QUINCY, Ill., Oct. 22 /PRNewswire/ -- Gardner Denver Machinery Inc.
(NYSE: GDI) reported a $3.2 million (86%) increase in net income for the three
months ended September 30, 1997, compared to the same period of 1996.  For the
third quarter of 1997, earnings per share increased $0.30 (83%) to $0.66,
compared to the previous year.  Net income for the nine month period ended
September 30, 1997 increased $7.8 million (69%), compared to the same period
of 1996.  For the nine month period, earnings per share increased $0.71 (64%),
compared to the same period of 1996.
    Ross Centanni, President and Chief Executive Officer of Gardner Denver
said, "Significantly increased order levels resulted in the improved
financial results."  Increased oil and gas well drilling and well servicing
led to growth in orders for the Company's petroleum products.  For the
quarter ended September 30, 1997, orders for petroleum products increased
approximately 190%, compared to the same period of 1996.  Orders for petroleum
products increased 52% in the third quarter of 1997, compared to the three
months ended June 30, 1997.  As a result of the growth in orders during the
year, backlog for petroleum products has increased 69% since December 31,
1996, to approximately $16 million as of September 30, 1997.
    Growth in demand for compressed air products has also favorably
impacted the Company's financial results, as has the performance of newly
acquired operations.   As a result of continuing high levels of industrial
capacity utilization, expansion of industrial investment and niche compressor
applications in the petroleum industry, orders for the Company's compressor
products increased 19% in the three month period ended September 30, 1997,
compared to the same period of 1996, and increased 14% compared to the three
month period ended June 30, 1997.  Backlog for the Compressed Air Products
segment has increased 19% since December 31, 1996, to approximately $43
million as of September 30, 1997.  These increases exclude the effect of
Tamrotor, a manufacturer of lubricated screw compressor air ends and packages
located in Tampere, Finland acquired by the Company on June 30, 1997.
    Mr. Centanni reported that demand for the Company's petroleum products
continues to remain strong as a result of higher oil and natural gas prices
and the related increases in drilling activity.  Demand in the Compressed Air
Products segment should also continue to increase, at a rate slightly greater
than the general expansion in the U.S. economy as indicated by the growth in
GNP.
    As a result of the growth in orders, revenues increased $20 million (35%)
to $76.5 million for the three months ended September 30, 1997, compared to
the same period of 1996.  Approximately $7 million of this increase is
attributable to the acquisition of Tamrotor.  Excluding Tamrotor, revenues in
the third quarter of 1997 increased approximately $13 million (23%) over the
same period in 1996.
    Compared to the second quarter of 1997, compressor product revenues,
excluding Tamrotor, declined $1.9 million (4%) in the third quarter of  1997,
due to the effect of a scheduled one-week vacation shutdown, but petroleum
product revenues increased $1.9 million (12%).
    Mr. Centanni noted that as a result of the significant volume increases in
petroleum product revenues, this business segment has leveraged its fixed
and semi-fixed costs to generate substantial improvements in operating
margins.  For the nine months ending September 30, 1997, the Petroleum
Products segment generated operating margins of 20.3%, compared to 7.5% for
the year ended December 31, 1996.  The Compressor Products segment generated
operating margins of 16.4% for the nine month period of 1997, slightly better
than operating margins generated in the previous year.
    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,
changes in demand for petroleum products, pricing of Gardner Denver products
and changes in the industrial production and industrial capacity utilization
rates.
    Comparisons of the financial results for the three and nine month periods
ended September 30, 1997 and September 30, 1996 appear on the following pages.
Gardner Denver's news releases are available by fax, at no charge, by calling
800-758-5804, extension 303875, or by visiting the Company's home page on the
Internet (http://www.gardnerdenver.com).
    Gardner Denver, with 1996 revenues of $218 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.

                                            (Unaudited)
                                         Three Months Ended
    Gardner Denver Machinery Inc.           September 30,

                                                                         %
                                          1997         1996            Change
                                  (in thousands, except per share data)

    Revenues:
      Compressed Air Products           $59,266      $48,211            23%
      Petroleum Products                 17,185        8,308           107

      Total revenues                     76,451       56,519            35

    Costs and Expenses:
      Cost of sales                      50,709       38,977            30
      Depreciation and amortization       2,614        2,099            25
      Selling and administrative         10,099        8,207            23
      Interest expense                    1,235          906            36
      Other, net                            130          ---           N/A

    Income before income taxes           11,664        6,330            84
    Provision for income taxes            4,699        2,595            81

    Net income                           $6,965       $3,735            86

    Earnings per share                    $0.66        $0.36            83

                                              (Unaudited)
                                            Nine Months Ended
    Gardner Denver Machinery Inc.             September 30,

                                                                         %
                                          1997          1996           Change
                                 (in thousands, except per share data)

    Revenues:
    Compressed Air Products             $165,852       $133,836         24%
      Petroleum Products                  46,121         20,166        129

      Total revenues                     211,973        154,002         38

    Costs and Expenses:
      Cost of sales                      140,905        106,509         32
      Depreciation and amortization        7,064          5,897         20
      Selling and administrative          28,752         20,680         39
      Interest expense                     3,147          2,000         57
      Other, net                             130            ---        N/A

    Income before income taxes            31,975         18,916         69
    Provision for income taxes            12,873          7,629         69

    Net income                           $19,102        $11,287         69
    Earnings per share                     $1.82          $1.11         64

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