ACTUANT -A (ATU)

Actuant Corporation (NYSE: ATU) today announced results for its second quarter ended February 28, 2007. Including a restructuring provision, second quarter fiscal 2007 net earnings and diluted earnings per share ("EPS") were $18.9 million and $0.62, respectively, versus comparable prior year net earnings and EPS of $19.3 million and $0.63, respectively. Fiscal 2007 second quarter results include a $3.8 million ($2.9 million net of tax, or $0.09 per diluted share) charge covering a portion of the Company's previously announced restructuring of its European Electrical business. Excluding the restructuring charge, second quarter EPS increased 13% year-over-year to $0.71 (see attached reconciliation of earnings).

Net earnings for the six months ended February 28, 2007 were $44.0 million, or $1.43 per diluted share, compared to $40.6 million, or $1.33 for the prior year period. Fiscal 2007 results include $0.09 per diluted share of European Electrical restructuring costs. Excluding restructuring, EPS was $1.52 in the first six months of fiscal 2007, a 14% increase over the prior year (see attached reconciliation of earnings).

Second quarter sales increased 24% to $341 million from $276 million in the prior year, reflecting strong core growth, the weaker US dollar, and approximately $35 million of sales from acquired businesses. Excluding foreign currency exchange rate changes and business acquisitions, second quarter fiscal 2007 sales increased approximately 7%. This increase reflected core growth in all four segments, including 12% in the Industrial Segment. Sales for the six months ended February 28, 2007 were $684 million, approximately 22% higher than the $560 million in the comparable prior year period. Excluding the impact of foreign currency rate changes and sales from acquired businesses, sales for the six-month period increased 8%.

Robert C. Arzbaecher, President and CEO of Actuant, commented, ?We are pleased with our second quarter results, including the 24% sales growth and 13% growth in EPS excluding restructuring, which were led by the strong performance of the Industrial Segment. Consistent with our business model, acquisitions made a significant contribution to the sales growth, however, each of our four segments contributed to the 7% core growth.?

Arzbaecher added, ?We continued to see significant operating profit margin improvement in our Industrial Segment. While consolidated operating profit margins were down slightly on a year-over-year basis due to lower profitability in the Electrical and Actuation Systems segments, Industrial Segment margins improved by 160 basis points. Progress was made in improving Automotive and Recreational Vehicle margins during the quarter, which positions Actuant well for strong second half earnings growth. We expect operating margin improvement in both Electrical and Actuation Systems Segments in the third and fourth quarter, and expect margin expansion for Actuant in total for the fiscal year.?

The Company also announced sales and earnings guidance for the third quarter and full year. Arzbaecher stated, ?Excluding future acquisition activity and European Electrical restructuring costs, we expect year-over-year third quarter sales and EPS to increase due to completed acquisitions, core sales growth and margin expansion. We are projecting third quarter sales and EPS (excluding restructuring) to be in the range of $360 - $370 million and $0.89 - $0.96 per share, respectively. We are also raising our full year fiscal 2007 sales and EPS ranges, resulting in updated guidance of $1.39 - $1.41 billion and $3.30 - $3.45 per share (excluding restructuring), respectively. The increased guidance equates to projected full year EPS growth of 14-19%.?

Net debt (total debt of $595 million less approximately $25 million of cash) was $570 million, an increase of $115 from the beginning of the quarter. Excluding the approximate $110 million of cash used for acquisitions and the $9 million decline in accounts receivable securitization, Actuant generated approximately $5 million of cash flow in the second quarter, which is a seasonally weak cash-flow period. The Company believes second half cash flow will be significantly higher than that in the first half, in line with historical seasonality. The Company had availability under its revolving credit facility in excess of $200 million as of February 28, 2007.

Second quarter fiscal 2007 Industrial Segment sales increased 36% to approximately $94 million, resulting from increased demand, foreign currency rate changes, and sales from acquisitions (D.L. Ricci, Precision Sure-Lock, Veha and InjectAseal). Excluding foreign currency exchange rate changes and sales from acquired businesses, Industrial Segment sales increased approximately 12% from the comparable prior year period, driven by continued strong demand in both the hydraulic tool and joint integrity product lines. Second quarter operating profit margins also expanded, increasing from 24.1% in the second quarter of last year to 25.7% in the current year, due to the continued benefit of higher volume and operating efficiencies.

Fiscal 2007 second quarter Electrical Segment sales increased 17% to approximately $124 million, reflecting 4% core sales growth, foreign currency exchange rate changes and the fiscal 2006 acquisitions of B.E.P. Marine and Actown. Electrical operating profit margins declined from 10.2% in the second quarter of fiscal 2006 to 4.7% in fiscal 2007 due primarily to the $3.8 million European Electrical restructuring charge, related inefficiencies in the European Electrical business and unfavorable sales and acquisition mix. Excluding the restructuring provision, current year second quarter operating margins were 7.7%. The Company is on track with its previously announced plans to downsize the European Electrical operations to improve profitability, and expects to recognize an additional $8-11 million of related restructuring costs (pre-tax) prior to the end of calendar 2007.

Actuation Systems second quarter fiscal 2007 sales increased 11% to approximately $98 million, reflecting foreign currency exchange rate changes and 7% core sales growth. Core sales growth was driven by increased demand in automotive and recreational vehicle (?RV?) actuation systems product lines, both of which increased approximately 15% year-over-year due to the continued impact of new convertible auto platform introductions and RV market share gains. Despite robust sales growth in Europe, as expected, truck actuation systems product line sales declined approximately 5% due to the end of the North American emissions-related pre-buy. Actuation Systems operating profit margins declined to 8.1% in the second quarter of fiscal 2007, due primarily to unfavorable product line sales mix.

Fiscal 2007 second quarter Engineered Products Segment sales increased approximately 92% year-over-year due to 9% core sales growth and the acquisition of Maxima in December 2006. Operating profit margins decreased to 12.6% from 13.4% in the prior year second quarter, primarily due to Maxima purchase accounting charges, higher amortization expense and acquisition sales mix.

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, March 22, and may be listened to via web cast on Actuant's website at www.actuant.com.

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.

Actuant Corporation
Condensed Consolidated Statements of Earnings
(Dollars in thousands except per share amounts)
(Unaudited)
			Three Months Ended					Six Months Ended
			February 28,					February 28,
				2007		2006			2007		2006
Net sales			$	341,020	$	276,019		$	684,003	$	559,895
Cost of products sold				230,775		184,958			460,713		369,356
	Gross profit			110,245		91,061			223,290		190,539
Selling, administrative and engineering expenses				66,910		54,433			134,064		113,915
Restructuring charge				3,776		-			3,885		-
Amortization of intangible assets				2,660		1,774			4,913		3,559
	Operating profit			36,899		34,854			80,428		73,065
Financing costs, net				8,268		6,084			15,109		12,151
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