ACTUANT -A (ATU)

Actuant Corporation (NYSE: ATU) today announced results for its third quarter ended May 31, 2007. Including restructuring charges, third quarter fiscal 2007 net earnings and diluted earnings per share ("EPS") were $29.6 million and $0.95, respectively, compared to prior year net earnings and EPS of $26.8 million and $0.86, respectively. Fiscal 2007 third quarter results include a $0.4 million ($0.01 per diluted share) charge covering a portion of the Company's previously announced restructuring of its European Electrical business. Fiscal 2006 third quarter results include a $2.6 million ($0.08 per diluted share) one-time tax benefit. Excluding the restructuring charge and prior year tax benefit, third quarter EPS increased 23% year-over-year from $0.78 to $0.96 (see attached reconciliation of earnings).

Third Quarter 2007 Highlights

• 23% improvement in EPS, excluding restructuring and prior year tax benefit, representing largest quarterly EPS growth of the year.
• Record sales of $385 million, a 22% increase over the prior year.
• Strong cash flow resulting in third quarter net debt reduction of $88 million. Year-to-date free cash flow of $98 million, a 138% conversion of net income.
• Sequential and year-over-year operating profit and EBITDA margin improvement.
• Completed acquisition of T.T. Fijnmechanica B.V. (?TTF?), broadening the Industrial Segment product offering.
• Announced $250 million Senior Notes offering (completed June 12^th).

Robert Arzbaecher, President and CEO of Actuant commented, "We are pleased with our performance in the third quarter which added to our track record of consistent, profitable growth. With the exception of the expected year-over-year sales decline in the Actuation Systems segment, we saw continued core sales growth in our other three segments. These results reinforce the benefits of Actuant's customer, market and geographic diversification. In addition, acquisitions contributed $42 million or 13% of the sales improvement in the third quarter and highlight the success of adding to growth opportunities in our existing businesses via acquisitions.?

Consolidated Results

Third quarter sales increased 22% to $385 million from $317 million in the prior year, reflecting the combination of core growth, business acquisitions and the weaker US dollar. Excluding the impact of foreign currency rate changes (5%) and acquisitions (13%), core sales growth was 4%. The Industrial Segment once again generated double digit core sales growth while the Actuation Systems Segment reported a year-over-year sales decline due to prior year convertible top launches and the North American heavy duty truck pre-buy.

The third quarter operating margin was 13.7%, excluding restructuring charges, an increase of 20 basis points versus the prior year resulting from improvements in both gross profit margin and selling, administrative and engineering spending, partially offset by higher acquisition related amortization expense. These improvements reflect the Company's strategic sourcing and Lean Enterprise Across Discipline (LEAD) activities.

Sales for the nine months ended May 31, 2007 were $1.069 billion, or 22% higher than the $877 million in the comparable prior year period. Excluding the impact of foreign currency rate changes and sales from acquired businesses, core sales increased 7%.

Earnings for the nine months ended May 31, 2007, excluding the restructuring charge, rose 19% to $77.1 million, or $2.48 per diluted share, compared to $64.8 million, or $2.11 for the comparable prior year period (excluding the tax benefit). Year-to-date fiscal 2007 results include $0.10 per diluted share of European Electrical restructuring charges while fiscal 2006 included an $0.08 favorable tax adjustment (see attached reconciliation of earnings).

Third quarter fiscal 2007 Industrial Segment sales increased 36% to $113 million, resulting from increased demand, the weaker US dollar and sales from acquired businesses. Excluding currency translation and sales from acquired businesses, Industrial Segment sales increased approximately 15% from the comparable prior year period, driven by continued strong demand in both the high-force hydraulic tool and joint integrity product lines. Third quarter operating profit margins expanded 370 basis points to 29.3% due primarily to the benefit of higher volume and operating efficiencies.

Fiscal 2007 third quarter Electrical Segment sales increased 17% to $128 million, reflecting 3% core sales growth, favorable foreign currency exchange rate changes and the August 2006 acquisition of Actown. The Electrical Segment operating profit margin declined from 10.2% in the third quarter of fiscal 2006 to 8.1% in fiscal 2007, excluding restructuring charges, primarily due to restructuring related inefficiencies in the European Electrical operations, product buyback and reset costs and unfavorable sales and acquisition mix. The Company expects to substantially complete the previously announced restructuring of its European Electrical operations by the end of calendar 2007.

Actuation Systems third quarter fiscal 2007 sales increased 2% to $112 million. Core sales declined 2% in the quarter as increased demand in the recreational vehicle (?RV?) and European truck markets was more than offset by declines in both the automotive and North American truck markets. Automotive sales in the third fiscal quarter of last year were over 50% higher than the previous year quarter due to several new convertible top platform launches. The decline in North America truck was anticipated due to the impact of emissions regulation changes. Operating profit margins declined year-over-year due primarily to unfavorable sales mix; however, they improved sequentially reflecting the benefit of profit improvement actions.

Fiscal 2007 third quarter Engineered Products Segment sales more than doubled to $32.9 million reflecting both 5% core sales growth and the acquisition of Maxima in December 2006. Operating profit increased to $4.3 million from $2.1 million while margins declined 120 basis points.

Financial Position

Quarter-end net debt (total debt of $555 million less $74 million of cash) was $481 million, a decrease of $88 million from the beginning of the quarter. Actuant's free cash flow in the quarter was approximately $92 million driven by strong earnings conversion, improved working capital management and the timing of certain cash payments. Approximately $23 million of cash was used in business acquisitions which nearly offset the $20 million increase in accounts receivable securitization proceeds in the quarter.

Outlook

The Company updated its fiscal year 2007 guidance to reflect both the TTF acquisition and third quarter results. Full year fiscal 2007 EPS is expected to be in the range of $3.38-3.43 (excluding European Electrical restructuring charges) on sales of $1.430-1.440 billion. Fourth quarter EPS (excluding restructuring charges) is projected to be in the $0.90-0.95 range.

Actuant also provided its preliminary outlook for fiscal 2008, which reflects the continued execution of its dual strategy of organic growth and tuck-in business acquisitions. The company is targeting approximately 10-15% EPS growth (excluding future acquisitions), above the mid-point of its fiscal 2007 EPS guidance. Diluted EPS is projected to be in the $3.70-3.90 range, excluding European Electrical restructuring charges. The Company currently anticipates that next year's sales will be in the $1.530?1.550 billion range, an increase of 6-8% over fiscal 2007.

Arzbaecher commented, ?We are very pleased with the way fiscal 2007 has developed and expect 2008 to follow a similar pattern. Our 2007 EPS guidance from last June anticipated 9-14% growth because, similar to our preliminary 2008 guidance, it didn't include the benefit of future acquisitions. As a result of acquisitions and base business performance, fiscal 2007 EPS is currently forecasted to grow 17-18% above the prior year. We are excited about the prospects for the upcoming year. There are growth opportunities in all our segments and the pipeline for additional acquisitions remains very active. Our focus on LEAD, including Asian sourcing, will continue to drive margin enhancement opportunities. We expect continued strong performance in 2008.?

Conference Call Information

An investor conference call is scheduled for 10am CDT today, June 19, 2007. Webcast information and conference call materials will be made available on the Actuant company website (www.actuant.com) prior to the start of the call.

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.

About Actuant

Actuant, headquartered in Butler, 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 $1.3 billion and its market capitalization from $113 million to over $1.3 billion. The Company employs a workforce of more than 6,700 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 Statements of Earnings
(Dollars in thousands except per share amounts)
(Unaudited)
			Three Months Ended			Nine Months Ended
			May 31,			May 31,
			2007	2006		2007	2006
Net sales			$ 385,090	$ 316,662		$ 1,069,093	$ 876,557
Cost of products sold			255,505	210,767		716,218	580,123
	Gross profit		129,585	105,895		352,875	296,434
Selling, administrative and engineering expenses			73,772	61,171		207,836	175,086
Restructuring charge			434	-		4,319	-
Amortization of intangible assets			2,906	1,884		7,819	5,443
	Operating profit		52,473	42,840		132,901	115,905
Financing costs, net			9,076	6,785		24,185	18,936
Other expense, net			660	659		1,632	1,682
	Earnings from operations before income tax expense and minority interest
			42,737	35,396		107,084	95,287
Income tax expense			13,146	8,636		33,480	28,015
Minority interest, net of income taxes			11	(27)		3	(81)
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