QUINCY, Ill., Oct. 21 /PRNewswire/ -- Gardner Denver, Inc. (NYSE: GDI)
reported diluted earnings per share of $0.52 in the quarter ending September
30, 1998, an increase of 18% from the $0.44 reported a year ago. For the nine
month period, diluted earnings per share increased 29% to $1.56, compared to
$1.21 for the same period of 1997.
The Company also announced that its Board of Directors has authorized the
repurchase of up to 1,600,000 shares of its common stock to be used for
general corporate purposes. The shares will be purchased from time to time in
open market or private transactions. Gardner Denver presently has
approximately 16,200,000 shares of common stock outstanding.
Revenue growth was achieved in the quarter through acquisitions completed
in 1998, incremental shipments of petroleum products from backlog and
increased revenues from international operations. For the three months ended
September 30, 1998, revenues were $96.6 million, compared to $76.5 million in
the same period of 1997. Approximately $18.5 million of this increase is
attributable to incremental revenues from acquisitions completed in 1998.
Excluding these incremental acquisitions, revenues increased approximately
$1.6 million (2%) for the quarter, compared to the same period of 1997.
Revenues for compressed air products increased $16.0 million (27%) to
$75.3 million for the quarter ended September 30, 1998, compared to $59.3
million for the same period of 1997, primarily as a result of incremental
revenues from acquisitions. Excluding incremental acquisition revenues, which
generated $15.7 million of the increase, compressed air products revenues
increased $0.3 million (1%) in the three month period compared to the previous
year. As a percentage of revenues, operating margin for this segment declined
to 14.7% for the three months ended September 30, 1998, compared to 15.8% for
the same period of 1997, but improved from 13.7% in the three months ended
June 30, 1998. The deterioration in operating margin (as a percentage of
revenues) for the three and nine month periods, compared to the previous year,
is primarily due to newly acquired operations which currently generate a lower
operating margin (after amortization of goodwill associated with the
acquisition) than that of the Company's existing operations and because the
Company is incurring expenses related to a plant relocation, which is planned
to occur in the fourth quarter of 1998. The improvement compared to the
previous quarter is attributable to cost reductions completed at recently
acquired operations.
Petroleum products revenues increased 24% to $21.3 million for the quarter
ended September 30, 1998, compared to the same period of 1997. Incremental
revenues from an acquisition generated $2.8 million of the $4.1 million
increase in revenues. The remaining increase resulted primarily from shipping
some of the order backlog that existed at the end of the previous quarter.
The incremental revenues resulted in a $1.0 million increase (26%) in the
operating earnings of this segment. The Company has been able to leverage its
manufacturing operations and administrative expenses as a result of its
increased revenues. Operating earnings, as a percentage of petroleum products
revenues, increased to 23.9% for the three months of 1998, from 23.5% for the
same period of 1997.
Revenues increased $77.9 million (37%) to $289.9 million for the nine
months ended September 30, 1998, compared to the same period of 1997.
Incremental revenues from acquisitions contributed $61.0 million of this
increase. Excluding acquisitions, revenues increased $16.9 million (8%) over
the same period of 1997.
For the nine months ended September 30, 1998, revenues for compressed air
products increased $57.6 million (35%) to $223.4 million, compared to the same
period of 1997. Excluding acquisitions, which contributed $53.4 million,
revenues increased $4.2 million (3%), primarily related to growth in the U.S.
economy and penetration of niche markets such as field gas gathering.
Petroleum products revenues increased $20.3 million (44%) in the nine months
ended September 30, 1998, compared to the same period of 1997. An acquisition
contributed $7.6 million of this increase. Excluding this acquisition,
revenues increased $12.7 million (28%), primarily as a result of shipping
drilling pumps from the order backlog that existed at the end of the previous
year. Operating earnings for this segment increased $6.4 million (68%) to
$15.7 million for the nine months of 1998, compared to the same period of
1997. As a percentage of petroleum products revenues, operating earnings
increased to 23.7% for the nine months of 1998, compared to 20.3% for the same
period of 1997, due to improved leverage and price increases implemented in
the second half of 1997.
Net income continued its double digit growth, increasing $1.7 million
(26%) for the quarter ended September 30, 1998, to $8.7 million ($0.52 diluted
earnings per share), compared to $7.0 million ($0.44 diluted earnings per
share) in the previous year. In the three months ended September 30, 1998,
net income included $0.6 million ($0.03 diluted earnings per share) in
incremental income from acquisitions. Excluding the incremental income from
acquisitions, net income increased $1.1 million (17%) for the quarter, a $0.05
diluted earnings per share improvement, primarily due to revenue growth, price
increases for petroleum products and leverage of manufacturing costs as
volume increased.
For the nine months ended September 30, 1998, net income increased $6.9
million (36%) to $26.0 million ($1.56 diluted earnings per share), compared to
$19.1 million ($1.21 diluted earnings per share) for the same period of 1997.
Acquisitions provided $1.6 million ($0.10 diluted earnings per share) of the
net income increase in the nine month period of 1998.
During the third quarter of 1998, demand for the Company's petroleum
products reached its lowest level of the previous twelve months. Orders for
petroleum products were $5.8 million in the third quarter of 1998, including
$1.5 million from acquisitions, compared to $20.5 million in the same period
of 1997. For the nine months ended September 30, 1998, orders were $42.5
million, including $5.4 million from acquisitions, compared to $50.2 million
for the same period of 1997. Backlog for this business segment declined to
$12.8 million on September 30, 1998 from $28.2 million on June 30, 1998. The
current level of backlog for petroleum products, which includes $1.8 million
from acquisitions, is approximately $1.9 million less than backlog as of
September 30, 1997.
With the exception of centrifugal blowers, orders for the Company's
compressed air products increased 5% in the third quarter of 1998, compared
to the previous quarter of the same year. Demand for centrifugal products was
negatively impacted by the impending relocation of the manufacturing facility
to Peachtree City, Ga., from Syracuse, N.Y. In the third quarter of 1998,
orders for compressed air products were $68.8 million, including $15.3 million
from acquisitions, compared to $66.1 million in the comparable period of 1997.
For the nine months ended September 30, 1998, orders for compressed air
products were $203.3 million, including $50.2 million from acquisitions,
compared to $173.9 million for the same period of 1997. Backlog for
compressed air products was $45.1 million as of September 30, 1998, including
$4.3 million from acquisitions, compared to $50.8 million as of September 30,
1997 and $51.1 million as of June 30, 1998.
Ross J. Centanni, President and CEO, said, "Based upon current levels of
oil and natural gas prices, orders for petroleum products in 1999 would be
similar to those received in 1998 and revenues would be comparable to the
order level. In 1998, revenues for this segment have significantly exceeded
new orders received as the Company shipped $21.5 million of petroleum products
from its order backlog. The Company has invested in manufacturing efficiency
improvements and will be able to respond quickly to increased demand when a
recovery in oil and natural gas prices occurs. Although the Company is not
able to predict the levels of oil and gas prices in 1999, based upon existing
supply and demand fundamentals for this industry, we believe a recovery should
occur in the future.
"In 1999, we anticipate that the rate of growth in orders for the
Company's compressed air products will be consistent with the growth rate of
GNP, in spite of projections for reduced capital expenditures by industrial
companies related to slowing economic growth worldwide. The Company believes
this improved growth will result from synergy benefits from operations
acquired in the previous eighteen months and the completion of the
manufacturing relocation. The Company will also realize order growth due to
consolidating the financial results of the Wittig operations for a full year,
compared to three quarters in 1998. We continue to focus on integrating
recent acquisitions and believe that we will realize improved operating
efficiencies and margin in 1999 as a result of these efforts," said Centanni.
"In 1999, cost reduction efforts and financial benefits of completing
acquisition integration projects should enhance the Company's profitability,
but not sufficiently to offset a decrease in profits from the expected
reduction in revenues resulting from the depressed demand for petroleum
products. Therefore, given our current economic outlook, the Company
anticipates that diluted earnings per share will be approximately 10% less in
1999 than in 1998, exclusive of any effect of the stock repurchase program,"
Centanni stated.
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
affect demand for the Company's compressed air products; and the degree to
which the Company is able to penetrate niche markets.
Comparisons of the financial results for the three and nine month periods
ended September 30, 1998 and September 30, 1997 appear on the following pages.
Gardner Denver, with 1997 revenues of $292 million, is a leading
manufacturer of reciprocating, rotary and vane compressors and blowers for
various industrial applications and pumps used in the petroleum industry.
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 Nine Months Ended
September 30, September 30,
% %
1998 1997 Change 1998 1997 Change
Revenues $96,605 $76,451 26 $289,906 $211,973 37
Costs and Expenses:
Cost of sales 64,024 50,709 26 193,553 140,905 37
Depreciation and
amortization 3,458 2,614 32 9,574 7,064 36
Selling and
administrative 13,407 10,099 33 40,099 28,752 39
Interest expense 1,287 1,235 4 3,852 3,147 22
Other expense 188 130 45 466 130 258
Income before income taxes14,241 11,664 22 42,362 31,975 32
Provision for income taxes 5,493 4,699 17 16,333 12,873 27
Net income $8,748 $6,965 26 $26,029 $19,102 36
Basic earnings per share $ 0.54 $ 0.46 17 $ 1.62 $ 1.27 28
Diluted earnings per share $ 0.52 $ 0.44 18 $ 1.56 $ 1.21 29
Diluted weighted average number
of shares outstanding 16,676 15,882 16,673 15,787
GARDNER DENVER, INC.
BUSINESS SEGMENT RESULTS
(in thousands, except percentages)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
% %
1998 1997 Change 1998 1997 Change
Compressed Air Products
Revenues $75,321 $59,266 27 $223,437 $165,852 35
Operating earnings 11,090 9,347 19 32,452 26,947 20
% of Revenues 14.7% 15.8% 14.5% 16.2%
Petroleum Products
Revenues 21,284 17,185 24 66,469 46,121 44
Operating earnings 5,088 4,044 26 15,747 9,348 68
% of Revenues 23.9% 23.5% 23.7% 20.3%
CONDENSED BALANCE SHEET ITEMS
(Unaudited) (Audited)
9/30/98 6/30/98 12/31/97
Cash and equivalents $19,274 $11,546 $8,831
Receivables, net 77,740 86,507 62,307
Inventories, net 60,247 62,617 48,324
Accounts payable and
accrued liabilities 69,206 69,918 58,471
Debt (includes current maturities) 83,356 90,340 51,686
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, 217-228-8209
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