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Gardner Denver Reports First Quarter 2012 Financial Results

Friday, 20 April 2012


WAYNE (US) – Gardner Denver, Inc. (NYSE: GDI) today announced first quarter 2012 financial results that established records for orders and backlog and first quarter records for revenue, Adjusted Operating Income and Adjusted DEPS.

Gardner Denver’s first quarter 2012 revenues of $604.4 million were up 14% over the same period of 2011. Operating income for the first quarter of 2012 was $79.8 million, an 8% decrease from $86.8 million recorded in the same period of 2011, resulting in a reduction in operating margins of 310 basis points to 13.2%. Net income in the first quarter of 2012 decreased 8% to $54.8 million, or $1.08 per diluted share. The decline in operating income and operating margin in the first quarter 2012 results was largely driven by $15.5 million of profit improvement costs and $7.4 million of expected purchase accounting costs related to the Robuschi acquisition, completed in 2011. Excluding these items as reflected on the reconciliation schedule below, Adjusted Operating Income increased 16% over the same period in 2011, Adjusted Operating Margins expanded 40 basis points to 17.0% and Adjusted DEPS were $1.40, a 22% increase over the first quarter of 2011.

“In a more challenging environment, Gardner Denver had a good first quarter with record orders of $680.3 million, up 11% over the prior year, and 14% revenue growth driven by solid organic growth of 11% and the contribution from the Robuschi acquisition. Adjusted Operating Margins expanded 40 basis points to 17.0%, resulting from our focus on operational excellence and incremental profit on higher sales. Cash flow provided by operating activities of $49 million was up 2% year-over-year, and we spent $8.8 million on share repurchases," said Barry L. Pennypacker, Gardner Denver’s President and Chief Executive Officer. “In addition, we recorded a $15.5 million charge to reduce costs and expand margins, primarily in our European businesses, as we took additional steps to a phased global restructuring. We anticipate that the payback on the announced restructuring action will be approximately 24 months."

Engineered Products Group (EPG) For the first quarter of 2012, EPG revenues increased 13% to $279 million. Operating income (2) in the first quarter of 2012 increased 15% to $64.3 million and operating margins improved to 23.1%, up 30 basis points from last year’s first quarter.

EPG had a good first quarter with double digit order growth year over year and sequentially, driven by our later cycle businesses, Nash and Emco Wheaton, which have exposure to oil & gas and infrastructure end markets. Organic revenue growth was 14%, compared to the same period in 2011, driven by our Petroleum & Industrial Pump business," said Mr. Pennypacker.

Industrial Products Group (IPG) For the first quarter of 2012, IPG revenues increased 14% to $326 million. Operating income (2) in the first quarter of 2012 decreased 50% to $15.5 million, and increased 12% on an adjusted basis. For the first quarter, operating margins were 4.8%, down 600 basis points from last year’s first quarter, and Adjusted Operating Margins were 11.0%, down 30 basis points.

IPG had a mixed first quarter as core growth rates continued to moderate as expected. In order to accelerate our margin expansion efforts, we are taking the necessary steps to align our cost structure to a more challenging environment, particularly in Europe," said Mr. Pennypacker.

Outlook “Excluding our pressure pumping business, we expect our end markets to experience moderate growth for the balance of 2012. Our record backlog gives us good visibility into the next six months and our order intake remains fairly healthy, supported by stable industrial trends globally. However, our pressure pumping business, which represented approximately 13% of our 2011 revenues, is experiencing rapid change as our customers react to challenging market conditions. In this uncertain environment, we expect a decline in OEM pressure pumps shipments in the second half of 2012, as we continue to work closely with our customers," noted Mr. Pennypacker.

“Second quarter 2012 earnings are expected to be in the range of $1.35 to 1.45 DEPS and we project our full-year 2012 earnings to be in the range of $5.20 to $5.40. These projections include profit improvement costs and other items totaling $0.05 per diluted share for the second quarter and $0.40 per diluted share for the total year. Second quarter 2012 Adjusted DEPS are expected to be in a range of $1.40 to $1.50 and full year 2012 Adjusted DEPS are expected to be in a range of $5.60 to $5.80," stated Mr. Pennypacker.

Conference Call Gardner Denver will broadcast a conference call to discuss results for the first quarter of 2012 on Friday, April 20, 2012 at 8:30 a.m. EDT through a live webcast. This free webcast will be available in listen-only mode and can be accessed, for up to ninety days following the call, through the Investors section on the Gardner Denver website at www.GardnerDenver.com or through Thomson StreetEvents at www.earnings.com.

Corporate Profile Gardner Denver, Inc., with 2011 revenues of approximately $2.4 billion, is a leading worldwide manufacturer of highly engineered products, including compressors, liquid ring pumps and blowers for various industrial, medical, environmental, transportation and process applications, pumps used in the petroleum and industrial market segments and other fluid transfer equipment, such as loading arms and dry break couplers, serving chemical, petroleum and food industries.

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SOURCE: Gardner Denver, Inc.