Altra Holdings Announces Financial Results for the Third Quarter of 2009

BRAINTREE, Mass., Nov. 2, 2009 (GLOBE NEWSWIRE) -- Altra Holdings, Inc.
(Nasdaq:AIMC), a leading global supplier of clutch brakes, couplings, gearing,
belted drives and power transmission components, today announced unaudited
financial results for the third quarter of 2009.

Financial Highlights

* Diluted EPS was $0.02; excluding restructuring charges and
expenses associated with the redemption of debt, non-GAAP
recurring diluted EPS was $0.06 for the third quarter. (a)

* Operating cash flow was $24.3 million for the third quarter and
a record $52.1 million for the first nine months of 2009.

* Reduced debt by nearly $16 million during the quarter,
bringing debt reduction for the first nine months of 2009 to
nearly $30 million.

* Quarterly net sales decreased 34.3% year-over-year to $104.8
million, which includes the adverse impact from foreign exchange
of approximately 280 bps.

* Cost reduction and facility consolidation activities on plan to
achieve previously communicated $60 million in savings during
2009.

* Narrows financial guidance for 2009.
(a) This press release includes non-GAAP financial measures. Please see below
under "Discussion of Non-GAAP Financial Measures" for a discussion of our use of
non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial
measures.

Comments on the Third Quarter

"We performed well in terms of overall operating results in the third quarter
amid a generally weak end-market environment," said Carl Christenson, President
and CEO. "Our focus on cash generated $47.0 million of free cash flow in the
first nine months, significantly exceeding our expectations for the full year."

"While third-quarter revenue decreased 34.3% from the very strong prior-year
third quarter, our gross profit margin of 27.3% only declined by 140 basis
points as a result of our cost-reduction efforts combined with lower raw
material cost," continued Christenson. "In addition, we increased our gross
profit margin by 100 basis points from the second quarter of 2009 even though
revenues were down 6% sequentially in what is typically a seasonally slow
quarter."

"We lowered inventories by more than $7.0 million during the third quarter and
reduced selling, general and administrative expenses by nearly 25% on a
year-over-year basis," continued Christenson. "As a result, we generated strong
cash flow and strengthened our balance sheet by reducing our debt by nearly
$16.0 million during the quarter."

Financial Results

Net sales for the third quarter of 2009 decreased 34.3% to $104.8 million from
$159.4 million in the third quarter of 2008. Net sales for the nine months ended
September 26, 2009 decreased 30.4% to $341.2 million from $490.5 million for the
first nine months of 2008.

Operating income for the third quarter of 2009 decreased 66.3% to $6.3 million
from $18.5 million in the third quarter of 2008. Excluding restructuring
charges, operating income for the third quarter of 2009 was $7.3 million, or
7.0% of sales. Operating income for the first nine months of 2009 decreased
66.8% to $20.3 million from $61.2 million in the same period of 2008. Excluding
restructuring charges, OPEB curtailment gain and inventory adjustments due to
the economic downturn, operating income for the first nine months of 2009
decreased 56.9% to $26.4 million, or 7.7% of sales.

Reported net income for the third quarter was $0.6 million, or $0.02 per diluted
share, compared with net income of $8.8 million, or $0.34 per diluted share, for
the third quarter of 2008. Reported net income for the nine-month period of 2009
was $0.3 million, or $0.01 per diluted share, compared with net income of $27.2
million, or $1.04 per diluted share, for the same period a year ago.

Non-GAAP recurring diluted earnings per share from continuing operations for the
third quarter of 2009 was $0.06 per diluted share, down from $0.35 per diluted
share in the third quarter of 2008. Non-GAAP recurring diluted earnings per
share from continuing operations for the first nine months of 2009 was $0.19 per
diluted share compared with $1.11 per diluted share for the first nine months of
2008.

Business Outlook

"We are cautiously optimistic that conditions in several end-markets that we
serve are gradually improving," said Christenson. "It appears that destocking
and inventory liquidation efforts by our customers are beginning to come to an
end as sales to our largest distribution customers are improving. For the first
time in 2009 we saw a positive book-to-bill ratio in the third quarter. We have
also seen an increase in project-related quoting activities. At the same time,
our cost-reduction efforts are on track and we continue to expect to realize $60
million in savings during 2009."

"We will continue to focus on generating cash and decreasing our borrowing
levels as we complete the final quarter of 2009 and begin 2010. We now expect to
report free cash flow in the range of $50 to $55 million for the year,"
concluded Christenson.

For 2009, the Company is forecasting net sales to be in the range of $440
million to $450 million and non-GAAP recurring diluted earnings per share in the
range of $0.20 to $0.25. Capital expenditures are expected to be in the range of
$8.0 million to $9.0 million, and depreciation and amortization in the range of
$21.5 million to $22.5 million. The Company no longer provides guidance relative
to the tax rate.

Altra Holdings, Inc.

(Unaudited) (Unaudited)
Consolidated Statements -------------------- --------------------
of Income Data: Year to Date
In Thousands of Dollars, Quarter Ended Period Ended
except per share amounts Sept. 26, Sept. 27, Sept. 26, Sept. 27,
2009 2008 2009 2008
--------- --------- --------- ---------
Net sales $ 104,766 $ 159,448 $ 341,183 $ 490,523
Cost of sales 76,194 113,627 250,950 346,517
--------- --------- --------- ---------
Gross profit $ 28,572 $ 45,821 $ 90,233 $ 144,006
Gross profit as a percent
of net sales 27.3% 28.7% 26.4% 29.4%
Selling, general &
administrative expenses 19,290 25,655 60,971 76,816
Research and development
expenses 1,508 1,663 4,569 5,160
Other post employment
benefit plan settlement
gain -- (107) (1,467) (276)
Restructuring expense 1,006 81 5,360 1,149
Loss on disposal of assets 516 -- 516 --
--------- --------- --------- ---------
Income from operations $ 6,252 $ 18,529 $ 20,284 $ 61,157
Income from operations as
a percent of net sales 6.0% 11.6% 5.9% 12.5%
Interest expense, net 6,290 7,302 18,879 22,456
Other non-operating
expense (income), net (371) (1,408) 1,248 (2,887)
--------- --------- --------- ---------
Income from continuing
operations before income
taxes $ 333 $ 12,635 $ 157 $ 41,588
Provision (Benefit) for
income taxes (315) 4,000 (143) 14,127
--------- --------- --------- ---------
Income tax rate -94.6% 31.7% -91.1% 34.0%
Net income from
continuing operations 648 8,635 300 27,461
Net income (loss) from
discontinued operations,
net of taxes of $43 for
the year to date period
ended September 27, 2008 -- 172 -- (224)
--------- --------- --------- ---------
Net income $ 648 $ 8,807 $ 300 $ 27,237
========= ========= ========= =========

Weighted Average common
shares outstanding
Basic 25,961 25,488 25,940 25,479
Diluted 26,213 26,157 26,112 26,159

Earnings per share - Basic
Net income from
continuing operations $ 0.02 $ 0.34 $ 0.01 $ 1.08
Net income (loss) from
discontinued operations -- 0.01 -- (0.01)
--------- --------- --------- ---------
Net income $ 0.02 $ 0.35 $ 0.01 $ 1.07

Earnings per share -
Diluted
Net income from
continuing operations $ 0.02 $ 0.33 $ 0.01 $ 1.05
Net income (loss) from
discontinued operations -- 0.01 -- (0.01)
--------- --------- --------- ---------
Net income $ 0.02 $ 0.34 $ 0.01 $ 1.04

Reconciliation of
Recurring Net Income:

Net income from
continuing operations $ 648 $ 8,635 $ 300 $ 27,461

Restructuring charges,
net of tax 717 55 3,640 749
Inventory adjustment due
to economic downturn,
net of tax -- -- 1,364 --
Net discount/premium &
deferred financing
expense on redeemed
debt, net of tax 321 513 388 1,122
Other post employment
benefit plan settlement
gain, net of tax -- (73) (904) (183)
Gain on the sale of
securities, net of tax -- -- -- (141)
Loss on the sale of
asset, net of tax -- -- 160 --
--------- --------- --------- ---------
Recurring net income $ 1,686 $ 9,130 $ 4,948 $ 29,008
========= ========= ========= =========

Recurring diluted earnings
per share $ 0.06 $ 0.35 $ 0.19 $ 1.11
========= ========= ========= =========

Consolidated Balance Sheets (Unaudited)
In Thousands of Dollars Sept. 26, Dec. 31,
2009 2008
Assets:
Current Assets
Cash and cash equivalents 71,940 52,073
Trade Receivables, net 58,605 68,803
Inventories 72,255 98,410
Deferred income taxes 8,032 8,032
Prepaid expenses and other current assets 10,054 6,514
Assets held for sale -- 4,676
---------- ----------
Total current assets 220,886 238,508
Property, plant and equipment, net 107,769 110,220
Intangible assets, net 76,447 79,339
Goodwill 78,955 77,497
Deferred income taxes 495 495
Other non-current assets, net 6,319 7,525
---------- ----------
Total assets $ 490,871 $ 513,584
========== ==========

Liabilities and stockholders' equity
Current liabilities
Accounts payable 25,819 33,890
Accrued payroll 13,438 16,775
Accruals and other liabilities 25,533 18,755
Deferred income taxes 6,906 6,906
Current portion of long-term debt 995 3,391
---------- ----------
Total current liabilities 72,691 79,717
Long-term debt, less current portion and
net of unaccreted discount and premium 231,633 258,132
Deferred income taxes 23,318 23,336
Pension liabilities 11,730 11,854
Other post retirement benefits 63 2,270
Long-term taxes payable 9,075 7,976
Other long-term liabilities 2,080 1,434
---------- ----------
Total stockholders' equity 140,281 128,865
---------- ----------
Total liabilities and stockholders' equity $ 490,871 $ 513,584
========== ==========

Year to date ended
----------------------
Sept. 26, Sept. 27,
2009 2008
---------- ----------
Cash flows from operating activities
Net income $ 300 $ 27,237
Adjustments to reconcile net income to net
cash flows:
Depreciation 12,547 12,409
Amortization of intangible assets 4,137 4,346
Amortization and write-offs of deferred
financing costs 1,560 1,863
Loss (gain) on foreign currency, net 1,092 (1,597)
Accretion of debt discount, net 621 759
Loss on sale of Electronics Division -- 224
Fixed asset impairment/disposal 2,563 --
Loss on sale of fixed assets -- 193
Other post employment benefit plan
settlement gain (1,467) (276)
Stock based compensation 2,273 1,516
Changes in assets and liabilities:
Trade receivables 13,025 (14,905)
Inventories 27,626 (5,871)
Accounts payable and accrued liabilities (11,929) 5,885
Other current assets and liabilities 71 (383)
Other operating assets and liabilities (365) 234
---------- ----------
Net cash provided by operating activities 52,054 31,634
---------- ----------
Cash flows from investing activities
Purchase of property, plant and equipment (5,105) (12,234)
Proceeds from sale of Electronics Division -- 17,310
---------- ----------
Net cash provided by (used in) investing
activities (5,105) 5,076
---------- ----------
Cash flows from financing activities
Payments on Senior Notes (4,950) (1,346)
Payments on Senior Secured Notes (22,200) (27,500)
Payments on Revolving Credit Agreement (3,000) (1,723)
Proceeds from additional borrowings under an
existing mortgage 1,467 --
Shares repurchased for tax withholding (259) --
Payment on mortgages (524) (228)
Payment on capital leases (614) (779)
---------- ----------
Net cash used in financing activities (30,080) (31,576)
---------- ----------
Effect of exchange rate changes on cash and
cash equivalents 2,998 (1,119)
---------- ----------
Net change in cash and cash equivalents 19,867 4,015
Cash and cash equivalents at beginning of year 52,073 45,807
---------- ----------
Cash and cash equivalents at end of period $ 71,940 $ 49,822
========== ==========
Reconciliation to free cash flow:
Net cash provided by operating activities 52,054 31,634
Purchase of property, plant and equipment (5,105) (12,234)
---------- ----------

Free cash flow $ 46,949 $ 19,400
========== ==========
Earnings Call

The company will conduct an investor conference call on November 3, 2009 at
11:00 a.m. EST to discuss its unaudited third-quarter 2009 financial results.
The public is invited to listen to the conference call by dialing 877-302-0756
domestically or 502-719-4487 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 10, 2009. To listen to the replay, dial 800-752-3416 domestically or
712-432-9141 for international access.

About Altra Holdings

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 Financial Measures

As used in this release and the accompanying slides posted on the company's
website, non-GAAP recurring diluted earnings per share, non-GAAP recurring
income from operations and non-GAAP recurring net income are each calculated
using either net income from continuing operations or income from continuing
operations that excludes premiums, discounts and interest expense associated
with the extinguishment of debt, other post employment benefit plan settlement
gains, restructuring costs, inventory adjustments due to the economic downturn
and other income or charges that management does not consider to be directly
related to the company's core operating performance. Non-GAAP recurring diluted
earnings per share is calculated by dividing non-GAAP recurring net income by
GAAP weighted average shares outstanding (diluted).

As used in this release and the accompanying slides posted on the company's
website, non-GAAP free cash flow is calculated as cash flow from operating
activities less capital expenditures.

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

Cautionary Statement Regarding 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. These statements include, but are not
limited to, any statement that may predict, forecast, indicate or imply future
results, performance, achievements or events. Forward-looking statements can
generally be identified by phrases such as "believes," "expects," "potential,"
"continues," "may," "should," "seeks," "predicts," "anticipates," "intends,"
"projects," "estimates," "plans," "could," "designed", "should be," and other
similar expressions that denote expectations of future or conditional events
rather than statements of fact. Forward-looking statements also may relate to
strategies, plans and objectives for, and potential results of, future
operations, financial results, financial condition, business prospects, growth
strategy and liquidity, and are based upon financial data, market assumptions
and management's current business plans and beliefs or current estimates of
future results or trends 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. These statements include, but may not be
limited to, those comments regarding customer destocking and inventory efforts,
expectations related to the results of cost-reduction efforts, plans to focus on
generating cash and decreasing borrowing levels and our ability to achieve those
results, expectations for free cash flow for 2009, and our guidance relating to
free cash flow, net sales, earnings per share, capital expenditures, and
depreciation and amortization.

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 United States and abroad
and the cyclical nature of our markets, (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 and the impact of the current global
economic environment on our customers, (7) fluctuations in the costs of raw
materials used in our products, (8) product liability claims, (9) work stoppages
and other labor issues, (10) changes in employment, 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) risks associated with impairment of goodwill
or intangibles assets, (17) failure of operating equipment or information
technology infrastructure, (18) risks associated with our debt leverage and
operating covenants under our debt instruments, (19) risks associated with the
global recession and volatility and disruption in the global financial markets,
(20) our ability to complete cost reduction actions and risks associated with
such actions, and (21) other risks, uncertainties and other factors described in
the Company's quarterly reports on Form 10-Q and annual reports on 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. Except as required by
applicable law, Altra Holdings, Inc. does not intend to, update or alter its
forward looking statements, whether as a result of new information, future
events or otherwise. AIMC-E

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CONTACT: Altra Holdings, Inc.
Christian Storch, Chief Financial Officer
781-917-0541
Christian.storch@altramotion.com