QUINCY, Ill., July 19 /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 June 30, 2000 were $94.0 million and diluted earnings per share for the same period were $0.30.
Revenues increased by 10% over the second quarter of 1999. Petroleum products revenues were up 101%, driven by strong well-stimulation pump sales. Compressed air products revenues increased by 3% due to acquisitions. Excluding acquisitions, compressed air products revenues fell by 4% (approximately two-thirds of which was due to foreign currency exchange rate changes).
Gross profit margins (defined as revenues less cost of sales) as a percent of revenues were approximately three percentage points lower in the second quarter of 2000 compared to the same period of 1999. This decrease was due to significantly unfavorable sales mix (including lower parts/aftermarket sales of compressed air products), increased manufacturing overhead spending (including engineering, product development and lean manufacturing initiatives), and deleverage on the lower volume in the base compressed air products business.
Net income for the quarter was $4.6 million, down 22% from the same period last year. This decrease was due primarily to the lower gross profit margins discussed above plus higher levels of depreciation and amortization and interest expense due to capital spending, acquisitions and higher interest rate levels.
Ross J. Centanni, Chairman, President and CEO, said, "The results for the quarter, particularly compressed air products revenues and operating earnings, were well below what we had expected early in the year. The actions taken by the Federal Reserve to increase interest rates and dampen economic activity have had a significantly negative impact on the sectors of the manufacturing economy served by our compressed air products segment."
Looking forward, Mr. Centanni further stated, "Unless there is a significant increase in order activity, I would anticipate earnings in the third quarter to be at approximately the same levels as a year ago. We believe these depressed sales levels should not continue much beyond the third quarter and because of our ongoing product development and lean manufacturing initiatives we are well-positioned to benefit when demand increases. In addition, inquiry levels have increased for petroleum drilling pumps and we are optimistic that sales should begin to pick up in this area by the fourth quarter."
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. 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 and natural gas 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; and the continued successful implementation of cost reduction efforts.
Comparisons of the financial results for the three and six month periods ended June 30, 2000 and 1999 follow.
Gardner Denver, with 1999 revenues of $324 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 ( 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,
% %
2000 1999 Change 2000 1999 Change
Revenues $93,963 $85,410 10 $182,266 $155,634 17
Costs and Expenses:
Cost of sales 65,241 56,726 15 126,519 105,086 20
Depreciation and
amortization 4,031 3,391 19 7,922 6,910 15
Selling and
administra-
tive 15,285 13,967 9 30,748 25,765 19
Interest expense 1,959 1,469 33 3,775 2,676 41
Other (income)/
expense, net (62) 103 (160) (590) 226 (361)
Income before
income taxes 7,509 9,754 (23) 13,892 14,971 (7)
Provision for
income taxes 2,861 3,765 (24) 5,293 5,779 (8)
Net income $4,648 $5,989 (22) $8,599 $9,192 (6)
Basic earnings
per share $0.30 $0.40 (25) $0.56 $0.61 (8)
Diluted earnings
per share $0.30 $0.39 (23) $0.56 $0.60 (7)
Basic weighted
average number
of shares
outstanding 15,310 14,895 3 15,261 15,070 1
Diluted weighted
average number
of shares
outstanding 15,509 15,281 1 15,486 15,431 --
Shares outstanding
as of 6/30 15,306 14,904 3
GARDNER DENVER, INC.
BUSINESS SEGMENT RESULTS
(in thousands, except percentages)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
% %
2000 1999 Change 2000 1999 Change
Compressed
Air Products
Revenues 80,976 $78,960 3 $158,678 $142,550 11
Operating
earnings 8,947 11,682 (23) 16,375 18,261 (10)
% of Revenues 11.0% 14.8% 10.3% 12.8%
Petroleum Products
Revenues 12,987 6,450 101 23,588 13,084 80
Operating
earnings 1,067 202 428 1,913 600 219
% of Revenues 8.2% 3.1% 8.1% 4.6%
CONDENSED BALANCE SHEET ITEMS
(Unaudited) % (Audited)
06/30/00 03/31/00 Change 12/31/99
Cash and equivalents $20,318 $20,598 (1) $27,317
Receivables, net 79,526 84,355 (6) 72,272
Inventories, net 62,157 62,732 (1) 60,356
Current assets 169,809 175,408 (3) 166,379
Total assets 384,916 391,151 (2) 379,419
Short-term debt and
cur. maturities 5,295 5,292 -- 5,289
Current liabilities 63,131 62,442 1 59,609
Long-term debt, excl.
cur. maturities 109,286 119,787 (9) 114,200
Total liabilities 223,639 234,365 (5) 226,810
Total stockholders'
equity 161,277 156,786 3 152,609
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