Enerpac Tool (EPAC) 8-K Updated Report on Form 10-K

Exhibit 99.2

ACTUANT CORPORATION

UPDATED REPORT ON FORM 10-Q

For the quarter ended November 30, 2007

Actuant Corporation (“Actuant” or the “Company”) is filing this Current Report on Form 8-K to include footnote disclosure of certain financial information pertaining to the guarantors of the Company’s Senior Credit Agreement and 6.875% Senior Notes in its Form 10-Q for the quarter ended November 30, 2007.

This update has no effect on the Company’s previously reported consolidated net income, financial position or cash flows.

Unless otherwise indicated, all information in this update is as of the filing date of our Form 10-Q for the quarter ended November 30, 2007. We have not updated the disclosures contained in our Form 10-Q to reflect any other events that have occurred after the filing date of our Form 10-Q (e.g. new accounting pronouncements).

TABLE OF CONTENTS

		Page No.
Part I - Financial Information		1
	Item 1 - Condensed Consolidated Financial Statements (Unaudited)	1
	Actuant Corporation-
	Condensed Consolidated Statements of Earnings	1
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Cash Flows	3
	Notes to Condensed Consolidated Financial Statements	4

FORWARD LOOKING STATEMENTS AND CAUTIONARY FACTORS

This quarterly report on Form 10-Q contains certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Such forward-looking statements include statements regarding expected financial results and other planned events, including, but not limited to, anticipated liquidity, and capital expenditures. Words such as “anticipate”, “assume”, “believe”, “estimate”, “expect”, “intend”, “plan”, “seek”, “project”, “target”, “goal”, and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual future events or results may differ materially from these statements. We undertake no obligation to publicly update then forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or otherwise.

The following is a list of factors, among others, that could cause actual results to differ materially from the forward-looking statements:

• exposure to fluctuations in energy prices;

• market conditions in the recreational vehicle, truck, automotive, industrial production, oil & gas, and construction industries;

• market acceptance of existing and new products;

• successful integration of acquisitions and related restructurings;

• operating margin risk due to competitive pricing and operating efficiencies;

• supply chain risk, material, labor, or overhead cost increases;

• foreign currency risk, interest rate risk and commodity risk;

• the length of economic downturns in our markets, litigation matters, our ability to access capital markets;

• industry trends, including changes in buying, inventory and other business practices by customers;

• our substantial indebtedness;

• our future profitability;

• an increase in competition within the markets in which we compete;

• regulatory changes;

• changes in general and/or regional economic conditions;

• our relationships with employees;

• the impact of current and future laws; and

• additional terrorist attacks.

Our Form 10-K for the fiscal year ended August 31, 2007 contains an expanded description of these and other risks that may affect our business, assets, and results of operations under the section entitled “Risk Factors”.

When used herein, the terms “Actuant,” “we,” “us,” “our,” and the “Company” refer to Actuant Corporation and its subsidiaries.

Actuant Corporation provides free-of-charge access to its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments thereto, through its website, www.actuant.com, as soon as reasonably practical after such reports are electronically filed with the Securities and Exchange Commission.

PART I – FINANCIAL INFORMATION

Item 1 – Financial Statements

ACTUANT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended November 30,
	2007			2006
Net sales	$	415,143		$	342,983
Cost of products sold		274,309			229,938
Gross profit		140,834			113,045
Selling, administrative and engineering expenses		81,296			67,154
Restructuring charges		5,521			109
Amortization of intangible assets		3,257			2,253
Operating profit		50,760			43,529
Financing costs, net		9,300			6,841
Other (income) expense, net		(1,110	)		217
Earnings before income tax expense and minority interest		42,570			36,471
Income tax expense		15,149			11,379
Minority interest, net of income taxes		(6	)		(10	)
Net earnings	$	27,427		$	25,102
Earnings per share:
Basic	$	0.49		$	0.46
Diluted	$	0.43		$	0.41
Weighted average common shares outstanding:
Basic		55,609			54,600
Diluted		64,654			63,434

See accompanying Notes to Condensed Consolidated Financial Statements

1

ACTUANT CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

(Unaudited)

	November 30, 2007			August 31, 2007
ASSETS
Current Assets
Cash and cash equivalents	$	68,741		$	86,680
Accounts receivable		224,419			194,775
Inventories		218,412			197,539
Deferred income taxes		14,516			14,827
Other current assets		12,498			11,459
Total Current Assets		538,586			505,280
Property, Plant and Equipment
Land, buildings, and improvements		34,606			43,034
Machinery and equipment		245,656			224,238
Gross property, plant and equipment		280,262			267,272
Less: Accumulated depreciation		(155,257	)		(144,455	)
Property, Plant and Equipment, net		125,005			122,817
Goodwill		624,252			599,841
Other Intangibles, net		280,778			260,418
Other Long-term Assets		10,052			12,420
Total Assets	$	1,578,673		$	1,500,776
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Short-term borrowings	$	134		$	—
Trade accounts payable		159,464			153,205
Accrued compensation and benefits		40,863			52,345
Income taxes payable		32,357			20,309
Current maturities of long-term debt		33			519
Other current liabilities		77,198			64,449
Total Current Liabilities		310,049			290,827
Long-term Debt, less Current Maturities		573,267			561,138
Deferred Income Taxes		110,412			103,589
Pension and Postretirement Benefit Liabilities		23,222			27,437
Other Long-term Liabilities		24,235			17,864
Shareholders’ Equity
Class A common stock, $0.20 par value per share, authorized 84,000,000 shares, issued and outstanding 55,760,976 and 55,348,718 shares, respectively		11,152			11,070
Additional paid-in capital		(336,610	)		(349,190	)
Retained earnings		843,178			825,165
Accumulated other comprehensive income		19,768			12,876
Stock held in trust		(1,939	)		(1,744	)
Deferred compensation liability		1,939			1,744
Total Shareholders’ Equity		537,488			499,921
Total Liabilities and Shareholders’ Equity	$	1,578,673		$	1,500,776

See accompanying Notes to Condensed Consolidated Financial Statements

2

ACTUANT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months Ended November 30,
	2007			2006
Operating Activities
Net earnings	$	27,427		$	25,102
Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation and amortization		10,464			7,877
Amortization of debt discount and debt issuance costs		453			382
Stock-based compensation expense		1,603			1,417
Provision/(benefit) for deferred income taxes		6,220			(2,917	)
(Gain) loss on disposal of assets		(261	)		122
Source (use) of cash from changes in components of working capital:
Accounts receivable		(22,767	)		(14,210	)
Increase in accounts receivable securitization program		4,924			3,152
Inventories		(7,024	)		(6,357	)
Prepaid expenses and other assets		948			(1,372	)
Trade accounts payable		238			(5,755	)
Income taxes payable		2,452			5,377
Other accrued liabilities		4,047			(5,075	)
Net cash provided by operating activities		28,724			7,743
Investing Activities
Proceeds from sale of property, plant and equipment		8,321			2,789
Capital expenditures		(9,036	)		(6,516	)
Cash paid for business acquisitions, net of cash acquired		(47,437	)		273
Net cash used in investing activities		(48,152	)		(3,454	)
Financing Activities
Net borrowings (repayments) on revolving credit facilities and short-term borrowings		134			(1,860	)
Principal repayments on term loans		(994	)		—
Cash dividend		(2,221	)		(2,187	)
Stock option exercises, related tax benefits, and other		2,013			114
Net cash used in financing activities		(1,068	)		(3,933	)
Effect of exchange rate changes on cash		2,557			571
Net (decrease) increase in cash and cash equivalents		(17,939	)		927
Cash and cash equivalents – beginning of period		86,680			25,659
Cash and cash equivalents – end of period	$	68,741		$	26,586

See accompanying Notes to Condensed Consolidated Financial Statements

3

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share amounts)

Note 1. Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of Actuant Corporation (“Actuant,” or the “Company”) have been prepared in accordance with generally accepted accounting principles for interim financial reporting, and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The condensed consolidated balance sheet data as of August 31, 2007 was derived from the Company’s audited financial statements, but does not include all disclosures required by generally accepted accounting principles. The Company’s significant accounting policies are disclosed in its fiscal 2007 Annual Report on Form 10-K. For additional information, refer to the consolidated financial statements and related footnotes in the Company’s fiscal 2007 Annual Report on Form 10-K.

In the opinion of management, all adjustments considered necessary for a fair presentation of financial results have been made. Except as otherwise described, such adjustments consist of only those of a normal recurring nature. Operating results for the three months ended November 30, 2007 are not necessarily indicative of the results that may be expected for the entire fiscal year ending August 31, 2008.

On October 18, 2007, the Company announced that its board of directors had approved a two-for-one stock split of its Class A common stock payable on November 8, 2007 to shareholders of record on October 29, 2007. The split was in the form of a stock dividend. All prior periods presentation have been adjusted to reflect the stock split.

Prior year Condensed Financial Statements have been reclassified where appropriate to conform to current year presentations. During the first quarter of fiscal 2008, the Company made an organizational change involving its Milwaukee Cylinder business unit, which resulted in it moving from the Engineered Products segment to the Industrial segment.

New Accounting Pronouncements

In February 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 155,“Accounting for Certain Hybrid Financial Instruments”, which amends SFAS No.’s 133 and 140, and improves the financial reporting of certain hybrid financial instruments by requiring more consistent accounting that eliminates exemptions and provides a means to simplify the accounting for these instruments. Specifically, SFAS No. 155 allows financial instruments that have embedded derivatives to be accounted for as a whole (eliminating the need to bifurcate the derivative from its host) if the holder elects to account for the whole instrument on a fair value basis. The adoption of SFAS No. 155 on September 1, 2007 did not have any impact on our consolidated results of operations, financial position, or cash flows.

In July 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes”(FIN 48). FIN 48 clarifies the way companies are to account for uncertainty in income tax reporting and filing and prescribes a consistent recognition threshold and measurement attribute for recognizing, derecognizing, and measuring the tax benefits of a tax position taken, or expected to be taken, on a tax return. The adoption of FIN 48 on September 1, 2007 increased the amount recorded by the Company for uncertain tax positions by approximately $9.4 million. This increase was recorded as an adjustment to fiscal 2008 opening retained earnings (See Note 12).

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. SFAS No. 157 provides a common definition of fair value and establishes a framework to make the measurement of fair value in generally accepted accounting principles more consistent and comparable. SFAS No. 157 also requires expanded disclosures to provide information about the extent to which fair value is used to measure assets and liabilities, the methods and assumptions used to measure fair value, and the effect of fair value measures on earnings. SFAS No. 157 is effective for the Company’s 2009 fiscal year, although early adoption is permitted. We are currently assessing the potential impact of SFAS No. 157 on our consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an Amendment of FASB Statement No. 115”.This standard permits an entity to choose to measure many financial instruments and certain other items at fair value. The fair value option permits a company to choose to measure eligible items at fair value at specified election dates. A company will report unrealized gains and losses on items for which the fair value option has been elected in earnings after adoption. SFAS No. 159 will be effective for us beginning in fiscal 2009. We are currently evaluating the impact SFAS No. 159 could have on our consolidated financial statements.

4

In December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business Combinations” (“SFAS No. 141(R)”). The objective of SFAS No. 141(R) is to improve the information provided in financial reports about a business combination and its effects. SFAS No. 141(R) requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. SFAS No. 141(R) also requires the acquirer to recognize and measure the goodwill acquired in a business combination or a gain from a bargain purchase and how to evaluate the nature and financial effects of the business combination. SFAS No. 141(R) is effective for the Company’s 2010 fiscal year.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements-an amendment of ARB No. 51”. The objective of SFAS No. 160 is to improve the financial information provided in consolidated financial statements. SFAS No. 160 amends ARB No. 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 also changes the way the consolidated income statement is presented, establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation, requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated and expanded disclosures in the consolidated financial statements that clearly identify and distinguish between the interests of the parent’s owners and the interest of the noncontrolling owners of a subsidiary. SFAS No. 160 is effective for the Company’s 2010 fiscal year. We are currently assessing the potential impact of SFAS No. 160 on our consolidated financial statements.

Note 2. Acquisitions

The Company completed one business acquisition during the first quarter of fiscal 2008 and five business acquisitions during the fiscal year ended August 31, 2007, all of which resulted in the recognition of goodwill in the Company’s Condensed Consolidated Financial Statements. The Company is continuing to evaluate the initial purchase price allocations for the acquisitions completed during fiscal 2007 and fiscal 2008, and will adjust the allocations as additional information relative to the fair values of the assets and liabilities of the acquired businesses become known.

On September 13, 2007 the Company acquired Templeton, Kenly & Co, Inc. (“TK”) for approximately $47.4 million. Headquartered in Broadview, Illinois, TK produces hydraulic pumps and tools, mechanical jacks, wrenches, and actuators. TK will operate in the High Force Hydraulic Tools product line of our Industrial segment. The preliminary purchase price allocation resulted in $14.0 million assigned to goodwill, $1.7 million assigned to tradenames, $0.3 million assigned to non-compete agreements, $0.3 assigned to patents and $18.9 million assigned to customer relationships. The amounts assigned to non-compete agreements, patents and customer relationships are being amortized over 3, 5 and 15 years, respectively.

On June 29, 2007, the Company acquired BH Electronics, Inc. (“BH”) for approximately $30.0 million. Headquartered in Munford, Tennessee, BH produces dashboard control panels and electronic assembly systems, primarily for the recreational boating market. BH is included in the Specialty Electrical product line of our Electrical segment. The preliminary purchase price allocation resulted in $14.4 million assigned to goodwill (which is not currently deductible for tax purposes), $2.8 million assigned to tradenames, $0.1 million assigned to non-compete agreements, and $9.3 million assigned to customer relationships. The amounts assigned to non-compete agreements and customer relationships are being amortized over 3 and 15 years, respectively.

On April 16, 2007, the Company acquired T.T. Fijnmechanica B.V. (“TTF”) for approximately $23.0 million. Headquartered in Roermond, The Netherlands, TTF supplies products and systems for use in the bridge building, infrastructure, and heavy lifting markets. Products include wedges, anchor heads, multi-strand jacks, and heavy lifting systems. TTF is included in the High Force Hydraulic Tools product line of our Industrial segment. The preliminary purchase price allocation resulted in $11.7 million assigned to goodwill (which is not currently deductible for tax purposes), $2.7 million assigned to tradenames, $0.7 million assigned to non-compete agreements, and $6.8 million assigned to customer relationships. The amounts assigned to non-compete agreements, and customer relationships are being amortized over 3 and 15 years, respectively.

On January 22, 2007, the Company acquired all of the outstanding stock of Injectaseal Deutschland GmbH (“Injectaseal”) for $13.0 million. Headquartered in Kerpen, Germany, Injectaseal provides leak management, on-site machining, pipeline intervention, and safety valve testing services primarily to Western European oil & gas and power generation companies. Injectaseal is included in the Joint Integrity product line of our Industrial segment. The preliminary purchase price allocation resulted in $11.2 million assigned to goodwill (which is not currently deductible for tax purposes), $0.1 million assigned to non-compete agreements, and $1.8 million assigned to customer relationships. The amounts assigned to the non-compete agreements and the customer relationships are being amortized over 3 years and 15 years, respectively.

5

On January 5, 2007, the Company acquired all of the outstanding stock of Veha Haaksbergen B.V. (“Veha”) for $5.0 million,. Headquartered in Haaksbergen, The Netherlands, Veha manufactures a wide range of machined products, including hydraulic cylinders. Veha is included in the High Force Hydraulic Tools product line of our Industrial segment. The preliminary purchase price allocation resulted in $2.5 million assigned to goodwill (which is not currently deductible for tax purposes), $0.2 million to non-compete agreements and $0.5 million assigned to customer relationships. The amounts assigned to the non-compete agreements and customer relationships are being amortized over 3 years and 10 years, respectively.

On December 22, 2006, the Company acquired all of the outstanding stock of Maxima Technologies (“Maxima”) for $91.0 million, including the assumption of approximately $1.9 million of Maxima’s debt. Maxima, headquartered in Lancaster, Pennsylvania, is a global electronics company specializing in custom-engineered and standard vehicle instrumentation, controls, components, and systems for low-to-medium volume severe-duty applications. Maxima serves the marine, agricultural, construction equipment, industrial, specialty vehicle, and automotive aftermarket. Maxima is included in the Other product line of our Engineered Products segment. The preliminary purchase price allocation resulted in $45.9 million assigned to goodwill (which is not currently deductible for tax purposes), $7.7 million assigned to tradenames, $6.8 million assigned to patents, and $19.3 million assigned to customer relationships. The amounts assigned to patents and customer relationships are being amortized over periods of 10 and 15 years, respectively.

The following unaudited pro forma results of operations of the Company for the three months ended November 30, 2007 and 2006, respectively, give effect to all acquisitions completed since September 1, 2006 as though the transactions and related financing activities had occurred on September 1, 2006.

	Three Months Ended November 30, 2007		Three Months Ended November 30, 2006
Net sales
As reported	$	415,143	$	342,983
Pro forma		416,784		381,898
Net earnings
As reported	$	27,427	$	25,102
Pro forma		27,450		25,461
Basic earnings per share
As reported	$	0.49	$	0.46
Pro forma		0.49		0.47
Diluted earnings per share
As reported	$	0.43	$	0.41
Pro forma		0.43		0.41

Note 3. Restructuring Reserves

The Company initiated plans to restructure its European Electrical product line within the Electrical segment during the fourth quarter of fiscal 2006. These plans were designed to reduce operating costs and improve profitability. To date, the Company has recorded pre-tax restructuring provisions totaling $15.8 million and expects to recognize an additional $4.0 to 5.0 million of similar pre-tax costs by the end of the second quarter, when the restructuring is expected to be completed.

A rollforward of the European Electrical restructuring reserve follows (in thousands):

Accrued restructuring costs as of August 31, 2007	$	2,150
Restructuring charges		5,521
Cash restructuring payments		(971	)
Product line management and rationalization		(743	)
Foreign currency impact		181
Accrued restructuring costs as of November 30, 2007	$	6,138

The remaining $6.1 million of accrued restructuring costs at November 30, 2007 represents severance cost of approximately $1.9 million and lease exit costs of approximately $4.2 million. The severance costs will be paid during fiscal 2008 and 2009 and the lease exit costs will be paid over the remaining term of the lease.

6

Note 4. Accounts Receivable Securitization

The Company maintains an accounts receivable securitization program whereby it sells certain of its trade accounts receivable to a wholly owned, bankruptcy-remote special purpose subsidiary which, in turn, sells participating interests in its pool of receivables to a third-party financial institution (the “Purchaser”). The Purchaser receives an ownership and security interest in the pool of receivables. New receivables are purchased by the special purpose subsidiary and participation interests are resold to the Purchaser as collections reduce previously sold participation interests. The Company has retained collection and administrative responsibilities on the participation interests sold. The Purchaser has no recourse against the Company for uncollectible receivables; however, the Company’s retained interest in the receivable pool is subordinate to the Purchaser and is recorded at fair value. Due to a short average collection cycle of approximately 60 days for such accounts receivable and the Company’s collection history, the fair value of the Company’s retained interest approximates book value. Book value of accounts receivable in the accompanying Condensed Consolidated Balance Sheet is comprised of the gross accounts receivable retained interest less a reserve for doubtful accounts, which is calculated based on a review of the specific receivable issues and supplemented by a general reserve based on past collection history. The retained interest recorded at November 30, 2007 and August 31, 2007 was $48.0 million and $47.2 million, respectively, and is included in accounts receivable in the accompanying Condensed Consolidated Balance Sheets. The securitization program has a final maturity in May 2008, subject to annual renewal by the Purchaser. The Company amended its securitization program in May 2007 to increase capacity from $60 million to $65 million. Trade accounts receivables sold and being serviced by the Company totaled $61.4 million and $56.5 million at November 30, 2007 and August 31, 2007, respectively.

Sales of trade receivables from the special purpose subsidiary totaled $114.0 million and $103.1 million for the three months ended November 30, 2007 and 2006, respectively. Cash collections of trade accounts receivable balances in the total receivable pool (including both sold and retained portions) totaled $196.1 million and $170.8 million for the three months ended November 30, 2007 and 2006, respectively.

The accounts receivables securitization program is accounted for as a sale in accordance with FASB Statement No. 140 “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities – A Replacement of FASB Statement No. 125.” Sales of trade receivables are reflected as a reduction of accounts receivable in the accompanying Condensed Consolidated Balance Sheets and the proceeds received are included in cash flows from operating activities in the accompanying Condensed Consolidated Statements of Cash Flows.

The following table provides additional information about delinquencies and net credit losses for trade accounts receivable subject to the accounts receivable securitization program.

	Balance Outstanding				Balance Outstanding 60 Days or More Past Due				Net Credit Losses Three Months Ended
	November 30, 2007		August 31, 2007		November 30, 2007		August 31, 2007		November 30, 2007		November 30, 2006
Trade accounts receivable subject to securitization program	$	109,432	$	103,706	$	7,214	$	6,963	$	485	$	529
Trade accounts receivable balances sold		61,442		56,518
Retained interest	$	47,990	$	47,188

Accounts receivable financing costs of $0.6 million for both of the three months ended November 30, 2007 and 2006 are included in financing costs in the accompanying Condensed Consolidated Statements of Earnings.

Note 5. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill for the three months ended November 30, 2007 are as follows:

	Industrial		Electrical		Actuation Systems		Engineered Products		Total
Balance as of August 31, 2007	$	163,890	$	205,963	$	169,660	$	60,328	$	599,841
Business acquired		14,025		—		—		—		14,025
Purchase accounting adjustments		2,176		—		—		—		2,176
Currency impact and other		3,617		2,294		918		1,381		8,210
Balance as of November 30, 2007	$	183,708	$	208,257	$	170,578	$	61,709	$	624,252

7

As discussed in Note 13, during the first quarter of fiscal 2008, a segment reporting change was made involving the Company’s Milwaukee Cylinder business unit. This resulted in a $4.7 million reclassification of goodwill between the Engineered Products and Industrial segments which is reflected in the August 31, 2007 balances above.

The gross carrying amount and accumulated amortization of the Company’s intangible assets that have defined useful lives and are subject to amortization as of November 30, 2007 and August 31, 2007 are as follows:

	November 30, 2007						August 31, 2007
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Customer Relationships	$	140,565	$	17,294	$	123,271	$	120,505	$	15,181	$	105,324
Patents		45,485		19,254		26,231		44,922		18,284		26,638
Trademarks		6,458		3,170		3,288		6,437		3,041		3,396
Non-compete agreements		2,305		894		1,411		1,930		781		1,149
Other		750		673		77		656		583		73
Total	$	195,563	$	41,285	$	154,278	$	174,450	$	37,870	$	136,580

The gross carrying amount of the Company’s intangible assets that have indefinite lives and are not subject to amortization as of November 30, 2007 and August 31, 2007 are $126.5 million and $123.8 million, respectively. These assets are comprised of acquired tradenames.

The increase in the gross carrying amounts of goodwill and other intangible assets is the result of an acquisition completed in the current fiscal year and the impact of foreign currency rates. See Note 2, “Acquisitions” for additional details.

Amortization expense recorded on the intangible assets listed above was $3.3 million and $2.3 million for the three months ended November 30, 2007 and 2006, respectively. The Company estimates that amortization expense will approximate $10.2 million for the remainder of the fiscal year ended August 31, 2008. Amortization expense for future years is estimated to be as follows: $13.5 million in fiscal 2009, $13.3 million in fiscal 2010, $12.7 million in 2011, $12.5 million in fiscal 2012, $11.4 million in fiscal 2013, and $80.7 million thereafter.

Note 6. Accrued Product Warranty Costs

The Company recognizes the cost associated with its product warranties at the time of sale. The amount recognized is based on historical claims rates and current claim cost experience. The following is a reconciliation of the changes in accrued product warranty during the three months ended November 30, 2007 and 2006:

	Three Months Ended November 30,
	2007			2006
Beginning balance	$	10,070		$	6,888
Warranty reserves of acquired business		72			—
Provision for warranties		3,420			2,137
Warranty payments and costs incurred		(2,450	)		(1,566	)
Foreign currency impact		308			91
Ending balance	$	11,420		$	7,550

8

Note 7. Debt

The Company’s indebtedness, as of November 30, 2007 and August 31, 2007 was as follows:

	November 30, 2007			August 31, 2007
Commercial paper	$	—		$	—
Revolver		—			—
Term loan		155,000			155,000
6.875% Senior Notes, due 2017		249,063			249,039
Other		19,371			7,618
Sub-total—Senior indebtedness		423,434			411,657
Convertible senior subordinated debentures (“2% Convertible Notes”), due 2023		150,000			150,000
Total debt, excluding short-term borrowings		573,434			561,657
Less: current maturities of long-term debt and short-term borrowings		(167	)		(519	)
Total long-term debt, less current maturities	$	573,267		$	561,138

The Company’s senior credit facility, as amended, provides for $155.0 million of term loans in addition to a $250.0 million revolver. The term loans mature on December 22, 2009 while the revolver matures on February 19, 2009. At November 30, 2007, the remaining $155.0 million outstanding term loans carried an interest rate of 6.534%, which represented LIBOR plus a 1.0% borrowing spread. All senior credit facility borrowings are subject to a pricing grid, which can result in further increases or decreases to the borrowing spread on a quarterly basis, depending on the Company’s debt to EBIDTA leverage ratios. In addition, a non-use fee is payable quarterly on the average unused credit line under the revolver. At November 30, 2007, the non-use fee was 0.20%. The senior credit facility contains customary limits and restrictions concerning investments, sales of assets, liens on assets, fixed charge coverage ratios, maximum leverage, dividends and other restricted payments. As of November 30, 2007, the Company was in compliance with all debt covenants.

There were no commercial paper borrowings outstanding at November 30, 2007. Total commercial paper outstanding cannot exceed $100.0 million under the terms of the senior credit facility. The revolver provides the liquidity backstop for outstanding commercial paper. Given the long term nature of the revolver backstop, all outstanding commercial paper is classified as a component of long-term debt. The combined outstanding balance of the revolver and any outstanding commercial paper cannot exceed $250.0 million. The unused and available credit line under the revolver at November 30, 2007 was approximately $250.0 million.

On June 12, 2007, the Company issued $250.0 million of 6.875% Senior Notes (the “6.875% Senior Notes”) at an approximate $1.0 million discount, generating net proceeds of $249.0 million. The Senior Notes were issued at a price of 99.607% to yield 6.93%, and require no principal installments prior to their June 15, 2017 maturity. The approximate $1.0 million initial issuance discount is being amortized through interest expense over the 10 year life of the Senior Notes. The net proceeds from the 6.875% Senior Notes were used to reduce the outstanding term loans under the senior credit facility from $400.0 million to $155.0 million.

Note 8. Derivatives

All derivatives are recognized in the Condensed Consolidated Balance Sheets at their estimated fair value. On the date it enters into a derivative contract, the Company designates the derivative as a hedge of a recognized asset or liability (“fair value” hedge), a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow” hedge), or a hedge of the net investment in a foreign operation. The Company does not enter into derivatives for speculative purposes. Changes in the fair value of a derivative that qualify as a fair value hedge are recorded in earnings along with the gain or loss on the underlying hedged asset or liability. Changes in the fair value of a derivative that qualifies as a cash flow hedge are recorded in accumulated other comprehensive income in the Condensed Consolidated Balance Sheets, until earnings are affected by the variability of cash flows. Changes in the fair value of a derivative used to hedge the net investment in a foreign operation are recorded in the accumulated other comprehensive income accounts in the Condensed Consolidated Balance Sheets.

On October 9, 2007, the Company terminated its $100 million aggregate notional value floating to fixed interest rate swaps, in order to reduce the mix of its fixed rate debt to total debt. The Company received $1.4 million on the termination as payment for full settlement of the fair value, which is being amortized over the remaining life of the original contracts.

9

In August 2006, the Company entered into cross-currency interest rate swap agreements (the “agreements”) between the U.S. dollar and the euro to hedge its net investment in European subsidiaries. In May 2007, the Company entered into further cross-currency interest rate swap agreements to hedge additional exposure on its net investments in European subsidiaries. The cross-currency interest rate swap agreements have a total notional value of €125.0 million and a maturity date of November 30, 2009. As of November 30, 2007 and 2006, the weakening of the US dollar caused the cross-currency interest rate swaps to be in an unrealized loss position in the amount of $19.1 million and $3.1 million, respectively, which is included with long-term debt.

While the Company regularly hedges certain commodity risks, the fair value of such contracts were not significant at November 30, 2007.

Note 9. Employee Benefit Plans

The Company provides defined benefit pension and other postretirement benefits to certain employees of domestic businesses it acquired that were entitled to those benefits prior to acquisition. At November 30, 2007 and August 31, 2007, the defined benefit plans consisted of three plans. Most of the domestic defined benefit pension plans are frozen, and as a result, the majority of the plan participants no longer earn additional benefits. The postretirement medical plans consist of four plans, all of which are unfunded. Two of the plans require individuals receiving medical benefits under the plan to make contributions to defray a portion of the cost, and these retiree contributions are adjusted annually. The other two plans do not require retiree contributions.

The Company also maintains nine separate defined benefit pension plans for certain non-US employees. Unlike existing U.S. pension plans, future benefits are earned with respect to the foreign plans.

Components of net periodic benefit costs were as follows:

	Three Months Ended November 30,
	2007			2006
Domestic Defined Benefit Pension Plans
Service Cost	$	21		$	21
Interest Cost		563			550
Expected return on assets		(702	)		(631	)
Amortization of actuarial loss		2			37
Net periodic benefit credit	$	(116	)	$	(23	)
Domestic Postretirement Medical Benefit Plans
Service Cost	$	6		$	6
Interest Cost		57			60
Amortization of actuarial gain		(109	)		(119	)
Net periodic benefit credit	$	(46	)	$	(53	)
Foreign Defined Benefit Pension Plans
Service Cost	$	122		$	149
Interest Cost		355			322
Expected return on assets		(80	)		(64	)
Amortization of actuarial loss		1			6
Net periodic benefit cost	$	398		$	413

The Company contributed approximately $1.6 million of cash and 120,000 shares of its common stock to various pension plans during the three months ended November 30, 2007. The Company does not anticipate making any significant contributions for the balance of fiscal 2008.

10

Note 10. Earnings Per Share

The reconciliations between basic and diluted earnings per share are as follows:

	Three Months Ended November 30,
	2007		2006
Numerator:
Net Earnings	$	27,427	$	25,102
Plus: 2% Convertible Notes financings costs, net of taxes		611		611
Net earnings for diluted earnings per share	$	28,038	$	25,713
Denominator (in thousands):
Weighted average common shares outstanding for basic earnings per share		55,609		54,600
Net effect of dilutive stock options based on the treasury stock method using average market price		1,528		1,317
Net effect of 2% Convertible Notes based on the if-converted method		7,517		7,517
Weighted average common and equivalent shares outstanding for diluted earnings per share		64,654		63,434
Basic Earnings Per Share:	$	0.49	$	0.46
Diluted Earnings Per Share:	$	0.43	$	0.41

Note 11. Income Taxes

The Company’s income tax expense is impacted by a number of factors, including the amount of taxable earnings derived in foreign jurisdictions with tax rates that are higher or lower than the U.S. federal statutory rate, state tax rates in the jurisdictions where the Company does business, and its ability to utilize various tax credits and net operating loss carryforwards. The effective income tax rate for the three months ended November 30, 2007, was 35.6% compared to 31.2% during the three months ended November 30, 2006. The effective income tax rate was higher in the three months ended November 30, 2007 primarily as a result of the restructuring charges for which tax benefits were fully reserved with valuation allowances.

As of September 1, 2007, the Company recognized the cumulative effect of adopting FIN 48 as a decrease to the opening balance of retained earnings, as follows (in thousands):

Retained earnings at August 31, 2007	$	825,165
Impact of adoption of FIN 48		(9,408	)
Retained earnings at September 1, 2007	$	815,757

The amount of unrecognized tax benefit after the FIN 48 adjustment was $20.8 million. Of the unrecognized tax benefit, $19.9 million relates to unrecognized tax positions that, if recognized, would affect the annual effective tax rate of the Company. The Company does not expect any uncertain tax benefits to significantly increase or decrease within the next 12 months. With few exceptions, the Company is no longer subject to U.S. federal, state and local, and foreign income tax examinations by tax authorities in the Company’s major tax jurisdictions for years before fiscal year 2003. The Company charges interest and penalties, in relation to unrecognized tax benefits, in the provision for income taxes.

Note 12. Segment Information

The Company is a manufacturer of a broad range of industrial products and systems and is organized into four reportable segments: Industrial, Electrical, Actuation Systems, and Engineered Products.

The Industrial segment is primarily involved in the design, manufacture, and distribution of branded hydraulic tools to the industrial, oil & gas, power generation, construction, and production automation markets. Industrial also provides manpower services and tool rental to the global joint integrity market. The Electrical segment is primarily involved in the design, manufacture, and distribution of electrical tools and supplies to the retail electrical wholesale, original equipment manufacturer (“OEM”), and marine markets. The Actuation Systems segment primarily focuses on developing and marketing highly engineered position and motion control systems for OEMs in the recreational vehicle, automotive, truck, and other industrial markets. The Engineered Products segment designs and manufactures various industrial products for industrial markets. During the first quarter of fiscal 2008, the

11

Company made an organizational change involving its Milwaukee Cylinder business unit, which resulted in it moving from the Engineered Products segment to the Industrial segment. All segment information has been adjusted to reflect this change. The Company evaluates segment performance based primarily on net sales and operating profit and has not aggregated individual operating segments due to the similar economic characteristics of the businesses.

The following tables summarize financial information by reportable segment.

	Three Months Ended
	November 30, 2007			November 30, 2006
Net Sales:
Industrial	$	137,089		$	103,934
Electrical		133,962			122,017
Actuation Systems		112,899			105,654
Engineered Products		31,193			11,378
Total	$	415,143		$	342,983
Operating Profit:
Industrial	$	37,976		$	28,958
Electrical		4,905			9,248
Actuation Systems		10,059			8,614
Engineered Products		4,235			1,653
General Corporate		(6,415	)		(4,944	)
Total	$	50,760		$	43,529
	November 30, 2007			August 31, 2007
Assets:
Industrial	$	496,596		$	423,565
Electrical		465,724			454,946
Actuation Systems		375,429			355,764
Engineered Products		145,957			147,412
General Corporate		94,967			119,089
Total	$	1,578,673		$	1,500,776

The following table summarizes sales by product line:

	Three Months Ended
	November 30, 2007		November 30, 2006
High Force Hydraulic Tools	$	87,412	$	63,944
Joint Integrity		49,677		39,990
North American Electrical		35,150		33,562
European Electrical		44,176		43,344
Specialty Electrical		29,604		18,243
Professional Electrical		25,032		26,868
Automotive Actuation Systems		32,531		32,328
Recreational Vehicle Actuation Systems		25,355		24,173
Truck Actuation Systems		45,533		41,487
Other		40,673		19,044
Total net sales	$	415,143	$	342,983

In addition to the impact of foreign currency rate changes, the comparability of the segment and product line data is impacted by the acquisitions discussed in Note 2, “Acquisitions”.

Corporate assets, which are not allocated, principally represent capitalized debt issuance costs, deferred income taxes, the fair value of derivative instruments and the retained interest in trade accounts receivable (subject to the accounts receivable program discussed in Note 4. “Accounts Receivable Securitization”).

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Note 13. Contingencies and Litigation

The Company had outstanding letters of credit of $6.5 million at November 30, 2007 and August 31, 2007, respectively. The letters of credit secure self-insured workers compensation liabilities.

The Company is a party to various legal proceedings that have arisen in the normal course of its business. These legal proceedings typically include product liability, environmental, labor, patent claims, and divestiture disputes. The Company has recorded reserves for loss contingencies based on the specific circumstances of each case. Such reserves are recorded when it is probable that a loss has been incurred as of the balance sheet date and such loss can be reasonably estimated. In the opinion of management, the resolution of these contingencies will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

The Company, in the normal course of business, enters into certain real estate and equipment leases or guarantees such leases on behalf of its subsidiaries. In conjunction with the spin-off of a former subsidiary in fiscal 2000, the Company assigned its rights in the leases used by the former subsidiary, but was not released as a responsible party from all such leases by the lessors. All of these businesses were subsequently sold. The Company remains contingently liable for those leases if any of these businesses are unable to fulfill their obligations thereunder. The discounted present value of future minimum lease payments for such leases totals, assuming no offset for sub-leasing, approximately $6.1 million at November 30, 2007. The future undiscounted minimum lease payments for these leases are as follows: $0.3 million in the balance of calendar 2007, $1.1 million in calendar 2008 through 2010, $1.2 million in calendar 2011; and $4.9 million thereafter.

The Company has facilities in numerous geographic locations that are subject to a range of environmental laws and regulations. Environmental costs that have no future economic value are expensed. Liabilities are recorded when environmental remediation is probable and the costs are reasonably estimable. Environmental expenditures over the last three years have not been material. Management believes that such costs will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

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Note 14. Guarantor Subsidiaries

On June 12, 2007, Actuant Corporation (the “Parent”) issued $250.0 million of 6.875% Senior Notes (the “6.875% Senior Notes”). All of our material domestic 100% owned subsidiaries (the “Guarantors”) fully and unconditionally guarantee the 6.875% Senior Notes on a joint and several basis. There are no significant restrictions on the ability of the Guarantors to make distributions to the Parent. The following tables present the condensed results of operations, financial position and cash flows of Actuant Corporation and its subsidiaries, the Guarantor and Non-Guarantor entities, and the eliminations necessary to arrive at the information for the Company on a consolidated basis.

General corporate expenses have not been allocated to subsidiaries, and are all included under the Parent heading. As a matter of course, the Company retains certain assets and liabilities at the corporate level (Parent column in the following tables) which are not allocated to subsidiaries including, but not limited to, certain employee benefit, insurance, financing, and tax liabilities. Income tax provisions for domestic Actuant Corporation subsidiaries are typically recorded using an estimate and finalized in total with an adjustment recorded at the Parent level. Net sales reported for each of the headings only includes sales to third parties; sales between entities are not significant. Additionally, substantially all of the indebtedness of the Company has historically been, and continues to be, carried at the corporate level and is therefore included in the Parent column in the following tables. Substantially all accounts receivable of the Parent and Guarantors are sold into the accounts receivable program described in Note 4. “Accounts Receivable Securitization”. Allowances for doubtful accounts remains recorded at the Parent and Guarantors. Intercompany balances include receivables/payables incurred in the normal course of business in addition to investments and loans transacted between subsidiaries of the Company or with Actuant.

14

Condensed Consolidated Statement of Earnings

	THREE MONTHS ENDED NOVEMBER 30, 2007
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	57,721		$	131,796		$	225,626		$	—		$	415,143
Cost of products sold		25,988			98,857			149,464			—			274,309
Gross profit		31,733			32,939			76,162			—			140,834
Selling, administrative and engineering expenses		20,045			23,419			37,832			—			81,296
Restructuring charge		—			—			5,521			—			5,521
Amortization of intangible assets		543			1,712			1,002			—			3,257
Operating profit		11,145			7,808			31,807			—			50,760
Financing costs, net		8,574			(3	)		729			—			9,300
Intercompany (income) expense, net		(5,541	)		4,847			694			—			—
Other expense, net		396			4			(1,510	)		—			(1,110	)
Earnings (loss) before income tax expense and minority interest		7,716			2,960			31,894			—			42,570
Income tax expense		2,746			1,053			11,350			—			15,149
Minority interest, net of income taxes		—			—			(6	)		—			(6	)
Net earnings (loss) before equity in earnings of subsidiaries		4,970			1,907			20,550			—			27,427
Equity in earnings of subsidiaries		22,457			—			—			(22,457	)		—
Net earnings	$	27,427		$	1,907		$	20,550		$	(22,457	)	$	27,427
	THREE MONTHS ENDED NOVEMBER 30, 2006
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	47,543		$	123,447		$	171,993		$	—		$	342,983
Cost of products sold		21,853			92,168			115,917			—			229,938
Gross profit		25,690			31,279			56,076			—			113,045
Selling, administrative and engineering expenses		16,574			20,254			30,326			—			67,154
Restructuring charge		—			—			109			—			109
Amortization of intangible assets		244			1,228			781			—			2,253
Operating profit		8,872			9,797			24,860			—			43,529
Financing costs, net		6,047			5			789			—			6,841
Intercompany (income) expense, net		(4,460	)		5,171			(711	)		—			—
Other expense, net		12			34			171			—			217
Earnings (loss) before income tax expense and minority interest		7,273			4,587			24,611			—			36,471
Income tax expense		2,269			1,431			7,679			—			11,379
Minority interest, net of income taxes		—			—			(10	)		—			(10	)
Net earnings (loss) before equity in earnings of subsidiaries		5,004			3,156			16,942			—			25,102
Equity in earnings of subsidiaries		20,098			—			—			(20,098	)		—
Net earnings	$	25,102		$	3,156		$	16,942		$	(20,098	)	$	25,102

15

Condensed Consolidated Balance Sheet

	NOVEMBER 30, 2007
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
ASSETS
Current Assets
Cash and cash equivalents	$	10,763		$	—		$	57,978		$	—		$	68,741
Accounts receivable		(95	)		(106	)		224,620			—			224,419
Inventories		31,541			84,728			102,143			—			218,412
Deferred income taxes		13,950			37			529			—			14,516
Prepaid expenses		4,406			1,055			7,037			—			12,498
Total Current Assets		60,565			85,714			392,307			—			538,586
Property, Plant & Equipment, net		18,345			36,672			69,988			—			125,005
Goodwill		61,414			366,729			196,109			—			624,252
Other Intangibles, net		38,246			169,914			72,618			—			280,778
Investment in Subsidiaries		1,220,387			158,567			62,385			(1,441,339	)		—
Other Long-term Assets		9,087			217			748			—			10,052
Total Assets	$	1,408,044		$	817,813		$	794,155		$	(1,441,339	)	$	1,578,673
LIABILITIES & SHAREHOLDERS’ EQUITY
Current Liabilities
Short-term borrowings	$	—		$	—		$	134		$	—		$	134
Trade accounts payable		23,478			41,927			94,059			—			159,464
Accrued compensation and benefits		9,765			4,858			26,240			—			40,863
Income taxes payable		8,970			979			22,408			—			32,357
Current maturities of long-term debt		—			4			29			—			33
Other current liabilities		19,680			19,943			37,575			—			77,198
Total Current Liabilities		61,893			67,711			180,445			—			310,049
Long-term Debt, less Current Maturities		573,241			3			23			—			573,267
Deferred Income Taxes		89,402			(286	)		21,296			—			110,412
Pension and Post-retirement Benefit Liabilities		6,074			—			17,148			—			23,222
Other Long-term Liabilities		15,784			1,829			6,622			—			24,235
Payable to (Receivable from) Subsidiaries		124,162			(93,698	)		(30,464	)		—			—
Stockholders’ Equity		537,488			842,254			599,085			(1,441,339	)		537,488
Total Liabilities and Stockholders’ Equity	$	1,408,044		$	817,813		$	794,155		$	(1,441,339	)	$	1,578,673

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	AUGUST 31, 2007
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
ASSETS
Current Assets
Cash and cash equivalents	$	25,605		$	—		$	61,075		$	—		$	86,680
Accounts receivable		(2,008	)		(1,463	)		198,246			—			194,775
Inventories		23,078			82,704			91,757			—			197,539
Deferred income taxes		14,088			37			702			—			14,827
Prepaid expenses		4,126			1,044			6,289			—			11,459
Total Current Assets		64,889			82,322			358,069			—			505,280
Property, Plant & Equipment, net		13,919			42,807			66,091			—			122,817
Goodwill		47,389			366,729			185,723			—			599,841
Other Intangibles, net		17,538			171,626			71,254			—			260,418
Investment in Subsidiaries		1,173,141			154,541			62,666			(1,390,348	)		—
Other Long-term Assets		11,483			197			740			—			12,420
Total Assets	$	1,328,359		$	818,222		$	744,543		$	(1,390,348	)	$	1,500,776
LIABILITIES & SHAREHOLDERS’ EQUITY
Current Liabilities
Short-term borrowings	$	—		$	—		$	—		$	—		$	—
Trade accounts payable		21,955			46,964			84,286			—			153,205
Accrued compensation and benefits		17,783			8,462			26,100			—			52,345
Income taxes payable		(1,876	)		10,728			11,457			—			20,309
Current maturities of long-term debt		—			4			515			—			519
Other current liabilities		15,563			18,272			30,614			—			64,449
Total Current Liabilities		53,425			84,430			152,972			—			290,827
Long-term Debt, less Current Maturities		560,604			4			530			—			561,138
Deferred income taxes		83,459			(286	)		20,416			—			103,589
Pension and Post-retirement Benefit Liabilities		7,171			—			20,266			—			27,437
Other Long-term Liabilities		14,053			1,525			2,286			—			17,864
Payable to (Receivable from) Subsidiaries		109,726			(98,504	)		(11,222	)		—			—
Stockholders’ Equity		499,921			831,053			559,295			(1,390,348	)		499,921
Total Liabilities and Stockholders’ Equity	$	1,328,359		$	818,222		$	744,543		$	(1,390,348	)	$	1,500,776

17

Condensed Consolidated Statement of Cash Flows

	THREE MONTHS ENDED NOVEMBER 30, 2007
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Operating Activities
Net earnings	$	27,427		$	1,907		$	20,550		$	(22,457	)	$	27,427
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		1,488			3,848			5,128			—			10,464
Dividend received		6,477			—			—			(6,477	)		—
Amortization of debt discount and debt issuance costs		453			—			—			—			453
Stock-based compensation		1,603			—			—			—			1,603
All other non-cash adjustments and changes in operating assets and liabilities		(12,024	)		(14,795	)		(6,861	)		22,457			(11,223	)
Net cash provided by operating activities		25,424			(9,040	)		18,817			(6,477	)		28,724
Investing Activities
Proceeds from sale of property, plant & equipment		704			5,473			2,144			—			8,321
Capital expenditures		(1,283	)		(1,239	)		(6,514	)		—			(9,036	)
Changes in receivables and payable to subsidiaries		7,958			11,283			(19,241	)		—			—
Business acquisitions, net of cash acquired		(47,437	)		—			—			—			(47,437	)
Cash used in investing activities		(40,058	)		15,517			(23,611	)		—			(48,152	)
Financing Activities
Principal repayments on term loans		—			—			(994	)		—			(994	)
Net (repayments) borrowings on revolving credit facilities and short-term borrowings		—			—			134			—			134
Dividend paid		—			(6,477	)		—			6,477			—
All other		(208	)		—			—			—			(208	)
Cash provided used in financing activities		(208	)		(6,477	)		(860	)		6,477			(1,068	)
Effect of exchange rate changes on cash		—			—			2,557			—			2,557
Net increase in cash and cash equivalents		(14,842	)		—			(3,097	)		—			(17,939	)
Cash and cash equivalents - beginning of period		25,605			—			61,075			—			86,680
Cash and cash equivalents - end of period	$	10,763		$	—		$	57,978		$	—		$	68,741

18

	THREE MONTHS ENDED NOVEMBER 30, 2006
	Parent			Guarantors			Non-Guarantors			Eliminations			Consolidated
Operating Activities
Net earnings	$	25,102		$	3,156		$	16,943		$	(20,099	)	$	25,102
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		1,100			2,997			3,780			—			7,877
Dividend received		6,467			—			—			(6,467	)		—
Amortization of debt discount and debt issuance costs		382			—			—			—			382
Stock-based compensation		1,417			—			—			—			1,417
All other non-cash adjustments and changes in operating assets and liabilities		(18,145	)		(17,365	)		(11,624	)		20,099			(27,035	)
Net cash provided by operating activities		16,323			(11,212	)		9,099			(6,467	)		7,743
Investing Activities
Proceeds from sale of property, plant & equipment		2,223			90			476			—			2,789
Capital expenditures		(1,580	)		(711	)		(4,225	)		—			(6,516	)
Changes in receivables and payable to subsidiaries		(13,204	)		18,300			(5,096	)		—			—
Business acquisitions, net of cash acquired		273			—			—			—			273
Cash used in investing activities		(12,288	)		17,679			(8,845	)		—			(3,454	)
Financing Activities
Net (repayments) borrowings on revolving credit facilities and short-term borrowings		(2,537	)		—			677			—			(1,860	)
Dividend paid		—			(6,467	)		—			6,467			—
All other		(2,073	)		—			—			—			(2,073	)
Cash provided by financing activities		(4,610	)		(6,467	)		677			6,467			(3,933	)
Effect of exchange rate changes on cash		—			—			571			—			571
Net increase in cash and cash equivalents		(575	)		—			1,502			—			927
Cash and cash equivalents - beginning of period		575			—			25,084			—			25,659
Cash and cash equivalents - end of period	$	—		$	—		$	26,586		$	—		$	26,586

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