QUINCY, Ill., April 22 /PRNewswire/ -- Gardner Denver Machinery Inc.
(NYSE: GDI) reported record diluted earnings per share of $0.49 in the quarter
ending March 31, 1998, an increase of 44% from the $0.34 reported a year ago.
The Company has achieved first quarter earnings per share growth in excess of
30% for each year since its spin-off in April 1994.
"Revenues continued to expand in the first quarter, compared to the
previous quarter and to the same period of the previous year, due to revenues
from newly acquired operations and increased petroleum product and engineered
package shipments. During the first quarter of 1998, the Company noted a
slight slowing in demand for its petroleum products, as a result of the
declining price of oil. During the second quarter it appears that demand for
petroleum products may be increasing slightly compared to that of the first
quarter," said Ross J. Centanni, President and CEO. "We remain cautiously
optimistic that demand for compressor products will continue to increase
slightly faster than the growth rate of the U.S. economy. The prognosis for
the petroleum segment is dependent upon the future price of oil and natural
gas. We look forward to additional revenue and earnings growth in 1998 as we
further integrate the four acquisitions we completed since June 1997, Champion
Pneumatic and Geological Equipment in the U.S., Tamrotor in Finland and Wittig
in Germany."
For the three months ended March 31, 1998, revenues were $89.8 million,
compared to $66.1 million in the same period of 1997. Approximately
$16.0 million of this increase is attributable to incremental revenues from
acquisitions which the Company has completed since June 1997. Excluding
incremental revenues from acquisitions, revenues increased approximately
$7.7 million (12%) for the quarter, compared to the same period of 1997.
Revenues for compressor products were $70.0 million for the quarter ended
March 31, 1998, compared to $52.4 million for the same period of 1997.
Acquisitions generated approximately $13.7 million of the $17.6 million
increase compared to the previous year. Excluding acquisitions, revenues for
this segment increased 8% in 1998 compared to the previous year as a result of
increased shipments of engineered packages and continued economic expansion in
the U.S. As a percentage of revenues, operating margin for this segment
declined compared to the same period of 1997 due to a slightly unfavorable mix
of shipments and because newly acquired operations currently generate a lower
operating margin (including amortization of goodwill associated with the
acquisition) than that of the Company's existing operations.
Petroleum products revenues increased 45% to $19.8 million for the quarter
ended March 31, 1998, compared to the same period of 1997. Incremental
revenues from acquisitions generated $2.3 million of the $6.1 million increase
in revenues. The remaining increase resulted primarily from shipments of
orders received in 1997 as a result of growth in oil and gas well drilling and
stimulation. The Company has been able to leverage its manufacturing
operations and obtain significant price increases in this business segment as
a result of the demand for petroleum products. Operating earnings for this
segment increased $2.4 million (120%) to $4.4 million for the quarter, or
22.3% of petroleum products revenues.
Net income continued to demonstrate year-over-year growth, increasing
$2.8 million (52%) for the quarter ended March 31, 1998, to $8.1 million
($0.49 diluted earnings per share), compared to $5.3 million ($0.34 diluted
earnings per share) in the previous year. In the three months ended March 31,
1998, net income included $0.7 million ($0.04 diluted earnings per share) in
incremental income from acquisitions. Excluding the incremental income from
acquisitions, net income increased $2.1 million (40%) for the quarter, an
$0.11 diluted earnings per share improvement, due to revenue growth, price
increases for petroleum products, improvements in manufacturing operations and
a lower tax rate.
All of the statements in this release, other than historical facts, are
forward-looking statements made in reliance upon the safe harbor of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to uncertainties and factors relating to the Company's
operations and business environment, all of which are difficult to predict and
many of which are beyond the control of the Company, that could cause actual
results of the Company to differ materially from those matters expressed in or
implied by such forward-looking statements. The following factors, among
others, could affect its future performance and cause actual results of the
Company to differ materially from those expressed in or implied by
forward-looking statements: the successful integration of recent
acquisitions; the level of oil and gas drilling and production, which affects
demand for the Company's petroleum products; pricing of Gardner Denver
products; changes in the industrial production and industrial capacity
utilization rates, which affects demand for the Company's compressor products;
and the degree to which the Company is able to penetrate niche markets.
Comparisons of the financial results for the three month periods ended
March 31, 1998 and March 31 1997 appear on the following pages.
Gardner Denver, with 1997 revenues of $292 million, is a leading
manufacturer of air compressor and blower products for various industrial
applications and pumps used in oil and gas production, and well servicing,
drilling and stimulation. Gardner Denver's news releases are available by fax
by calling 800-758-5804, extension 303875, or by visiting the Company's home
page on the Internet (http://www.gardnerdenver.com).
GARDNER DENVER MACHINERY INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts and percentages)
(Unaudited)
Three Months Ended
March 31,
%
1998 1997 Change
Revenues $89,792 $66,075 36
Costs and Expenses:
Cost of sales 59,398 44,453 34
Depreciation and
amortization 2,895 2,260 28
Selling and administrative 12,954 9,361 38
Interest expense 1,179 977 21
Other expense 155
Income before income taxes 13,211 9,024 46
Provision for income taxes 5,130 3,700 39
Net income $8,081 $5,324 52
Basic earnings per share $0.51 $0.36 42
Diluted earnings per share $0.49 $0.34 44
GARDNER DENVER MACHINERY INC.
BUSINESS SEGMENTS RESULTS
(in thousands, except percentages)
(Unaudited)
Three Months Ended
March 31,
%
1998 1997 Change
Compressed Air Products
Revenues $70,030 $52,425 34
Operating earnings 10,678 8,340 28
% of Revenues 15.2% 15.9%
Petroleum Products
Revenues 19,762 13,650 45
Operating earnings 4,412 2,008 120
% of Revenues 22.3% 14.7%
SOURCE Gardner Denver Machinery Inc.
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Related links:
http://www.gardnerdenver.com
Company News On-Call: http://www.prnewswire.com or
fax, 800-758-5804, ext. 303875
CONTACT:
Helen W. Cornell, Vice President, Corporate
Secretary and Treasurer of Gardner Denver, 217-228-8209
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