Revenues Grow 13% and EPS Increases 35% From Prior Year Quarter
QUINCY, Ill., Oct. 24 /PRNewswire/ -- Gardner Denver, Inc. (NYSE: GDI), a
leading manufacturer of compressors and blowers for industrial applications
and pumps for petroleum and industrial markets, announced that revenues for
the three months ended September 30, 2001 were $103.4 million, an increase of
13% compared to the third quarter of 2000. Diluted earnings per share in the
third quarter were $0.35, up 35% from a year ago, and included a $0.4 million
after-tax gain ($0.03 per share) from litigation settlement proceeds. The
third quarter also included the results of Hamworthy Bellis & Morcom ("HBM")
and Hoffman Air and Filtration Systems ("Hoffman"). These two businesses were
acquired in September of 2001 and were slightly accretive to diluted earnings
per share.
Revenues for the three-month period increased $11.8 million, compared to
the same period of 2000. Petroleum products revenues increased $8.2 million,
or 56%, compared to last year's third quarter. This increase was driven by
strong drilling and well stimulation pump sales as a result of high oil and
natural gas prices during the first half of 2001. Compressed air products
revenues, including $6.9 million from acquisitions, increased $3.6 million, or
5%. Excluding acquisitions, the compressed air products revenues declined
$3.3 million, or 4% due to declining U.S. industrial production which weakened
sales of domestic compressors and blowers. Unfavorable foreign currency
exchange rates also contributed to this decline.
Net income for the third quarter increased $1.5 million compared to the
prior year period, to $5.6 million. Diluted earnings per share increased to
$0.35 for the third quarter compared to $0.26 for the same period of 2000.
The increases in net income and diluted earnings per share are primarily due
to the positive impact of increased leverage of the petroleum segment's fixed
costs on higher revenue volume, combined with improved operational performance
at the well stimulation pump and water jetting production facilities. The
non-recurring item and acquisitions mentioned above also contributed to the
increase.
Ross J. Centanni, Chairman, President and CEO said, "Considering the
sluggish U.S. economy, which has taken its toll on our compressed air products
segment's orders, revenues and operating margin, we are pleased with our third
quarter results. To date, these negative conditions have been overshadowed by
the enhanced performance of the petroleum products segment, which has
experienced significant growth compared to the prior year due to increased
drilling for oil and natural gas in the United States. Current trends
indicate a temporary slowdown in this segment as oil and gas prices have
fallen significantly off their highs of late last year. However, we believe
that over the long-term, needs for oil and natural gas will generate
substantial demand for our pumps."
"We continue to be successful in managing our working capital and
optimizing operating cash flows. As an integral part of our strategy for
growth, we use these strong cash flows to acquire value-added businesses with
underlying synergistic strengths. Year to date, operating cash flows were
approximately $32 million, compared to $12 million in the prior year. In
2001, this increase in cash flow helped enable us to pursue two larger
acquisitions which will better position Gardner Denver to capitalize globally
when a stronger industrial economy emerges."
Regarding fourth quarter and full-year 2001 results, Mr. Centanni stated,
"As a result of the economic conditions discussed above, which have been
exacerbated by the fallout from the tragic events of September 11th, we have
slightly lowered our expectations for the quarter from previous estimates.
Our current expectations are that diluted EPS for the fourth quarter should be
in the range of $0.32 to $0.37, which would result in full-year 2001 diluted
EPS between $1.39 and $1.44."
"A primary focus of our activities during the fourth quarter will be the
continued successful integration of the HBM and Hoffman acquisitions.
Production from the Hoffman facility in Syracuse, New York will be relocated
early next year to existing Gardner Denver facilities in Peachtree City,
Georgia and Baltic, Ohio. As a result of this and other actions, we expect
the recent acquisitions of HBM and Hoffman to be significantly accretive in
2002."
Looking forward to 2002, Mr. Centanni concluded by stating, "Projecting
financial results for next year in this time of great economic uncertainty is
extremely difficult. Our expectations are that market conditions for the
first half of next year will be similar to what we are experiencing currently.
We are guardedly optimistic that things could improve in the second half of
next year. Our initial projection for 2002 diluted EPS is in the range of
$1.45 to $1.65. These results will be impacted by the cessation of goodwill
amortization, as prescribed in SFAS 142, 'Goodwill and Other Intangible
Assets,' which should add approximately $0.25 to EPS in 2002. On the other
hand, earnings for the first nine months of 2001 were favorably impacted by
'other income' items aggregating approximately $0.10 per share that we don't
expect to recur in 2002. Finally, we expect expenses for pension and other
post-retirement benefits to negatively impact EPS in 2002 by nearly $0.10 per
share compared to 2001 due to lower investment performance, lower interest
rates and higher retiree medical costs."
Safe Harbor
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. As a general matter,
forward-looking statements are those focused upon anticipated events or trends
and expectations and beliefs relating to matters that are not historical in
nature. 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. These uncertainties and factors could cause actual results to
differ materially from those matters expressed in or implied by such forward-
looking statements. The following uncertainties and 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 ability
to identify, negotiate and complete future acquisitions; the speed with which
the Company is able to integrate its recent acquisitions and realize the
related financial benefit; the domestic and/or worldwide level of oil and
natural gas prices and oil and gas drilling and production, which affect
demand for the Company's petroleum products; changes in domestic and/or
worldwide industrial production and industrial capacity utilization rates,
which affect demand for the Company's compressed air products; pricing of
Gardner Denver products; the degree to which the Company is able to penetrate
niche markets; the ability to maintain and to enter into key purchasing and
supply relationships; and the continued successful implementation of cost
reduction efforts.
Comparisons of the financial results for the three and nine month periods
ended September 30, 2001 and 2000 follow.
Gardner Denver will broadcast, through a live webcast, its conference call
to discuss third quarter earnings on Thursday, October 25, 2001 at 9:30 a.m.
Eastern. This free webcast will be available in listen-only mode and can be
accessed, for up to thirty days following the call, through the Investor
Relations page on the Gardner Denver website ( http://www.gardnerdenver.com ) or on
CCBN's website ( http://www.companyboardroom.com ).
Gardner Denver, with 2000 revenues of $379 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 facsimile
(800-758-5804, extension 303875) or by visiting the Company's website
( 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,
% %
2001 2000 Change 2001 2000 Change
Revenues $103,426 $91,614 13 $308,876 $275,668 12
Costs and
Expenses:
Cost of sales 72,544 66,047 10 217,305 195,641 11
Depreciation and
amortization 4,252 4,007 6 12,724 11,929 7
Selling and
administrative 17,007 13,613 25 50,281 44,341 13
Interest expense 1,548 1,882 (18) 4,937 5,657 (13)
Other income, net (739) (438) 69 (3,030) (2,295) 32
Income before
income taxes 8,814 6,503 36 26,659 20,395 31
Provision for
income taxes 3,262 2,477 32 9,864 7,770 27
Net income $5,552 $4,026 38 $16,795 $12,625 33
Basic earnings
per share $0.36 $0.26 38 $1.08 $0.83 30
Diluted earnings
per share $0.35 $0.26 35 $1.07 $0.82 30
Basic weighted
average number
of shares
outstanding 15,581 15,321 15,526 15,281
Diluted weighted
average number
of shares
outstanding 15,862 15,467 15,749 15,477
Shares
outstanding as
of 9/30 15,596 15,339
Note: The Consolidated Statement of Operations and the Business Segment
Results are presented in accordance with the requirements of the Financial
Accounting Standards Board's Emerging Issues Task Force 00-10, "Accounting
for Shipping and Handling Fees and Costs" and thus, include outbound
freight billed to customers as revenues and outbound freight expenses in
cost of sales. In addition, the Company currently allocates all costs
related to corporate activity to its segments and calculates their
operating earnings presented in the Business Segment Results based on
income before interest expense, other income, net and income taxes.
Certain prior year amounts have been reclassified to conform with current
year presentation.
GARDNER DENVER, INC.
BUSINESS SEGMENT RESULTS
(in thousands, except percentages)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
% %
2001 2000 Change 2001 2000 Change
Compressed Air
Products
Revenues $80,580 $76,967 5 $240,564 $237,162 1
Operating
earnings 5,888 6,627 (11) 17,203 20,765 (17)
% of Revenues 7.3% 8.6% 7.2% 8.8%
Orders 76,109 76,723 (1) 236,284 231,235 2
Backlog 68,455 45,148 52 68,455 45,148 52
Petroleum
Products
Revenues $22,846 $14,647 56 $68,312 38,506 77
Operating
earnings 3,735 1,320 183 11,363 2,992 280
% of Revenues 16.3% 9.0% 16.6% 7.8%
Orders 19,590 13,679 43 82,443 42,284 95
Backlog 26,315 10,857 142 26,315 10,857 142
CONDENSED BALANCE SHEET ITEMS
(Unaudited) % (Audited)
9/30/01 06/30/01 Change 12/31/00
Cash and equivalents $27,445 $19,673 40 $30,239
Receivables, net 90,569 77,201 17 79,448
Inventories, net 78,364 61,271 28 61,942
Current assets 204,850 167,290 22 179,916
Total assets 497,765 386,292 29 403,881
Short-term debt and
cur. maturities 55,556 5,631 887 5,781
Current liabilities 137,850 63,001 119 68,243
Long-term debt, excl.
cur. maturities 119,125 92,308 29 115,808
Total liabilities 304,587 202,200 51 232,733
Total stockholders'
equity 193,178 184,092 5 171,148
SOURCE Gardner Denver, Inc.
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http://www.gardnerdenver.com
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http://www.prnewswire.com/comp/303875.html
CONTACT:
Helen W. Cornell, Vice President, Strategic
Planning and Operations Support of Gardner Denver, Inc.,
+1-217-228-8209
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