Exhibit 99.1 Actuant Announces Record Third Quarter Sales and Earnings MILWAUKEE--(BUSINESS WIRE)--June 20, 2006--Actuant Corporation (NYSE:ATU) today announced record sales and earnings for its third quarter ended May 31, 2006. Third quarter fiscal 2006 net earnings and diluted earnings per share ("EPS") were $26.8 million and $0.86, respectively, compared to net earnings and EPS of $20.0 million and $0.66, respectively, for the third quarter of fiscal 2005. Third quarter 2005 and 2006 EPS includes $0.02 and $0.08 per diluted share of favorable tax reserve adjustments, respectively. Excluding these tax adjustments, third quarter EPS increased 22% year-over-year. Net earnings for the nine months ended May 31, 2006 were $67.4 million, or $2.19 per diluted share, compared to $52.1 million, or $1.79 per diluted share for the comparable prior year period, representing increases of 29% and 22%, respectively. Third quarter sales increased approximately 17% to $316.7 million compared to $271.7 million in the prior year, driven by strong base business growth and revenues from acquired businesses. Excluding foreign currency exchange rate changes and sales from acquired businesses, third quarter sales increased approximately 11% from the comparable prior year period. Sales for the nine-months ended May 31, 2006 were $876.6 million, approximately 24% higher than the $706.7 million in the comparable prior year period, reflecting sales volume added through business acquisitions and strong base business growth. Excluding the impact of foreign currency rate changes and sales from acquired businesses, sales increased 7% for the nine-month period. Net debt at May 31, 2006 was approximately $460 million (gross debt of $479 million less approximately $19 million of cash), compared to $417 million at the beginning of the quarter. The increase in debt during the quarter was attributable to the $95 million of borrowings to fund the D.L. Ricci and Precision Sure-Lock acquisitions, partially offset by approximately $52 million of third quarter cash flow. Availability under the Company's revolving credit facility remained strong at approximately $171 million as of May 31, 2006. Third quarter Tools & Supplies segment sales were $193 million, an approximate 22% increase over fiscal 2005. Excluding foreign currency exchange rate changes and sales from acquired businesses, segment sales increased approximately 10% from the comparable prior year period, driven by continued growth in shipments to the industrial tools and electrical markets. Fiscal 2006 third quarter Engineered Solutions segment sales increased approximately 9% year-over-year to $124 million. Excluding foreign currency exchange rate changes, Engineered Solutions sales increased 11%, a significant improvement from the -1% year-over-year sales change in the second quarter, driven primarily by the substantial increase in automotive convertible top system sales. Robert C. Arzbaecher, President and CEO of Actuant, commented, "We are pleased with third quarter results, especially the 11% sales growth (excluding currency and acquisitions) and the $52 million of cash flow. We continued to see strong demand from a number of our end markets during the quarter, including industrial tools and electrical products, as well as the acceleration in automotive convertible top sales growth. The acquisitions of D.L. Ricci and Precision Sure-Lock in April also added a combined $5.3 million to third quarter revenues. These two businesses complement our existing industrial tools platforms by providing us new products and services that can be combined with our existing offerings to deliver more value to customers." "Actuant's third quarter operating profit margins improved approximately 100 basis points year-over-year, the combined result of favorable sales and acquisition mix, increased fixed cost absorption, cost reductions and increased low cost country sourcing. While we were pleased with these improvements, certain of our businesses are not meeting our margin expectations. This includes automotive due to start-up inefficiencies, European electrical due to a high cost structure, and recreational vehicle due to current industry shipment levels. In addition, a number of businesses experienced sharp increases in the cost of commodities such as electrical steel, plastic resins and copper during the quarter. While we are working hard to manage all of these issues, we expect them to reduce the year-over-year margin growth in the fourth quarter and into 2007." "We made progress during the quarter on restructuring plans for the European electrical business, and expect to begin a multi-faceted program in the next quarter to reduce costs and streamline the business, including shifting labor intensive work out of high-cost regions, outsourcing certain functions to third parties, reducing or eliminating low-margin product lines, and consolidating facilities. While the details of all actions have yet to be finalized, we expect the aggregate pre-tax restructuring costs to be in the range of $17-20 million (approximately $0.49-0.58 per diluted share), to be recognized starting in the fourth quarter and continuing through the end of fiscal 2007. We anticipate annual pre-tax savings from the restructuring of approximately $7-8 million when fully completed, which we expect in the beginning of fiscal 2008." Arzbaecher concluded, "This brings us to our outlook for the final quarter of fiscal 2006 and our initial view on fiscal 2007. We are expecting fourth quarter results to be similar to those generated in the third quarter (excluding the third quarter tax adjustments), with sales in the range of $310-320 million and EPS of $0.73-0.78 per share, excluding European electrical restructuring costs. Fourth quarter year-over-year sales and EPS growth are forecasted to be in the 15-19% and 16-24% ranges, respectively. Based on these estimates, our fiscal 2006 full year outlook for sales is $1.187-1.196 billion and EPS is $2.92-2.97, again excluding European electrical restructuring costs. Based on an assessment of our markets and the broader economy, as well as a full year's benefit of this year's acquisitions, we anticipate continued sales and EPS growth in 2007. We anticipate fiscal 2007 sales in the range of $1.29-1.31 billion and EPS of $3.15-3.35 per diluted share, excluding European electrical restructuring costs and future acquisitions. We are optimistic about Actuant's future and believe the ongoing execution of our business model will continue to reward shareholders." 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, 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. An investor conference call is scheduled for 11am ET today, June 20, and may be listened to via web cast on Actuant's website at www.actuant.com. About Actuant Actuant, headquartered in Glendale, Wisconsin, is a diversified industrial company with operations in more than 30 countries. The Actuant businesses are market leaders in highly engineered position and motion control systems and branded hydraulic and electrical tools and supplies. Since its creation through a spin-off in 2000, Actuant has grown its sales from $482 million to over $1 billion and its market capitalization from $113 million to over $1.5 billion. The Company employs a workforce of more than 6,000 worldwide. Actuant Corporation trades on the NYSE under the symbol ATU. For further information on Actuant and its business units, visit the Company's website at www.actuant.com. (tables follow) Actuant Corporation Condensed Consolidated Balance Sheets (Dollars in thousands) May 31, August 31, 2006 2005 ------------ ------------ (Unaudited) ASSETS Current assets Cash and cash equivalents $19,212 $10,356 Accounts receivable, net 164,835 131,185 Inventories, net 151,571 135,960 Deferred income taxes 15,428 14,974 Other current assets 8,830 6,838 ------------ ------------ Total current assets 359,876 299,313 Property, plant and equipment, net 95,595 83,879 Goodwill 491,886 428,285 Other intangible assets, net 203,802 175,001 Other long-term assets 13,114 9,857 ------------ ------------ Total assets $1,164,273 $996,335 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Short-term borrowings $66 $21 Trade accounts payable 113,502 89,506 Accrued compensation and benefits 41,436 32,663 Income taxes payable 19,111 15,049 Current maturities of long-term debt 9,523 136 Other current liabilities 50,658 51,360 ------------ ------------ Total current liabilities 234,296 188,735 Long-term debt, less current maturities 469,649 442,661 Deferred income taxes 68,009 58,783 Pension and postretirement benefit accruals 42,344 41,192 Other long-term liabilities 17,305 20,131 Shareholders' equity Capital stock 5,456 5,410 Additional paid-in capital (359,299) (370,875) Accumulated other comprehensive income (loss) (10,173) (20,282) Restricted stock awards (2,699) (1,452) Stock held in trust (1,314) (1,166) Deferred compensation liability 1,314 1,166 Retained earnings 699,385 632,032 ------------ ------------ Total shareholders' equity 332,670 244,833 ------------ ------------ Total liabilities and shareholders' equity $1,164,273 $996,335 ============ ============ Actuant Corporation Condensed Consolidated Statements of Earnings (Dollars in thousands except per share amounts) Three Months Ended Nine Months Ended May 31, May 31, ---------------------- ---------------------- 2006 2005 2006 2005 ---------------------- ---------------------- (Unaudited) (Unaudited) Net sales $316,662 $271,733 $876,557 $706,677 Cost of products sold 210,767 185,071 580,123 481,824 ---------------------- ---------------------- Gross profit 105,895 86,662 296,434 224,853 Selling, administrative and engineering expenses 61,171 51,174 175,086 134,151 Amortization of intangible assets 1,884 1,610 5,443 3,476 ---------------------- ---------------------- Operating profit 42,840 33,878 115,905 87,226 Financing costs, net 6,785 4,936 18,936 10,781 Other (income) expense, net 659 435 1,682 (744) ---------------------- ---------------------- Earnings from operations before income tax expense and minority interest 35,396 28,507 95,287 77,189 Income tax expense 8,636 8,744 28,015 25,572 Minority interest, net of income taxes (27) (234) (81) (519) ---------------------- ---------------------- Net earnings $26,787 $19,997 $67,353 $52,136 ====================== ====================== Earnings per share Basic $0.99 $0.74 $2.49 $2.03 Diluted 0.86 0.66 2.19 1.79 Weighted average common shares outstanding Basic 27,150 26,956 27,091 25,663 Diluted 31,717 31,438 31,591 30,165 Actuant Corporation Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three Months Ended Nine Months Ended May 31, May 31, ---------------------------------------- 2006 2005 2006 2005 --------- --------- --------- --------- Operating Activities Net earnings $26,787 $19,997 $67,353 $52,136 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 6,681 6,448 19,923 16,245 Amortization of debt discount and debt issuance costs 368 359 1,089 936 Stock-based compensation expense 1,476 1,228 3,648 3,168 Provision for deferred income taxes (1,305) 316 (802) (475) Loss/(gain) on disposal of assets (345) 145 (275) (151) Changes in operating assets and liabilities, excluding the effects of the business acquisitions: Accounts receivable (5,724) (4,509) (22,375) (11,753) Increase in AR securitization program 3,808 1,790 4,250 21,070 Inventories (2,885) 4,525 (8,198) (5,513) Prepaid expenses and other assets (497) 349 (1,727) 3,085 Trade accounts payable 15,509 4,304 18,022 (1,548) Income taxes payable 4,181 (3,321) 5,831 (448) Reimbursement of tax refund to former subsidiary - - - (15,837) Other accrued liabilities 6,822 (2,395) 3,138 (8,889) --------- --------- --------- --------- Net cash provided by operating activities 54,876 29,236 89,877 52,026 Investing Activities Proceeds from sale of property, plant and equipment 474 - 589 2,839 Capital expenditures (5,566) (3,558) (15,465) (11,505) Cash paid for business acquisitions, net of cash acquired (95,539) (94,808) (104,876) (381,955) --------- --------- --------- --------- Net cash used in investing activities (100,631) (98,366) (119,752) (390,621) Financing Activities Net borrowings (repayments) on revolving credit facilities and short-term borrowings 51,566 72,077 36,481 17,881 Proceeds from issuance of term loans - - - 250,000 Proceeds from euro-denominated acquisition loan - - - 19,602 Principal payments on term loans - (827) - (3,045) Retirement of KCI 10.5% bonds - - - (82,800) Debt issuance costs - - - (2,300) Net proceeds from Class A common stock offering - - - 134,360 Payment of Cash Dividend - - (2,165) - Tax benefit from stock-based compensation 1,489 401 2,149 3,548 Stock option exercises and other 514 500 1,991 2,056 --------- --------- --------- --------- Net cash provided by financing activities 53,569 72,151 38,456 339,302 Effect of exchange rate changes on cash 419 (206) 275 144 --------- --------- --------- --------- Net increase in cash and cash equivalents 8,233 2,815 8,856 851 Cash and cash equivalents - beginning of period 10,979 4,069 10,356 6,033 --------- --------- --------- --------- Cash and cash equivalents - end of period $19,212 $6,884 $19,212 $6,884 ========= ========= ========= ========= 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 $174,577 $192,580 $548,463 ENGINEERED SOLUTIONS SEGMENT 102,570 101,442 124,082 328,094 -------------------------------------------------- TOTAL $283,876 $276,019 $316,662 $ - $876,557 ================================================== % SALES GROWTH TOOLS & SUPPLIES SEGMENT 61.1% 26.0% 21.7% 34.0% ENGINEERED SOLUTIONS SEGMENT 17.7% 4.9% 9.3% 10.3% TOTAL 42.2% 17.3% 16.5% 24.0% OPERATING PROFIT TOOLS & SUPPLIES SEGMENT $30,416 $27,355 $32,479 $90,250 ENGINEERED SOLUTIONS SEGMENT 11,762 11,131 14,342 37,235 CORPORATE / GENERAL (3,967) (3,632) (3,981) (11,580) -------------------------------------------------- TOTAL $38,211 $34,854 $42,840 $ - $115,905 ================================================== OPERATING PROFIT % TOOLS & SUPPLIES SEGMENT 16.8% 15.7% 16.9% 16.5% ENGINEERED SOLUTIONS SEGMENT 11.5% 11.0% 11.6% 11.3% TOTAL (INCLUDING CORPORATE) 13.5% 12.6% 13.5% 13.2% EBITDA TOOLS & SUPPLIES SEGMENT $33,530 $30,868 $35,395 $99,793 ENGINEERED SOLUTIONS SEGMENT 14,105 13,968 17,348 45,421 CORPORATE / GENERAL (3,601) (3,586) (3,881) (11,068) -------------------------------------------------- TOTAL $44,034 $41,250 $48,862 $ - $134,146 ================================================== EBITDA % TOOLS & SUPPLIES SEGMENT 18.5% 17.7% 18.4% 18.2% ENGINEERED SOLUTIONS SEGMENT 13.8% 13.8% 14.0% 13.8% TOTAL (INCLUDING CORPORATE) 15.5% 14.9% 15.4% 15.3% 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 TAX (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 19,298 26,787 $67,353 FINANCING COSTS, NET 6,067 6,084 6,785 18,936 INCOME TAX EXPENSE 10,220 9,159 8,636 28,015 DEPRECIATION & AMORTIZATION 6,521 6,721 6,681 19,923 MINORITY INTEREST, NET OF INCOME TAX (42) (12) (27) (81) --------------------------------------------- EBITDA (NON-GAAP MEASURE) $44,034 $41,250 $48,862 $ - $134,146 ============================================= (1) EBITDA represents net earnings before financing costs, net, 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