Exhibit 99.1
[GLOBAL POWER LOGO]
Global Power Equipment Group Inc.
Reports Second Quarter EPS of $0.32
Company Reduces Debt by Nearly $43 Million During the Period
TULSA, Oklahoma, July 29, 2002 - Global Power Equipment Group Inc. (NYSE: GEG),
a leading design, engineering and fabrication firm providing a broad array of
equipment and services to diversified global companies engaged in the power and
process industries, today reported financial results for the second quarter
ended June 29, 2002.
Global Power Equipment Group reported earnings of $14.6 million, or $0.32 per
diluted share, on revenues of $163 million for the second quarter of fiscal
2002. This compares to pro forma net earnings of $10.9 million, or $0.23 per
diluted share, on revenues of $171 million for the second quarter of fiscal
2001.
For the six months ended June 29, 2002, the Company reported net earnings of
$29.9 million, or $0.65 per diluted share, on revenues of $366 million. This
compares to pro forma net earnings for the same period last year of $19.8
million, or $0.42 per diluted share, on revenues of $328 million.
The company's gross profit margin for the most recent period was 22.0 percent
compared to the year ago margin of 18.1 percent. For the first six months of
2002, the Company's gross margin was 19.8 percent compared to 17.5 percent in
the same period of 2001.
The company generated EBITDA (earnings before interest, taxes, depreciation and
amortization) of $26.0 million for the second quarter, up 21 percent over
adjusted EBITDA of $21.5 million for the same period in 2001.
From the end of March, the company reduced debt from $117.6 million to $74.9
million or by nearly $42.7 million.
"Our strong manufacturing performance continued to yield impressive financial
results during the most recent quarter and allowed us to sharply reduce our
debt," stated Larry Edwards, Global Power Equipment Group's president and chief
executive officer. "We continue to see increased activity in several markets
outside of the United States, particularly in Europe and Asia. However, that
activity has yet to reach a level sufficient to offset the reduced level of
activity we are experiencing inside the United States. Cancellations of projects
from our firm backlog have been minimal and a limited number of customers have
pushed project development schedules into 2003. Announced deferrals of new power
projects in the United
Global Power Equipment Group Inc.
Second Quarter 2002 Earnings - Page 2
States have adversely impacted our new order bookings. Because of these
developments, we have tempered our expectations for the second half of this
year."
At the end of the second quarter, the Company's firm backlog totaled $423
million compared to $487 million at the end of March 2002 and $682 million at
the end of June 2001. Approximately 25 percent of the Company's bookings into
firm backlog during the first six months have originated from projects outside
the United States compared to approximately 8 percent during the same period
last year.
Earnings Estimate
Based upon information management currently has evaluated, in conjunction with
this release, management estimates 2002 earnings of between $0.94 to $0.98 per
diluted share on sales of between $575 and $600 million. The Company further
anticipates that free cash flow from operations during the second half of the
current fiscal year will permit a further reduction in debt down to between $55
million and $60 million by year-end.
The company establishes initial guidance for fiscal year 2003 of between $0.70
and $0.80 per diluted share on sales of between $470 and $525 million.
About Global Power
Oklahoma based Global Power Equipment Group Inc. (NYSE: GEG) is a
global designer, engineer and fabricator of equipment for gas turbine power
plants. The company markets its products under the Deltak, Braden, and
Consolidated Fabricators brands and also offers value-added services including
engineering, retrofit and upgrade, and maintenance and repair. Global Power
Equipment Group's equipment is installed in power plants in more than 30
countries on six continents, giving it what it believes to be one of the largest
installed bases of equipment for gas turbine power plants. Global Power
Equipment Group maintains a web site at www.globalpower.com.
-------------------
Statements contained in this release regarding the Company's or management's
intentions, beliefs, expectations, or predictions for the future, including, but
not limited to, those regarding anticipated operating results, are forward
looking statements within the meaning of U.S. federal securities laws and are
subject to a number of risks, assumptions and uncertainties that could cause the
Company's actual results to differ materially from those projected. 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 ending
December 29, 2001, and other reports on file with the U.S. Securities and
Exchange Commission.
Company Contact:
- ----------------
Bob Zwerneman
Director of Investor Relations
(918) 274-2398
[GLOBAL POWER LETTERHEAD]
Global Power Equipment Group Inc.
Second Quarter 2002 Earnings - Page 3
GLOBAL POWER EQUIPMENT GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
---------------------- -------------------------
June 29, June 30, June 29, June 30,
2002 2001 2002 2001
-------- -------- -------- --------
Revenues $162,916 $171,435 $366,443 $327,605
Cost of sales 127,026 140,428 293,825 270,184
-------- -------- -------- --------
Gross profit 35,890 31,007 72,618 57,421
Selling and administrative expenses 10,778 10,390 21,189 18,923
Amortization expense 43 450 87 847
-------- -------- -------- --------
Operating income 25,069 20,167 51,342 37,651
Interest expense, net 1,105 5,991 2,388 12,383
-------- -------- -------- --------
Income before income taxes and
extraordinary loss 23,964 14,176 48,954 25,268
Income tax provision 9,346 3,124 19,092 4,055
Income tax benefit from tax status change - (88,000) - (88,000)
-------- -------- -------- --------
Income before extraordinary loss 14,618 99,052 29,862 109,213
Extraordinary loss on debt
extinguishment, net of tax - 18,060 - 18,060
-------- -------- -------- --------
Net income 14,618 80,992 29,862 91,153
Preferred dividend - (907) - (2,947)
-------- -------- -------- --------
Net income available to common stockholders $ 14,618 $ 80,085 $ 29,862 $ 88,206
======== ======== ======== ========
Basic income per common share
Weighted average shares outstanding 43,953 37,480 43,953 34,503
Income before extraordinary loss $ 0.33 $ 2.62 $ 0.68 $ 3.08
Extraordinary loss - (0.48) - (0.52)
-------- -------- -------- --------
Net income available to common
stockholders $ 0.33 $ 2.14 $ 0.68 $ 2.56
======== ======== ======== ========
Diluted income per common share
Diluted shares outstanding 45,639 39,220 45,642 36,219
Income before extraordinary loss $ 0.32 $ 2.50 $ 0.65 $ 2.93
Extraordinary loss - (0.46) - (0.50)
-------- -------- -------- --------
Net income available to common stockholders $ 0.32 $ 2.04 $ 0.65 $ 2.43
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Global Power Equipment Group Inc.
Second Quarter 2002 Earnings - Page 4
GLOBAL POWER EQUIPMENT GROUP INC.
EARNINGS AND EBITDA INFORMATION
2002 ACTUAL AND 2001 PRO FORMA
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
---------------------------- -------------------------------
June 29, June 30, June 29, June 30,
2002 2001 2002 2001
------------ -------------- -------------- --------------
Net income available to common stockholders $ 14,618 $ 80,085 $ 29,862 $ 88,206
Add (Less):
Preferred dividend - 907 - 2,947
Extraordinary loss on debt extinguishment,
net of tax - 18,060 - 18,060
Income tax benefit from tax status change - (88,000) - (88,000)
Reduced tax provision due to non-taxable
status prior to IPO - (3,822) - (8,607)
Pro forma effect of debt restructuring - 2,886 - 6,394
IPO related compensation charge and other - 804 - 804
------------ --------------- -------------- --------------
Pro forma net income available to common
stockholders $ 14,618 $ 10,920 $ 29,862 $ 19,804
============ =============== ============== ==============
Pro forma basic income per common share
Weighted average shares outstanding 43,953 46,874 43,953 46,874
Net income available to common stockholders $ 0.33 $ 0.23 $ 0.68 $ 0.42
============ =============== ============== ==============
Pro forma diluted income per common share
Diluted shares outstanding 45,639 46,874 45,642 46,874
Net income available to common stockholders $ 0.32 $ 0.23 $ 0.65 $ 0.42
============ =============== ============== ==============
EBITDA $ 25,982 $ 3,425 $ 53,145 $ 22,011
Add:
Extraordinary loss on debt extinguishment, net
of tax - 18,060 - 18,060
------------ --------------- -------------- --------------
Adjusted EBITDA $ 25,982 $ 21,485 $ 53,145 $ 40,071
============ =============== ============== ==============
Global Power Equipment Group Inc.
Second Quarter 2002 Earnings - Page 5
GLOBAL POWER EQUIPMENT GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 29, December 29,
2002 2001
-------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 18,383 $ 2,435
Accounts receivable, net of allowance of $1,667 and $2,385 87,844 123,182
Inventories 7,003 5,973
Costs and estimated earnings in excess of billings 113,922 131,355
Deferred tax assets 23,130 19,068
Other current assets 1,105 1,920
-------- --------
Total current assets 251,387 283,933
Property, plant and equipment, net 27,309 27,810
Deferred tax assets 68,895 71,454
Goodwill, net 42,256 42,256
Other assets 5,378 5,178
-------- --------
Total assets $395,225 $430,631
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LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt $ 8,377 $ 15,505
Accounts payable 35,826 56,005
Accrued compensation and employee benefits 8,099 11,838
Accrued warranty 18,722 16,489
Billings in excess of costs and estimated earnings 136,403 145,522
Other current liabilities 13,299 17,968
-------- --------
Total current liabilities 220,726 263,327
Long-term debt, net of current maturities 66,545 90,124
Commitments and contingencies
Stockholders' equity
Common stock 440 440
Paid-in capital deficit (28,329) (28,329)
Accumulated comprehensive income (loss) 832 (80)
Retained earnings 135,011 105,149
-------- --------
Total stockholders' equity 107,954 77,180
-------- --------
Total liabilities and equity $395,225 $430,631
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