Enerpac Tool (EPAC) 8-K Actuant Reports Second Quarter Results; Reaffirms Fiscal 2014 Guidance; New Share Repurchase Program Announced

Exhibit 99.1

Actuant Reports Second Quarter Results; Reaffirms Fiscal 2014 Guidance; New Share Repurchase Program Announced

MILWAUKEE--(BUSINESS WIRE)--March 19, 2014--Actuant Corporation (NYSE: ATU) today announced results for its second quarter ended February 28, 2014.

Highlights

• Total sales increased 9% compared to the prior year with core sales growth of 4% (total sales excluding the impact of acquisitions, divestitures and foreign exchange rates) and acquisitions contributing 5%.
• Diluted earnings per share from continuing operations (“EPS”) were $0.30, down from $0.35 in the prior year comparable quarter due to a higher effective income tax rate.
• Repurchased 2.6 million shares of common stock for $94 million in the quarter, completing the prior seven million share repurchase authorization. Actuant’s Board of Directors approved a new seven million share buy-back program.
• Finalized the sale of the Electrical business which resulted in a net gain in discontinued operations. Proceeds were used to reduce debt and fund share repurchases.
• Introduced third quarter EPS guidance in the range of $0.60-0.65 per share.

Mark E. Goldstein, Chief Executive Officer of Actuant commented, “On a consolidated basis, results in the quarter were generally in line with our forecast and reflected the normal seasonal slowdown. The 4% core sales growth includes significantly improved activity in Energy and continued solid growth in Engineered Solutions. Industrial’s core sales decline reflected cautious spending patterns by customers as well as negative North American weather and facility relocation impacts. We are pleased with the progress we are making on some of the operational issues within Energy that we highlighted last quarter. However, the impact of segment mix, choppy demand, and other inefficiencies related to facility closures and relocations weighed on consolidated profit margins. While our pre-tax income increased year-over-year, tax expense doubled, resulting in a decline in year-over-year second quarter EPS.”

Consolidated Results

Continuing Operations

Consolidated sales for the second quarter were $328 million, 9% higher than the $300 million in the comparable prior year quarter. Core sales increased 4% while acquisitions contributed 5% to total sales. Despite sizeable movements in emerging market currency exchange rates, the net foreign currency translation impact on a consolidated basis was negligible due to the stronger Euro and British Pound. Fiscal 2014 second quarter net earnings and EPS from continuing operations were $22.3 million, or $0.30 per share, compared to $25.8 million and $0.35, respectively, in the comparable prior year quarter.

Sales for the six months ended February 28, 2014 were $667 million, 10% higher than the $608 million in the comparable prior year period. Excluding the 6% benefit of acquisitions, year-to-date core sales increased 4%. Earnings and EPS for the six months ended February 28, 2014 were $55.3 million, or $0.74 per diluted share, compared to $56.4 million, or $0.76 per diluted share for the comparable prior year period

Discontinued Operations

Results from discontinued operations represent the financial results of the Electrical business for all periods presented. The Company completed the sale of the segment on December 13, 2013 and the $19.1 million of earnings from discontinued operations in the second quarter of fiscal 2014 includes the net gain on the divestiture.

New Seven Million Share Repurchase Authorization

The Company also announced that its Board of Directors approved a new seven million share repurchase program. During the quarter, the Company completed its prior share repurchase authorization. “Since the approval of the initial seven million share buy-back authorization, $214 million of capital was returned to shareholders, and over $300 million was deployed on acquisitions,” stated Goldstein. “We have the strongest balance sheet in our history and will continue to deploy capital with our priorities being internal growth, acquisitions, and opportunistic share repurchases.”

Segment Results

Industrial Segment
(US $ in millions)
	Three Months Ended		Six Months Ended
	February 28,		February 28,
	2014	2013	2014	2013
Sales	$93.6	$99.0	$192.2	$200.1
Operating Profit	$26.5	$26.4	$53.4	$53.4
Operating Profit %	28.3%	26.6%	27.8%	26.7%

Second quarter fiscal 2014 Industrial segment sales were $94 million, 5% lower than the prior year. This 5% core sales decline was due to lower global Integrated Solutions activity compared to the prior year’s robust levels as well as continued tepid Industrial Tool demand, notably in the mining maintenance market. In addition, a plant relocation and severe weather hindered North American volumes in the quarter. Second quarter operating profit margin of 28.3% was 170 basis points higher than the comparable prior year period due to favorable mix and effective cost management.

Energy Segment
(US $ in millions)
	Three Months Ended		Six Months Ended
	February 28,		February 28,
	2014	2013	2014	2013
Sales	$106.0	$80.8	$214.0	$171.6
Operating Profit	$9.5	$9.7	$18.4	$25.1
Operating Profit %	9.0%	12.0%	8.6%	14.6%

Fiscal 2014 second quarter year-over-year Energy segment sales increased 31% to $106 million. Excluding the 21% benefit from acquisitions and the unfavorable 1% foreign currency exchange rate change impact, core sales increased 11% from the prior year. Hydratight experienced a significant sequential improvement in core sales growth, notably in North American and Asia Pacific maintenance activity. Cortland’s core sales growth reflects higher demand for synthetic rope, seismic and defense products. Viking revenues in the quarter continue to be impacted by mobilization delays on secured contracts and delayed decisions by project sponsors on active bids. While margins declined year-over-year due to acquisition and sales mix, they improved 70 basis points sequentially from the first quarter level, despite seasonally weaker second quarter revenue.

Engineered Solutions Segment
(US $ in millions)
	Three Months Ended		Six Months Ended
	February 28,		February 28,
	2014	2013	2014	2013
Sales	$128.2	$120.7	$261.2	$236.6
Operating Profit	$9.5	$8.3	$22.7	$15.9
Operating Profit %	7.4%	6.9%	8.7%	6.7%

Second quarter fiscal 2014 Engineered Solutions segment sales increased 6% from the prior year to $128 million. Excluding the 1% decline from product line divestitures, core sales increased 7%. Second quarter sales continued to benefit from strong European heavy-duty truck demand. In addition, the segment experienced higher activity in the China truck market along with increased agriculture sales, notably from new products. Second quarter operating profit margin increased 50 basis points year-over-year due to the higher volumes, partially offset by relocation inefficiencies associated with several complex facility moves.

Corporate and Income Taxes

Corporate expenses for the second quarter of fiscal 2014 were $6.5 million, $0.9 million below the comparable prior year period due to cost reduction efforts. The Company’s effective income tax rate for the quarter of 29.0% was higher than the prior year’s 15.7%. It was also above the approximate 25% guidance provided for the quarter due primarily to the mix of global earnings by tax jurisdiction.

Financial Position

Net debt declined approximately $158 million in the quarter to $235 million (total debt of $390 million less $155 million of cash). The Company received gross proceeds of approximately $258 million from the December 2013 sale of the Electrical business which were used to fund divestiture costs, reduce debt and repurchase approximately $94 million of common stock. Free cash flow in the quarter was impacted by a build in working capital, which should reverse later in the year, and higher capital spending. At February 28, 2014, the Company had a net debt to EBITDA leverage ratio of 0.9, and $600 million in revolver availability.

Outlook

Goldstein continued, “We are seeing modestly improving order activity and trends. This, coupled with the progress our businesses continue to make on operating efficiencies and processes, provides optimism for stronger financial performance in the second half of fiscal year 2014. We are maintaining our expectation for full year core sales growth of 3-5% and revenue of $1.410-$1.450 billion. EPS is expected to be at the lower end of our $2.00-2.10 forecast based on our current visibility. We continue to anticipate full year free cash flow of approximately $190 million.

We expect third quarter sales to be in the $370-380 million range, with EPS of $0.60-0.65. The third quarter outlook incorporates the normal sequential uptick in activity experienced across nearly all of our underlying businesses, as well as an effective income tax rate in the low teens.

Actuant’s continued focus on our core strategies of operational excellence, high growth market expansion, Growth + Innovation, and strategic acquisitions positions us well for 2014 and beyond."

Conference Call Information

An investor conference call is scheduled for 10 am CT today, March 19, 2014. 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 Form 10-K filed with the Securities and Exchange Commission for further information regarding risk factors. Actuant disclaims any obligation to publicly update or revise any forward-looking statements as a result of new information, future events or any other reason.

About Actuant Corporation

Actuant Corporation is a diversified industrial company serving customers from operations in more than 30 countries. The Actuant businesses are leaders in a broad array of niche markets including branded hydraulic tools and solutions; specialized products and services for energy markets and highly engineered position and motion control systems. The Company was founded in 1910 and is headquartered in Menomonee Falls, Wisconsin. Actuant trades on the NYSE under the symbol ATU. For further information on Actuant and its businesses, visit the Company's website at www.actuant.com.

(tables follow)

Actuant Corporation
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
			February 28,			August 31,
			2014			2013
ASSETS
Current assets
	Cash and cash equivalents		$	155,017		$	103,986
	Accounts receivable, net			233,951			219,075
	Inventories, net			164,994			142,549
	Deferred income taxes			16,326			18,796
	Other current assets			30,116			28,228
	Assets of discontinued operations			-			272,606
		Total current assets		600,404			785,240
Property, plant and equipment, net				208,179			201,496
Goodwill				749,782			734,952
Other intangible assets, net				372,034			376,692
Other long-term assets				28,735			20,952
		Total assets	$	1,959,134		$	2,119,332
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
	Trade accounts payable		$	153,726		$	154,049
	Accrued compensation and benefits			45,824			43,800
	Current maturities of debt			2,250			-
	Income taxes payable			32,849			14,014
	Other current liabilities			63,646			56,899
	Liabilities of discontinued operations			-			53,080
		Total current liabilities		298,295			321,842
Long-term debt				387,750			515,000
Deferred income taxes				95,114			115,865
Pension and postretirement benefit accruals				12,283			20,698
Other long-term liabilities				64,591			65,660
Shareholders' equity
	Capital stock			15,633			15,399
	Additional paid-in capital			80,622			49,758
	Treasury stock			(214,010	)		(104,915	)
	Retained earnings			1,266,116			1,188,685
	Accumulated other comprehensive loss			(47,260	)		(68,660	)
	Stock held in trust			(4,123	)		(3,124	)
	Deferred compensation liability			4,123			3,124
		Total shareholders' equity		1,101,101			1,080,267
Total liabilities and shareholders' equity			$	1,959,134		$	2,119,332

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,			February 28,		February 28,
		2014		2013			2014		2013
Net sales		$	327,770	$	300,468		$	667,326	$	608,277
Cost of products sold			203,323		184,290			411,099		367,731
	Gross profit		124,447		116,178			256,227		240,546
Selling, administrative and engineering expenses			79,240		73,339			161,158		148,199
Amortization of intangible assets			6,226		5,968			12,441		12,002
	Operating profit		38,981		36,871			82,628		80,345
Financing costs, net			6,262		6,260			13,012		12,582
Other expense (income), net			1,326		(37	)		2,467		607
	Earnings from continuing operations before income tax expense		31,393		30,648			67,149		67,156
Income tax expense			9,089		4,814			11,840		10,771
Earnings from continuing operations			22,304		25,834			55,309		56,385
Earnings from discontinued operations, net of income taxes			19,088		2,601			22,120		8,393
Net earnings		$	41,392	$	28,435		$	77,429	$	64,778
Earnings from continuing operations per share
	Basic	$	0.31	$	0.35		$	0.76	$	0.77
	Diluted		0.30		0.35			0.74		0.76
Earnings per share
	Basic	$	0.57	$	0.39		$	1.07	$	0.89
	Diluted		0.56		0.38			1.04		0.87
Weighted average common shares outstanding
	Basic		72,227		72,946			72,656		72,869
	Diluted		73,773		74,416			74,392		74,343

Actuant Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
	Three Months Ended						Six Months Ended
	February 28,			February 28,			February 28,			February 28,
	2014			2013			2014			2013
Operating Activities
Net earnings	$	41,392		$	28,435		$	77,429		$	64,778
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization		15,761			14,451			31,965			28,898
Net gain on disposal of businesses		(26,339	)		-			(26,339	)		-
Stock-based compensation expense		6,509			3,651			10,612			7,128
Benefit for deferred income taxes		(2,656	)		(2,862	)		(11,064	)		(6,018	)
Amortization of debt discount and debt issuance costs		423			496			983			992
Other non-cash adjustments		124			5			(743	)		(172	)
Changes in components of working capital and other:
Accounts receivable		(2,271	)		(8,260	)		4,769			(3,721	)
Inventories		(10,149	)		7,166			(21,783	)		(4,152	)
Prepaid expenses and other assets		1,978			4,939			(1,071	)		(1,204	)
Trade accounts payable		(15,395	)		(10,733	)		(12,835	)		(22,281	)
Income taxes payable		(10,210	)		(3,883	)		(13,399	)		(2,722	)
Accrued compensation and benefits		6,268			1,526			3,673			(12,427	)
Other accrued liabilities		(1,498	)		(6,883	)		(5,314	)		(8,776	)
Net cash provided by operating activities		3,937			28,048			36,883			40,323
Investing Activities
Proceeds from sale of property, plant and equipment		95			200			2,008			1,177
Proceeds from sale of businesses, net of transaction costs		243,386			-			243,386			-
Capital expenditures		(10,969	)		(4,037	)		(22,226	)		(11,726	)
Business acquisitions, net of cash acquired		-			-			-			(83	)
Net cash provided by (used in) investing activities		232,512			(3,837	)		223,168			(10,632	)
Financing Activities
Net repayments on revolving credit facilities and other debt		(113,000	)		-			(125,000	)		-
Principal repayments on term loan		-			(1,250	)		-			(2,500	)
Purchase of treasury shares		(93,743	)		(1,679	)		(109,095	)		(8,821	)
Payment of contingent consideration		(339	)		(1,350	)		(753	)		(1,350	)
Stock option exercises and related tax benefits		15,241			5,299			25,803			10,772
Cash dividend		-			-			(2,919	)		(2,911	)
Net cash provided by (used in) financing activities		(191,841	)		1,020			(211,964	)		(4,810	)
Effect of exchange rate changes on cash		867			(2,719	)		2,944			(2,242	)
Net increase in cash and cash equivalents		45,475			22,512			51,031			22,639
Cash and cash equivalents - beginning of period		109,542			68,311			103,986			68,184
Cash and cash equivalents - end of period	$	155,017		$	90,823		$	155,017		$	90,823

ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA FROM CONTINUING OPERATIONS
(Dollars in thousands)
			FISCAL 2013															FISCAL 2014
			Q1			Q2			Q3			Q4			TOTAL			Q1			Q2			Q3	Q4	TOTAL
SALES
	INDUSTRIAL SEGMENT		$	101,122		$	98,999		$	111,308		$	111,191		$	422,620		$	98,641		$	93,571				$	192,212
	ENERGY SEGMENT			90,769			80,794			99,158			92,651			363,372			107,925			106,031					213,956
	ENGINEERED SOLUTIONS SEGMENT			115,918			120,675			133,739			123,418			493,750			132,990			128,168					261,158
		TOTAL	$	307,809		$	300,468		$	344,205		$	327,260		$	1,279,742		$	339,556		$	327,770				$	667,326
% SALES GROWTH
	INDUSTRIAL SEGMENT			1	%		1	%		1	%		1	%		1	%		-2	%		-5	%				-4	%
	ENERGY SEGMENT			13	%		2	%		3	%		-1	%		4	%		19	%		31	%				25	%
	ENGINEERED SOLUTIONS SEGMENT			-10	%		-2	%		-2	%		4	%		-3	%		15	%		6	%				10	%
		TOTAL		-1	%		0	%		0	%		2	%		0	%		10	%		9	%				10	%
OPERATING PROFIT (LOSS)
	INDUSTRIAL SEGMENT		$	27,006		$	26,350		$	32,426		$	31,862		$	117,644		$	26,897		$	26,477				$	53,374
	ENERGY SEGMENT			15,387			9,677			19,736			18,480			63,280			8,923			9,504					18,427
	ENGINEERED SOLUTIONS SEGMENT			7,625			8,275			12,754			11,674			40,328			13,190			9,548					22,738
	CORPORATE / GENERAL			(6,544	)		(7,431	)		(7,874	)		(9,258	)		(31,107	)		(5,363	)		(6,548	)				(11,911	)
		TOTAL	$	43,474		$	36,871		$	57,042		$	52,758		$	190,145		$	43,647		$	38,981				$	82,628
OPERATING PROFIT %
	INDUSTRIAL SEGMENT			26.7	%		26.6	%		29.1	%		28.7	%		27.8	%		27.3	%		28.3	%				27.8	%
	ENERGY SEGMENT			17.0	%		12.0	%		19.9	%		19.9	%		17.4	%		8.3	%		9.0	%				8.6	%
	ENGINEERED SOLUTIONS SEGMENT			6.6	%		6.9	%		9.5	%		9.5	%		8.2	%		9.9	%		7.4	%				8.7	%
		TOTAL (INCLUDING CORPORATE)		14.1	%		12.3	%		16.6	%		16.1	%		14.9	%		12.9	%		11.9	%				12.4	%
EBITDA
	INDUSTRIAL SEGMENT		$	29,033		$	28,471		$	34,374		$	33,742		$	125,620		$	28,657		$	27,907				$	56,564
	ENERGY SEGMENT			19,694			14,278			23,977			22,185			80,134			17,923			18,130					36,053
	ENGINEERED SOLUTIONS SEGMENT			12,047			12,611			16,700			15,659			57,017			17,365			13,581					30,946
	CORPORATE / GENERAL			(6,195	)		(6,582	)		(7,556	)		(8,556	)		(28,889	)		(5,235	)		(6,202	)				(11,437	)
		TOTAL	$	54,579		$	48,778		$	67,495		$	63,030		$	233,882		$	58,710		$	53,416				$	112,126
EBITDA %
	INDUSTRIAL SEGMENT			28.7	%		28.8	%		30.9	%		30.3	%		29.7	%		29.1	%		29.8	%				29.4	%
	ENERGY SEGMENT			21.7	%		17.7	%		24.2	%		23.9	%		22.1	%		16.6	%		17.1	%				16.9	%
	ENGINEERED SOLUTIONS SEGMENT			10.4	%		10.5	%		12.5	%		12.7	%		11.5	%		13.1	%		10.6	%				11.8	%
		TOTAL (INCLUDING CORPORATE)		17.7	%		16.2	%		19.6	%		19.3	%		18.3	%		17.3	%		16.3	%				16.8	%

ACTUANT CORPORATION
SUPPLEMENTAL UNAUDITED DATA
RECONCILIATION OF GAAP MEASURE TO NON-GAAP MEASURES
(Dollars in thousands, except for per share amounts)
			FISCAL 2013															FISCAL 2014
			Q1			Q2			Q3			Q4			TOTAL			Q1			Q2			Q3	Q4	TOTAL
EARNINGS (LOSS) BEFORE SPECIAL ITEMS (1)
	NET EARNINGS (LOSS)		$	36,343		$	28,435		$	(92,983	)	$	58,253		$	30,048		$	36,037		$	41,392				$	77,429
	LOSS (EARNINGS) FROM DISCONTINUED OPERATIONS, NET OF INCOME TAX			(5,792	)		(2,601	)		139,060			(13,138	)		117,529			(3,032	)		(19,088	)				(22,120	)
		EARNINGS FROM CONTINUING OPERATIONS		30,551			25,834			46,077			45,115			147,577			33,005			22,304					55,309
	INCOME TAX ADJUSTMENT			-			-			-			(10,596	)		(10,596	)		-			-					-
		TOTAL	$	30,551		$	25,834		$	46,077		$	34,519		$	136,981		$	33,005		$	22,304				$	55,309
DILUTED EARNINGS (LOSS) PER SHARE, BEFORE
SPECIAL ITEMS (1)
	NET EARNINGS (LOSS)		$	0.49		$	0.38		$	(1.24	)	$	0.78		$	0.40		$	0.48		$	0.56				$	1.04
	LOSS (EARNINGS) FROM DISCONTINUED OPERATIONS, NET OF INCOME TAX			(0.08	)		(0.03	)		1.86			(0.18	)		1.58			(0.04	)		(0.26	)				(0.30	)
		EARNINGS FROM CONTINUING OPERATIONS		0.41			0.35			0.62			0.60			1.98			0.44			0.30					0.74
	INCOME TAX ADJUSTMENT			-			-			-			(0.14	)		(0.14	)		-			-					-
		TOTAL	$	0.41		$	0.35		$	0.62		$	0.46		$	1.84		$	0.44		$	0.30				$	0.74
EBITDA (2)
	NET EARNINGS (LOSS) (GAAP MEASURE)		$	36,343		$	28,435		$	(92,983	)	$	58,253		$	30,048		$	36,037		$	41,392				$	77,429
	LOSS (EARNINGS) FROM DISCONTINUED OPERATIONS, NET OF INCOME TAX			(5,792	)		(2,601	)		139,060			(13,138	)		117,529			(3,032	)		(19,088	)				(22,120	)
		EARNINGS FROM CONTINUING OPERATIONS		30,551			25,834			46,077			45,115			147,577			33,005			22,304					55,309
	FINANCING COSTS, NET			6,322			6,260			6,229			6,026			24,837			6,750			6,262					13,012
	INCOME TAX EXPENSE			5,957			4,814			3,825			776			15,372			2,751			9,089					11,840
	DEPRECIATION & AMORTIZATION			11,749			11,870			11,364			11,113			46,096			16,204			15,761					31,965
		EBITDA - EXCLUDING DISCONTINUED OPERATIONS (NON-GAAP MEASURE)	$	54,579		$	48,778		$	67,495		$	63,030		$	233,882		$	58,710		$	53,416				$	112,126

FOOTNOTES
NOTE:	The total of the individual quarters may not equal the annual total due to rounding.
(1)	Earnings (loss) and diluted earnings (loss) per share, excluding special items (income tax adjustments and discontinued operations), represent net earnings (loss) and diluted earnings (loss) per share per the Condensed Consolidated Statements of Earnings net of charges or credits for items to be highlighted for comparability purposes. These measures should not be considered as an alternative to net earnings (loss) or diluted earnings (loss) per share as an indicator of the Company's operating performance. However, this presentation is important to investors for understanding the operating results of the current portfolio of Actuant companies. The total of the individual components may not equal due to rounding.
(2)	EBITDA represents net earnings (loss) before financing costs, net, income tax expense, discontinued operations and depreciation & amortization. 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 Condensed 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
Karen Bauer
Communications & Investor Relations Leader
262-293-1562