QUINCY, Ill., July 21 /PRNewswire/ -- Gardner Denver, Inc. (NYSE: GDI), a
leading manufacturer of compressors and blowers for industrial applications
and pumps for the petroleum and industrial markets, announced that revenues
and earnings increased sequentially in the second quarter of 1999 from the
first quarter due to improved demand for compressed air products and the
continuing successful integration of acquisitions. Compared to the first
quarter of 1999, revenues in the second quarter increased 22% to $85.4 million
and diluted earnings per share grew 86% to $0.39.
As anticipated, revenues were reduced in the second quarter and first
half, as compared to the same periods of the previous year. Revenues for the
three months declined approximately $18.1 million, or 17%, compared to the
same period of 1998, primarily due to reduced demand for petroleum products.
This reduced demand and slower industrial production in the United States
caused revenues to decline approximately $37.7 million, or 19%, for the first
half, compared to 1998. Net income was $6.0 million, or $0.39 diluted
earnings per share, for the second quarter compared to $9.2 million, or $0.55
diluted earnings per share, for the same period of 1998. For the first half
of 1999, net income was $9.2 million, or $0.60 diluted earnings per share,
compared to $17.3 million, or $1.04 diluted earnings per share, in 1998.
Ross J. Centanni, Chairman, President and CEO, said "Lower levels of
industrial production and manufacturing capacity utilization, which began
declining in the second half of 1998, reduced demand for compressed air
products through the first half of 1999 compared to the first half of the
previous year. I am pleased to note, however, that compared to the first
quarter of 1999, demand for compressor products has improved somewhat. A
recovering industrial economy, complemented by the continuing successful
integration of acquisitions, enabled us to increase revenues in this segment
by 17% in the second quarter compared to the first quarter of 1999, even after
excluding acquisitions. The second quarter also reflects improved operating
efficiencies at our new manufacturing facility in Georgia and an overall
increase in operating margins for compressed air products to 14.8%."
"Order inquiries have increased and appear to be across horsepower sizes,
applications and industries. Previously, we believed that this improvement
would result in increasing revenues in the third quarter, but at present the
growth appears to have tapered to a rate comparable to the one experienced in
the second quarter of 1999. As a result, we believe the recovery previously
anticipated for the second half of 1999 will occur, but with improvements
evident in the fourth quarter rather than the third."
"The comparison of petroleum revenues to the previous year is still quite
unfavorable for both the second quarter and first half. The significant
decline in the price of oil in 1998 has caused a reduction in demand for
drilling and well stimulation pumps and backlog continued to decline in this
segment during the first half of 1999. However, despite the unfavorable
comparisons in revenues and operating margins for this segment, order
inquiries for these products are increasing and the business continues to
generate cash to fund the Company's strategies for growth. I believe we may
see improved demand for petroleum products by the fourth quarter of this year,
if the price of oil remains at current levels and the rig count continues to
increase. Orders for petroleum parts are improving, which is typically a
precursor to increased demand for pumps. In anticipation of a recovery, we
are building some pump inventory to accelerate the potential benefit of
increased demand later this year."
"We continue to position our company for future growth and are actively
seeking other synergistic acquisitions, both in the United States and Europe,
such as Butterworth Jetting Systems and the Allen-Stuart Equipment Company
which we purchased in April 1999. Allen-Stuart enhances our ability to supply
engineered packages, incorporating the Company's compressor and blower
products. Butterworth Jetting Systems strengthens Gardner Denver's presence
in the rapidly growing water jet market."
"During the first six months of 1999, we also spent approximately
$6.3 million for capital to reduce costs, improve efficiency and expand
machining capacity. We plan to continue implementing programs to improve
manufacturing efficiencies and further integrate acquisitions, which should
result in additional improvements in operating margins in the future,"
Centanni concluded.
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 Gardner
Denver'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 to differ materially from those matters expressed in or
implied by such forward-looking statements. The following factors, among
others, could affect future performance and cause actual results to differ
materially from those expressed in or implied by forward-looking statements:
the successful integration of recent acquisitions; the level of oil prices and
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 affect
demand for the Company's compressed air products; the degree to which the
Company is able to penetrate niche markets; the successful implementation of
cost reduction efforts; and the extent to which the Company is able to operate
without disruption due to Year 2000 Issues.
Comparisons of the financial results for the three and six month periods
ended June 30, 1999 and 1998 follow.
Gardner Denver, with 1998 revenues of $385 million, is a leading
manufacturer of reciprocating, rotary and vane compressors and blowers for
various industrial applications and pumps used in the petroleum and industrial
markets. 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, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts and percentages)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
% %
1999 1998 Change 1999 1998 Change
Revenues $85,410 $103,509 (17)$155,634 $193,301 (19)
Costs and Expenses:
Cost of sales 56,726 70,131 (19) 105,086 129,529 (19)
Depreciation and
amortization 3,391 3,221 5 6,910 6,116 13
Selling and
administrative 13,967 13,738 2 25,765 26,692 (3)
Interest expense 1,469 1,386 6 2,676 2,565 4
Other expense 103 123 (16) 226 278 (19)
Income before
income taxes 9,754 14,910 (35) 14,971 28,121 (47)
Provision for
income taxes 3,765 5,710 (34) 5,779 10,840 (47)
Net income $5,989 $9,200 (35) $9,192 $17,281 (47)
Basic earnings
per share $0.40 $0.57 (30) $0.61 $1.08 (44)
Diluted earnings
per share $0.39 $0.55 (29) $0.60 $1.04 (42)
Basic weighted
average number
of shares
outstanding 14,895 16,115 (8) 15,070 16,035 (6)
Diluted weighted
average number
of shares
outstanding 15,281 16,708 (9) 15,431 16,680 (7)
Shares outstanding
as of 6/30 14,904 16,131 (8)
GARDNER DENVER, INC. BUSINESS SEGMENT RESULTS
(in thousands, except percentages)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
% %
1999 1998 Change 1999 1998 Change
Compressed Air
Products
Revenues $78,960 $78,086 1 $142,550 $148,116 (4)
Operating
earnings 11,682 10,684 9 18,261 21,362 (15)
% of Revenues 14.8% 13.7% 12.8% 14.4%
Petroleum Products
Revenues 6,450 25,423 (75) 13,084 45,185 (71)
Operating earnings 202 6,247 (97) 600 10,659 (94)
% of Revenues 3.1% 24.6% 4.6% 23.6%
CONDENSED BALANCE SHEET ITEMS
(Unaudited) % (Audited)
06/30/99 03/31/99 Change 12/31/98
Cash and equivalents $19,932 $15,220 31 $24,474
Receivables, net 71,425 62,768 14 69,617
Inventories, net 58,559 56,004 5 53,115
Current assets 154,869 140,021 11 151,805
Total assets 351,661 327,119 8 342,130
Short-term debt
and cur. maturities 282 279 1 2,452
Current liabilities 53,595 55,770 (4) 63,258
Long-term debt, excl.
cur. maturities 103,733 78,011 33 81,058
Total liabilities 210,159 188,533 11 199,444
Total stockholders'
equity 141,502 138,586 2 142,686
SOURCE Gardner Denver, Inc.
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Related links:
http://www.gardnerdenver.com
Company News On-Call:
http://www.prnewswire.com/comp/303875.html or fax,
800-758-5804, ext. 303875
CONTACT:
Helen W. Cornell, Vice President, Corporate
Secretary and Treasurer of Gardner Denver, Inc., 217-228-8209
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