Gardner Denver, Inc. Reports First Quarter Earnings Per Share of $0.29
QUINCY, Ill., April 24 /PRNewswire-FirstCall/ -- 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 for the three months ended March 31, 2002 were $106.6 million, a 6% increase compared to $100.9 million in the first quarter of 2001.
Diluted earnings per share in the first quarter of 2002 were $0.29, down 6% compared to the first quarter of 2001.
First Quarter Results
Revenues for the three-month period increased $5.7 million compared to the ame period of 2001. Compressed Air Products revenues, including $24.2 million from acquisitions, increased $14.2 million, or 19%, for the three months of 2002, compared to 2001. Excluding acquisitions, the decline in Compressed Air Products revenues is primarily attributable to the softness in the overall U.S. economy (exacerbated by the impact of the September 11th attack) which weakened demand for domestic compressors and blowers.
Unfavorable foreign currency exchange rates also contributed to the decline. Pump Products revenues for the three-month period decreased approximately $8.5 million, or 32%, compared to the same period of 2001. This decrease resulted primarily from depressed demand for petroleum pumps due to lower oil and natural gas prices in the second half of 2001.
Net income was $4.6 million for the first three months of 2002, compared to $4.8 million in 2001. Diluted earnings per share decreased 6% to $0.29 for the first quarter of 2002, compared to $0.31 for the same period of 2001. Net income and diluted earnings per share in the first quarter of 2001 included a $0.5 million after-tax gain ($0.03 per share) from litigation settlement proceeds and $0.9 million after-tax ($0.06 per share) expense for goodwill amortization. Excluding these two non-recurring items, net income for the first quarter of 2001 would have been $5.2 million and diluted earnings per
share in the first quarter of 2001 would have been $0.34.
CEO's Comments Regarding First Quarter Results
"Given the current economic conditions, which are adversely impacting both the Compressed Air Products and Pump Products segments, we were very pleased with our first quarter results," stated Ross J. Centanni, Chairman, President and CEO.
"Excluding acquisitions, revenues decreased in both operating segments. Given the relatively high fixed cost structure inherent in these businesses, de-leverage due to lower volume adversely affected profitability. We were able to largely offset this de-leveraging impact through tight controls on spending. As a result of these efforts, operating margins for the Compressed Air Products segment improved sequentially in the first quarter of 2002 as compared to the fourth quarter of 2001, even after adjusting for goodwill amortization expense in the fourth quarter of 2001. Reported selling and administrative costs increased 20%, due solely to the impact of our acquisitions. Excluding acquisitions, these expenses decreased approximately 5% compared to the first quarter of 2001."
"We have also made significant progress in integrating the Belliss & Morcom and Hoffman acquisitions which were made last September. We consolidated Belliss' two U.K. sales and administrative offices into one facility and integrated their U.S. operations into existing Gardner Denver facilities. Manufacturing previously done at Hoffman's Syracuse facility has been transferred to our Georgia operation. These efforts should result in cost reductions in the second half of 2002."
"We continue to generate strong operating cash flow, which was approximately $4.5 million for the quarter. This compares favorably to the $1.8 million cash flow in the first quarter of 2001. These favorable cash flows were used to pay down $7.5 million in debt and position us to continue to pursue acquisitions."
Outlook
Looking forward, Mr. Centanni stated, "Prior to the tragic events of September 11, 2001, we would have expected demand for our compressed air products to have improved in the first quarter of 2002. We now believe that the current adverse economic conditions affecting the Company will continue until at least the end of the second quarter. We do, however, see some positive signs that may bode well for a pick up as we move into the second half of the year. Order rates have improved somewhat for some lower horsepower compressors and certain positive displacement blowers, typically sold into the service sector of the economy. Also, if the recent higher levels of natural gas and oil prices continue, demand for oil well servicing and drilling could return to higher levels, stimulating demand for our petroleum pumps."
Based on these observations, the Company anticipates that diluted earnings per share in the second quarter will be approximately $.30 to $.35 and $1.40 to $1.60 for the full year.
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; the ability to attract and retain quality management personnel; and the continued successful implementation of cost reduction efforts.
Comparisons of the financial results for the three-month periods ended March 31, 2002 and 2001 follow.
Gardner Denver will broadcast, through a live webcast, its conference call to discuss first quarter earnings on Thursday, April 25, 2002 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 2001 revenues of $420 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 ).
Source: Gardner Denver, Inc.
