Robert Arzbaecher - Chairman, Chief Executive Officer and President Mark Goldstein - Chief Operating Officer and Executive Vice President Karen Bauer - Director of Investor Relations Andrew Lampereur - Chief Financial Officer and Executive Vice President

Jeffrey Hammond - KeyBanc Capital Markets Inc. Ingrid Aja - JP Morgan Chase & Co James Lucas - Janney Montgomery Scott LLC Charles Brady - BMO Capital Markets U.S. Ajay Kejriwal - FBR Capital Markets & Co. Robert Barry - UBS Investment Bank R. Scott Graham - Jefferies & Company, Inc. Jamie Sullivan - RBC Capital Markets, LLC Deane Dray - Citigroup Inc

Ladies and gentlemen, thank you for standing by. Welcome to the Actuant Corporation's Third Quarter Fiscal 2011 Earnings Conference Call. We are conducting a live meeting to coincide with the audio conference. [Operator Instructions] As a reminder, this conference is being recorded, Thursday, June 16, 2011. It is my pleasure to turn the conference over to Karen Bauer, Actuant's Director, Investor Relations. Please go ahead.

Good morning, and welcome to Actuant's Third Quarter Fiscal 2011 Earnings Conference Call. On the call with me today are Bob Arzbaecher, Actuant's Chief Executive Officer; Mark Goldstein, Chief Operating 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 notes. 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. Finally, given the fact that our earnings calls for the past several quarters have run quite long, we've decided to institute the common one question, one follow-up rule. Thank you in advance for following this new practice. With that, I'd like to turn the call over to Bob.

Thank you, Karen, and thanks for joining us on today's call. We were very pleased with the quarter, delivering strong performance in sales, margins, EPS and cash flow. Our core sales accelerated from last quarter to 14%, led by over 20% growth in both Energy and Industrial. Our operating margins were up nicely. We executed well on our pricing action during the quarter, covering the majority of our raw material cost increases. EPS was $0.51 a share, about 10% higher than our guidance and 46% above last year. And our cash flow was $69 million, putting us on track to achieving our 11th consecutive year of free cash flow conversion in excess of net income. Finally, we completed the Weasler acquisition just after the end of the quarter. This is a great addition to our Engineered Solutions segment, and I'll provide more detail on this acquisition later on the call. With that summary, I'll turn it over to Andy to go through the quarterly details.

Thank you, Bob, and good morning, everyone. Results from continuing operations for the quarter were very strong by most any measure, and I will do the normal deep dive to them in a minute. But before doing so, I wanted to quickly cover the $2 million loss in discontinued operations in the income statement. During the quarter, we had some post-closing adjustments related to the sale of the European Electrical business, which had taken place in the last day of the prior quarter. We put these to bed this quarter which explains the $2 million charge. Now let's walk through our results from continuing operations. In a nutshell, sales and earnings were strong throughout the entire quarter. Sales of $393 million were above our guidance range and up 27% year-over-year. I'll dissect sales a few different ways shortly. Year-over-year operating profit margins increased 140 basis points to nearly 15% in the quarter, excluding prior-year restructuring costs. Third quarter earnings per share from continuing operations was $0.51 and also exceeded expectations, benefiting from the higher sales and margins. Excluding prior-year restructuring charges and tax adjustments, EPS grew 46% from last year, making it the sixth consecutive quarter of EPS growth greater than 40% on a year-over-year basis. Now let's discuss results in more detail. Third quarter sales were up 27% year-over-year, with a 9% benefit from acquisitions, 4% from currency and 14% of core growth. Core growth exceeded our expectations and actually increased sequentially from last quarter, and all 4 segments contributed. We did see the acceleration of growth from Energy and the deceleration from Engineered Solutions that we have predicted on our last call. However, growth in the Industrial segment accelerated from the last quarter and upside to our guidance with broad strength across most end markets. The combination of this 27% overall sales growth and the 140 basis points of operating margin expansion resulted in a 45% increase in operating profit versus last year, excluding restructuring costs. Favorable segment mix, incremental coverage of fixed cost from higher sales levels and cost reductions all contributed to the margin expansion. With the exception of the Electrical segment, which was hurt by weak solar sales, we saw margin expansion in the other 3 segments, both on a sequential and a year-over-year basis. Consolidated third quarter EBITDA margins were 18%, the highest we've seen since the recession, and we expect additional full year margin expansion next year. On the pricing front, which was a popular topic for investors on our last call, we did announce and implement price increases in a number of businesses, including but not limited to those industrial distribution, DIY retail, OEM and other markets. Some of them took effect in May while others became effective on the 1st of June. The punchline is that we are very pleased with the execution of these pricing actions over the last 90 days, and we don't anticipate any meaningful unrecovered inflation from raw materials in the fourth quarter. Now I'll review our third quarter results by segment, starting first with the Industrial segment, which had an outstanding quarter. Year-over-year, core sales accelerated from 15% last quarter to 23% this quarter. Overall sales grew 35%, reflecting acquisitions, foreign currency benefits and the core sales. Order intake once again exceeded sales in this segment, which bodes well for continued growth. The strength we saw was across almost all end markets as well and did not moderate as the quarter progressed. Profitability in this segment continued to improve, with operating profit margins up 140 basis points from a year ago and the highest in the fiscal year. This business is performing very well right now, and we are bullish on its future prospects. On our last earnings call, we discussed the increased quoting activity in most energy markets, and our expectations for the strong second half recovery in Energy segment sales despite, at the time, relatively modest 5% second quarter core sales growth. Many of these quotes did turn into orders and sales, resulting in 22% core sales growth in the third quarter. We saw improvement in most markets, including deferred maintenance in refineries. The Hydratight and Cortland businesses did a great job in executing during the quarter and had some really nice wins that will help us out next year as well. Overall, third quarter sales increased 38% year-over-year in the Energy segment. Profitability also rebounded sharply in the segment from a seasonally weak second quarter, with sequential margin expansion of over 400 basis points. Switching to the Electrical segment. Its year-over-year core sales grew 3% compared to a 2% decline last quarter. We saw a stronger demand from OEMs in the transformer space, certain marine and utility end markets as well, which offset the sluggish demand in the resi and commercial construction markets, which we sensed are bouncing along the bottom. Total segment sales increased 30% year-over-year, which was driven primarily by the benefit of the Mastervolt acquisition. In his prepared remarks later on the call today, Bob will cover solar market sales and conditions, which adversely impacted segment profitability in the quarter. Excluding the impact of the Mastervolt acquisition, segment margins were in line with the prior year in Electrical. Our final segment is Engineered Solutions, which has had quite a year. While sales growth did moderate as we had guided in our last earnings call, the segment still generated 9% core growth. More impressively, EBITDA margin expanded to nearly 19% in the quarter, driven by increased volumes and near-perfect execution. Looking ahead, we see continued growth in the segment's largest end market being European truck but more challenging comps and headwinds from lower convertible top and recreational vehicle sales. This will result in a core growth rate that will continue to moderate over the next year despite some very healthy markets and margins. The Weasler acquisition, which closed on June 2, will add a fair amount of sales and profits next year as well, so continue to expect good things from Engineered Solutions. That's it for my comments on the P&L. I'll provide a few now on cash flow and our capital position. Our free cash flow in the quarter was great at nearly $70 million and reflects the back-end loaded nature of our cash flow generation. We have generated nearly $90 million of free cash flow so far this year and still expect to finish the year in the $140 million to $150 million range. At the end of May, we had our entire $600 million revolver available and untapped. A few days later, we closed and funded the $155 million Weasler acquisition. Pro forma for this deal, our net-debt-to-EBITDA leverage increased to about 2.1x but is still right in the middle of our targeted long-term 1.5x to 2.5x leverage comfort zone. Because of the strong cash flow and the profit improvement during fiscal 2011, we both entered and should end the year at just under 2x leverage despite the fact that we have funded $300 million in acquisitions in fiscal 2011. That's it for my prepared remarks today. Bob, the line is yours.

Thanks, Andy. I wanted to provide an overview of our latest acquisition, Weasler Engineering. We completed this acquisition on June 2, so we're early into the integration. Weasler is a market leader in the highly engineered drive shaft used in a number of markets, most notably agriculture. We like a lot about this deal including the long-term growth prospects of agriculture and food, the highly engineered nature of the product, their leading position in the North American market, a 40% aftermarket sales mix and a strong management team. I'd like to spend a few minutes explaining what the products in the end markets for you. Weasler provides the critical power transmission connection between the tractor and the implements. Rather than a tractor or combine build rate, the key driver here is productivity and uptime. Once the farmer's out harvesting or bailing, he can't afford interruptions. There are various types of implements that do a lot of different tasks. The obvious customers that come to mind, companies like Deere, CNH and AGCO. But just as important from a revenue standpoint for Weasler are OEMs like Coon, Vermeer, Toro, Ditch Witch and many others. Weasler has a very said diversified customer base. These drive shafts are exposed to harsh environments and get beat up with use, which generate significant replacements, spare and repair sales for Weasler, accounting for about 40% of total revenue. A number of channels are used to serve this aftermarket, whether it's the OE service and dealer networks, retail, specialty distributors or repair shops. As we look at the acquisition integration of Weasler with Actuant, the focus is on leveraging the product technology and market leadership Weasler had demonstrated in North America to grow in Europe and then also around the globe. The European market is approximately 2x the size of North America, primarily due to smaller farms. Weasler currently supports Europe OEMs and aftermarket through a sales and engineering office in the Netherlands and a low-cost country manufacturing facility in Hungary. With Weasler, Actuant currently serves the agriculture market with a number of different products, including Maxima on the instrumentation and gauges, hydraulic systems from Power-Packer and flexible shafts from Elliott. With Weasler, the agriculture vertical market in Engineered Solution now accounts for about $100 million in revenue and provides some diversity away from the other 2 large verticals we have, heavy duty truck and convertible top. Given the increasing middle class of emerging markets that is adopting a more protein-rich diet, as well as the expanding population globally and the resulting increase in demand for food, the need for increased productivity in farms is critical. We believe that the ag market that Weasler serves will experience above-average growth for the long term. Now switching gears. During the course of the last 90 days, we've received many questions regarding solar. It candidly has generated far more questions than the 4% of total revenues it represents for Actuant. We discussed on last quarter's earnings call the headwind in the solar PV market, including reductions in feed-in tariffs in certain countries and inventory build at solar distributors. Frankly, we didn't see a lot of improvement in this in the third quarter, although quoting activity and distributor sentiment did improve in the last 30 days. While clearly disappointing from a short-term market dynamics, we remain confident in the growth prospects for solar over the long term. Solar remains the closest renewable energy source to parity, and recent actions such as Germany's plans to close down its nuclear plants is another example of why diversity in our energy focus is a prudent strategy. Also, we still believe that the solar inverters in the 50-kilowatt and below range for residential and light commercial application is the right place for Mastervolt to be from a product line standpoint. While currently navigating these headwinds in the solar market, momentum in the other markets that Actuant serves are offsetting the impact. Our diversified portfolio is doing well, as you can see on this slide. We have maintained strong double-digit growth, even though it has come up against tougher year-over-year comparisons. Our profit margins continue to improve, the function of higher volume, restructuring savings and favorable mix. Earnings and EPS have grown in excess of 50% on a trailing basis during the past year. And as we look ahead to the next year or so, we're very encouraged by the highest margin segment, Industrial and Energy, which have historically made up 2/3 of our profits. These segments are performing well, and it bodes well for continued EPS performance in 2012. Now let's move to guidance. With our strong third quarter results and the acquisition of Weasler, we've increased our full year 2011 sales guidance to $1.43 billion to $1.44 billion. Weasler will be EPS neutral in the fourth quarter due to one-time transaction costs and purchase accounting. However, we've raised our full year EPS guidance to $1.60 to $1.65 to take into account the current business momentum elsewhere. For 2012, we're endorsing preliminary sales guidance of $1.6 billion to $1.65 billion, roughly 15% higher than the current year. We are expecting core growth of 5% to 8%, moderating from the double-digit level we are now enjoying due to tougher comparables. The carryover from Mastervolt and Weasler acquisition should add about $100 million or 7% to that total growth. Our EPS guidance for 2012 is $1.80 to $2 a share. This represents an increase of about 15% over our 2011 guidance. Driving this is incremental profit from sales growth and margin expansion from volume, cost controls and favorable mix. Free cash flow guidance for 2012 is $155 million to $165 million, another year of free cash flow conversion in excess of 100%. As you can see on this slide, there are other assumptions in next year's guidance such as margin, tax rates, shares outstanding, et cetera. In summary, over the past decade, Actuant has generated a strong track record of sales, earnings and cash flow, driven by consistently following our ROIC-driven business model, including reinvestment of the cash flow in both organic and acquisition growth opportunities. Most of our financial metrics should hit new highs in 2012, thanks to some of the acquisitions over the past years, including Cortland, Mastervolt and Weasler. Our base businesses are generally not at the prior peaks, other than for cash flow and margins. We expect a number of our companies to hit new revenue highs in 2012. And if we can achieve near the upper end of the earnings target for 2012, we'll create a new EPS high as well. Actuant's employees are focused on delivering another strong year in 2012 and look forward to the opportunities and the challenges of the upcoming year. That's it for my prepared remarks, operator, and I want to open it up, the phone lines, for question-and-answer session.

[Operator Instructions] And our first question comes from the line of Robert Barry with UBS. Robert Barry - UBS Investment Bank: Looks like it's a pretty strong quarter, and that actually gets to my first question. It doesn't really seem like you're seeing very much weakness in certainly most of the business right now, but I was wondering to what extent you have factored assumptions about things like slowing growth in emerging markets or in the U.S. industrial economy into the outlook for next year?

Okay. The answer is we've based our guidance, as we always do, on what we're hearing as a roll up from the businesses and what we actually read and feel from customers in the marketplace. I'd say the only place that we saw a wee bit of slowness was in some of our Asia-Pac area and some of the truck accounts. But other than that, we really haven't seen any, so we did not try to predict it. I think what you've seen in our guidance is really a moderation of some very tough comparables, and that gets you to the 5% to 8% that we talked about being the core growth. Robert Barry - UBS Investment Bank: Okay. And then just to follow-up on that. The revenue outlook was raised. I thought it might have been raised a little bit more just given the beat in the quarter and the addition of Weasler, though I'm not sure what the seasonality of Weasler is or how much it's adding in the fourth quarter in terms of sales. But I think you raised the midpoint of the revenue guidance about 23% and beat by 13% in this quarter. And I don't know, I just assumed Weasler would add 20% to 25%. Is there some area of incremental weakness for the fourth quarter versus the last revenue outlook?

Yes, I'll handle it, Rob. It's definitely seasonality within our Engineered Solutions business. The other 3 segments are going to be pretty similar sequentially. But in the fourth quarter, we do anticipate shutdowns in Europe in the fourth quarter on the truck side and on the automotive side, which we have not seen in the last year. Last year in the fourth quarter, we were seeing acceleration from Q3 to Q4, which masked that normal seasonality. There's also some other seasonality in a few other businesses along the way. We mentioned automotive is sequentially softening, that's coming through as well on that but it's pretty much limited to the Engineered Solutions segment.

Our next question comes from the line of Jim Lucas with Janney Capital Markets. James Lucas - Janney Montgomery Scott LLC: First question, Energy, was hoping you could give us a little bit more color on Cortland versus Hydratight. You had alluded to some project wins that help next year. But wondering where particularly you're seeing the strength in Energy, both geographically as well as are there any particular pockets that stand out stronger than others?

Okay. So Cortland, as you said, did have a little bit of a strong, stronger quarter. It also, I think, fell a little harder than Hydratight did in the recession. So that is definitely the case. And Cortland does a little more of the front-end stuff, a little more exploration, seismic, things like that, that play into the Cortland business. Geographically, pretty good everywhere. Maybe a little weaker in the Gulf than other places but pretty good everywhere. What we were very encouraged about was some of the activity towards some of the capital projects. We're starting to see a little more activity, and the maintenance is always kind of a reliable one but we saw little more activity in maintenance, I mean, in capital projects. James Lucas - Janney Montgomery Scott LLC: Okay. And a follow-up question. I thought that the prepared remarks on solar answered a lot of questions. But with regards to your due diligence, the second bullet on the Mastervolt update, the weaker-than-expected sales. When you did the due diligence, knowing that upcoming changes in tariffs, what are you seeing today versus your initial due diligence? Where have you seen the biggest delta?

Well, I think a couple of things. One is when we closed on that acquisition, there were a lot of rumors about feed-in tariff changes. There was only one identified, and we actually lowered the purchase price to take that one into account, so we knew about that 1. The other ones, we had some of outside consultants help us try to handicap, ballpark what's happened. And the tariff reductions were worse than that. Germany is probably the place that's the most dramatic there because it's the largest of the markets and I'll cover that. The second place that is very hard to get any information from is how much inventory is in the distribution channel because a lot of this is tier 2 or tier 3 distribution. It's very hard for us to get a view of that. I was over at the Munich show last week, the big Intersolar Show. Distributors are a little more positive than they were 60 days ago, said they had a good May, that they got some of the inventory out, expecting this summer to get some more out, hopefully within the next 90 days or through the inventory correction piece. James Lucas - Janney Montgomery Scott LLC: And did you see -- I guess there was a press release from Collins Stewart talking about a potential tariff reduction not happening in July now. Does that have any benefit for you?

It was actually announced when we were at the show. What Germany has said is they're going to have a 24% reduction in the tariff during the year, and it's based on a kind of a complex formula that they come up with, with what the cost on the grid is because they're trying to make sure they don't overpay grid parity in Germany. That calculation came in at 6% for the 1st of July. That's probably what he's referring to. That's the first half, and people expected a much bigger tariff reduction in the first half than 6%. So that was a positive vibe that went through the show quite rapidly during the thing. It still remains to be seen. If they follow what they said, they would have an 18% reduction in December, and that's the one that's the question, whether they'll follow-up with that much or whether the calculation will change it somehow.

Our next question comes from the line of Ann Duignan from JP Morgan. Ingrid Aja - JP Morgan Chase & Co: It's Ingrid Aja standing in for Ann. I guess not to harp too much on the Solar business, but it does seem to be a drag on margins. So I was just trying to understand with the continued weakness in that market, maybe you can discuss your expectations for margins looking into 2012?

Well, we had for the segment a little over 10% EBITDA margins. We would expect them to improve from there. I think we've told Wall Street consistently that we thought 15% was kind of a best-in-class running rate level, so it's a big gap. We didn't say we're going to get there right away. And with some of the slowness in Solar, it's going to take a little longer.

Improving from the 10% that we just saw is contingent on solar rebounding from -- so the margins in the North American business are pretty respectable, just Solar was not good.

Mastervolt has had higher teens, close to 20% EBITDA when it's going. So it's not like those numbers are inherent. When we bought the acquisition, our expectation was Solar would increase the margins for the segment. Ingrid Aja - JP Morgan Chase & Co: Okay, fair enough. And then on the Weasler business, maybe you could just talk about the margin profile there into 2012? I realize for Q4, given the transaction costs and the amortization, it's going to be EPS neutral. But looking forward, what can we expect?

Weasler's margin profile is higher than the Engineered Solutions in total. So as a reference point this past quarter, they had 19%, which is probably about as high as you should expect it to be. But margins were slightly above that for this business coming in, so it's a nice profile margin business. And there is not a lot of seasonality from a margin standpoint within this business. It's pretty steady once we get beyond the purchase accounting in the first 2 quarters.

Our next question comes from the line of Deane Dray with Citi Investment Resources. Deane Dray - Citigroup Inc: First question relates to M&A. So you had said the expectation somewhere, $100 million, $150 million was sort of the M&A budget for the year, and Weasler came in right at the high end of that. Do you reload here? You obviously have some balance sheet room but just take us through expectations, pipeline, pricing and so forth?

I'm glad you asked that question, Deane, because we are changing kind of the way we look at guidance for acquisitions. In the past, we've talked -- we do $100 million to $150 million or $150 million to $200 million in purchase price in a given year. And this past year, what happened is we did $150 million deal with Mastervolt. People said, "Are you done?" No, we're not done and we do another $150 million deal, and people are saying, "Are you out of the business?" No, we're not. I think what we're going to do going forward is instead of giving a purchase price target out there, we're essentially going to let our leverage essentially be one of the governors. The other governor being just management capacity to handle the acquisitions. So as long as we're comfortably in the 1.5x to 2.5x EBITDA range, that's really going to be the governor in terms of what we can handle from an acquisition standpoint. We don't think it's probably prudent to put out a target out there. If we don't hit the target, people are concerned. If we put a target out there and we spend it right away, they think the deal is done. So that's the change we're doing going forward.

As for the funnel today, Deane, it's actually quite robust. We've got a number of things in there. I would tell you that it's primarily focused on Industrial and Energy since we did the big Weasler and Mastervolt. I think both of those teams are excited about the integrations that they're participating in now. And our focus has always been to try to do the lion's share of our acquisitions in Industrial and Energy, and that's where our funnel activity is. Deane Dray - Citigroup Inc: Great. In terms of pricing, bid-ask spreads, level of discussions and so forth?

Yes. I mean, Weasler was at the higher end of our 6x to 8x EBITDA range that we typically talk about. We're seeing a couple of things that are north of that. We see plenty of things kind of in that fairway. Nothing today looks to be double-digit EBITDA on a true trailing basis. Deane Dray - Citigroup Inc: Great. And then in terms of the business, we got an update on Energy, and between Industrial and Energy, that's about 2/3 of the growth drivers for Actuant. How about on the Industrial side? Just expectations for the coming year, indicators that you're seeing today, maybe an update on the Bay Bridge?

I think when you look at our revenues for next year, we're expecting Energy to kind of lead the pack and probably the Industrial segment to be behind that in terms of core growth. I think our strongest areas within Industrial going forward would be the infrastructure side. We definitely have a lot of quoting going on there. We've got some verticals out there that are doing very well, that did very well in the quarter. One of the ones I'll just call out is mining. It's done well. We've put some dedicated resources on that in different regions around the world, and we're seeing very nice growth, 30%, 40% growth in that specific segment. We've also starting to see some incremental revenues coming through as a result of some of the new products and product upgrades that we've made in the line. There's more scheduled over the next year as well, but some of the new hand pumps and cylinders that are out there are being very well received by customers.

As for the Bay Bridge, Deane, we completed our final lift of that in the last 30 days, the big celebration out there. I don't believe it's open for traffic. They still got a lot of building to do. But for the portion that we're done, we're complete. And I believe there is a YouTube video of that construction on the American Bridge website if anybody wants to see what that looks like.

Our next question comes from the line of Ajay Kejriwal with FBR Capital Markets. Ajay Kejriwal - FBR Capital Markets & Co.: On Industrial, nice performance, nice upside surprise despite these tough comps. So I guess what's driving demand there? Are you seeing customers taking advantage of bonus depreciation? Or is it that they have not spent through the recession and you're seeing some catch-up? I mean they're really strong numbers.

Yes. I think it is a good proxy for Industrial activity, both from a maintenance and a repair and just general production. I mean I look at the ISM numbers like everybody else, and it's a bit of a head scratcher when you look at what we just performed there. Very broad-based, lots of different end markets, lots of different customers, orders ahead of sales. So it's a little puzzling what you read personally versus the facts that associate with Enerpac. It is always a little bit unique. I mean, high-force hydraulic tools are very niche-y piece of the top of the food chain of infrastructure kind of projects plus maintenance and repairs. So possibly, we're a little different than the ISM data. But the news is just it's strong. It exceeded our expectations. It sounds like it exceeded yours, and there's just no evidence that's anything's changing from there.

I think the other 2 things I would add. First on your question on bonus depreciation. I mean a typical invoice for Enerpac, our products as it's been bought is less than $2,000, so we don't think the bonus depreciation's having really much of an impact, it's probably just expensed anyway. And then second item I'd call out if you think back to 2004 to 2008, Industrial grew on a core basis 10%, just within plus or minus 1% on a core basis for 5 years running. Certainly, the underlying economy in ISM was not anywhere near 10%, so there's some good niches out there that the business participates in that it gets better than average growth.

The last comment on this would be that Enerpac, and we've lived through 4 recessions with it. It typically comes out of recession with a little stronger market share, and I think you're seeing that happen here, too. Ajay Kejriwal - FBR Capital Markets & Co.: Good. And you talked about the micro data and it's indeed surprising to see that micro is still doing very well. So it would be helpful if you could maybe talk about the monthly trends. You did talk about Industrial but maybe for the company as a whole, how did the quarter progress?

Yes. Certainly, we saw the strong March that all the calendar quarter companies talked about on their April calls for their March quarter. We saw that but candidly, we had very strong other 2 months, there wasn't any distinguishment really between it. Across all 3, we had good. Probably the one exception was Engineered Solutions that moderated in the fourth quarter, and that was offset by Energy probably picking up a little bit more steam as the quarter progressed. Ajay Kejriwal - FBR Capital Markets & Co.: Good. And maybe one last one if I can squeeze on the tax rate. So the 25% for next year is -- that's a little higher than at least versus my model. So is that related to Weasler or anything else going on?

What 25% are you talking about? Ajay Kejriwal - FBR Capital Markets & Co.: So that effective tax rate for 2012 in your assumptions?

Yes. Our guidance for fiscal '11 was 22% to 23%. You are correct, it is partially Weasler, partially Mastervolt as well. We have a much higher tax rate here in the U.S. than most of the other areas or most all areas of the world. Right now, we didn't have a 338(h)(10) on that deal, so some of the step-up is not -- we're not getting the benefit for. The other piece, I would say, is just the incremental growth. We're seeing more growth in rebound now in North America as we go forward, higher tax rates in the U.S. again.

I would tell you, Ajay, I still think we have a very aggressive tax department that do a world-class job. And the fact that we -- I think the rate in the 20s is tremendous.

Our next question comes from the line of Jeff Hammond with KeyBanc Capital Markets. Jeffrey Hammond - KeyBanc Capital Markets Inc.: Just a couple finer point, clean-up questions. Can you just comment on what your businesses are telling you outside of that slowness of heavy truck in China? What they're seeing, what they're worried about, not worried about in China? And then just, if you could just tell us how your -- I mean, you talked a little bit about Solar and the distribution channel feeling a little bit better. But maybe give us a little bit more granularity on how you think or how you're kind of modeling that business within the fiscal '12 guidance?

Well, it's a timely question for Mark Goldstein, our COO, who was just in China last week. So I'm going to let Mark handle that one.

Thanks, Bob. Jeff, relative to China, like Bob said, I was there last week, and we are seeing some moderation on the truck side of the business. Industrial continues to be strong but it is moderating a little bit as well. There continues to be inflation that we're seeing over there, not only on the material side but just from an R&D standpoint. And there's a lot of talk about it, but we still feel very good about China, very good about the team. And when we look at the other opportunities around instrumentation, when we look about other opportunities around some of our other businesses, we feel good about what's going on in China. We're staffing accordingly. So all in all, we continue to see a strong growth, 20%, 25% growth in that market.

Yes. It's amazing where China, they do handwringing when they slow their economy from 10% or 11% down to 8%. It's still 3x global GDP, where the U.S. and mature Europe is. So absolutely no change in our enthusiasm for that part of the market. Jeffrey Hammond - KeyBanc Capital Markets Inc.: Okay. And then just on Solar, how are you building the model for fiscal '12? When's kind of the inflection point where some of that channel, extra channel inventories is worked through?

Well, I'd tell you the guidance we've given is pretty modest. We did not bake in a huge recovery in the Solar business. We've written this thing down, we're learning the segment. So I think we are reasonably conservative on where we think Solar will be in our fiscal '12. As I said earlier, I think that the distribution channel has a little more kick in their step than they did a month ago. They are starting to work some of the inventory out of there. This isn't going to be a zippy turnaround, immediate thing. But I think over a 60, 90 day, I mean if you're a little more optimistic, I think you'll believe they're going to work through those issues, you're going to get a more normalized ordering pattern than we've had in the last 6 months.

I mean, I put together the forecast. I mean, certainly I've got front half more conservative than back half. But even at the back half, we are well below prior peak rates for this business, so we are not being aggressive.

Our next question comes from the line of Jamie Sullivan with RBC Capital Markets. Jamie Sullivan - RBC Capital Markets, LLC: Wonder if you could talk a little bit more just across the business about geographies. What sort of exceeded your expectations in the quarter, surprise one way or the other?

I would say, I mean, again, it was equally strong in Europe as in the U.S. We saw a little -- the softening that we saw in Asia, I would say, was probably the most pronounced in the month of May, not that it was expensive, but May was softer than March and April. But what we're talking might be like by 5%. It didn't fall off. Europe, as we go forward, it's going to feel more of the headwind from automotive. We've talked about that in the past where auto will continue to moderate, and it will be down year-over-year as we move forward really in the next 4, 5 quarters here. We had some huge launches last year in convertible tops that had some nice comps because of it. We're up against those comps. And just the life cycle of these platforms, the volume comes up quite a bit in the year after the launch. So that is going on, but other than that, I mean, the growth that we're seeing in the Americas and Industrial relative to Europe, it's very similar in our other businesses that are operating in all geographic areas.

Yes, the only thing I'd add to Andy's comment is our fourth quarter, because of the August, summer, July and August, which European volume just comes off considerably. And last year, they were earlier in a recession recovery. Some of the guys worked through holiday. It's going to be a little quirkier quarter in Europe. Again, I believe that, that's more of a seasonal factor, not a trend factor. But don't be surprised if the fourth quarter, if you see a little squirrely Europe. Jamie Sullivan - RBC Capital Markets, LLC: Okay, thanks. And then just moving to Energy, just diving there a little bit more deeply. You talked about what where you're seeing the strength in orders. Just wondering if you're seeing any change in quotation activity or particular strength in certain types of services or products there?

I think we're seeing more quote activity. I think we're seeing more quote activity for a bigger systems. I think we're seeing more activity in gas projects than in oil projects. But it's amazing where a year ago, we had the big disaster with BP going on. And it's almost like it didn't even happen in terms of what customers are looking at projects that they're playing with. I'm sure a function of that is what the price of gas is today, but just doing well in all geographies.

Our next question comes from the line of Scott Graham with Jefferies & Company. R. Scott Graham - Jefferies & Company, Inc.: I just hope you guys don't mind one more question on the Industrial segment. If we look across these businesses, a lot of them are sort of general industrial, lots of different things in there. I was just wondering if we look at that piece, just maybe amalgamate a bunch of small end markets that you guys have shown make up that business versus, let's say, Energy versus infrastructure. Could you kind of rank order kind of how -- because that was, as was mentioned previously, that's some pretty strong growth on a very difficult comp, and I was just wondering kind of rank order how that worked out in the quarter?

It's a tough thing to do, Scott. I'm going to give it to you but recognize it requires a lot of detail to get an accurate number. So MRO is probably the strongest. It's the biggest piece of that part of the business, so you can't have a 20%-plus growth without MRO playing a fairly big role. The industrial tools had a very strong quarter. IS had a reasonable quarter, but we have a lot of things that are kind of down the pipe on some of those bigger projects that are probably more in the backlog than actually in the order. Mining, we had some opportunities on our product line that kind of came out of Simplex, it was branded Enerpac for lifting vehicles and changing tires and mine, seems to be a real hot product that went well. We have a mining vertical team that's working on that as well. Rail was pretty strong. Again, most of that came through the Simplex acquisition but has had very good results. And last is Energy, which the Industrial business does have a fair amount of torque wrenches that go into -- intentioners that go into wind and into oil and gas. It's more of a product sale than an a system sale that Hydratight does, but that was also pretty strong for the quarter. R. Scott Graham - Jefferies & Company, Inc.: That does help, great. In the past, you guys have talked about the prior-peak margin and how you guys will exceed that. I know you touched on this earlier. But are you still kind of thinking, even with Mastervolt margins maybe being currently depressed right now but also Weasler, which is maybe incremental to the margin, corporate margin, that your 2008 peak margin, call it 13.4%, that, that margin still should be about 200 basis points higher at some point, given restructuring, given what you've done to shrink the footprint?

Well, while Andy's trying to pull up some numbers, I'll just comment generally about the peaks. As we said in our comments, we actually hit a peak revenue in the quarter if you allow for the discontinuance of comps that happened. We were not at the peak EBITDA line for total Actuant. We were at 18%, and I think 18.8% or something is the peak-peak. But we're getting quite close to that. And if you look at it segment-by-segment, Engineered Solutions over the prior peak, and with still 50% revenue to go, Enerpac, close to the prior peak, particularly adjusting for the mix that exists today with IS. And again 5%, 10% more to go in the sales volume. Electrical, both sides, lower than the peak, lots of room to go there. And then Energy, getting closer, probably will hit the peak in 2012 on sales. And with the margin mix between Cortland and Hydratight, it's going to get close to that peak.

Our guidance for next year, when you look at margins, I mean, essentially what it contemplates both at LP and EBITDA margin essentially 50 to 100 basis points up in margin. So I feel very good about where margins are right now and where they're going. Certainly, I think there's room for expansion beyond next year's as well on it. When you bring in some of these acquisitions, there's a lot of intangibles associated with them that you're amortizing through, which sometimes can dampen the LP margin, that's why you tend to look at EBITDA margins as well. But we stand by our belief. We talked about 200 basis points up, taking $40 million of cost out. Certainly, we put costs back in on growth and innovation but we're feeling good about this comment.

It feels like the old days, Scott, where 50 to 100 basis points of margin expansion as a target annually is back in the saddle. R. Scott Graham - Jefferies & Company, Inc.: Well, those old days were good.

And our final question comes from the line of Charlie Brady with BMO Capital Markets. Charles Brady - BMO Capital Markets U.S.: With respect to the Engineered Solutions, the incrementals, the incremental margins this quarter obviously, as they have been throughout the year, have been pretty strong. And I'm just wondering, obviously, those are going to moderate down. As you look into 2012 and what your guidance is, what level of kind of incrementals on Engineered are you looking at? And what does Weasler do to that? And then kind of as a follow-up, in the quarter, the corporate expense line seemed to pop up a little bit. I'm just wondering, was that a function of the Weasler acquisition having some costs embedded in there as you're running around doing that deal? Or is there else going on there? Should that trend back down a little bit?

Yes, I'll handle both of those. The EBITDA margin, within the margin question and Engineered Solutions. I wish we could say expect 19% day in and day out going forward, but it's a pretty rarefied there given that group there. I do expect margin expansion year-over-year on a quarterly basis as we move into next year, and Weasler will be part of that at the EBITDA line going forward. But our growth out of our 4 segments, we talked about Industrial Energy being higher growth. The other 2 clearly will be lower growth. It would be low to mid single-digit core growth, I think, in those next year so that will have some impact in margins going forward. But margins have been very good. With respect to the question you had an corporate expenses, we did have some extra noise going through there. Within the quarter, we probably had about $750,000 got corporate-related to our growth and innovation projects and staff related to it. But the bigger item in there is we had about $1.5 million of provisions for idle facilities where we've got facilities that are vacant that we either have subleases on or that we own and we're trying to sell them. So that's the biggest 1. It was a $1.5 million provision in the quarter.

In prior, we broke out those as restructuring. I think we told you guys, we weren't going to do that this year, and that's where you see that bubble. Charles Brady - BMO Capital Markets U.S.: So shall we expect corporate expense on a quarterly basis to be kind of bumped up a little bit higher level?

I don't expect it to be at that same level but probably in the $8 and change million a month, I mean at quarter run rate.

I think that was the last call, so I just wanted to thank you again for joining our call today. Just a note that our fourth quarter call will be held on September 28. And we have also tentatively scheduled our annual Investor Day in New York City for October 4. We will all be around the balance of the day to take any follow-up questions you have. Thank you.