DALLAS, May 15, 2001 (PRIMEZONE) -- Dresser, Inc. today announced financial results for the first quarter ended March 31, 2001. The Company recorded revenues of $361.4 million for the quarter, compared to $339.8 million for the same period last year. Operating income for the three months ended March 31, 2001 was $37.4 million after a $4.0 million restructuring charge, compared to $39.1 million for the first quarter last year. The charge was for the previously announced closing of a manufacturing plant. Net income for the quarter was $19.5 million, compared to $26.7 million for the year-ago period. In addition to the restructuring charge, net income was also impacted by foreign exchange adjustments resulting from business reorganization in connection with the purchase of Dresser.
Dresser, Inc. is the successor company to the former Dresser Equipment Group of Halliburton Company. Halliburton sold the Dresser Equipment businesses to an investor group led by First Reserve Corporation and Odyssey Investment Partners, LLC on April 10, 2001. The cash value of the sale was $1.3 billion.
Patrick M. Murray, president and chief executive officer of Dresser, Inc., said, "Even though we were still part of Halliburton Company throughout the first quarter, we are announcing first quarter results as part of our commitment to disclosure and open communication with our debt holders. As required by the sale agreement with Halliburton, we are conducting an audit of our financial statements at and for periods ending on the closing date of the sale, including the quarter ended March 31, 2001. Because of the terms and conditions of the sale agreement with Halliburton, it is possible that the audit may require us to make certain adjustments to our first quarter results. Although we do not expect such adjustments to result in any material negative impact to the financial results reported here, we cannot assure you to that effect until the audit is complete."
Gross margin for the quarter was 30.8%, compared to 31.9% for the same period in 2000. SG&A, which included the restructuring charge of $4.0 million for Dresser's retail fueling business, was 20.5% of sales, compared to 20.4% a year ago. EBITDA for the three months was $50.9 million, compared to $52.5 million for the same period last year. Backlog at March 31, 2001 was $383.3 million, compared to $362.7 million at December 31, 2000 and $331.4 million at March 31, 2000.
"We had a strong first quarter, which was in line with our expectations," said Murray. "Our Power Systems segment continued to grow, and we had a positive turnaround late in the quarter in both revenues and earnings for the Flow Control segment."
The Company also announced that it has filed a registration statement on Form S-4 with the Securities and Exchange Commission that would provide for the exchange of Dresser's unregistered 9 3/8% Senior Subordinated Notes due 2011 for publicly-registered notes having the same economic terms. Dresser issued $300 million aggregate principal amount of Senior Subordinated Notes in April 2001 in a private placement.
Murray said strength in the Flow Control and Power Systems segments is expected to continue in the second quarter "We expect total operating income to range from $42.0 million to $43.0 million in the second quarter, with EBITDA of $55.5 million to $56.5 million. As we continue forward as an independent company, we believe the combination of the historic Dresser brand and the market positions we occupy in the energy services and equipment industry provide great opportunities for continued growth and profitability."
Conference Call
The Company's earnings conference call will be conducted today at 5:00 p.m. EDT, 4:00 p.m. CDT. Following a brief presentation, participants will have the opportunity to ask questions. To participate in the call, dial 1-800-946-0782, ten minutes before the conference call begins and ask for the Dresser conference.
There will also be a real-time audio webcast of the conference call by StreetFusion. To listen to the live call, select the StreetFusion icon from www.dresser.com / Investor Relations, at least 15 minutes before the start of the call to register, download, and install any necessary audio software. Individuals accessing the audio webcast will be "listen only" and will not have the capability to take part in the Q&A session.
A digital replay will be available one hour after the conclusion of the call and for the next 30 days. Interested individuals can access the webcast replay at www.dresser.com/Investor Relations by pressing the StreetFusion icon.
Headquartered in Dallas, Texas, Dresser, Inc. is a worldwide leader in the design, manufacture and marketing of highly engineered equipment and services sold primarily to customers in the flow control, measurement systems, and power systems segments of the energy industry. Dresser has a widely distributed global presence, with over 8,500 employees and a sales presence in over 100 countries worldwide. The company's website can be accessed at www.dresser.com.
Safe Harbor Statement
Certain statements made herein concerning anticipated future performance are forward-looking statements. These forward-looking statements are based on estimates, projections, beliefs and assumptions of management and are not guarantees of future performance. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of important factors. Representative examples of these factors include (without limitation) the cyclical nature of the industries served by the Company, which can be affected by factors outside the company's control; the general economy; the demand for the company's products and services; and the amount of debt the company must service. This list of factors is not intended to be exhaustive. Additional information concerning relevant risk factors can be found in the company's Registration Statement on Form S-4, filed with Securities and Exchange Commission. All forward-looking statements made in this press release or on the conference call are expressly qualified by reference to the disclosure in that Registration Statement.
Dresser, Inc.
Consolidated Statement of Earnings
(Unaudited)
(In Millions)
Three Months Ended
--------------------
March 31,
2001 2000
--------------------
Revenues $ 361.4 $ 339.8
Cost of revenues 250.1 231.4
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Gross earnings 111.3 108.4
Selling, engineering,
administrative and general expenses 73.9 69.3
------ ------
Operating Income 37.4 39.1
Other income (deductions) (2.4) 1.2
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Earnings before taxes 35.0 40.3
Income taxes (15.5) (13.6)
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Net earnings $ 19.5 $ 26.7
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Dresser, Inc.
Information by Business Segment
(Unaudited)
(In Millions)
Three Months Ended
--------------------
March 31,
2001 2000
--------------------
Revenues:
Flow Control $ 137.4 $ 128.2
Measurement Systems 136.5 139.9
Power Systems 88.7 72.8
Eliminations (1.2) (1.1)
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$ 361.4 $ 339.8
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Operating income:
Flow Control 16.7 19.4
Measurement Systems 8.9 13.4
Power Systems 13.7 9.3
Eliminations (1.9) (3.0)
------ ------
$ 37.4 $ 39.1
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Supplemental Information:
Depreciation and Amortization $ 13.5 $ 13.4
Capital Expenditures $ 6.2 $ 8.2
Backlog $ 383.3 $ 331.4
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