Exhibit 99.3
Slide 1
Fourth Quarter 2004 Earnings Call
March 3, 2005
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 fourth quarter earnings release of March 2, 2005. This press release is available at http://www.globalpower.com by accessing Press Releases through the Investor Relations tab.
Slide 3
Bookings & Backlog
1. Fourth quarter bookings = $153.0 MM
Europe (52%), USA (16%), Asia (14%) Middle East (10%)
2. 12/31/2004 Backlog = $308.9 MM
+73% from 12/27/2003, +42% from 9/25/2004
3. Backlog to rise further in Q1, up sharply in Q2 (post-WISG acquisition)
Slide 4
Financial Results – 4Q04 vs. 4Q03
In $000s, except per share and % chg
4Q04 4Q03 % Chg
Revenues $61,825 $65,449 -5.5%
Direct Costs $52,609 $45,967 +14.4%
Gross Margin $9,216 $19,482 -52.7%
Gross Margin Percent 14.9% 29.8% -14.9 pts
Operating Expenses
G&A $7,156 $8,615 -16.9%
Other $4,435 $2,771 +60.1%
Total Operating Expenses $11,591 $11,386 +1.8%
Operating Profit (Loss) $(2,375) $8,096 -129.3%
Net Interest Expense $785 $286 +174.5%
Income (Loss) Before Income Taxes & Minority Interest $(3,160) $7,810 -140.5%
Income Tax Provision (Benefit) $(1,201) $2,727 -144.0%
Income (Loss) Before Minority Interest $(1,959) $5,083 -138.5%
Minority Interest $(30) $- NA
Net Income $(1,929) $5,083 -138.0%
Diluted Shares Outstanding 46,432 46,196 +1.0%
EPS $(0.04) $0.11 -136.4%
EBITDA $(1,535) $8,979 -117.1%
Slide 5
Financial Results – FY04 vs. FY03
In $000s, except per share and % chg
FY04 FY03 % Chg
Revenues $233,692 $263,778 -11.4%
Direct Costs $194,435 $192,281 +1.1%
Gross Margin $39,257 $71,497 -45.1%
Gross Margin Percent 16.8% 27.1% -10.3 pts
Operating Expenses
G&A $26,663 $25,713 +3.7%
Other $12,499 $12,370 +1.0%
Total Operating Expenses $39,162 $38,083 +2.8%
Operating Profit $95 $33,414 -99.7%
Net Interest Expense $1,281 $1,504 -14.8%
Income (Loss) Before Income Taxes & Minority Interest $(1,186) $31,910 -103.7%
Income Tax Provision (Benefit) $(451) $12,126 -103.7%
Income (Loss) Before Minority Interest $(735) $19,784 - -103.7%
Minority Interest $(30) $- NA
Net Income $(705) $19,784 -103.6%
Diluted Shares Outstanding 46,195 45,911 +1.0%
EPS $(0.02) $0.43 -104.7%
EBITDA $3,708 $36,977 -90.0%
Slide 6
Financial Results
Segment and Geographic Details
4Q04 vs. 4Q03 and YTD04 vs. YTD03
In $000s, except % chg
Revenues 4Q04 4Q03 Change % Chg
Heat Recovery Equipment $30,745 $23,288 $7,457 32.0%
Auxiliary Power Equipment 31,080 42,161 (11,081) (26.3)%
Total $61,825 $65,449 $(3,624) (5.5)%
United States $26,636 $38,250 $(11,614) (30.4)%
Asia 16,409 9,163 7,246 79.1%
Europe 8,837 13,219 (4,382) (33.1)%
Middle East 2,225 1,838 387 21.1%
Other 7,718 2,979 4,739 159.1%
Revenues YTD04 YTD03 Change % Chg
Heat Recovery Equipment $117,316 $119,893 $(2,577) (2.1)%
Auxiliary Power Equipment 116,376 143,885 (27,509) (19.1)%
Total $233,692 $263,778 $(30,086) (11.4)%
United States $89,414 $178,835 $(89,421) (50.0)%
Asia 66,585 17,650 48,935 277.3%
Europe 24,282 38,988 (14,706) (37.7)%
Middle East 39,766 14,439 25,327 175.4%
Other 13,645 13,866 (221) (1.6)%
Slide 7
World Carbon Steel Price
Hot Rolled Plate
$ per Metric Ton
900 800 700 600 500 400 300 200 100 0
Fourth quarter 2004 prices were 102% above the prior year averaging 33.1¢ lb.
MEPS Forecast
1999 2000 2001 2002 2003 2004 2005
Source: MEPS (International) Ltd. – February 28, 2005
Slide 8
Gross Margins
By Quarter
30% 25% 20% 15% 10%
14.9%
Long-term Average Range 16% – 19%
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
1999 2000 2001 2002 2003 2004
Average for year 17.9% 17.0% 18.2% 22.4% 27.1% 16.8%
Slide 9
Historical Backlog
At End of Quarter
$ MMs
750 500 250 0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
1999 2000 2001 2002 2003 2004
Slide 10
Financial Results – Through Q4004
Cash & Cash Usage
In $000s
FY2001 FY2002 FY2003 FY2004
Beginning of period cash $26,308 $2,435 $59,042 $51,315
EBITDA 94,361 92,936 36,977 3,708
Other operating, investing, financing activities 6,790 12,123 (9,183) (16,324)
Change in debt (113,465) (45,556) (35,110) 70,641
Capital expenditures (11,559) (2,896) (411) (1,942)
Purchase of a business, net of cash acquired - - - (8,710)
Change in cash (23,873) 56,607 (7,727) 47,373
Cash at end of period $2,435 $59,042 $51,315 $98,688
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)
12/31/04 Total Debt $95,604
Net Debt (3,084)
Note: Net Debt is Total Debt less Cash & Cash Equivalents. Includes $74.4 million of restricted cash for purchase of WISG.
Slide 11
Key Financial Statistics
As of 12/31/04
Net working capital (average LTM) - $000s $(844)
EBITDA - $000s $3,708
Total debt - $000s $95,604
Cash & Cash Equivalents - $000s $98,688
Net debt - $000s $(3,084)
Stockholders’ equity - $000s $162,420
Total capital invested (Stockholders’ equity + LT-Debt) - $000s $241,170
Total debt to total capitalization 58.9%
Pre-tax Return on Average Invested Capital (LTM) 3.3%
Pre-tax Return on Average Equity (LTM) (0.7)%
*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