Actuant Announces Transactions, Preliminary 3rd Quarter Sales

    MILWAUKEE--June 6, 2001--Actuant Corporation announced today that it recently completed the sale of a product line and the sale of trade accounts receivable pursuant to an asset securitization agreement. It also announced preliminary sales for its fiscal third quarter ended May 31, 2001.
    The Company completed the sale of its Enerpac quick mold change business ("QMC") to the QMC management team in mid-May. Gross proceeds from the divestiture were approximately $1 million, and were used to reduce debt. In conjunction with the divestiture, the Company entered into a contract with the purchaser to supply Enerpac product for use in QMC's production automation systems. The QMC business had revenue of approximately $6 million and a modest EBITDA loss in the last twelve months. The Company will be recording a non-operating charge in its third quarter related to the divestiture of QMC and costs attributable to other non-continuing businesses.
    Robert C. Arzbaecher, Actuant President and Chief Executive Officer, commented, "We are pleased to complete the sale of QMC. We are proceeding with the possible sale of Mox-Med and expect to complete a transaction in the fourth quarter. Since QMC and Mox-Med do not fit into either our branded tools or position/motion control strategies, we have decided to divest them and use the proceeds to reduce debt."
    In May 2001, the Company entered into an accounts receivable securitization facility (the "A/R Financing Facility"). Under the A/R Financing Facility, the Company and certain of its subsidiaries sell trade accounts receivable to Actuant Receivables Corporation, a special purpose entity, which in turn sells participation interests in its pool of accounts receivable to financial institutions. The Company initially sold approximately $30 million of receivables under the facility on an off-balance sheet basis.
    Andrew G. Lampereur, Actuant Chief Financial Officer, commented, "The $30 million of proceeds from the off-balance sheet financing provided under the securitization program was used to reduce debt. This new facility provides us with sub-5% financing rates, based on today's interest rate environment, and will result in annual financing savings of approximately $0.8 million." The Company will be reporting approximately $0.6 million of costs in the third quarter relating to the establishment of the A/R Financing Facility.
    Actuant also announced preliminary sales for its fiscal third quarter of approximately $123 million. Arzbaecher commented, "Our third quarter sales from continuing businesses are down approximately 8% from the prior year, and came in slightly lower than the $125 million guidance we provided during our second quarter earnings conference call. Although the recent EURO weakening was partly responsible for the shortfall, the economic softening in the North American and European markets was the primary cause. This sales shortfall, along with modest product mix changes, will result in lower earnings than our most recent guidance. We continue to review our operations for cost savings to partially mitigate the impact of slowing sales. During the third quarter we took out additional headcount, identified product lines and SKUs for elimination and decided to consolidate recreational vehicle slide-out production from our Beaver Dam, Wisconsin plant into our newly acquired Mishawaka, Indiana facility." As a result, the Company will be recognizing a restructuring provision of approximately $2 million in its third quarter operating results to cover the costs of severance and the plant consolidation. The Company anticipates being in compliance with the covenants of its credit agreements as of May 31, 2001.
    Arzbaecher continued, "Despite the challenging short-term economic conditions Actuant is facing, we remain positive on our long-term prospects. Results from the recently acquired Dewald business have exceeded our expectations and acquisition integration activities are progressing on schedule. We also are pleased to report that both Dewald and Power Gear have been awarded sizeable RV leveling and slide-out business from a leading domestic RV manufacturer. Meanwhile, our hit rate on winning new automotive convertible top actuation systems remains very strong, as evidenced by a number of new platform awards including the Chevrolet SSR, Volkswagen Beetle, Cadillac Evoq and the Peugeot 307. Finally, we continue to make progress in reducing debt, which remains our top priority."
    The Company will be holding a conference call on Wednesday, June 20, 2001 at 10:00 am Central time (11:00 AM Eastern) to discuss third quarter operating results. To participate in the call, dial Genesys Conferencing at (952)556-2802. The call will also be available on the Company's website at www.actuant.com and at www.vcall.com through October 3, 2001. If you are unable to participate in the call, a taped replay will be available from 12:00 pm Central time on Wednesday, June 20th, 2001 through 11:59pm on Wednesday, June 27, 2001. To access the taped replay, call Genesys Conferencing at (800)615-3210 and enter reservation number 5260966.

    About Actuant

    Actuant, headquartered in Milwaukee, Wisconsin, is a diversified industrial company with operations in 19 countries. The Actuant businesses are market leaders in highly engineered position and motion control systems and branded hydraulic and electrical tools. Products are offered under such established brand names as Enerpac, Gardner Bender, Mox-Med, Milwaukee Cylinder, Nielsen Sessions, Power-Packer, Power Gear and Dewald.
    For further information on Actuant and its business units, visit the Company's website at www.actuant.com.