HOUSTON, May 3, 2012 /PRNewswire/ --
Results
Summary ($ in millions, except per share data):
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First
Quarter
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2012
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2011
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Total
revenues
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$661.8
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|
$354.2
|
Income
from operations
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|
$51.7
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|
$19.2
|
Interest
expense, net
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|
($16.3)
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|
($15.0)
|
Early
redemption premium on debt
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|
$0.0
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($8.2)
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Other
income, net
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$0.1
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|
$3.6
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Income
(loss) before income taxes
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$35.5
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($0.4)
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Net income
attributable to Dresser-Rand
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$23.6
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$0.4
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Diluted
EPS
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$0.31
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$0.00
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Shares
used to compute EPS (000)
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76,049
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80,249
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Total
bookings
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$827.0
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$522.3
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Total
backlog
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$2,746.8
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$2,151.7
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Dresser-Rand Group Inc. ("Dresser-Rand" or the "Company")
(NYSE: DRC), a global supplier of rotating equipment and
aftermarket parts and services, reported net income of $23.6 million, or $0.31 per diluted share, for the first quarter
2012, compared with net income of $0.4
million, or breakeven earnings per diluted share, for the
first quarter 2011. First quarter 2011 results include a
pre-tax charge to non-operating income of approximately
$15.4 million ($0.13 per diluted share after-tax) related to a
debt refinancing.
Vincent R. Volpe Jr., President
and Chief Executive Officer of Dresser-Rand, said, "We are pleased
with our first quarter 2012 financial results. Income
from operations of $52 million was up
169% from year ago levels and above the top end of our guidance
range. Bookings of approximately $442
million and $385 million for
new units and aftermarket parts and services, respectively, were
strong and important in helping us achieve our 2012 earnings goals
and in building a strong backlog for 2013.
"As previously guided, we expect to see improved operating
margins commensurate with the increase in volume over the balance
of the year and, as such, are reiterating our full year operating
income guidance of $360 to $420
million. Similarly, we are reiterating bookings guidance for
new units and aftermarket parts and services in the range of
$1.7 to $1.9 billion and $1.4 to $1.6 billion, respectively.
"Our backlog at the end of the quarter was at a record level of
approximately $2.7 billion, which was
28% higher than the year ago level. Our new units backlog of
$2.2 billion was up approximately 24%
and gives us a good start on 2013 new unit revenues with
approximately $900 million of the new
unit backlog scheduled to ship in 2013.
"On the strategic front, during the first quarter, we acquired
Synchrony, Inc., a technology development company with a portfolio
of world-class technologies and products including active magnetic
bearings (AMB), low power, high speed motors, small generators, and
power electronics for clean, efficient, and reliable rotating
machinery.
Bookings of $827.0 million for the
first quarter 2012 were 58% higher than the $522.3 million for the first quarter 2011. The
$2,746.8 million backlog at the end
of March 2012 was 28% higher than the
$2,151.7 million backlog at the end
of March 2011.
Revenues for the first quarter 2012 of $661.8 million were 87% higher than the first
quarter 2011. Guascor was acquired in May 2011 and contributed approximately
$91.2 million of revenues in the
first quarter 2012.
Total operating income for the first quarter 2012 was
$51.7 million compared to operating
income of $19.2 million for the first
quarter 2011. As a percentage of revenues, operating income
for the first quarter 2012 of 7.8% compares with 5.5% for the
corresponding period in 2011. First quarter 2012 operating
income increased compared with the corresponding period in 2011
principally due to higher revenues. Operating margins
improved principally from operating leverage on higher
volumes.
Net income was $23.6 million, or
$0.31 per diluted share, for the
first quarter 2012, compared to net income of $0.4 million, or breakeven earnings per diluted
share, for the first quarter 2011. Net income for the first
quarter 2011 includes the previously mentioned financing related
costs of approximately $15.4 million
pre-tax, which decreased earnings per diluted share by $0.13 after-tax.
New Units Segment
New unit bookings of $442.2
million for the first quarter 2012 were 70% higher than the
bookings of $259.5 million for the
corresponding period in 2011. The backlog at March 31, 2012, of $2,174.3 million was 24% higher than the
$1,747.7 million backlog at
March 31, 2011.
New unit revenues were $367.7
million for the first quarter 2012 compared to $144.9 million for first quarter 2011, an
increase of $222.8 million or
154%. Guascor contributed approximately $21.1 million of revenues in the first quarter
2012.
New unit operating income of $20.2
million for the first quarter 2012 compares with operating
income of $13.5 million for the first
quarter 2011. This segment's operating margin was 5.5% for
the first quarter 2012, compared to 9.3% for the first quarter
2011. The decrease in operating margin was principally due to
a less favorable mix of new unit projects as the three months ended
March 31, 2011, included a few higher
margin projects compared to the three months ended March 31, 2012. Additionally, margins were
adversely impacted in 2012 by a higher allocation of overhead cost
to the segment resulting from the higher percentage of new unit
revenues to total revenues.
Aftermarket Parts and Services Segment
Aftermarket bookings of $384.8
million for the first quarter 2012 were 46% higher than
bookings of $262.8 million for the
corresponding period in 2011. The backlog at March 31,
2012, of $572.5 million was 42%
higher than the $404.0 million
backlog at March 31, 2011.
Aftermarket parts and services revenues were $294.1 million for the first quarter 2012,
compared to $209.3 million for the
first quarter 2011, an increase of $84.8
million or 41%. Guascor contributed
approximately $70.1 million of
revenues in the first quarter 2012.
Aftermarket operating income was $53.3 million for the first quarter 2012,
compared to $28.9 million for the
first quarter 2011. This segment's operating margin was 18.1%
for the first quarter 2012, compared to 13.8% for the first quarter
2011. This increase was principally from the benefits of
operating leverage on higher volume and the lower allocation of
overhead cost to the segment resulting from the lower percentage of
aftermarket revenues to total revenues.
Liquidity and Capital Resources
As of March 31, 2012, cash and
cash equivalents totaled $123.1
million and borrowing availability under the
$700 million revolving credit portion of the Company's senior
secured credit facility was $233.1
million, as $219.7 million was used for outstanding
letters of credit and $247.2 million
of borrowings was outstanding.
In the first quarter 2012, cash provided by operating activities
was $9.9 million compared with cash
used in operating activities of $4.5
million for the corresponding period in 2011. In the
first quarter 2012, net cash used in investing activities was
$55.8 million compared with
$11.4 million for the first quarter
2011. Cash used in investing activities in the first quarter
2012 includes $48.8 million related
to the acquisition of Synchrony, Inc. and $4.0 million related to an additional capital
investment in the noncontrolling interest of Echogen Power Systems,
LLC. Cash used in investing activities in the first quarter
2011 includes $5 million related to
the investment in Echogen and a $1.3
million license fee payment to Echogen. Cash provided
by financing activities was $37.5
million in the first quarter of 2012, compared to cash used
in financing activities of $119.0
million in the first quarter of 2011. As of
March 31, 2012, net debt was
approximately $920.5 million.
Outlook
The Company reiterates its guidance for 2012 with expectations
for new unit bookings of $1.7 to $1.9
billion, aftermarket bookings of $1.4
to $1.6 billion, operating income of $360 to $420 million, new unit segment margins in
low double digits and aftermarket segment margins in the range of
22 to 24%. The Company expects its full year 2012 interest
expense to be in the range of $60 to $65
million, and the Company expects its effective tax rate to
be approximately 32 to 34 percent.
The Company expects second quarter 2012 operating income to be
in the range of 17 to 19% of the total year.
Conference Call
The Company will discuss its first quarter 2012 results at its
conference call on May 4, 2012, at
9:00 a.m. Eastern Time. You may
access the live webcast presentation at www.dresser-rand.com.
Participants may also join the conference call by dialing (877)
868-1831 in the U.S. and (914) 495-8595 from outside the U.S. five
to ten minutes prior to the scheduled start time.
A replay of the webcast will be available from 12:00
noon Eastern Time on May 4, 2012, through 11:59
p.m. Eastern Time on May 11,
2012. You may access the webcast replay at
www.dresser-rand.com. The replay of the conference can be
accessed by dialing (800) 585-8367 in the U.S. and (404) 537-3406
from outside the U.S. The replay pass code is 74616286.
About Dresser-Rand
Dresser-Rand is among the largest suppliers of rotating
equipment solutions to the worldwide oil, gas, petrochemical, and
process industries. The Company operates manufacturing
facilities in the United States,
France, United Kingdom, Spain, Germany, Norway, and India, and maintains a network of 49 service
and support centers (including 6 engineering and R&D centers)
covering more than 150 countries.
This news release may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements include, without limitation,
the Company's plans, objectives, goals, strategies, future events,
future bookings, revenues, or performance, capital expenditures,
financing needs, plans, or intentions relating to acquisitions,
business trends, executive compensation, and other information that
is not historical information. The words "anticipates,"
"believes," "expects," "intends,"
"appears," "outlook," and similar expressions identify such
forward-looking statements. Although the company believes
that such statements are based on reasonable assumptions, these
forward-looking statements are subject to numerous factors, risks,
and uncertainties that could cause actual outcomes and results to
be materially different from those projected. These factors,
risks, and uncertainties include, among others, the following:
economic or industry downturns; the variability of bookings due to
volatile market conditions, subjectivity clients exercise in
placing orders, and timing of large orders; volatility and
disruption of the credit markets; its inability to generate cash
and access capital on reasonable terms and conditions; its
inability to implement its business strategy to increase
aftermarket parts and services revenue; its ability to comply with
local content requirements; delivery delays by certain third party
suppliers of large equipment; its ability to implement potential
tax strategies; competition in its markets; failure to complete or
achieve the expected benefits from any future acquisitions;
economic, political, currency and other risks associated with
international sales and operations; fluctuations in currencies and
volatility in exchange rates; loss of senior management;
environmental compliance costs and liabilities; failure to maintain
safety performance acceptable to its clients; failure to negotiate
new collective bargaining agreements; unexpected product claims and
regulations; infringement on its intellectual property or
infringement on others' intellectual property; its pension expenses
and funding requirements; difficulty in implementing an information
management system; and the Company's brand name may be confused
with others. These and other risks are discussed in detail in
the Company's filings with the Securities and Exchange Commission
at www.sec.gov. Actual results, performance, or achievements
could differ materially from those expressed in, or implied by, the
forward-looking statements. The Company can give no
assurances that any of the events anticipated by the
forward-looking statements will occur or, if any of them does, what
impact they will have on results of operations and financial
condition. The company undertakes no obligation to update or
revise forward-looking statements, which may be made to reflect
events or circumstances that arise after the date made or to
reflect the occurrence of unanticipated events, except as required
by applicable law. For information about Dresser-Rand, go to
its website at www.dresser-rand.com.
DRC-FIN
DRESSER-RAND GROUP INC.
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CONSOLIDATED STATEMENT OF INCOME
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Three
Months Ended March 31,
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(Unaudited)
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2012
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2011
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($ in
millions, except per share amounts)
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Period to Period
Change
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2011 to
2012
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%
Change
|
Net sales
of products
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$
494.7
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|
$
253.4
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$
241.3
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95.2%
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Net sales
of services
|
167.1
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100.8
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66.3
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65.8%
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Total
revenues
|
661.8
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354.2
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|
307.6
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86.8%
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Cost of
products sold
|
395.2
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|
178.2
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|
217.0
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121.8%
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Cost of
services sold
|
121.7
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75.4
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46.3
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61.4%
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Total cost
of sales
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516.9
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253.6
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263.3
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103.8%
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Gross
profit
|
144.9
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|
100.6
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44.3
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44.0%
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Selling
and administrative expenses
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88.7
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|
77.0
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11.7
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15.2%
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Research
and development expenses
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4.5
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4.4
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|
0.1
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2.3%
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Income
from operations
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51.7
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|
19.2
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32.5
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169.3%
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Interest
expense, net
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(16.3)
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(15.0)
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(1.3)
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8.7%
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Early
redemption premium on debt
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-
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(8.2)
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8.2
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NM
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Other
income, net
|
0.1
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|
3.6
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(3.5)
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-97.2%
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Income
(loss) income before income taxes
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35.5
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(0.4)
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35.9
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NM
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Provision
for income taxes
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11.2
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1.2
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10.0
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NM
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Net income
(loss)
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24.3
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(1.6)
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25.9
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NM
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Net
(income) loss attributable to noncontrolling interest
|
(0.7)
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2.0
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(2.7)
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-135.0%
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Net income
attributable to Dresser-Rand
|
$
23.6
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$
0.4
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$
23.2
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NM
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Net income
per share
|
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Basic
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$
0.31
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$
0.01
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Diluted
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|
$
0.31
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$
0.00
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Weighted
average shares outstanding - (in thousands)
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Basic
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75,293
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79,451
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Diluted
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76,049
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80,249
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DRESSER-RAND GROUP INC.
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CONSOLIDATED SEGMENT DATA
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($ in
millions)
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Three
Months Ended March 31,
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Period to Period
Change
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Segment
% of Total
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2012
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2011
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2011 to
2012
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%
Change
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2012
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2011
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(Unaudited)
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Revenues
|
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|
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|
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New
units
|
$
367.7
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|
$
144.9
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$
222.8
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153.8%
|
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55.6%
|
|
40.9%
|
Aftermarket parts and services
|
294.1
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|
|
209.3
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|
|
84.8
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40.5%
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44.4%
|
|
59.1%
|
Total
revenues
|
$
661.8
|
|
|
$
354.2
|
|
|
$
307.6
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86.8%
|
|
100.0%
|
|
100.0%
|
Gross
profit
|
|
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New
units
|
$
46.9
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|
$
31.6
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$
15.3
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48.4%
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Aftermarket parts and services
|
98.0
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69.0
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29.0
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42.0%
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Total
gross profit
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$
144.9
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$
100.6
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$
44.3
|
44.0%
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Income
from operations
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New
units
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$
20.2
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$
13.5
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$
6.7
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49.6%
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Aftermarket parts and services
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53.3
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28.9
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24.4
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84.4%
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Unallocable
|
(21.8)
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(23.2)
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1.4
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-6.0%
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Total
income from operations
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$
51.7
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$
19.2
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$
32.5
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169.3%
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Bookings
|
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New
units
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$
442.2
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$
259.5
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$
182.7
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70.4%
|
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|
Aftermarket parts and services
|
384.8
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|
262.8
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|
122.0
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46.4%
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|
Total
bookings
|
$
827.0
|
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|
$
522.3
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$
304.7
|
58.3%
|
|
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Backlog
- ending
|
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New
units
|
$
2,174.3
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|
$
1,747.7
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$
426.6
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24.4%
|
|
|
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|
Aftermarket parts and services
|
572.5
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|
404.0
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|
168.5
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41.7%
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|
Total
backlog
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$
2,746.8
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$
2,151.7
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$
595.1
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27.7%
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DRESSER-RAND GROUP INC.
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CONSOLIDATED BALANCE SHEET
|
($ in
millions)
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|
March
31,
|
|
December 31,
|
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|
|
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|
|
2012
|
|
2011
|
|
|
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|
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|
|
(Unaudited)
|
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|
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|
|
Assets
|
|
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|
|
Current
assets
|
|
|
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|
Cash and
cash equivalents
|
|
$
123.1
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|
$
128.2
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|
Restricted
cash
|
|
23.5
|
|
29.5
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|
Accounts
receivable, less allowance for losses of $8.6 at 2012 and $9.3 at
2011
|
410.2
|
|
476.9
|
|
Inventories, net
|
|
447.7
|
|
409.0
|
|
Prepaid
expenses and other
|
|
80.3
|
|
67.1
|
|
Deferred
income taxes, net
|
|
41.3
|
|
40.3
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|
Total
current assets
|
|
1,126.1
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|
1,151.0
|
Property,
plant and equipment, net
|
|
465.4
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|
459.0
|
Goodwill
|
|
|
|
914.1
|
|
865.5
|
Intangible
assets, net
|
|
523.2
|
|
502.2
|
Deferred
income taxes
|
|
11.0
|
|
11.1
|
Intangible
assets, net
|
|
67.8
|
|
63.9
|
|
|
Total
assets
|
|
$
3,107.6
|
|
$
3,052.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable and accruals
|
|
$
573.0
|
|
$
596.4
|
|
Customer
advance payments
|
|
255.9
|
|
272.2
|
|
Accrued
income taxes payable
|
|
21.1
|
|
19.4
|
|
Current
portion of long-term debt
|
|
37.4
|
|
39.3
|
|
|
Total
current liabilities
|
|
887.4
|
|
927.3
|
Deferred
income taxes
|
|
43.8
|
|
42.3
|
Postemployment and other employee benefit
liabilities
|
|
127.8
|
|
135.9
|
Long-term
debt
|
|
1,029.7
|
|
987.9
|
Other
noncurrent liabilities
|
|
87.8
|
|
86.3
|
|
|
Total
liabilities
|
|
2,176.5
|
|
2,179.7
|
Stockholders' equity
|
|
|
|
|
|
Common
stock, $0.01 par value, 250,000,000 shares authorized;
|
|
|
|
|
|
and
75,636,622 and 75,363,784 shares issued and outstanding
at
|
|
|
|
|
|
March 31,
2012, and December 31, 2011, respectively
|
|
0.8
|
|
0.8
|
|
Additional
paid-in capital
|
|
111.5
|
|
105.3
|
|
Retained
earnings
|
|
929.1
|
|
905.5
|
|
Accumulated other comprehensive loss
|
|
(111.2)
|
|
(138.8)
|
|
|
Total
Dresser-Rand stockholders' equity
|
|
930.2
|
|
872.8
|
|
Noncontrolling interest
|
|
0.9
|
|
0.2
|
|
|
Total
stockholders' equity
|
|
931.1
|
|
873.0
|
|
|
Total
liabilities and stockholders' equity
|
|
$
3,107.6
|
|
$
3,052.7
|
DRESSER-RAND GROUP INC.
|
CONSOLIDATED STATEMENT OF CASH
FLOWS
|
($ in
millions)
|
|
Three
Months Ended March 31,
|
|
2012
|
|
2011
|
|
|
|
|
|
|
(Unaudited)
|
Cash flows
from operating activities
|
|
|
|
|
Net income
(loss)
|
$
24.3
|
|
$
(1.6)
|
|
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities
|
|
|
|
|
|
Depreciation and amortization
|
20.7
|
|
13.8
|
|
|
Deferred
income taxes
|
1.8
|
|
0.3
|
|
|
Stock-based compensation
|
0.6
|
|
(0.1)
|
|
|
Excess tax
benefits from share-based compensation
|
(3.8)
|
|
(3.4)
|
|
|
Amortization of debt financing costs
|
0.9
|
|
7.8
|
|
|
Provision
for losses on inventory
|
0.1
|
|
0.4
|
|
|
Loss on
sale of property, plant and equipment
|
(0.1)
|
|
0.1
|
|
|
Net loss
from equity investments
|
1.3
|
|
-
|
|
|
Working
capital and other, net of acquisitions
|
|
|
|
|
|
|
Accounts
receivable
|
75.2
|
|
29.4
|
|
|
|
Inventories
|
(32.4)
|
|
(14.8)
|
|
|
|
Accounts
payable and accruals
|
(36.8)
|
|
(37.9)
|
|
|
|
Customer
advances
|
(21.3)
|
|
44.4
|
|
|
Other
|
|
(20.6)
|
|
(42.9)
|
|
|
|
Net cash
provided by (used in) operating activities
|
9.9
|
|
(4.5)
|
Cash flows
from investing activities
|
|
|
|
|
Capital
expenditures
|
(10.0)
|
|
(5.1)
|
|
Proceeds
from sales of property, plant and equipment
|
0.1
|
|
-
|
|
Acquisitions, net of cash
|
(48.8)
|
|
-
|
|
Other
investments
|
(4.0)
|
|
(6.3)
|
|
Decrease
in restricted cash balances
|
6.9
|
|
-
|
|
|
|
Net cash
used in investing activities
|
(55.8)
|
|
(11.4)
|
Cash flows
from financing activities
|
|
|
|
|
Proceeds
from exercise of stock options
|
1.6
|
|
2.1
|
|
Proceeds
from borrowings
|
147.1
|
|
535.0
|
|
Excess tax
benefits from stock-based compensation
|
3.8
|
|
3.4
|
|
Repurchase
of common stock
|
-
|
|
(355.0)
|
|
Payments
for debt financing costs
|
-
|
|
(13.2)
|
|
Repayments
of borrowings
|
(115.0)
|
|
(291.3)
|
|
|
|
Net cash
provided by (used in) financing activities
|
37.5
|
|
(119.0)
|
Effect of
exchange rate changes on cash and cash equivalents
|
3.3
|
|
9.0
|
Net
decrease in cash and cash equivalents
|
(5.1)
|
|
(125.9)
|
Cash and
cash equivalents, beginning of the period
|
128.2
|
|
420.8
|
Cash and
cash equivalents, end of period
|
$
123.1
|
|
$
294.9
|
DRESSER-RAND GROUP INC.
|
Reconciliation of GAAP to Non-GAAP Financial
Information
|
(Unaudited)
|
|
Net
Debt:
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December 31,
|
|
|
2012
|
|
2011
|
|
|
(Unaudited; $ in millions)
|
Components
of net debt
|
|
|
|
|
Cash, cash
equivalents and restricted cash
|
$
146.6
|
|
$
157.7
|
|
Current
portion of long-term debt
|
(37.4)
|
|
(39.3)
|
|
Long-term
debt
|
(1,029.7)
|
|
(987.9)
|
|
Net
debt
|
$
(920.5)
|
|
$
(869.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt
is defined as total debt minus cash and cash equivalents. The
Company's
|
|
|
|
management
views net debt, a non-GAAP financial measure, to be a useful
measure of a
|
|
|
|
company's
ability to reduce debt, add to cash balances, pay dividends,
repurchase
|
|
|
|
stock, and
fund investing and financing activities.
|
|
|
|
SOURCE Dresser-Rand Group Inc.