Applied Power reports record 1996 sales and earnings.

MILWAUKEE--(BUSINESS WIRE)--Oct. 2, 1996--Applied Power Inc. (APW - NYSE) reported record sales and earnings for the fourth quarter and year ended August 31, 1996. For the fiscal year, earnings from continuing operations were a record $33.7 million, or $2.41 per share, an increase of 35 percent over the $25.0 million, or $1.82 per share, reported last year. Sales for the year set a new record of $571.2 million, up 8 percent from 1995 sales of $527.1 million.

Net earnings for the fourth quarter were $9.2 million, a historic high for Applied Power and an increase of 21 percent over the comparable prior year period. Earnings per share for the quarter totaled $0.66, a 20 percent increase over the $0.55 for the same period last year. Sales for the fourth quarter were $147.3 million, an increase of 7 percent over the $137.4 million reported in fiscal 1995. Excluding the effect of a stronger dollar, sales in the fourth quarter grew 10 percent over the comparable prior year period.

Richard G. Sim, Chairman and CEO, commented, "We are delighted with the record sales and earnings in fiscal 1996. This is our third consecutive year with earnings growth of 35 percent or more. These records are the result of our continued strategy of pursuing sustainable growth opportunities, leveraging our cost structure to improve operating margins, and selectively acquiring businesses that fit our three existing business segments."

Two of the Company's three business segments posted sales increases in fiscal 1996 compared to the prior year. Wright Line's sales grew 37 percent, reflecting the success of new products introduced in the last two years and the continued expansion of the Wright Line sales force. Distributed Products' sales increased over 7 percent, reflecting the market's continued acceptance of the segment's products even in slowing economies. Engineered Solutions' sales fell 1 percent from last year, primarily the result of the softening in the convertible top market in the U.S. and Europe, and the sale of its APITECH Mobile Equipment business in January of this year. Geographically, all regions exhibited sales growth, with the exception of Latin America.

Outstanding debt at August 31, 1996 totaled $92.6 million, compared to the $87.0 million outstanding at the beginning of the year. The net increase in debt is primarily the result of the acquisitions of Vision Plastics and CalTerm Inc. and the purchase of the European distribution rights for the Company's Wright Line product. Despite the acquisition activity, strong current year earnings caused a decline in the Company's debt to total capital ratio from 37 percent at the beginning of the year to 34 percent at August 31, 1996.

Looking forward towards fiscal 1997, Sim stated, "We feel we can continue the record sales and earnings performance. Including the effect of the recent Everest acquisition, we think Applied Power is positioned to deliver sales of $650 to $690 million, and earnings per share of $2.70 to $3.00 for the year. This would represent an earnings increase of between 12 and 24 percent and would be consistent with our long term goal of 15 to 20 percent annual earnings improvement."

The above comments regarding fiscal 1997 represent forward looking statements made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. Management cautioned that these projections are based on current estimates of future performance and are highly dependent upon a variety of factors which could cause actual results to differ from these estimates. These factors include the economic environment in the industrial production, trucking, construction, aerospace, automotive, and defense industries in both North America and Europe. Applied Power's results are also subject to continued market acceptance of the Company's new product introductions, the successful integration of recent acquisitions, operating margin risk due to competitive pricing, foreign currency risk and interest rate risk.

Applied Power is a global company comprised of three business segments. Engineered Solutions supplies components and systems based on hydraulic and vibration control technologies to a diverse group of OEM customers. Distributed Products provides a wide variety of industrial and electrical tools and consumables sold primarily through distribution worldwide. Wright Line provides furnishings and enclosures for technical environments and equipment. -0-

                          Applied Power Inc.
                  Comparative Statement of Earnings
               (In Thousands, Except per Share Amounts)

                                    Three Months Ended August 31,
                                         1996          1995

Sales                                  $147,296      $137,405
Cost of Goods Sold                       88,556        85,068
  Gross Profit                           58,740        52,337

Engineering, Selling and
  Administrative Expense                 41,956        39,011
  Operating Profit                       16,784        13,326

Other Expense
  Interest Expense (Net)                  2,366         2,129
  Amortization of Intangibles             1,250           713
  Other (Net)                                54            44
    Earnings Before Income Taxes         13,114        10,440

Income Tax Expense                        3,890         2,819

Net Income                             $  9,224      $  7,621

Earnings per Share                     $   0.66      $   0.55

Average Shares Outstanding               14,021        13,886

                          Applied Power Inc.
                   Comparative Statement of Earnings
                (In Thousands, Except per Share Amounts)

                                        Year Ended August 31,
                                         1996          1995

Sales                                  $571,215      $527,058
Cost of Goods Sold                      351,283       325,621
  Gross Profit                          219,932       201,437

Engineering, Selling and
  Administrative Expense                158,485       149,210
  Operating Profit                       61,447        52,227

Other Expense (Income)
  Interest Expense (Net)                  8,456        10,291
  Amortization of Intangibles             4,054         3,369
  Other (Net)                              (230)        1,694
    Earnings Before Income Taxes         49,167        36,873

Income Tax Expense                       15,438        11,868

Net Earnings from Continuing Operation   33,729        25,005

Extraordinary Loss from Early
  Extinguishment of Debt,
  Net of $2,423 Tax Benefit                   0        (4,920)

Net Income                             $ 33,729      $ 20,085

Earnings per Share:
  Continuing Operations                $   2.41      $   1.82
  Extraordinary Charge                     0.00         (0.36)
    Earnings per Share                 $   2.41      $   1.46

Average Shares Outstanding               13,983        13,746

                          Applied Power Inc.
                      Comparative Balance Sheet
                        (Dollars in Thousands)

                                       August 31,    August 31,
                                         1996          1995
CURRENT ASSETS

Cash and Cash Equivalents              $  1,001      $    911
Accounts Receivable                      68,747        71,000
Inventories                             120,648       103,358
Prepaid Expenses                         16,758        15,195
  Total Current Assets                  207,154       190,464

Other Assets                              6,370         6,274
Goodwill                                 58,266        57,346
Intangible Assets                        33,464        10,427

Property, Plant & Equipment
  Gross Property, Plant & Equipment     168,125       153,226
  Less:  Accumulated Depreciation       (91,889)      (84,791)
    Net Property, Plant & Equipment      76,236        68,435

  TOTAL ASSETS                         $381,490      $332,946

LIABILITIES AND SHAREHOLDERS' EQUITY

Short-term Borrowings                  $ 15,818      $ 12,620
Trade Accounts Payable                   41,397        37,530
Accrued Compensation and Benefits        20,805        19,707
Income Taxes Payable                      8,344         7,575
Other Current Liabilities                22,378        19,828
Current Maturities of Long-term Debt          0           187
  Total Current Liabilities             108,742        97,447

Long-term Debt, Less Current Portion     76,798        74,156
Deferred Income Taxes                    14,381        16,386
Other Long-term Liabilities              13,114        13,271

SHAREHOLDERS' EQUITY
  Common Stock                            2,730         2,681
  Additional Paid-in Capital             34,383        28,328
  Retained Earnings                     126,392        94,285
  Cumulative Translation Adjustments      4,950         6,392
    Total Shareholders' Equity          168,455       131,686

  TOTAL LIABILITIES AND
    SHAREHOLDERS' EQUITY               $381,490      $332,946

CONTACT: Applied Power Inc.

Robert C. Arzbaecher, 414/781-6600