Bob Arzbaecher - Chief Executive Officer Andy Lampereur - Chief Financial Officer Karen Bauer - Director, Investor Relations

Jeff Hammond - KeyBanc Capital Markets Jim Lucas - Janney Montgomery Jamie Sullivan - RBC Capital Markets Charlie Brady - BMO Capital Markets Scott Graham - Ladenburg Thalmann Dean Dray - FBR Capital Markets Ann Duignan - JP Morgan Robert McCarthy - Robert W. Baird Joe Mantello - Sidoti & Co.

Ladies and gentlemen thank you for standing by. Welcome to the Actuant Corp. first quarter fiscal 2010 earnings conference call. We are conducting a live meeting to coincide with the audio conference. If you would like to view the presentation online, please refer to your meeting invitation for details. As a reminder this conference is being recorded Thursday December 17, 2009. (Operator Instructions) It is now my pleasure to turn the conference over to Karen Bauer Actuant’s Director, Investor Relations.

Good morning and welcome to Actuant’s first quarter fiscal 2010 earnings conference call. On the call with me today are Bob Arzbaecher, Actuant’s Chief Executive Officer; and Andy Lampereur, Chief Financial Officer. I would like to point out that our earnings release and the slide presentation supplementing today’s call are available in the investors section of our website. Before we start, let me offer the following cautionary note. During this call, we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Investors are cautioned that forward-looking statements are inherently uncertain and that there are a number of factors that could cause actual results to differ materially from these statements. These factors are outlined in our SEC filings. With that, I’d like to turn the call over to Bob.

Thank you, Karen and greetings from Frigid Milwaukee. As you probably seeing we’re off to a great start in fiscal 2010. We had sequential improvement in sales, EBITDA and EPS from our fourth quarter and are convinced the worst is behind us. We beat our expectations for sales and EPS for the first quarter. We tightened our sales guidance range around the high end of our previous range and we increased our EPS guidance for the year. We had great cash flow for the quarter and raised our full year estimate of free cash flow to $100 million to $110 million. Well in excess of net income. Probably just as important as the numbers Actuant’s business units are returning to a higher level predictability. Simply stated we’re getting back to what we have done historically well, set manage and deliver. By this, I mean setting expectations, managing the key variables day-to-day and month-to-month and delivering the results. With these opening remarks I’ll turn it over to Andy to go through the numbers and I will come back and cover a few topics later in the guidance. Andy?

Thank you, Bob and good morning everyone. As Bob mentioned we had a strong first quarter and exceeded our sales and earnings guidance. This provides us with a solid start to fiscal ‘10. Sales for the quarter were $305 million ahead of the $280 to $300 million guidance. While this is down about 18% from the prior year, it was a strongest quarterly sales figure in the past four quarters. On a GAAP basis, we reported diluted EPS of $0.17 a share compared to $0.19 a share a year ago. In addition to the restructuring costs in both years, fiscal 2009s results included in asset impairment charge as well as discontinued operations. If we focus just on the continuing operations and exclude the special items, EPS was $0.20 a share for the first quarter compared to $0.45 a share a year ago. We previously communicated to you that the first quarter was going to be tough from a comp standpoint given last year’s results, but if our guidance is correct, we will be reporting positive earnings per share in each of the next three quarters. Positive EPS that being growth as well, before diving into first quarter results, I wanted to provide an update on our restructuring activities which will provide a good backdrop for understanding some of the factors that influenced our results and outlook. Our first quarter GAAP results included $3.6 million of restructuring costs, covering a variety of actions underway at Actuant. We have a number of plan consolidations and facility closures in process that should be wrapping up in the second quarter, which will result in the second quarter restructuring expense total that’s higher than the first. This is all inline with our restructuring plans and timelines and doesn’t represent any kind of delay or change in expectations. Just completed quarter, businesses were busy transferring production from one plan to another, as well as transitioning back office functions, too. This resulted in under absorbed or in some cases duplicates costs. These duplicate costs and under absorption are not included in the restructuring expense in the income statement but rather are included in the $0.20 a share adjusted EPS. For example, we had overlapping customer service and inside sales employees in our North American electrical business for part of the quarter while this function was being transitioned from this NAPAs Houston and spring grove offices into the Glendale office. We also had start up and duplicate costs to support the transfer of the Simplex production from Chicago to Wisconsin as well as other transfers. This was most prevalent in the industrial and electrical segments during the quarter. Once we wrap up these projects in the second quarter, these transition costs go away, in the real savings kick in and our margins will expand nicely. Now let’s begin into the numbers. The $305 million in revenue during the first quarter was our second consecutive quarter of sequential sales growth up 5% from last quarter. Part of this is a less worse phenomenon, part of it is due to the weaker U.S. dollar and part of it is due to real core growth in few of our businesses. Core sales in the first quarter were down 20% from a year ago a continuing trend of improvement that started last quarter. As you will hear when we walk through each of our segments three of the four had sequential improvement in the quarter, in the core sales metric. Underlying these quarterly sales figures was also a trend of improvement within the quarter, as the quarter progressed. Meaning the overall core sales decline was less in November, than it was in September. As a reminder from last year, Actuant hit the economic wall midway through the second quarter of fiscal 2009. As a result, when we look forward into the second quarter, we’re expecting a significant improvement in the year-over-year trend. Now I would like to shift our discussion to margins. To consolidate EBITDA margin for the first quarter, excluding restructuring costs was 13.3%, which was the same as last quarter. If you peeling the onion, you will see that our internal profit margins improved nicely from the fourth quarter, but they were muted by about $4 million sequential increase and incentive compensation expense which alone is worth 140 basis points a margin. Additionally, we had unfavorable sales mix with our most profitable industrial segment, showing the largest year-over-year sales decline of the four segments as well as a restructuring transition cost I discussed earlier and now another way to engage margins during the quarter, is the fact that our consolidated gross profit margin was 35% in the first quarter, which is a 200 to 300 basis point improvement over the last two quarters. Despite the unfavorable mix in restructuring disruption, we’re seeing expansion at the gross profit line but, again, this is being masked by the incentive compensation expense which is primarily showing up in SG&A. Finally, you can see the benefits of the completed restructuring where it has been completed; looking at the engineered solutions margins this quarter and we’re confident you will see consolidated year-over-year improvement during the balance of the fiscal year. Now let’s discuss results for the quarter, for each of our segments, starting first with industrial. Last quarter, we talked about stabilization in the industrial segment and in this quarter we had sequential growth. Industrial core sales were down 30% this quarter, compared to 35% decline last quarter, but even more encouraging it got better as the quarter progressed. The improvement we’re seeing in industrial is a little bit more pronounced in North America and Asia than in Europe. During the quarter, Enerpac landed very nice projects in Asia and Europe and saw increased order activity in its base industrial tool product line. The major restructuring project underway in this segment is a consolidation of Simplex’s manufacturing into Enerpac. This should be completed during the second quarter and will be followed by decent margin expansion in the segment. Similar my comments on the consolidated margins, during the quarter the industrial segment margins were adversely impacted by incentive comps expense accruals as well as transition costs related to restructuring. We expect second half margin expansion with high incremental margins on revenue growth, plus the benefit of the restructuring savings. Shifting now to the energy segment, if you recall our comments from last quarters call, we were expecting first quarter core sales to decline more than the 11% decline we saw in the fourth quarter. In reality, we ended the first quarter down about 12%, which was quite a bit better than we expected. Core sales for this segment exclude the Cortland acquisition in the first quarter, but that will change in the second quarter and going forward. We feel we have seen some stabilization in the sales run rate in both the Cortland and Hydratight platforms in the first quarter. We also feel good about the visibility over the next 90 days in this segment, but less so about the back half of the year and Bob will cover more on this later in the call. Electrical segment core sales were down 18% from year ago just a modest improvement from the 19% decline last quarter. We saw incremental improvement in North American retail markets during the quarter, but headwind in Europe. The electrical segment have the most restructuring activity going on during the quarter out of our four segments with several major projects in process. Most of the large ones will be completed in the next 90 days, which will boost our second half profit margins. In the first quarter, though, these actions were a bit of a drag on margins as was incentive comp expense. Our final segment is engineered solutions which receives the convergent CFO’s gold star for improvement award given the current economic environment. Its year-over-year core sales decline was had sequentially from a 37% decline in the fourth quarter, to 18% in the first quarter. This reflected year-over-year growth in sales to both the automotive and RV markets and sequential improvement in other off highway sales. We’re also encouraged by some new convertible platform wins during the quarter at power factor as well as increased production rates from certain European truck OEMs that will help us out during the balance of the year. We also made major progress on the margin front and engineered solutions as I am sure you seen. First quarter, EBITDA margins improved over 300 basis points sequentially to over 10%, and we expect this trend to continue throughout the year, reflecting the dual benefit of both higher volume and restructuring savings. Moving away from the income statement, one of the highlights during the quarter, again was robust cash flow. We generated $41 million of free cash flow in the quarter. Good management of working capital and cash income taxes as well as modest capital expenditures resulted in a strong cash flow quarter. As we mentioned in our last quarterly call, we allowed our off balance sheet air securitization program to expire in September, as it was no longer cost effective from an interest expense perspective and this resulted in a $37 million increase in debt during the quarter. This had no impact on credit availability or our debt covenants as a securitization had always been factored into those calculations. Our first quarter free cash flow however of $41 million more than offset this $37 million impact from securitization resulting and decline in debt during the quarter of $391 million. At quarter end, we had just $37 million of our 400 million revolver tapped leaving plenty of capacity to fund its future growth. That is for my prepared remarks today. I will turn the line back over to Bob.

Thank you, Andy. In the last quarterly call, I shared the assessment that Actuant was past the worse part of this recession and three of our four business segments were exhibiting some kind of improvement. 90 days later we’re more convinced of this than ever and it showed up in our financials. While we believe it will be a slow economic recovery, it absolutely feels like a recovery. Let me go a few data points on that. The first is our core sales. Andy just went through these with you. We saw continued improvement off the bottom and industrial electrical and engineered solutions. We saw a number of customers particularly in the vehicle market begin to produce what they sell. Our huge improvement from last year, we actually had core growth in both convertibles and RVs during the quarter and expect core growth in truck later this year as production levels match OEM sales. We saw that the big box retailers in North America were seeing less worse same store sales from the prior year. The comments from Home Depot and Lowe’s have turned positive although cautiously positive. Additionally, it feels like the electrical aisle outperformed the rest of the stores with better than store averages. Finally we saw excesses in sales at industrial for the second straight quarter. Meaning orders were in excess of sales in industrial for the second straight quarter. This is a short lead time business, and it both well for us in the future. That’s not no say we don’t have challenges, but so far so good in 2010. Now I would like to talk about energy. As you know, we have described this business this segment as the wildcard for the year. Looking at these 90 days ago, we were expecting worse course sales decline than the 12% it was down. So better performance in the first quarter than we had expected off to a good start in 2010. We still feel energy is the hardest of the Actuant segments to predict at this juncture. You see both positive and negative signs in the marketplace. Oil prices in the $70 to $80 a barrel range is not bad, rig count from the industry statistics is up off the lows earlier this year. Turnaround activity is starring to show some signs of life resulting in improved Hydratight technician utilization. On the negative side, exploration is still down significantly, affecting the Cortland seismic product line. Also big project business continues to be slow. While difficult to predict in the short term, we remain confident of the long term value equation for both Hydratight and Cortland. We continue to love the MRO nature of Hydratight. Safety and maintenance continue to be critical condition issues for asset owners. You can delay turnarounds for awhile, but you have to get the work done eventually. The trend towards deepwater exploration and drilling, benefits both the Hydratight and Cortland businesses and simply stated, deepwater is where the oil is. We continue to hear from customers that our ability to serve them globally with a broad basket of products and services is what they need. So look for us to continue to deploy capital into this segment for growth, both on an internal growth initiative basis, and from acquisitions. Now I would like to turn to restructuring and add a few comments from what Andy has already covered. First, this was the busiest quarter to date in terms of active large projects underway. A number of these will be completed in the second quarter. Our estimated cost and savings from restructuring are unchanged from last quarter about $35 million in both cost and annual savings once everything is completed. The punch line on restructuring is that it is on time, on budget, and our confidence level of delivering margin expansion in the future from this restructuring is quite high. We also executed a portfolio management goal, which was the divestiture in early December which is now our second quarter of electrical spiking and pluming product lines. Our annual sales of this product line were about $12 million and we received proceeds of approximately $7 million, which you will see in the second quarter cash flow. These were SKU intensive product lines from the legacy Dresco business and were not remain to our electrical strategy. Therefore divesting in them was a good way to simplify the business and deploy the capital elsewhere. Now let’s turn to acquisitions. While we did not complete any transactions during the quarter there was a decent amount of activity going on and some opportunities are moving closer to the finish line a couple of comments about acquisitions. Most of these projects are in the $10 to $50 million range in size. They are opportunities all tuck in acquisitions primarily focused the energy and industrial segments. Valuations are in the 6 to 8 times EBITDA range down specifically from the peak a few years ago. Acquisition timing is always difficult to predict with any degree of confidence, but we’re still comfortable with our target of approximately $100 million of capital deployed on acquisitions over the next year, probably three to five transactions inline with our free cash flow generation. Now let’s move to guidance. As I mentioned earlier, we tightened our revenue guidance to $1.2 and to $1.25 billion, around the top end of our previous guidance. Andy also mentioned earlier that we are anniversaring last year’s economic collapse midway through the second quarter. Accordingly our sales guidance assumes a single digit core decline in the second quarter followed by two quarters of 6% to 8% core growth. While the growth is welcome, it has more to do with easier comps than any robust increases in end market demand. EBITDA margins should grow year-over-year in each of the next three quarters especially in the back half of the year reflecting the restructuring savings and higher sales volumes. Based on these factors, plus our first quarter beat we’re increasing our EPS guidance excluding restructuring $0.82 to $0.97 per share up from the previous range of $0.70 to $0.95 a share. Given the strong first quarter cash flow we’re also raising our fiscal year free cash flow to $100 to $110 million. This represents a cash flow conversion in excess of 150%, of net income. Now zeroing in on the second quarter, we’re forecasting sales of $275 million to $295 million and EPS of $0.12 to $0.17 a share. As you can see on the graph on this slide, the second quarter is seasonably our lowest from an earnings standpoint. With holidays in December, fewer workdays in February and winter months in northern climates affecting the construction, infrastructure and energy markets, while we are expecting year-over-year single digit core sales decline in the second quarter, additional restructuring benefits will come through, generating EPS growth over last years $0.11 a share again, excluding restructuring charges. Finally, we spent a fair amount of time on last quarter’s earnings call, and investor meetings over the last three months, discussing the fact that the first quarter comparable was going to be tough, and that the calendar year 2000 comparables will be pretty robust about in terms of EPS growth. This accompanying slide lays this out for you. Through November of 2009 our LTM EPS was $0.70 a share. If you believe our guidance for fiscal year 2010 you will see robust calendar year EPS growth. This is a function of the single digit core sales growth and margin expansion from restructuring that we already discussed and this excludes acquisitions which we believe will be accretive to guidance. That’s it for my prepared remarks operator. I’d like to turn it to open up the phone lines for the question-and-answer session.

(Operator Instructions) Your first question comes from Jeff Hammond - KeyBanc Capital Markets Jeff Hammond - KeyBanc Capital Markets: Andy you talked about the inefficiencies and redundancies, around some of the plant moves. Is there where to quantify that in the first quarter and what that might look like into 2Q before it goes away?

It is pretty difficult to do that, we can see individually at some plants how much, where we have got doubled up people and that sort of thing but we didn’t really break out efficiencies for, our various departments, within a plant as an example. So, I don’t have a hard number for you. In terms of looking forward, in the second quarter, there will still be some out there I would expect it to be a little less, because some of these projects will be, being completed and the end of December some of be in January so I expect it to be less of an impact from that standpoint. Jeff Hammond - KeyBanc Capital Markets: Then in engineered solutions, it looks like the, revenue went from 77 to 89 on a sequential basis. Can you just kind of rank order auto, RV, truck, in terms of the contribution?

Yes, we had very nice core growth come coming out of both RV and auto. I mean, on a percentage basis, RV was probably the highest of those coming off such a low number, but we were double digits, really in both RV and in auto in the plus 20% range, for the quarter. So I would say that kind of range truck improved a little bit, sequentially, as the quarter went along, but, what Bob was referring to and I was as well as far as the ramp up in production or production meeting sales, I think you’re going to see more of that as the year rolls along. We’re hearing and seeing in the build rates as we look out six months that the rates are coming up. So, it was much less of an impact in the quarter from truck than the other.

Also, Jeff, don’t forget that engineered solutions has quite a bit of European content compare to some of the other segments and so currency, I think you were giving the absolute sales numbers there and currency had a pretty meaningful impact. Jeff Hammond - KeyBanc Capital Markets: Then just finally on energy, yes, I think you talk about deferred maintenance. As you talk to your customers anecdotally are they starting to feel better about that maintenance cycle or is there still a lot discussion about deferrals?

It is kind of as my comments stated. You can talk to one customer and be 10 miles down the road and the guy bidding on the same turnaround type stuff and he will are a very different opinion. So, very difficult to for me to say whether that is a positive or a negative sign or that there has been a big change. I think that clearly you do get a change in behavior as you go to the next calendar year because a lot of the maintenance and repairs of budgeted item that goes with peoples annual budgets and a lot of oil and gas guys are 12/31 year ends. I think anecdotally, we feel like the Gulf of Mexico has reasonable amount of activity for our technicians and the next three months, and as Andy said in his comments, the back half is a little more open, but we do have some visibility to technician utilization.

Your next question comes from Jim Lucas - Janney Montgomery. Jim Lucas - Janney Montgomery: Is this the inaugural CFO Gold Star Award, Andy?

I think it is. I think I might have created a monster here. Jim Lucas - Janney Montgomery: One and two house keeping question first FX for the quarter, what was the impact?

As couple points, it was towards replacing. Jim Lucas - Janney Montgomery: The M&A you’ve talked about improving environment some of our expectations coming down, focusing on tuck ends this year. We saw a small product line divestiture, as you’re starting to get more visibility and you’ve seen seller expectations coming down. Could we look for a trend of additional divestitures, as the year progresses?

I think the ones that we’ve twisted by and large are what you’re going to see. We do look at it. That’s an initiative that I think this recession has made us more aggressive about being row it focused EBIT down to SKUs and in product lines, but I think you’ve seen what you’re going to see. Jim Lucas - Janney Montgomery: With regards on the corporate expense line, clearly there a lot has changed from last year to this year. How should we think about that from an annualized run rate basis?

It’s going to be somewhere when you look at the OP, OP line, and that’s supplemental schedule we had, it’s going to be somewhere in the $6 million to $7 million of quarter range as we go forward here.

Your next question comes from Jamie Sullivan - RBC Capital Markets. Jamie Sullivan - RBC Capital Markets: Wondered, if you could maybe walk through kind of your outlook for the year in the segments, similar to how you broke it out on Analysts Day for what you’re assuming for the guidance range for the year, if you just want to highlight any changes to your forecast that would be helpful.

If you start with industrial, we still are in the kind of minus 5% to minus 10% range for the guidance. We did a little better than that in the first quarter. Some of that was currency related so, we probably want another quarter before we’re willing to call that a thing. In energy, I think…

Just to clarify when you say ‘better,’ it’s we were down 20% year-over-year. We did better than our expectations… Jamie Sullivan - RBC Capital Markets: In energy we have tightened that range. I think it’s, we were kind of flat to minus 10. I think we’re kind of flat to minus five at this point. Second quarter, will probably be the worst from a negative point of view, of the four quarters for the year, but again we got some visibility there and feel okay. In electrical, it’s about the same as what we did the last time. Maybe a touch worse, given the fact that, Europe electrical is a little flatter. I also would adjust that for the fact that we sold that product line. That runs about what $12 million a year or a $3 million a quarter. So, you got to kind of factor that out we sold that in December. Then, engineered solutions, probably a positive instead of a negative, we were flat to minus five, we’re kind of flat to up a bit right now, would be our guidance. It’s the things we talked about that would be driving those numbers. Jamie Sullivan - RBC Capital Markets: You comment about the orders in industrial being, book-to-bill being greater than one essentially. Should we assume that industrial will be up sequentially, given that?

Up sequentially from the first quarter is that what your comment is? Jamie Sullivan - RBC Capital Markets: Right.

I guess the way I would explain that Jamie is seasonally our second quarter is weaker relative to the first, but I think when you look at the year-over-year trend sequentially, you should see an improvement in the trend, but absolute dollars sequentially will be down because of seasonality. Jamie Sullivan - RBC Capital Markets: If you could just talk about what you’re seeing in terms of any pricing pressure across the different segments?

No, we don’t have any pricing pressure. I don’t think we have any pricing power either. It’s kind of just flat. Flat as you go. I think I’ve talked to a number of you guys about the fact that during this recession, pricing pressures from customers abated particularly in the vehicle side particularly where they were just trying to keep the vendor base alive with 60%, 70% declines in volume. I fully expect that we’re going to see some pricing pressure as volume comes back. They will return to looking for the kind of 1% to 3% cost downs in an annual basis, and we’re used to those negotiations and its part of our fabric with our lead process to kind of offset those things with other improvements. So, I don’t out of my things to worry about, pricing is not one that I am concerned, but I don’t think we’re going to be able to raise prices considerably either so, I think it just kind of in that flat zone. Jamie Sullivan - RBC Capital Markets: You’re confident that you would be able to offset any it would be a margin neutral event essentially.

Yes, the only think I would add to that is, anything associated with raw material, we have quite a bit of our customers when we went through the big raw material gains couple of years ago, we have quite a few of our indexing that is index to those raw material components. I know that’s starting to spook people seeing copper and other things go up, but I think that’s again factored in with pricing negotiations. Jamie Sullivan - RBC Capital Markets: Is the Gold Star award, is that a non-cash charge?

It is a pride thing only, non-monetary.

Your next question comes from Charlie Brady - BMO Capital Markets. Charlie Brady - BMO Capital Markets: With regard to just the FX I know it’s not a significant impact, but can you just on the four segments, because you had some divestitures and you had a little core give us what the FX impact were across the four businesses?

I think it’s two in industrial, one in energy, with the pound over there that hasn’t moved as much as the euro. I think it’s two in electrical and three in engineered solutions. Charlie Brady - BMO Capital Markets: Can you just talk a little bit more about the engineered solution the automotive market the convertible top winds that you mentioned in your prepared remarks and kind of the ramp up on auto and how that pertains the rest of the year how that ought to rollout. That obviously had a pretty good sequential improvement. I’m wondering was there an initial pop as the new models get thrown in there or what was driving that.

Auto I think, when we talk about new models one, that hasn’t hit the revenue stream yet probably doesn’t hit until late 2010, fiscal early 2011. Andy maybe you can just walk through a couple of those models for them. When you look at what happened in the specific quarter, I think it’s that balance of production and sales that we’ve talked about and a lost vehicle markets driving it. We also were still receiving the benefit of some of the latching and actuation that was not in the prior year. We’ve talked about that in the product line. We do that with Mercedes and Volvo, are the two big customers there.

During the quarter we picked up a convertible top wind from Nissan. We also a first for Actuant, there is a cherry convertible that will be made in China, that’s a first for us as well. We also won the replacement on the Megan that one actually kicks in the middle of these fiscal years, that’s the first one that’s coming at us. We also re-upped on the Saab. We won that one as well, so those are some of the ones were referring to.

I think when we think about convertibles as you know it’s somewhat of our oligopoly it’s us and Hoyberger kind of share that market. I think it bodes well. I think we went through a period after the crisis where the last thing on any top stack maker or car maker’s mind was a new platform, but you’re starting to see it come out and we’ve talked at lengthy you guys about trends for tractable hard tops and how convertibles are gaining share as a total percentage of automotive. I think some of these wins are just an indication that moves towards open air systems are or convertibles haven’t stopped yet. Charlie Brady - BMO Capital Markets: Just one more house keeping, Andy tax rate for the rest of the year?

I think it’s going to be generally in line lease on quarterly somewhere in that 28%, 29% it’s getting more and more difficult to have a real nice flat tax rate through the year with some of the gap changes that are coming through, but yes, think 28ish, 29 for the balance of the year.

Your next question comes from Scott Graham - Ladenburg Thalmann. Scott Graham - Ladenburg Thalmann: Couple of questions on some of the businesses looks like it’s coming back on line, the auto and RV. Although you did touch on this I think, Bob. Obviously, those end markets have changed to say somewhat would be an understatement in the last, 18 months, but those businesses, those revenues coming back online, at roughly the same margin…?

For auto, the answer is, yes and I would argue maybe even a little higher, than we’ve done historically, again, Andy gave the Gold Star and margins were a big piece of that, and auto was what big piece of that. So, I think auto is coming on line, and we’re feeling very good about that. I don’t think auto, it continues to be something I think we don’t see there was any permanent impairment too. When you go to RV, we do see more of a permanent impairment. Yes the sales are up, but nowhere near the $120 million on an annual basis that we went into this recession and we’re not expecting to go flying back up there. Still, support Winnebago, it’s a great customer. They’re a great customer. Their announcement out this morning was very similar to ours. Fleetwood is back on track, just doing the motor home side, which is great that’s the piece we do. So, we’re taking care of some customers, very targeted, process. We’ve combined that business with power packer in the U.S. now. So, we’ve really cut some of the cost out of there. I wouldn’t say it’s going to get back to the high teens margins of EBITDA that it went into this recession at, but I don’t think it’s going to be a disaster either.

I don’t see anything from internal margins on RVs certainly has not changed. Just looking at RV today versus 2004, the fee coming in fundamentally the cost structure is very different. So I think that’s what Bob is referring to. Scott Graham - Ladenburg Thalmann: Two other questions, the first one is on Gits and I know that we walked into this downturn with a lot of optimism about their ability to really harvest some of the changes in emissions and engine formats. I’m just wondering you guys threw out if you recall back a couple years ago sort of a Gits unbooked backlog. I was wondering if you might at least talk around that number what the opportunity you see now for Gits on a go-forward basis and if that has changed?

I’ll start out and Andy, you can come in behind me. Our opportunity with Gits hasn’t really changed. It’s pushed out because some of the OEMs pushed out some of their EGR solutions, decide to go to SCR, decided to do different things. So, we continue to believe the opportunity to double the business somewhere around $50 million in incremental revenue is still out there. It isn’t going to come in 2010, or 2011. It’s further out than that, but we’re still excited about that technology. We’ve gained quite a bit in our relationship with Caterpillar. That was one that wasn’t even in the original look a couple years ago, because candidly we weren’t focused on off highway equipment as much as we were on highway. So nice win there, it’s a global market. We’ve got opportunities in China, or some of the truck guys there. We got opportunities and actual programs that are running with some of the European truck guys and then obviously the U.S. guys have the 2010 emissions requirement coming right at them and we’re part of that solution, too. You know, FCR versus EGR is a white-hot debate. I don’t want to weigh in which way that whole world is going to go on that, because I think we’re all going to try to figure that out. Our content is better with EGR. We would like to see more EGR, but we also do things with SCR and we’ll pick up revenue in both. So when I boil it all down, Scott, I don’t think there’s any change in our enthusiasm out of it. It’s probably just a change in timing.

I think you nailed it. Scott Graham - Ladenburg Thalmann: Okay. It does seem that from my readings at least that this climate conference at once the U.S. finishes writing whatever they write on power, it sounds to me as if our vehicles and our factories are like the next thing to tackle, and would seem to be an opportunity for you guys, but still unknown nevertheless. Another question I have for you is, last one is on Cortland’s and that was the business that we bought a little over a year ago. It paid up maybe a little bit more for than you guys normally do, but seemed like a good business and now here we are a year into it operating under the Actuant flag and assimilated with some of the energy business. I’m wondering what your view is on this business, on a go forward basis, how that can be worked to, one plus one equals three with Hydratight and kind of what are you seeing in that business now a year later? Andy, why don’t you frame out what Cortland is just in terms of the markets it serves pick up the sickles into engineered solutions with Sanlam and then I’ll come and talk a little more about Scott’s question, what have we done since we loaned it and where do we look at it from an outlook point of view.

When you look at it from a revenue standpoint, when you bought those roughly $100 million a quarter of that went into engineered solutions and the other three quarters went into the energy segment of the portion that’s in the energy segment, about half of that are about $40 million. Actually is energy oriented, there’s a lost other end markets that are out there that they serve some including defense, some aerospace. We actually have some medical in there as well.

Couple of products on the space shuttle.

So that part is going well. I think certainly our enthusiasm for this business is still very high certainly, not going to try to say that we haven’t been impacted by the economy in the last year, in particular, in the oil and gas area. It’s probably gotten hurts worse than the base Hydratight business from oil and gas because of the seismic exposure, that’s as resident within that chunk of business. Seismic is off 30%-40% relative to a lower number for Hydratight, but from an operational standpoint, very happy with how it’s going. We’ve introduced lead out there. I got a chance in the last months to get over to the U.K. and see what we’ve done in that operation. It looks great, coming along well the same thing with the sling in fiber rope business as well, it’s doing really well. So I think we’re very encouraged and positive about how it has performed in the last year. Other than just the market it is down, but the management team has done a great job.

Pretty hard to quantify what we’ve done Scott, but my guess we probably got 150 to 200 basis points of margin improvement before the town downturn. So try not to say that business is way up. It’s not. It is incremental margins are down due to the volume as Andy said, but from a lead point of view we see demonstrated improvement. We’ve taken working capital out. That’s one of our real signature things about lead is to really look is to really look at working capital and we’ve had a lost success with the Cortland asset in that. With Lead we are able to delay and actually cancel a major expansion that Cortland wants to do in Houston. So it’s a good example of how Lead, while it didn’t create any value by creating, sorry, didn’t create any savings, but it allowed us to avoid some capital that we were going to spend by opening up a Houston location. We were able to tuck that into our Hydratight location. Look for acquisitions in this space. So while the prices are down in the market is down we’re aggressive on looking at acquisitions in this space. There’s a lot going on in synthetic rope, there’s a lot going on and Different markets for umbilicals. These are all very exciting areas for us. So again I don’t look in the rear view mirror and worry about Cortland. I think it is solidly part of the Actuant family. Making good progress on some of the initiatives we have. Yes, the market is a little weak in the seismic side. That will bounce back as my comments talked about with the deep water.

Your next question comes from Dean Dray - FBR Capital Markets. Dean Dray - FBR Capital Markets: Andy, regarding the incentive comp accruals, maybe I missed this. Could you just give us some color as to what’s driving that and what’s the expectation over the next couple of quarters?

Absolutely, when you look at last year, after the first quarter, it was pretty obvious that we were up against something very different and we stopped accruing all incentives, on last year, given our August year end. The actual expense that we had for the entire 12 months was $1 million for the full year. By comparison the prior year was about $180 million of payout. We are accruing, through the first quarter, based on the assumption that we will be hitting our plan for the year, hitting what we committed to with the board, and we’ll be getting bonuses at the end of the year. So, we accrued ratably through the fourth quarters even though there might be more improvement in the back half of the year than the first half. So when you look at like in the third and the fourth quarter of last year, there was zero incentive comp baked in those numbers. We had about $4 million come through in the first quarter this year. So, that alone is worth about 130, 140 basis points sequentially as I mentioned. Dean Dray - FBR Capital Markets: We’ll view that as more of a high quality problem, the fact that you are meaning plan and an effective ratchet up these accruals?

Yes, that’s true. This is not like news in the sense that we had dollars in the plan. I think we accrued maybe just a little bit more than we originally had in the plan in the first quarter, but it’s the real issue here is sequential as opposed to what the outlook is for the year, just compared sequentially to Q3 and Q4, which had nothing compared to the first quarter, which had about four.

The other continuing I would add Deane is, you get these bonus accruals get dwarfed by the restructuring savings. So that’s what leads us to margin improvement on the year on kind of flattish volume. Deane Dray - FBR Capital Markets: It does raise the question. We’ve heard a number of companies have been giving their 2010 outlook on a calendar year. They talk about what sort of snap back and labor costs, are you seeing when you’re no longer doing the furloughs and so forth. So how much are you expecting to come back and that $35 million of savings? Is that net any of these year-over-year increase in labor costs?

The $35 million doesn’t include any, what I’d called temporary actions like furloughs and temporary wage cuts or 401(k). None of that is in there, that’s all temporary type stuff that is not in the $35 million. Deane Dray - FBR Capital Markets: Are there any hiring plans, or what is your approach? I think the last count was somewhere around 21% headcount reduction. What’s the expectation as to when do you start hiring again? Do you run a third shift and go to temps or how do you expect to manage that?

Our goals is to use our lead process and try to be more efficient and try to do as the volume comes back, try to do it with today’s existing headcount. You’ll never be 100% successful at that, but that’s kind of our goal is to try to use efficiency to try to really retain the current headcount. We’re also spending time looking at, where does that headcount comeback. We have a very large China facility, for example, that’s under utilized, so as volume comes back, how do we position it where some of that goes to China at a much lower cost, than replacing it somewhere else. Same is true with Mexico. We have a fairly robust campus. I got to visit down in the Juarez area, and same kind of opportunity that we have with China, in Mexico. So it’s a complicated story. The answer is we’re going to try not to add many people at all. We obviously do have to hire as people be replaced as we have growth strategies and new products. So you do add selected people, but it versus the 2000 people that have left. It’s not going to be anywhere near that number as it comes back. Deane Dray - FBR Capital Markets: When you talk about seasonal FX for your second quarter and holidays and so forth, and it’s been a while since we’ve been on more of a normal seasonal cycle. So at the changes at the margins that you can tell so far, they’re going to be more shutdowns? Is there anything unique going into the quarter?

I wouldn’t say anything unique. I mean I just flapping for the call, I looked at the last six or seven years, how much of a dip we have from quarter one to quarter two. I think what some people might miss is, since we’ve added the Hydratight platform. It’s gotten more pronounced because there’s significant reduction in service work during the middle of winter up in the North Sea as an example, but nothing out of the ordinary, Dean, in terms after we’re seeing this year versus last year or people stretching out vacation shutdowns or holiday shutdowns.

If anything it is a little positive. I mean, Winnebago was absolutely not working last holiday. In their press release this morning they said, they are. I think some of our truck guys in Europe have similar phenomena, but not a major change. Last year was a disaster. I think this year is going to be similar to prior years, other than last year. Deane Dray - FBR Capital Markets: Then for Enerpac and the idea we’re watching margins and they seem to have stabilized and what I’m interested in hearing is any color you can provide regarding Enerpac demand. The MRO flavor is there anything in the stimulus bill that was follow up past by Congress this week that was earmarked for roads. I don’t know if bridges, but just give us a sense laugh you’re hearing from distributors? What you’re hearing from customers regarding demand?

Cautious optimism is what we’re hearing from the channel. Improving demand, no inventory correction going on, getting back to some level of normal let’s see, although it will take awhile to get back. That’s what we’re hearing. It’s a little stronger in the U.S. incident that is in Europe, but Europe is improving also. Asia, it just depends what part of Asia. I think China continues to be a place where stimulus is spent. We’ve got a lot of big quotes and ideas going on for large infrastructure projects there, won a couple things in the Singapore area in last quarter, which will be rolling out kind of later in the year. So it feels like you got some solid footing on, gradually going to comeback. Deane Dray - FBR Capital Markets: Does that include concert tours?

Yes, we need a few more U2 stages. That was a good one.

Your next question comes from Ann Duignan - JP Morgan. Ann Duignan - JP Morgan: Most of my questions have been answered, but I was interested in some of your comments maybe from a bigger picture. I think you said that in electrical and big box that the electrical segment in the stores is outperforming other segment. Can you just give us a little more color in that why you think that might be happening or what is going on out there?

It’s not universal across everywhere. We don’t get same store comps from the electrical aisle in every case. So my comments are not scientific as maybe I sounded on the call. I think there are a couple of reasons, why the electrical aisle is a little better. One is that voltage involved. It’s not an aisle that people shop unless they’re doing some kind of repair work. So it is not a big ticket aisle like white goods would be or lumber would be. So, it tends to be an aisle that I think is just it mirrors a little bit of foot traffic. If you follow these guys, a lot of what they are saying is the foot traffic is up, but people aren’t spending as much. I think they’re spending the same amount in the electrical aisle versus some of these white goods things. That’s what I would attribute it to Ann.

People typically that are going to the electrical aisle, because there something is broken as opposed to making major improvement.

I mean, if you’re like me voltage scares you and it tends to be an aisle where they don’t do a lot of promotions. They tend to have small SKUs, not a big ticket item, but it’s also one that doesn’t get comparison shopped, store-to-store. So it tends to be a pretty good aisle for these customers. Ann Duignan - JP Morgan: So maybe just more stability in demand rather than some of the other aisle…?

I think the foot traffic. Ann Duignan - JP Morgan: Then also in kind of the same context, you talked about build schedules from truck OEMs. Also can you give us a bit of color there, what is your truck OEMs telling you these days about next four to six months?

In Europe, there’s certainly not predicting runaway sales by any stretch, but they’re telling us is, they are through the destocking mode, and the production levels they are going to be doing better matching what their sales output is. So it’s more a factor of that than they’re seeing a boost out there. I think the growth in calendar year is going to be okay from an ultimate sales standpoint, but not runaway growth. So we’re really banking on just that balancing out of production and sales, and it’s not across the Board with some of those international OEMs. Some have got on the destocking much earlier than others and those are the ones that we’re seeing the production levels balance out a little bit quicker, there are still a couple over there that are still in a destocking mode right now.

You also see some international sales for some of these guys. Brazil, for example and China, and some of the South America, different countries in South America, that bodes pretty well for Actuant. I mean there are not many suppliers in the captain tilt area, but we’re able to support people like Volvo and Scania in place like Brazil and we now got location that does that.

Your next question comes from Robert McCarthy - Robert W. Baird. Robert McCarthy - Robert W. Baird: First, I’d like to start out with clarification, Bob. I heard you at the close of your prepared remarks, very carefully say that you still expect to deploy $100 million on acquisitions over the next years. Over the next year really is the same as calendar 2010. I had a memory that you’d been talking about within fiscal 2010. Is there a change here or am I imagining something?

No, I think I’ve been saying $100 million over the last 12 months and obviously I have gone through three months and haven’t done any, so it slipped to the right. I think we could end up with $100 million in the August quarter, certainly one deal would be the difference between annual and a calendar. So I maybe a little disappointed, we didn’t get something done. I’m thinking about the funnel. We had a couple of things that still evaluation gap, that look like they’re further along and people pulled in their reins a little. Not meaningful change, Rob. You can’t predict this stuff down to a 90 day period of time. Every time I do, I end up on thing myself so. Robert McCarthy - Robert W. Baird: Is one of the things that fell away this purchase you apparently weren’t negotiating for the Holly assets?

I don’t remember talking about the Holly assets? Robert McCarthy - Robert W. Baird: It’s been report as part of filings associated with legal proceedings, so I think associated with the bankruptcy, but it’s a matter of public record I believe that…?

Now I know where you got your information. As the filing said, we are involved in that bankruptcy. If people are trying to understand what Holly is, Holly is a larger company, but they have a product line that fits very well with the Gits product line, in the engineered solutions business. So it’s not a complete Holly. It’s a comment of product line within Holly, and that’s probably about all I’m going to mention on that. Robert McCarthy - Robert W. Baird: The product line that you’re interested in, is it proprietary technology along the lines of Gits?

Yes. Robert McCarthy - Robert W. Baird: Then also maybe I missed something, but Andy, can you talk about the $23 million of open market convertible purchases and what you’re intentions are there?

We have actually between the last two quarters we’ve bought back $32 million of our $150 million to convertible bonds, because we’re able to buy them at a discount. We bought them at a very modest discount, and took them out. We had extra cash to do so in the process we reduced the share count on standing by about a million and a half shares for EPS purposes and that was really the impetus for it. Today the bonds are trading well over. I think they had about 107 or so. We have no interest in paying a premium to take these bonds back. We will just see what happens between now and November of calendar 2010, when the first call put as these, but as you know we had the revolver out there. We up sized it in the last 12 months, essentially in order to be sure we had a backstop for these convertible bonds to the extent that they did not convert on their own prior respiration. So that’s kind of the game plan we’re going to sit patiently see what happens with our stocks… Robert McCarthy - Robert W. Baird: Are there transaction costs that are showing up in the net interest expense line or do you still call it financing costs?

There’s a little bit of that issuance cost right off in there. It really is pretty nominal. I think that offset the discount we bought them back. So there’s really no net P&L impact. Robert McCarthy - Robert W. Baird: So can you help me understand that line, because it was sequentially, basically flat, despite the significant amount of debt reduction that you made last quarter? Is it just a function of average outstanding during the quarter or is there something unusual in there?

I think it’s more a situation of just the timing during the quarter and when the outstanding were, when the outstanding were at various points in time. We had cash on the balance sheet at various points especially in the fourth quarter and it’s earning virtually nothing but I got quarter a point or something like that so. Robert McCarthy - Robert W. Baird: So for our purposes in terms of modeling, we can think of that interest expense number as a fairly clean number?

Yes, it is a pretty good number. I think during the course, the balance of the year, it’s going to come down a little bit. As we continue to generate cash, but not a lot.

Yes, I mean the majority of that data is fixed at 6 and 7, 8 with the bonds.

We’re probably on track for the full year’s $32 million to $33 million. It is essentially annualizing the first quarter. Robert McCarthy - Robert W. Baird: Then Bob, in the second half of the year, where you have the benefit of easier comps as you noted, and your outlook is for not much demand growth, does that mean then that up 6 to 8 organically. I mean this is kind of all else equal type of question, but is that plus six to eight then a measure? How much destocking hurt you, last year or is there a way to think of this as no, there’s some share or what?

There’s a little share. We won an electrical. We won the granger business with our transformer business. There’s no question that the destocking that happened in truck and off highway equipment last year. They don’t have to sell any more to us to have meaningful sales growth contributing. So other than that, I think I’m along the lines of where a granger is. They’re talking about slow single digit kind of growth in their end markets. I think that’s what I’m talking about, maybe 1% to 2% kind of GDP range will yield for us that 6% to 7% just based on some of the market share things and just that destocking. Any market share things I have missed, Andy, a little more convertibles?

Some bigger projects and then… Robert McCarthy - Robert W. Baird: If I could push it for one more, in the stabilizing energy comps. One of the features of that business when it was just Hydratight was a little bit of unpredictable quarter-to-quarter. Are the two close numbers a function of some timing of some revenue between the two quarters?

I think I guess, I’ll just elaborate on one thing. There’s a little bit of benefit coming through in the second quarter. On a sizeable contract that we won in Kazakhstan that essentially was pushed out from the first quarter into the second. We’ve a pretty good comfort level that the revenues that the revenues are going to be there. We’ve got a decent; I would say a decent backlog of business in the Cortland business in terms of looking at the second quarter. Versus the revenue forecast we’ve got there. So I think that’s what gives us our confidence over the next 90 days. I think when you look beyond that into the back half of the year, it’s going to come down to some of the bigger projects that Bob referred to as far as are the oil companies and the asset owners, are they going to be spending more as a capital budgets going to go up in 2010, relative to what they did in calendar 2009, which was a significant slash. So I think that’s really, where Bob’s comments were from more a comfort level stabilization here, but still a wild card back half of the year.

I don’t think the acquisition of Cortland really changed the lumpiness of this segment. I mean, it might have gotten a little better, because I think it’s just a touch more backlog driven and there’s no technicians that can create some of that lumpiness, but it’s still going to be a business that, if you’re just looking quarter. Some quarters you’re going to be thrilled with another quarters, you’ll be disappointed. I think more on a 12 month trailing basis a bid levels off. Robert McCarthy - Robert W. Baird: It looks like the business that was largest contributor to your improved guidance for organic growth, right?

Yes, it was down less than we expected it to be down on the first quarter.

Your next question comes from Joe Mantello - Sidoti & Co. Joe Mantello - Sidoti & Co.: I just have two quick questions. I know a lot of questions have been asked already. First, I was wondering if you can just talk about what the percentage of heavy duty truck, automobile and RV is to the Engineered Solutions segment. Where you sort of think about those breakouts will move in a couple of years? The second question would be, just in terms restructuring. I was wondering if you could quantify how much the savings of the $35 million that you’ve realized already and what you expect in 2010 and ‘11?

I think when you look at the truck, auto and RV to your first question. Truck is half of that. RV is probably 20% and auto is probably about 30% just on a directional basis. If you’re looking at what percentage overall, the thing is. So I think that answers your first one. Joe Mantello - Sidoti & Co.: Do you expect maybe RV and automobile probably maybe move higher over just because we’re coming off of such a bottom extreme bottom?

I’m looking at that in kind of a fiscal year 2010 basis, is what I just gave you.

RV is too small. Even if it went up 100%, it wouldn’t move the needle. I think when you look at auto it’s a bigger piece of the equation.

If you look backwards RV was 10% and truck was a little bigger. Auto was going a little bigger. With respect to the restructuring, the $35 million in annual savings as what we’ve communicated out to that, we previously communicated that we generated about $15 million of savings last year and that we’ve seen about $10 million this year and incremental $10 million next year. So when you look at the amount this year, it is definitely back end loaded, in terms of the savings coming through. On that I mean we’re getting some of the last year’s run rate coming through in the first quarter here, but we’re in the first half, but the real savings from these electrical actions that I talked about from the Simplex actions and whatnot really come through in the back half of the year.

Your final question comes from Jamie Sullivan - RBC Capital Markets. Jamie Sullivan - RBC Capital Markets: I can do a follow-up as well, but the only question I had was if you could just talk a little bit more about the differences you’re seeing in the U.S. versus Europe and some of the dynamics there?

I’ll try to give you a brief one on that, but I think our view is the U.S. recovery is more pronounced than it is in Europe. We see that in the consumer side of the businesses, where the DIY in Europe is significantly weaker than the North American consumer, just stores-to-stores looking at a Praktiker, or an OBI versus a depot and a Lowe’s. We definitely that’s a pronounced one. Enerpac is a touch weaker. I think we do some of the infrastructure projects in Europe, which are probably offsetting that a little bit, but it is a touch weaker and those will be the two. The oil and gas business is more of a global business. I don’t think we can really attribute any difference there. The truck business in Europe, I think seems to be a little steadier than the truck business in North America. I believe some of that is the submissions and trying to figure out whether people are buying trucks earlier or later and you just don’t have that phenomenon in Europe, it seems a little steadier.

Thank you. Mr. Arzbaecher, there are no further questions at this time. I’ll turn the conference back over to you, please continue with your presentation or closing remarks.

Thank you very much. We ran a few minutes long, but I think they were all great questions and we were happy to do it. Andy, myself, and Karen are here all day, if you’d like to follow-up any further. We really want to thank you for participating in today’s call. Wish you and your families a healthy and happy holiday season. Thank you and goodbye.

Thank you. Ladies and gentlemen, that concludes our conference call for today. We thank you for your participation and ask that you please disconnect your lines. Have a good day.