Exhibit 99.3
Slide 1
Third Quarter 2004 Earnings Call
October 26, 2004
9:00 AM EDT
Slide 2
“Forward Looking Statements”
Statements made during this presentation are based on management’s beliefs as well as assumptions made by, and information currently available to management, pursuant to “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995. While these statements reflect our best judgment, they are subject to risks and uncertainties that could cause a change in focus and direction. Information concerning some of the factors that could cause actual results to differ materially from those in, or implied by, the forward looking statements are set forth under “Risk Factors” in the Company’s Form 10-K for the period ended December 27, 2003.
Non-GAAP Financial Measure
This presentation contains disclosure of EBITDA, which is a non-GAAP financial measure within the meaning of Regulation G promulgated by the Securities and Exchange Commission. A reconciliation of EBITDA to net income available to common stockholder before income taxes, the most directly comparable GAAP financial measure, as well as additional information concerning EBITDA, is included in the exhibits to Global Power Equipment Group’s second quarter earnings release of October 25, 2004. This press release is available at http://www.globalpower.com by accessing Press Releases through the Investor Relations tab.
Slide 3
Global Power’s Operating Environment
1. Market Environment
2. Operations
3. 2005 Fiscal Guidance
Slide 4
World Carbon Steel Price
Hot Rolled Plate
$ per Metric Ton
2002
2003
2004
2005
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4QE
1QE
2QE
3QE
0
100
200
300
400
500
600
700
800
Average 3Q04 prices were 90% greater than a year ago
MEPS Forecast
Source: MEPS (International) Ltd.
Slide 5
Financial Results – 3Q04 vs. 3Q03
In $000s, except per share and % chg
3Q04 3Q03 % Chg
Revenues $59,720 $57,301 +4.2%
Direct Costs $50,621 $43,454 +16.5%
Gross Margin $9,099 $13,847 -34.3%
Gross Margin Percent 15.2% 24.2% -9.0pts
Operating Expenses
G&A $6,084 $5,088 +19.6%
Other $2,685 $3,490 -23.1%
Total Operating Expenses $8,769 $8,578 +2.2%
Operating Profit $330 $5,269 -93.7%
Net Interest Expense $185 $326 -43.3%
Net Income Before Income Taxes $145 $4,943 -97.1%
Income Tax Provision $55 $1,928 -97.1%
Net Income $90 $3,015 -97.0%
Diluted Shares Outstanding 46,921 45,996 +2.0%
EPS $0.00 $0.07 NM
EBITDA $1,440 $6,143 -76.6%
Slide 6
Financial Results – YTD04 vs. YTD03
In $000s, except per share and % chg
YTD04 YTD03 % Chg
Revenues $171,867 $198,329 -13.3%
Direct Costs $141,826 $146,314 -3.1%
Gross Margin $30,041 $52,015 -42.2%
Gross Margin Percent 17.5% 26.2% -8.7pts
Operating Expenses
G&A $19,507 $17,098 +14.1%
Other $8,064 $9,599 -16.0%
Total Operating Expenses $27,571 $26,697 +3.3%
Operating Profit $2,470 $25,318 -90.2%
Net Interest Expense $496 $1,218 -59.3%
Net Income Before Income Taxes $1,974 $24,100 -91.8%
Income Tax Provision $750 $9,399 -92.0%
Net Income $1,224 $14,701 -91.7%
Diluted Shares Outstanding 46,869 45,788 +2.4%
EPS $0.03 $0.32 -90.6%
EBITDA $5,243 $27,998 -81.3%
Slide 7
Financial Results
Segment and Geographic Details
3Q04 vs. 3Q03 and YTD04 vs. YTD03
In $000s, except % chg
Revenues 3Q04 3Q03 Change % Chg
Heat Recovery Equipment $31,973 $29,428 $2,545 8.6%
Auxiliary Power Equipment 27,747 27,873 (126) (0.5)%
Total $59,720 $57,301 $2,419 4.2%
United States $14,945 $41,450 $(26,505) (63.9)%
Asia 28,778 409 28,369 6,936.2%
Europe 3,990 11,370 (7,380) (64.9)%
Middle East 10,005 - 10,005 NA
Other 2,002 4,072 (2,070) (50.8)%
Revenues YTD04 YTD03 Change %Chg
Heat Recovery Equipment $86,571 $96,605 $(10,034) (10.4)%
Auxiliary Power Equipment 85,296 101,724 (16,428) (16.1)%
Total $171,867 $198,329 $(26,462) (13.3)%
United States $62,778 $140,585 $(77,807) (55.3)%
Asia 50,176 8,487 41,689 491.2%
Europe 15,445 25,769 (10,324) (40.1)%
Middle East 37,541 12,601 24,940 197.9%
Other 5,927 10,887 (4,960) (45.6)%
Slide 8
Gross Margins
By Quarter
1999
2000
2001
2002
2003
2004
Average
20.3%
Average for year
17.9%
17.0%
18.2%
22.4%
27.1%
17.5%
15.2%
10%
15%
20%
25%
30%
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
Slide 9
Historical Backlog
At End of Quarter
1999
2000
2001
2002
2003
2004
$ MMs
0
250
500
750
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
Slide 10
Financial Results – Through Q3004
Cash & Cash Usage
In $000s
FY2001 FY2002 FY2003 YTD2004
Beginning of period cash $26,308 $2,435 $59,042 $51,315
EBITDA 94,361 92,936 36,977 5,243
Other operating, investing, financing activities 6,790 12,123 (9,183) (10,560)
Change in debt (113,465) (45,556) (35,110) (3,952)
Capital expenditures (11,559) (2,896) (411) (976)
Purchase of a business, net of cash acquired - - - (8,516)
Change in cash (23,873) 56,607 (7,727) (18,761)
Cash at end of period $2,435 $59,042 $51,315 $32,554
Total Debt / Net Debt as of:
12/30/00 Total Debt $219,094
Net Debt 192,786
12/29/01 Total Debt $105,629
Net Debt 103,194
12/28/02 Total Debt $60,073
Net Debt 1,031
12/27/03 Total Debt $24,963
Net Debt (26,352)
9/25/04 Total Debt $21,011
Net Debt (11,543)
Note: Net Debt is Total Debt less Cash & Cash Equivalents.
Slide 11
Key Financial Statistics
As of 9/25/04
Net working capital (average LTM) - $000s $(9,983)
EBITDA - $000s $5,243
Total debt - $000s $21,011
Cash & Cash Equivalents - $000s $32,554
Net debt - $000s $(11,543)
Stockholders’ equity - $000s $160,279
Total capital invested (Stockholders’ equity + LT-Debt) - $000s $160,279
Total debt to total capitalization 13.1%
Pre-tax Return on Average Invested Capital (LTM) 9.9%
Pre-tax Return on Average Equity (LTM) 6.2%
*Pre-tax returns are based on reported pre-tax earnings over the past four quarters for average invested capital and average equity
Note: Net Debt is Total Debt less Cash & Cash Equivalents.
Slide 12
Thank You
For Additional Information Please Contact:
Bob Zwerneman
Director, Investor Relations
Global Power Equipment Group Inc.
(918) 274-2398
bobz@globalpower.com