Altra Industrial Motion
Nov 5, 2008

Altra Holdings Announces Record Financial Results for the Third Quarter of 2008

Nov 5, 2008 (GlobeNewswire via COMTEX News Network) --



                   Company Maintains Full-Year Guidance

     Net Sales Increase 8.2% to a Third-Quarter Record $159.4 Million

               Recurring EPS Grows 45.8% to $0.35 Per Share

                    Operating Margin Improves to 11.6%

QUINCY, Mass., Nov. 5, 2008 (GLOBE NEWSWIRE) -- Altra Holdings, Inc. (Nasdaq:AIMC), a leading global supplier of clutch brakes, couplings, gearing, belted drives and power transmission components, announced today unaudited third quarter financial results for the quarter ended September 27, 2008.

Comments on the Third Quarter

"Altra delivered another quarter of strong financial results, posting record net sales for our fiscal third quarter," said Michael L. Hurt, Chairman and CEO. "Our 6.2% organic sales growth was driven by continuing demand from our global OEMs and target market successes.

"Our third-quarter growth was particularly impressive given softer North American and Western European markets, which were especially weak in September," added Hurt. "We also delivered these results despite a weakening global economy. We improved operating margins to 11.6% and delivered a 45.8% increase in recurring EPS even with commodity prices rising at the beginning of the third quarter. Our balance sheet continues to be strong with a cash balance of approximately $50 million at the end of the third quarter. We continued to improve our leverage as we repurchased $12.5 million worth of our 9% notes."

Financial Results

Net sales for the third quarter of 2008 increased 8.2% to a third-quarter record $159.4 million from $147.3 million in the third quarter of 2007. The growth rate, adjusted for acquisitions, was 6.2% for the quarter. Net sales for the nine months ended September 27, 2008 increased 13.1% to $490.5 million from $433.5 million for the first nine months of 2007. The growth rate adjusted for acquisitions for the first nine months of the year was 6.1%.

Operating income for the third quarter of 2008 increased 9.5% to $18.5 million from $16.9 million in the third quarter of 2007. Operating income for the third quarter of 2008 was 11.6% of sales. Operating income for the first nine months increased 22.9% to $61.2 million from $49.8 million in the first nine months of 2007. Excluding $1.1 million in restructuring charges and a $0.3 million OPEB curtailment gain, operating income for the first nine months of 2008 was $62.0 million, or 12.7% of sales.

Reported net income for the third quarter was $8.8 million, or $0.34 per diluted share, compared with $4.3 million, or $0.17 per diluted share, for the third quarter of 2007. Reported net income for the nine-month period of 2008 was $27.2 million, or $1.04 per diluted share, compared with $12.9 million, or $0.53 per diluted share, for the nine-month period of 2007.

Recurring diluted earnings per share from continuing operations for the third quarter of 2008 grew to $0.35 per diluted share from $0.24 per diluted share in the third quarter of 2007. Recurring diluted earnings per share from continuing operations for the first nine months of 2008 grew to $1.11 per diluted share from $0.82 per diluted share in the first nine months of 2007.

Business Outlook

"Market fundamentals weakened in a number of our end markets in September as worldwide industrial production and capacity utilization decreased," said Hurt. "As a result, our incoming order rates are softening in certain markets.

"Our business fundamentals remain strong and in this slower economic environment we are implementing initiatives to ensure that Altra will emerge from the economic slowdown as a stronger, more efficient company," added Hurt. "We have accelerated our productivity actions for the balance of 2008 and for 2009 while continuing to focus on driving market share gains through the downturn. We are realizing the synergies from the TB Woods acquisition and from our low-cost country sourcing and lean enterprise initiatives. As a result, we are maintaining our full-year guidance for 2008."

For 2008, the company continues to forecast net sales in the range of $640 million to $650 million, and diluted recurring earnings per share in the range of $1.28 to $1.37. Altra Holdings expects capital expenditures in the range of $15.0 to $17.0 million, depreciation and amortization in the range of $21.0 to $23.0 million and a tax rate of approximately 34.0%.



                          Altra Holdings, Inc.

                                             (Unaudited)
                                ------------------  ------------------
 Condensed Statements of
  Income Data:                     Quarter Ended    Year to Date Ended
 In Thousands of Dollars,       Sept. 27, Sept. 29, Sept. 27, Sept. 29,
  except per share amounts        2008      2007       2008     2007
                                --------  --------  --------  --------
  Net sales                     $159,448  $147,278  $490,523  $433,512
  Cost of sales                  113,627   105,597   346,517   310,666
                                --------  --------  --------  --------
   Gross profit                 $ 45,821  $ 41,681  $144,006  $122,846
   Gross profit as a percent
    of net sales                    28.7%     28.3%     29.4%     28.3%
  Selling, general &
   administrative expenses        25,655    22,981    76,816    67,386
  Research and development
   expenses                        1,663     1,606     5,160     4,465
  OPEB curtailment gain             (107)       --      (276)       --
  Restructuring expense               81       189     1,149     1,180
                                --------  --------  --------  --------
   Income from operations       $ 18,529  $ 16,905  $ 61,157  $ 49,815
   Income from operations as a
    percent of net sales            11.6%     11.5%     12.5%     11.5%
  Interest expense, net            7,302    11,406    22,456    31,280
  Other non-operating (income)
   expense, net                   (1,408)      438    (2,887)      522
                                --------  --------  --------  --------
   Income from continuing
    operations before income
    taxes                       $ 12,635  $  5,061  $ 41,588  $ 18,013
  Provision for income taxes       4,000     1,637    14,127     6,485
                                --------  --------  --------  --------
  Income tax rate                   31.7%     32.3%     34.0%     36.0%
   Net income from continuing
    operations                     8,635     3,424    27,461    11,528

  Net income (loss) from
   discontinued operations, net
   of taxes of $43 and $583 for
   the year to date period ended
   September 27, 2008 and
   September 29, 2007,
   respectively                      172       886      (224)    1,352
                                --------  --------  --------  --------
     Net income                 $  8,807  $  4,310  $ 27,237  $ 12,880
                                ========  ========  ========  ========

 Weighted Average common
  shares outstanding
  Basic                           25,488    25,075    25,479    23,069
  Diluted                         26,157    26,119    26,159    24,094

 Earnings per share - Basic
  Net income from continuing
   operations                   $   0.34  $   0.14  $   1.08  $   0.50
  Net income (loss) from
   discontinued operations          0.01      0.03     (0.01)     0.06
                                --------  --------  --------  --------
     Net income                 $   0.35  $   0.17  $   1.07  $   0.56

 Earnings per share - Diluted
  Net income from continuing
   operations                   $   0.33  $   0.13  $   1.05  $   0.48
  Net income (loss) from
   discontinued operations          0.01      0.04     (0.01)     0.05
                                --------  --------  --------  --------
     Net income                 $   0.34  $   0.17  $   1.04  $   0.53

 Other Financial Data:
  Depreciation & amortization      5,820     5,845    16,755    16,377
  Capital expenditures             4,593     2,554    12,234     6,803

 Reconciliation of Recurring
  Net Income:

  Net income from continuing
   operations                   $  8,635  $  3,424  $ 27,461  $ 11,528

  Restructuring charges, net of
   tax                                55       128       749       755
  Premium & deferred financing
   expense eliminated on
   redeemed 11.25% bonds, net of
   tax                                --     2,768        77     6,651

  Premium, deferred financing
   expense and original issued
   discount eliminated on
   redeemed 9% bonds, net of
   tax                               513        --       945        --

  OPEB curtailment gain related
   to restructuring activities,
   net of tax                        (73)       --      (183)       --
  Gain on the sale of
   securities, net of tax             --        --      (141)       --

  Amortization of inventory fair
   value adjustment, net of tax       --        --        --       418

  Accelerated vesting for stock
   compensation (for ex
   director), net of tax              --        --        --       184

  Bridge financing fee on TB
   Woods acquisition, net of tax      --        --        --       305
  Deferred financing expense
   eliminated on pay down of TB
   Wood's revolving credit
   facility, net of tax               --        --       100        --
                                --------  --------  --------  --------
   Recurring net income         $  9,130  $  6,320  $ 29,008  $ 19,841
                                ========  ========  ========  ========

  Recurring diluted EPS         $   0.35  $   0.24  $   1.11  $   0.82
                                ========  ========  ========  ========



 Condensed Balance Sheets             (Unaudited)
 In Thousands of Dollars             September 27,        December 31,
                                         2008                 2007

 Assets:
  Current Assets
    Cash and cash equivalents             49,822              45,807
    Trade Receivables, net                86,631              73,248
    Inventories, net                     106,374             101,835
    Deferred income taxes                  8,447               8,286
    Receivable from sale of
     Electronics Division                     --              17,100
    Prepaid expenses and other             5,871               5,578
    Assets held for sale                   4,676               4,728
                                   --------------      --------------
 Total current assets                    261,821             253,015
    Property, plant and equipment,
     net                                 111,677             113,043
    Intangible assets, net                83,642              88,943
    Goodwill                             112,932             114,979
    Deferred income taxes                    151                 231
    Other assets                           4,643               6,747
                                   --------------      --------------
 Total assets                       $    574,866        $    580,525
                                   ==============      ==============

 Liabilities and stockholders'
  equity
  Current liabilities
    Accounts payable                      42,893              41,668
    Accrued payroll                       19,035              16,988
    Accruals and other liabilities        26,079              22,001
    Taxes payable                            512                  --
    Deferred income taxes                  8,060               8,060
    Current portion of long-term
     debt                                  3,343               2,667
                                   --------------      --------------
  Total current liabilities               99,922              91,384
    Long-term debt, less current
     portion and net of unaccreted
     discount and premium                259,423             291,399
    Deferred income taxes                 24,443              24,490
    Pension liabilities                    9,219              13,431
    Other post retirement benefits         2,343               3,170
    Long-term taxes payable                4,726               5,911
    Other long-term liabilities            4,155               4,308
                                   --------------      --------------
 Total stockholders' equity              170,635             146,432
                                   --------------      --------------
 Total liabilities and stock-
  holders' equity                   $    574,866        $    580,525
                                   ==============      ==============

The company will conduct an investor conference call on November 6, 2008 at 2:00 PM EST to discuss its unaudited third-quarter 2008 financial results. The public is invited to listen to the conference call by dialing 800-862-9098 domestically or 785-424-1051 for international access, and asking to participate in Conference ID# ALTRA. Also the company has posted slides on its web site at http://www.altramotion.com in the Investor Relations Section in the Events & Presentations tab to help the participants better follow the discussion. A replay of the recorded conference call will be available until midnight on November 12, 2008. To listen to the replay, dial 800-374-1375 domestically or 402-220-0682 for international access.

Altra Holdings, Inc., through its wholly-owned subsidiary Altra Industrial Motion, Inc., is a leading multinational designer, producer and marketer of a wide range of mechanical power transmission products. The company brings together strong brands covering over 40 product lines with production facilities in eight countries and sales coverage in over 70 countries. Our leading brands include Boston Gear, Warner Electric, TB Wood's, Formsprag Clutch, Ameridrives Couplings, Industrial Clutch, Kilian Manufacturing, Marland Clutch, Nuttall Gear, Stieber Clutch, Wichita Clutch, Twiflex Limited, Bibby Transmissions, Matrix International, Inertia Dynamics, Huco Dynatork and Warner Linear.

The Altra Holdings, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4038

Discussion of Non-GAAP Measures

As used in this news release and the accompanying slides posted on its website, non-GAAP recurring diluted earnings per share is calculated using net income from continuing operations that excludes premiums and interest expense associated with the extinguishment of debt, OPEB curtailment gain, and restructuring charges that management does not consider to be directly related to the company's core operating performance. Non-GAAP recurring diluted net income per share is calculated by dividing non-GAAP recurring net income by GAAP weighted average shares outstanding (diluted).

Altra believes that the presentation of non-GAAP recurring net income and non-GAAP recurring diluted earnings per share provides important supplemental information to management and investors regarding financial and business trends relating to the company's financial condition and results of operations.

Forward-Looking Statements

All statements, other than statements of historical fact included in this release are forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on financial data, market assumptions and business plans available only as of the time the statements are made, which may become out of date or incomplete. Forward-looking statements are inherently uncertain, and investors must recognize that events could differ significantly from our expectations.

In addition to the risks and uncertainties noted in this release, there are certain factors that could cause actual results to differ materially from those anticipated by some of the statements made. These include: (1) competitive pressures, (2) changes in economic conditions in the U.S. and abroad, (3) loss of distributors, (4) the ability to develop new products and respond to customer needs, (5) risks associated with international operations, including currency risks, (6) accuracy of estimated forecasts of OEM customers, (7) increased costs of raw materials used in our products, (8) product liability claims, (9) work stoppages and other labor issues, (10) changes in environmental, tax and other laws and changes in the enforcement of laws, (11) loss of key management and other personnel, (12) changes in pension and retirement liabilities, (13) the ability to achieve business plans, including with respect to an uncertain economic environment; (14) the ability to successfully execute, manage and integrate key acquisitions and mergers (15) failure to obtain or protect intellectual property rights, (16) failure of operating equipment or information technology infrastructure and (17) risks associated with our debt leverage and operating covenants under our debt instruments, (18) extreme volatility and disruption in the global financial markets and (19) as well as other risks, uncertainties and other factors described in the company's Form 10-Q, Form 10-K and in the company's other filings with the U.S. Securities and Exchange Commission (SEC) or in materials incorporated therein by reference. Altra Holdings, Inc. is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. AIMC-E

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Altra Holdings, Inc.

Altra Holdings, Inc.
          Christian Storch, Chief Financial Officer
          (617) 689-6380
          Christian.storch@altramotion.com

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