DALLAS, Aug. 7, 2001 (PRIMEZONE) -- Dresser, Inc. today announced financial results for the second quarter ended June 30, 2001. The Company recorded revenues of $373.4 million for the quarter, compared to $356.0 million for the same period last year. Operating income for the three months ended June 30, 2001 was $42.8 million, compared to $39.7 million for the second quarter last year. EBITDA for the three months was $56.1 million, compared to $51.7 million for the same period last year.
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. As a result of the transaction, interest costs increased, as planned, and together with unfavorable foreign exchange adjustments resulted in net income of $18.7 million versus $20.5 million for the year ago period.
Patrick M. Murray, president and chief executive officer of Dresser, Inc., said, "We're very pleased with the financial results of the second quarter, on both a sequential and year-to-year basis, and with the progress made on several fronts. We had significant improvements in revenue growth, gross margin, operating income and EBITDA."
Gross margin for the quarter was 31.0%, compared to 30.3% for the same period in 2000. SG&A was 19.6% of sales, compared to 19.2% a year ago. Backlog at June 30, 2001 was $401.9 million, compared to $383.3 million at March 31, 2001 and $333.5 million at June 30, 2000.
For the six months ended June 30, revenues were $734.9 million, compared to $695.7 million for the first half last year. Operating income for the first half was $80.2 million, compared to $78.8 million for the same period last year. EBITDA for the six months ended June 30 was $107.0 million, compared to $104.3 million a year ago.
"Our Power Systems segment continued an outstanding performance, with revenues increasing 27% over the second quarter last year, and we expect continued strength from this segment the remainder of the year," said Murray. "Flow Control revenues were also up, increasing about 4% on year-to-year basis, and also saw its backlog continue to grow. Measurement Systems revenues declined by 5% from last year, due primarily to general weakness in the non-energy manufacturing economy. The retail fueling component of this segment also continues to be impacted by oil company consolidations, which has slowed investment."
"Power Systems is well positioned for the second half, and Flow Control results will improve. However, softness in the Measurement Systems segment will likely offset any improvement in the performance of Power Systems and Flow Control. About 15% of Dresser's revenues derive from non-energy manufacturing, primarily in the Measurement Systems segment. Economic conditions in this sector, as well as capital investment by major oil companies for retail fueling equipment will be key factors in reaching our 2001 goals," Murray said. "We are continuing to look for opportunities to reduce cost and improve performance in Measurement Systems."
The acquisition of Entech Industries, Inc. was finalized at the end of the quarter in a transaction valued at $70 million as announced previously. Entech consisted of five business units engaged in the design, manufacture and distribution of valves engineered for the oil & gas production and transmission, petrochemical and power industries. The Entech business lines have been integrated into Dresser's Flow Control segment.
The Company is in the process of finalizing its registration statement on Form S-4 with the Securities and Exchange Commission, and expects the process to be completed by the end of the third quarter. The Form S-4 filing will 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.
Conference Call
The Company's earnings conference call will be conducted today at 11:30 a.m. EDT, 10:30 a.m. CDT. Following a brief presentation, participants will have the opportunity to ask questions. To participate in the call, dial 1-800-475-3716, ten minutes before the conference call begins and ask for the Dresser conference. There will be no phone replay of the conference call.
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 90 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 Six Months Ended
June 30, June 30,
------------------- -------------------
2001 2000 2001 2000
------- ------- ------- -------
Revenues $ 373.4 $ 356.0 $ 734.9 $ 695.7
Cost of revenues 257.5 248.1 507.6 479.5
--------------------------------------------- ----------------------
Gross earnings 115.9 107.9 227.3 216.2
Selling, engineering,
administrative
and general expenses 73.1 68.2 147.1 137.4
-------------------------------------------- ----------------------
Operating Income 42.8 39.7 80.2 78.8
Other income (deductions) (20.2) 0.6 (22.6) 1.8
--------------------------------------------- ----------------------
Earnings before taxes 22.6 40.3 57.6 80.6
Income taxes (3.9) (19.8) (19.4) (33.4)
--------------------------------------------- ----------------------
Net earnings $ 18.7 $ 20.5 $ 38.2 $ 47.2
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Dresser, Inc.
Information by Business Segment
(Unaudited)
(In Millions)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2001 2000 2001 2000
------- ------- ------- -------
Revenues:
Flow Control $ 149.5 $ 143.4 $ 286.9 $ 271.5
Measurement Systems 136.7 144.3 274.1 284.2
Power Systems 88.1 69.3 176.8 142.2
Eliminations (0.9) (1.0) (2.9) (2.2)
--------------------------------------------- --------------------
$ 373.4 $ 356.0 $ 734.9 $ 695.7
============================================= ======================
Operating income:
Flow Control $ 18.8 $ 22.0 $ 35.5 $ 41.4
Measurement Systems 12.6 12.5 21.5 25.8
Power Systems 15.2 10.3 28.9 19.6
Eliminations (3.8) (5.1) (5.7) (8.0)
--------------------------------------------- --------------------
$ 42.8 $ 39.7 $ 80.2 $ 78.8
============================================= ======================
Supplemental Information:
Depreciation and
Amortization $ 13.3 $ 11.8 $ 26.8 $ 25.0
Capital Expenditures $ 6.6 $ 6.1 $ 12.8 $ 14.3
Backlog $ 401.9 $ 333.5 $ 401.9 $ 333.5
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