferred income taxes 59,216 58,783 Pension and postretirement benefit accruals 40,519 41,192 Other long-term liabilities 21,255 20,131 Shareholders' equity Capital stock 5,424 5,410 Additional paid-in capital (367,239) (370,875) Accumulated other comprehensive income (loss) (28,140) (20,282) Restricted stock awards (1,323) (1,452) Stock held in trust (1,302) (1,166) Deferred compensation liability 1,302 1,166 Retained earnings 653,300 632,032 ------------ ------------- Total shareholders' equity 262,022 244,833 ------------ ------------- Total liabilities and shareholders' equity $1,003,977 $996,335 ============ ============= Actuant Corporation Condensed Consolidated Statements of Earnings (Dollars in thousands except per share amounts) Three Months Ended November 30, -------------------------- 2005 2004 ------------ ------------- (Unaudited) Net sales $283,876 $199,677 Cost of products sold 184,398 135,876 ------------ ------------- Gross profit 99,478 63,801 Selling, administrative and engineering expenses 59,482 36,800 Amortization of intangible assets 1,785 591 ------------ ------------- Operating profit 38,211 26,410 Financing costs, net 6,067 1,938 Other (income) expense, net 698 (1,219) ------------ ------------- Earnings from operations before income tax expense and minority interest 31,446 25,691 Income tax expense 10,220 8,806 Minority interest, net of income taxes (42) (56) ------------ ------------- Net earnings $21,268 $16,941 ============ ============= Earnings per share Basic $0.79 $0.71 Diluted 0.70 0.62 Weighted average common shares outstanding Basic 27,037 23,877 Diluted 31,453 28,362 Actuant Corporation Condensed Consolidated Statements of Cash Flows (Dollars in thousands) Three Months Ended November 30, ------------------------------- 2005 2004 --------------- --------------- (Unaudited) Operating Activities Net earnings $21,268 $16,941 Adjustments to reconcile net earnings to net cash used in operating activities: Depreciation and amortization 6,521 4,098 Amortization of debt discount and debt issuance costs 360 245 Stock-based compensation expense 1,066 915 Provision for deferred income taxes 57 245 Gain on disposal of assets (66) (179) Changes in operating assets and liabilities, excluding the effects of the business acquisition: Accounts receivable (18,446) (11,034) Inventories (5,745) (5,327) Prepaid expenses and other assets (1,184) 3,785 Trade accounts payable 6,707 (1,940) Income taxes payable 5,493 1,827 Reimbursement of tax refund to former subsidiary - (15,837) Other accrued liabilities 4,992 (3,441) --------------- --------------- Net cash provided by (used in) operating activities 21,023 (9,702) Investing Activities Proceeds from sale of property, plant and equipment 115 357 Capital expenditures (5,075) (3,183) Cash paid for business acquisition, net of cash acquired - (8,952) --------------- --------------- Net cash used in investing activities (4,960) (11,778) Financing Activities Net borrowings (repayments) on revolving credit facilities and short-term borrowings (17,103) 17,625 Principal payments on term loans - (91) Cash dividend (2,165) - Tax benefit from stock-based compensation 188 3,383 Stock option exercises and other 428 1,233 --------------- --------------- Net cash provided by (used in) financing activities (18,652) 22,150 Effect of exchange rate changes on cash (297) 385 --------------- --------------- Net increase (decrease) in cash and cash equivalents (2,886) 1,055 Cash and cash equivalents - beginning of period 10,356 6,033 --------------- --------------- Cash and cash equivalents - end of period $7,470 $7,088 =============== =============== ACTUANT CORPORATION SUPPLEMENTAL UNAUDITED DATA (Dollars in thousands) FISCAL 2005 --------------------------------------------- Q1 Q2 Q3 Q4 TOTAL --------------------------------------------- SALES TOOLS & SUPPLIES SEGMENT $112,537 $138,546 $158,211 $174,250 $583,544 ENGINEERED SOLUTIONS SEGMENT 87,140 96,721 113,522 95,139 392,522 --------------------------------------------- TOTAL $199,677 $235,267 $271,733 $269,389 $976,066 ============================================= % SALES GROWTH TOOLS & SUPPLIES SEGMENT 16.8% 33.8% 43.9% 63.9% 40.2% ENGINEERED SOLUTIONS SEGMENT 24.0% 33.5% 31.2% 16.8% 26.3% TOTAL 19.9% 33.7% 38.3% 43.5% 34.3% OPERATING PROFIT TOOLS & SUPPLIES SEGMENT $17,493 $19,621 $21,924 $28,537 $87,575 ENGINEERED SOLUTIONS SEGMENT 12,080 10,803 16,091 10,792 49,766 CORPORATE / GENERAL (3,163) (3,486) (4,137) (4,064) (14,850) --------------------------------------------- TOTAL $26,410 $26,938 $33,878 $35,265 $122,491 ============================================= OPERATING PROFIT % TOOLS & SUPPLIES SEGMENT 15.5% 14.2% 13.9% 16.4% 15.0% ENGINEERED SOLUTIONS SEGMENT 13.9% 11.2% 14.2% 11.3% 12.7% TOTAL (INCLUDING CORPORATE) 13.2% 11.4% 12.5% 13.1% 12.5% EBITDA TOOLS & SUPPLIES SEGMENT $19,262 $22,560 $25,619 $31,877 $99,318 ENGINEERED SOLUTIONS SEGMENT 13,384 13,345 18,143 13,150 58,022 CORPORATE / GENERAL (919) (3,308) (3,871) (4,186) (12,284) --------------------------------------------- TOTAL $31,727 $32,597 $39,891 $40,841 $145,056 ============================================= EBITDA % TOOLS & SUPPLIES SEGMENT 17.1% 16.3% 16.2% 18.3% 17.0% ENGINEERED SOLUTIONS SEGMENT 15.4% 13.8% 16.0% 13.8% 14.8% TOTAL (INCLUDING CORPORATE) 15.9% 13.9% 14.7% 15.2% 14.9% FISCAL 2006 --------------------------------------------- Q1 Q2 Q3 Q4 TOTAL --------------------------------------------- SALES TOOLS & SUPPLIES SEGMENT $181,306 $181,306 ENGINEERED SOLUTIONS SEGMENT 102,570 102,570 --------------------------------------------- TOTAL $283,876 $- $- $- $283,876 ============================================= % SALES GROWTH TOOLS & SUPPLIES SEGMENT 61.1% 61.1% ENGINEERED SOLUTIONS SEGMENT 17.7% 17.7% TOTAL 42.2% 42.2% OPERATING PROFIT TOOLS & SUPPLIES SEGMENT $30,416 $30,416 ENGINEERED SOLUTIONS SEGMENT 11,762 11,762 CORPORATE / GENERAL (3,967) (3,967) --------------------------------------------- TOTAL $38,211 $- $- $- $38,211 ============================================= OPERATING PROFIT % TOOLS & SUPPLIES SEGMENT 16.8% 16.8% ENGINEERED SOLUTIONS SEGMENT 11.5% 11.5% TOTAL (INCLUDING CORPORATE) 13.5% 13.5% EBITDA TOOLS & SUPPLIES SEGMENT $33,530 $33,530 ENGINEERED SOLUTIONS SEGMENT 14,105 14,105 CORPORATE / GENERAL (3,601) (3,601) --------------------------------------------- TOTAL $44,034 $- $- $- $44,034 ============================================= EBITDA % TOOLS & SUPPLIES SEGMENT 18.5% 18.5% ENGINEERED SOLUTIONS SEGMENT 13.8% 13.8% TOTAL (INCLUDING CORPORATE) 15.5% 15.5% ACTUANT CORPORATION Reconciliation of GAAP measures to non-GAAP measures (Dollars in thousands) FISCAL 2005 --------------------------------------------- Q1 Q2 Q3 Q4 TOTAL --------------------------------------------- EBITDA(1) NET EARNINGS $16,941 $15,198 $19,997 $19,115 $71,251 FINANCING COSTS, NET 1,938 3,907 4,936 6,146 16,927 INCOME TAX EXPENSE 8,806 8,022 8,744 9,440 35,012 DEPRECIATION & AMORTIZATION 4,098 5,699 6,448 6,176 22,421 MINORITY INTEREST, NET OF INCOME TAXES (56) (229) (234) (36) (555) --------------------------------------------- EBITDA (NON-GAAP MEASURE) $31,727 $32,597 $39,891 $40,841 $145,056 ============================================= FISCAL 2006 --------------------------------------------- Q1 Q2 Q3 Q4 TOTAL --------------------------------------------- EBITDA(1) NET EARNINGS $21,268 $21,268 FINANCING COSTS, NET 6,067 6,067 INCOME TAX EXPENSE 10,220 10,220 DEPRECIATION & AMORTIZATION 6,521 6,521 MINORITY INTEREST, NET OF INCOME TAXES (42) (42) --------------------------------------------- EBITDA (NON-GAAP MEASURE) $44,034 $- $- $- $44,034 ============================================= (1) EBITDA represents net earnings before financing costs, income tax expense, depreciation & amortization and minority interest. 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 reviews this as a measure of the company's ability to incur and service debt. In addition, EBITDA is used by many of our investors and lenders, and is presented as a convenience to them. However, the EBITDA measure presented may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation. CONTACT: Actuant Corporation Andrew Lampereur, 414-352-4160