- Email: [email protected]
Crane Co, USA
August 2005
Pump Industry Analyst
Crane Co, USA
Gardner Denver Inc, USA
Key Figures (US$ million) Three months ended 30.6 Net Sales Of Which: Fluid Handling
Key Figures (US$ million) Three months ended 30.6
2005
2004
525.6
479.1
245.9
217.9
Operating Profit Of Which: Fluid Handling
54.9
50.8
20.0
14.9
Net Income
35.7
31.2
2005
2004
Revenues Of Which: Compressor and Vacuum Fluid Transfer
250.3
161.3
200.9 49.4
126.0 35.3
Cost of Sales
167.9
108.7
14.7
8.3
Net Income
Net Sales Of Which: Fluid Handling
2005
2004
1032.7
927.4
474.5
421.8
Operating Profit Of Which: Fluid Handling
96.7
89.4
32.5
23.6
Net Income
60.7
53.4
2005
2004
Revenues Of Which: Compressor and Vacuum Fluid Transfer
489.2
315.7
393.7 95.5
249.0 66.7
Cost of Sales
328.9
213.2
25.0
14.8
Net Income
COMMENT COMMENT Fluid Handling’s second quarter sales increase of US$28.0 million included US$21.2 million from core businesses and US$6.8 million from foreign currency translation. Operating profit and margin continued to improve both versus the first quarter and prior year on strengthening market demand, productivity improvements and customer price increases which are now largely offsetting higher raw material costs. Crane Pumps & Systems sales of US$24.6 million decreased US$3.1 million, or 11%, reflecting product shortages from production disruptions caused by a plant
consolidation, lower sales due to customer inventory reduction initiatives and lower government demand compared with the prior year. While showing improvement from approximately 2% in the first quarter, operating profit margin of approximately 6% was down from 14% in the prior year due to lower sales volume, unfavorable mix and the production disruptions. The Fluid Handling Segment backlog was US$201.8 million at 30 June 2005, compared with US$200.6 million at 31 March 2005 and US$172.1 million at 30 June 2004. ■
Gardner Denver Inc's revenues and net income for the three months ended 30 June 2005 were US$250.3 million and US$14.7 million, respectively. These results represent a 77% improvement in net income and 55% increase in revenues, compared to the second quarter of the previous year. Compared to the first quarter of 2005, revenues increased approximately 5% and net income increased approximately 42%. These improved results were primarily a result of the Nash Elmo acquisition, continued expansion in demand for pumps used in oil and natural gas well drilling and stimulation and incremental other income.
Demand for oil and natural gas well drilling pumps and replacement parts increased substantially, due to elevated energy prices and continued increases in North American rig counts. Over the last twelve months, we have booked more orders for drilling pumps than in any comparable period since the 1980s. Gardner Denver anticipates that there will be additional opportunities to generate synergistic benefits via facility and product rationalization, sales channel leverage and material cost reductions through further integration of Nash Elmo, Bottarini and Thomas into the Gardner Denver business platform. ■
7
COMPANY WATCH
Six months ended 30.6 Six months ended 30.6
Pump Industry Analyst
Crane Co, USA
Gardner Denver Inc, USA
Key Figures (US$ million) Three months ended 30.6 Net Sales Of Which: Fluid Handling
Key Figures (US$ million) Three months ended 30.6
2005
2004
525.6
479.1
245.9
217.9
Operating Profit Of Which: Fluid Handling
54.9
50.8
20.0
14.9
Net Income
35.7
31.2
2005
2004
Revenues Of Which: Compressor and Vacuum Fluid Transfer
250.3
161.3
200.9 49.4
126.0 35.3
Cost of Sales
167.9
108.7
14.7
8.3
Net Income
Net Sales Of Which: Fluid Handling
2005
2004
1032.7
927.4
474.5
421.8
Operating Profit Of Which: Fluid Handling
96.7
89.4
32.5
23.6
Net Income
60.7
53.4
2005
2004
Revenues Of Which: Compressor and Vacuum Fluid Transfer
489.2
315.7
393.7 95.5
249.0 66.7
Cost of Sales
328.9
213.2
25.0
14.8
Net Income
COMMENT COMMENT Fluid Handling’s second quarter sales increase of US$28.0 million included US$21.2 million from core businesses and US$6.8 million from foreign currency translation. Operating profit and margin continued to improve both versus the first quarter and prior year on strengthening market demand, productivity improvements and customer price increases which are now largely offsetting higher raw material costs. Crane Pumps & Systems sales of US$24.6 million decreased US$3.1 million, or 11%, reflecting product shortages from production disruptions caused by a plant
consolidation, lower sales due to customer inventory reduction initiatives and lower government demand compared with the prior year. While showing improvement from approximately 2% in the first quarter, operating profit margin of approximately 6% was down from 14% in the prior year due to lower sales volume, unfavorable mix and the production disruptions. The Fluid Handling Segment backlog was US$201.8 million at 30 June 2005, compared with US$200.6 million at 31 March 2005 and US$172.1 million at 30 June 2004. ■
Gardner Denver Inc's revenues and net income for the three months ended 30 June 2005 were US$250.3 million and US$14.7 million, respectively. These results represent a 77% improvement in net income and 55% increase in revenues, compared to the second quarter of the previous year. Compared to the first quarter of 2005, revenues increased approximately 5% and net income increased approximately 42%. These improved results were primarily a result of the Nash Elmo acquisition, continued expansion in demand for pumps used in oil and natural gas well drilling and stimulation and incremental other income.
Demand for oil and natural gas well drilling pumps and replacement parts increased substantially, due to elevated energy prices and continued increases in North American rig counts. Over the last twelve months, we have booked more orders for drilling pumps than in any comparable period since the 1980s. Gardner Denver anticipates that there will be additional opportunities to generate synergistic benefits via facility and product rationalization, sales channel leverage and material cost reductions through further integration of Nash Elmo, Bottarini and Thomas into the Gardner Denver business platform. ■
7
COMPANY WATCH
Six months ended 30.6 Six months ended 30.6