SOURCE: Gardner Denver, Inc.

Gardner Denver, Inc.

February 10, 2011 16:07 ET

Gardner Denver, Inc. Delivers Solid Fourth Quarter 2010 Financial Results

Strong Revenue Growth and Margin Expansion Drive DEPS Improvement

WAYNE, PA--(Marketwire - February 10, 2011) - Gardner Denver, Inc. (NYSE: GDI)

Company Highlights (Attributable to Gardner Denver):

-- Diluted Earnings per Share ("DEPS") were $1.08 for the fourth quarter
   of 2010, inclusive of corporate relocation and due diligence costs
   totaling $0.07, compared to $0.71 in the previous year.
-- Strong fourth quarter growth with orders and revenues up 31 percent
   and 18 percent, respectively.
-- Operational improvements contribute to 310 basis points of operating
   margin expansion to 15.2 percent.
-- Total year 2010 cash provided by operating activities of $202
   million, 117 percent of net income.
-- Guidance for 2011: first quarter DEPS of $0.88 to $0.93 and total
   year DEPS of $3.90 to $4.10, including profit improvement costs
   and other items totaling $0.02 and $0.10 per diluted share,
   respectively.

Gardner Denver, Inc. (NYSE: GDI) today announced that revenues and operating income for the three months ended December 31, 2010 were $530.0 million and $80.4 million, respectively, and net income and DEPS attributable to Gardner Denver were $57.1 million and $1.08, respectively. The three-month period of 2010 included expenses for corporate relocation, due diligence and other items totaling $4.7 million, or $0.07 DEPS.

Compared to the three-month period of 2009, revenues increased 18 percent and orders increased 31 percent. The improvement in demand for Industrial Products was broad, occurring in every region of the world. Demand for Engineered Products was strong, with the most significant increases resulting from incremental demand for petroleum pump products and aftermarket services. Consolidated operating income improved 48% compared to the three-month period of the prior year, increasing to $80.4 million from $54.4 million in 2009. Operating income as a percentage of revenues was 15.2 percent in the three-month period of 2010, compared to 12.1 percent in the prior year period. The increase in operating income was largely driven by incremental profitability on the revenue growth, favorable product mix and the benefits of operational improvements previously implemented.

For the twelve-month period of 2010, revenues and operating income were $1,895.1 million and $252.4 million, respectively, and net income and DEPS attributable to Gardner Denver were $173.0 million and $3.28, respectively. The twelve-month period of 2010 included expenses for corporate relocation, due diligence and other items totaling $7.6 million, or $0.11 DEPS. For the twelve-month period of 2009, the net loss and per share basis net loss attributable to Gardner Denver were $165.2 million and $3.18, respectively. The twelve-month period of 2009 included expenses totaling $309.7 million, or $5.58 DEPS, for profit improvement initiatives, impairment charges and other items.

CEO's Comments

"The strong fourth quarter 2010 financial results reflect a continued improvement in our business environment combined with solid operational execution of our strategic priorities," said Barry L. Pennypacker, Gardner Denver's President and Chief Executive Officer. "We have positioned the Company to continue benefitting from strong organic growth in faster-growing end markets and geographies, such as energy, infrastructure and Asia Pacific. I am generally pleased with the progress we have made in executing our strategies and improving the operations, as evidenced by our operating margins expanding approximately 300 basis points and our achievement of record-breaking inventory turns of 5.8 in the fourth quarter of 2010. Both of the Company's reportable segments were able to deliver sequential profit improvement in the last three quarters of 2010. These results were driven by the efficiencies and focus that underpin the Gardner Denver Way, positioning us well for the future.

"In 2010, cash provided by operating activities was more than $202 million, or 117 percent of net income attributable to Gardner Denver. Our strong balance sheet and cash generation give us the flexibility to invest in the business and make further share repurchases and selective acquisitions, if the appropriate opportunities become available. In addition, we invested $33.0 million in capital expenditures in the twelve-month period of 2010, with a focus on reducing costs and increasing production output. We will continue to be very disciplined in terms of capital allocation."

Outlook

Mr. Pennypacker stated, "For 2011, we expect gradual improvements in capacity utilization to continue to drive demand for our Industrial Products and services including some replacement opportunities for industrial compressors and blowers. As a result of our expectation for gradual economic improvement in developed markets, we anticipate revenues for our Industrial Products to grow slightly in 2011, but continue to remain cautious in our outlook.

"Revenues for Engineered Products depend more on existing backlog levels than revenues for Industrial Products, and orders for Engineered Products are frequently scheduled for shipment over an extended period of time. Many of these products are used in process applications, such as oil and gas refining and chemical processing, which are industries that typically experience increased demand later in an economic cycle. Our current outlook assumes that demand for drilling pumps, well servicing equipment and OEM compressors will remain strong in 2011."

Mr. Pennypacker stated, "Based on this economic outlook, our existing backlog and productivity improvement plans, we are projecting the first quarter 2011 DEPS attributable to Gardner Denver to be in a range of $0.88 to $0.93 and our full-year 2011 DEPS to be in a range of $3.90 to $4.10. This projection includes first quarter and full year 2011 profit improvement costs and other items totaling $0.02 and $0.10 per diluted share, respectively. Full-year 2011 DEPS attributable to Gardner Denver, adjusted to exclude profit improvement costs and other items, are expected to be in a range of $4.00 to $4.20. The effective tax rate assumed in the DEPS guidance for 2011 is 28 percent. The Company expects capital expenditures to total approximately $45 million in 2011, as we continue to invest in growth initiatives and margin expansion projects on the shop floor."

Fourth Quarter Results

Revenues increased $79.2 million (18 percent) to $530.0 million for the three months ended December 31, 2010, compared to the same period of 2009. Organically, order and revenue growth were 32 percent and 19 percent, respectively, in the fourth quarter of 2010, compared to the prior year period.

Orders and revenues for the Industrial Products segment increased 23 percent and 17 percent, respectively, in the fourth quarter, compared to the same period of 2009, reflecting on-going improvement in demand for OEM products and aftermarket parts and services on a global basis. In the fourth quarter of 2010, unfavorable changes in foreign currency exchange rates reduced orders and revenues for the Industrial Products segment by 2 percent. Organically, this segment generated order and revenue growth of 25 percent and 19 percent, respectively, in the fourth quarter of 2010, compared to the prior year period. See "Selected Financial Data Schedule" at the end of this press release.

Engineered Products segment orders and revenues increased 45 percent and 18 percent, respectively, for the three months ended December 31, 2010, compared to the same period of 2009, reflecting strong demand for drilling and well servicing pumps. In the fourth quarter of 2010, unfavorable changes in foreign currency exchange rates reduced orders and revenues for the Engineered Products segment by 1 percent. The ILMVAC acquisition, completed in the third quarter of 2010, increased orders and revenues by 3 percent and 2 percent, respectively. Organically, this segment generated order and revenue growth of 43 percent and 17 percent, respectively, in the fourth quarter of 2010, compared to the prior year period. See "Selected Financial Data Schedule" at the end of this press release.

Gross profit increased $36.4 million (25 percent) to $180.7 million for the three months ended December 31, 2010, compared to the same period of 2009, primarily as a result of volume improvements, favorable product mix and cost reductions, despite the impact of unfavorable changes in foreign currency exchange rates. Gross margin increased to 34.1 percent in the three months ended December 31, 2010, from 32.0 percent in the same period of 2009. The increase in gross margin was due to the benefits of operational improvements, cost reductions, volume leverage and favorable product mix.

Selling and administrative expenses increased $14.5 million to $99.0 million in the three-month period ended December 31, 2010, compared to the same period of 2009, primarily due to corporate relocation costs and increases in compensation and benefit expenses, partially offset by cost reductions and changes in foreign currency exchange rates ($2.2 million). The ILMVAC acquisition, completed in the third quarter of 2010, added $1.1 million to selling and administrative expenses in the fourth quarter of 2010. As a percentage of revenues, selling and administrative expenses remained flat at 18.7 percent for the three-month period ended December 31, 2010, compared to the same period of 2009.

Depreciation and amortization expense was $15.4 million for the three-month period of 2010 and $17.4 million in the three-month period of 2009.

Operating income, as adjusted to exclude the net impact of expenses incurred for corporate relocation costs ($2.6 million), due diligence on an abandoned transaction ($2.2 million) and other items ("Adjusted Operating Income") for the three-month period ended December 31, 2010 was $85.0 million, compared to $59.2 million in the prior year period. Adjusted Operating Income as a percentage of revenues improved to 16.0 percent from 13.1 percent in the three-month period of 2009. DEPS attributable to Gardner Denver, as adjusted for the impact of corporate relocation costs, due diligence and other items ("Adjusted DEPS") for the three-month period ended December 31, 2010, were $1.15, compared to $0.73 in the three-month period of 2009. Adjusted Operating Income, on a consolidated and segment basis and Adjusted DEPS are both financial measures that are not in accordance with generally accepted accounting principles in the U.S. ("GAAP"). See "Reconciliation of Operating Income (Loss) and DEPS to Adjusted Operating Income and Adjusted DEPS" at the end of this press release. Gardner Denver believes the non-GAAP financial measures of Adjusted Operating Income and Adjusted DEPS provide important supplemental information to both management and investors regarding financial and business trends used in assessing its results of operations. Gardner Denver believes excluding the specified items from operating income and DEPS provides a more meaningful comparison to the corresponding reported periods and internal budgets and forecasts, assists investors in performing analysis that is consistent with financial models developed by investors and research analysts, provides management with a more relevant measurement of operating performance, and is more useful in assessing management performance.

Adjusted Operating Income for the Industrial Products segment in the fourth quarter of 2010 was $30.8 million and segment Adjusted Operating Income as a percentage of revenues was 10.1 percent. By comparison, Adjusted Operating Income for the Industrial Products segment was $19.5 million, or 7.5 percent of revenues, in the three-month period of 2009. Segment operating income(1) and segment operating margin(1), as reported under GAAP, for the Industrial Products segment for the three months ended December 31, 2010 were $26.9 million and 8.9 percent, respectively. Segment operating income(1) and segment operating margin(1) for the Industrial Products segment, as reported under GAAP, for the three months ended December 31, 2009 was $20.7 million and 8.0 percent of revenues, respectively. The improvement in Adjusted Operating Income for this segment was primarily attributable to cost reductions and incremental profit on revenue growth. See the "Selected Financial Data Schedule" and the "Reconciliation of Operating Income (Loss) and DEPS to Adjusted Operating Income and Adjusted DEPS" at the end of this press release.

Adjusted Operating Income for the Engineered Products segment for the fourth quarter of 2010 was $54.3 million and segment Adjusted Operating Income as a percentage of revenues was 24.0 percent. Adjusted Operating Income for the Engineered Products segment in the three-month period of 2009 was $39.8 million, or 20.9 percent of revenues. Segment operating income(1), as reported under GAAP, for the Engineered Products segment for the three months ended December 31, 2010 was $53.4 million and segment operating margin(1) was 23.7 percent, compared to $33.7 million and 17.7 percent, respectively, in the same period of 2009. The improvement in Adjusted Operating Income for this segment was primarily attributable to cost reductions, favorable product mix and incremental profitability on revenue growth. See the "Selected Financial Data Schedule" and the "Reconciliation of Operating Income (Loss) and DEPS to Adjusted Operating Income and Adjusted DEPS" at the end of this press release.

The provision for income taxes for the three months ended December 31, 2010 increased $7.5 million to $18.0 million, compared to the same period of 2009. The effective tax rates for the three-month periods of 2010 and 2009 were 24 percent and 22 percent, respectively.

Net income attributable to Gardner Denver for the three months ended December 31, 2010 increased $19.9 million to $57.1 million, compared to $37.2 million in the same period of 2009. Diluted earnings per share attributable to Gardner Denver for the three months ended December 31, 2010 were $1.08, compared to $0.71 for the same period of the previous year.

Twelve Month Results

Revenues in the twelve-month period of 2010 increased $117.0 million (7 percent) to $1,895.1 million, compared to $1,778.1 million in the same period of 2009. This increase was primarily attributable to on-going improvements in demand for petroleum products, OEM products, and aftermarket parts and services, partially offset by unfavorable changes in foreign currency exchange rates.

Gross profit increased $75.8 million (14 percent) to $626.4 million in the twelve months ended December 31, 2010, compared to the same period of 2009, primarily as a result of volume improvements and cost reductions, despite the impact of unfavorable changes in foreign currency exchange rates. Gross margin increased to 33.1 percent in the twelve-month period of 2010, compared with 31.0 percent in the twelve-month period of 2009, primarily due to cost reductions and favorable product mix.

Compared to 2009, selling and administrative expenses increased $13.3 million in the twelve-month period of 2010 to $369.5 million due primarily to corporate relocation costs and increases in compensation and benefit expenses, partially offset by cost reductions. As a percentage of revenues, selling and administrative expenses decreased to 19.5 percent in the twelve months ended December 31, 2010, compared to 20.0 percent in 2009, primarily due to cost reductions and revenue leverage.

Depreciation and amortization expense was $60.2 million in the twelve-month period of 2010 and $68.7 million in the twelve-month period of 2009.

For the twelve-month period, operating income increased $366.1 million to $252.4 million in 2010, compared to an operating loss of $113.7 million in same period of 2009. Operating income as a percentage of revenues was 13.3 percent in the twelve-month period of 2010. The operating loss in 2009 was impacted by impairment charges ($262.4 million), as well as profit improvement initiatives and other items (totaling $47.3 million). The year-over-year increase in operating income was also attributable to cost reductions, revenue volume improvements and favorable product mix.

Adjusted Operating Income (a non-GAAP financial measure) for the twelve-month period ended December 31, 2010 was $260.0 million, compared to $196.0 million in the prior year period. Adjusted Operating Income as a percentage of revenues increased to 13.7 percent from 11.0 percent in the twelve-month period of 2009. See "Reconciliation of Operating Income (Loss) and DEPS to Adjusted Operating Income and Adjusted DEPS" at the end of this press release.

The provision for income taxes was $56.9 million in the twelve months ended December 31, 2010, compared to $24.9 million in the same period of 2009. The effective tax rate for the twelve-month period of 2010 was 25 percent. The provision in 2009 reflected the reversal of deferred tax liabilities totaling $11.6 million associated with the intangible asset impairment charges and, in the first quarter of 2009, expense of $8.6 million associated with the write-off of deferred tax assets related to net operating losses recorded in connection with the acquisition of CompAir. In the first quarter of 2009, the Company also recognized a $3.6 million benefit as a result of a reversal of an income tax reserve and related interest associated with the completion of a foreign tax examination.

The Company generated net income attributable to Gardner Denver of $173.0 million in the twelve-month period of 2010, compared to a net loss of $165.2 million in the same period of 2009. The Company generated DEPS attributable to Gardner Denver of $3.28 in the twelve-month period of 2010, compared to a net loss on a per share basis of $3.18 for the same period of the previous year. Adjusted DEPS (a non-GAAP financial measure) for the twelve-month period ended December 31, 2010 were $3.39, compared to Adjusted DEPS for the prior year period of $2.40, reflecting a 41 percent improvement on a 7 percent improvement in revenues. See "Reconciliation of Operating Income (Loss) and DEPS to Adjusted Operating Income and Adjusted DEPS" at the end of this press release.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "could," "should," "anticipate," "expect," "believe," "will," "project," "lead," or the negative thereof or variations thereon or similar terminology. The actual future performance of the Company could differ materially from such statements. Factors that could cause or contribute to such differences include, but are not limited to: changing economic conditions; pricing of the Company's products and other competitive market pressures; the costs and availability of raw materials; fluctuations in foreign currency exchange rates and energy prices; risks associated with the Company's current and future litigation; and the other risks detailed from time to time in the Company's SEC filings, including but not limited to, its Annual Report on Form 10-K for the fiscal year ending December 31, 2009, and its subsequent quarterly reports on Form 10-Q. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company does not undertake, and hereby disclaims, any duty to update these forward-looking statements, although its situation and circumstances may change in the future.

Comparisons of the financial results for the three and twelve-month periods ended December 31, 2010 and 2009 follow.

Gardner Denver will broadcast a conference call to discuss results for the fourth quarter of 2010 on Friday, February 11, 2011 at 9:30 a.m. Eastern Time through a live webcast. This free webcast will be available in listen-only mode and can be accessed, for up to ninety days following the call, through the Investor Center on the Gardner Denver website at www.GardnerDenver.com or through Thomson StreetEvents at www.earnings.com.

Gardner Denver, Inc., with 2010 revenues of approximately $1.9 billion, is a leading worldwide manufacturer of highly engineered products, including compressors, liquid ring pumps and blowers for various industrial, medical, environmental, transportation and process applications, pumps used in the petroleum and industrial market segments and other fluid transfer equipment, such as loading arms and dry break couplers, serving chemical, petroleum and food industries. Gardner Denver's news releases are available by visiting the Investors section on the Company's website (www.GardnerDenver.com).

(1) Segment operating income (loss) (defined as income before interest expense, other income, net, and income taxes) and segment operating margin (defined as segment operating income (loss) divided by segment revenues) are indicative of short-term operational performance and ongoing profitability. For a reconciliation of segment operating income (loss) to consolidated operating income (loss) and consolidated income (loss) before income taxes, see "Business Segment Results" at the end of this press release.

                           GARDNER DENVER, INC.
                  CONSOLIDATED STATEMENTS OF OPERATIONS                    
         (in thousands, except per share amounts and percentages)
                                (Unaudited)


                 Three Months Ended           Twelve Months Ended
                    December 31,                  December 31,
                --------------------    %    ----------------------    %
                  2010       2009     Change    2010        2009     Change
                ---------  ---------  -----  ----------  ----------  -----

Revenues        $ 529,972  $ 450,770     18  $1,895,104  $1,778,145      7
  Cost of sales   349,293    306,499     14   1,268,696   1,227,532      3
                ---------  ---------         ----------  ----------
Gross profit      180,679    144,271     25     626,408     550,613     14
  Selling and
   administrative
   expenses        98,973     84,511     17     369,482     356,210      4
  Other
   operating
   expense, net     1,346      6,519    (79)      4,516      45,673    (90)
  Impairment
   charges, net         -     (1,205)    NM           -     262,400     NM
                ---------  ---------         ----------  ----------
Operating
 income (loss)     80,360     54,446     48     252,410    (113,670)    NM
  Interest
   expense          5,595      7,108    (21)     23,424      28,485    (18)
  Other income,
   net             (1,118)      (592)    89      (2,865)     (3,761)   (24)
                ---------  ---------         ----------  ----------
Income (loss)
 before income
 taxes             75,883     47,930     58     231,851    (138,394)    NM
  Provision for
   income taxes    17,954     10,469     71      56,897      24,905    128
                ---------  ---------         ----------  ----------
Net income
 (loss)            57,929     37,461     55     174,954    (163,299)    NM
Less: Net
 income
 attributable
 to
 noncontrolling
 interests            834        293    185       1,992       1,886      6
                ---------  ---------         ----------  ----------
Net income
 (loss)
 attributable
 to Gardner
 Denver         $  57,095  $  37,168     54  $  172,962  $ (165,185)    NM
                =========  =========         ==========  ==========

Earnings (loss)
 per share
 attributable
 to
 Gardner Denver
 common
 stockholders:
  Basic
   earnings
   (loss) per
   share        $    1.09  $    0.71     54  $     3.31  $    (3.18)    NM
                =========  =========         ==========  ==========
  Diluted
   earnings
   (loss) per
   share        $    1.08  $    0.71     52  $     3.28  $    (3.18)    NM
                =========  =========         ==========  ==========

Cash dividends
 declared per
 common share   $    0.05  $    0.05      -  $     0.20  $     0.05    300
                =========  =========         ==========  ==========

Basic weighted
 average
 number of
 shares
 outstanding       52,509     52,023             52,296      51,891
                =========  =========         ==========  ==========
Diluted
 weighted
 average
 number of
 shares
 outstanding       52,940     52,454             52,728      51,891
                =========  =========         ==========  ==========

Shares
 outstanding as
 of December 31    52,181     52,192
                =========  =========





                           GARDNER DENVER, INC.                            
                      CONDENSED BALANCE SHEET ITEMS
                    (in thousands, except percentages)
                                (Unaudited)


                                                        %
                            12/31/2010   9/30/2010    Change    12/31/2009
                            ----------- ----------- ----------  -----------

Cash and cash equivalents   $   157,029 $   166,596         (6) $   109,736
Accounts receivable, net        369,860     366,766          1      326,234
Inventories, net                241,485     235,894          2      226,453
Total current assets            828,537     819,424          1      718,511

Total assets                  2,027,098   2,030,339          -    1,939,048

Short-term borrowings and
 current maturities of
 long-term debt                  37,228      32,950         13       33,581
Accounts payable and
 accrued liabilities            322,372     329,021         (2)     289,949
Total current liabilities       359,600     361,971         (1)     323,530
Long-term debt, less
 current maturities             250,682     272,609         (8)     330,935

Total liabilities               837,425     867,488         (3)     875,039

Total stockholders' equity  $ 1,189,673 $ 1,162,851          2  $ 1,064,009






                           GARDNER DENVER, INC.
                         BUSINESS SEGMENT RESULTS
                    (in thousands, except percentages)
                                (Unaudited)


                 Three Months Ended           Twelve Months Ended
                    December 31,                  December 31,
                --------------------    %    ----------------------    %
                  2010       2009     Change    2010        2009     Change
                ---------  ---------  ------ ----------  ----------  ------
Industrial
 Products Group

  Revenues      $ 304,135  $ 260,181      17 $1,099,812  $1,022,860       8
  Operating
   income
   (loss)          26,921     20,749      30     93,107    (239,408)     NM
  % of
   revenues           8.9%       8.0%               8.5%    (23.4%)
    Orders        298,515    243,414      23  1,128,996     944,333      20
    Backlog       211,662    193,173      10    211,662     193,173      10

Engineered
 Products Group

  Revenues        225,837    190,589      18    795,292     755,285       5
  Operating
   income          53,439     33,697      59    159,303     125,738      27
  % of
   revenues          23.7%      17.7%              20.0%       16.6%
    Orders        226,791    156,612      45    932,555     626,010      49
    Backlog       341,822    201,999      69    341,822     201,999      69

Reconciliation
 of Segment
 Results to
 Consolidated
 Results

Industrial
 Products
 Group
 operating
 income (loss)  $  26,921  $  20,749         $   93,107  $ (239,408)
Engineered
 Products
 Group
 operating
 income            53,439     33,697            159,303     125,738
                ---------  ---------         ----------  ----------
Consolidated
 operating
 income (loss)     80,360     54,446            252,410    (113,670)
  % of
   revenues          15.2%      12.1%              13.3%       (6.4%)
Interest
 expense            5,595      7,108             23,424      28,485
Other income,
 net               (1,118)      (592)            (2,865)     (3,761)
                ---------  ---------         ----------  ----------
Income (loss)
 before income
 taxes          $  75,883  $  47,930         $  231,851  $ (138,394)
                =========  =========         ==========  ==========
  % of
   revenues          14.3%      10.6%              12.2%       (7.8%)
                =========  =========         ==========  ==========        

The Company evaluates the performance of its reportable segments based on
operating income (loss), which is defined as income (loss) before interest
expense, other income, net, and income taxes.  Reportable segment operating
income (loss) and segment operating margin (defined as segment operating
income (loss) divided by segment revenues) are indicative of short-term
operating performance and ongoing profitability.  Management closely
monitors the operating income (loss) and operating margin of each business
segment to evaluate past performance and identify actions required to
improve profitability.





                           GARDNER DENVER, INC.
                     SELECTED FINANCIAL DATA SCHEDULE
                    (in millions, except percentages)
                                (Unaudited)


                                  Three Months Ended   Twelve Months Ended
                                      December 31,         December 31,
                                  -------------------  --------------------
                                                 %                    %
                                  $ Millions  Change   $ Millions   Change
                                  ----------  -------  ----------  --------
Industrial Products Group
2009 Revenues                          260.2              1,022.9
Effect of currency exchange rates       (6.0)      (2)       (5.0)        -
Organic growth                          49.9       19        81.9         8
                                  ----------  -------  ----------  --------
2010 Revenues                          304.1       17     1,099.8         8

2009 Orders                            243.4                944.3
Effect of currency exchange rates       (6.4)      (2)       (1.2)        -
Organic growth                          61.5       25       185.9        20
                                  ----------  -------  ----------  --------
2010 Orders                            298.5       23     1,129.0        20

Backlog as of  12/31/09                193.2
Effect of currency exchange rates       (2.0)      (1)
Organic growth                          20.5       11
                                  ----------  -------
Backlog as of 12/31/10                 211.7       10

Engineered Products Group
2009 Revenues                          190.6                755.3
Incremental effect of
 acquisitions                            3.9        2         7.9         1
Effect of currency exchange rates       (1.9)      (1)       (0.9)        -
Organic growth                          33.2       17        33.0         4
                                  ----------  -------  ----------  --------
2010 Revenues                          225.8       18       795.3         5

2009 Orders                            156.6                626.0
Incremental effect of
 acquisitions                            4.1        3         7.7         1
Effect of currency exchange rates       (1.7)      (1)       (2.2)        -
Organic growth                          67.8       43       301.1        48
                                  ----------  -------  ----------  --------
2010 Orders                            226.8       45       932.6        49

Backlog as of  12/31/09                202.0
Incremental effect of
 acquisitions                            2.2        1
Effect of currency exchange rates       (3.5)      (2)
Organic growth                         141.1       70
                                  ----------  -------
Backlog as of 12/31/10                 341.8       69

Consolidated
2009 Revenues                          450.8              1,778.1
Incremental effect of
 acquisitions                            3.9        1         7.9         1
Effect of currency exchange rates       (7.9)      (2)       (5.9)        -
Organic growth                          83.2       19       115.0         6
                                  ----------  -------  ----------  --------
2010 Revenues                          530.0       18     1,895.1         7





                           GARDNER DENVER, INC.
          RECONCILIATION OF OPERATING INCOME (LOSS) AND DEPS TO
                ADJUSTED OPERATING INCOME AND ADJUSTED DEPS
         (in thousands, except per share amounts and percentages)
                                (Unaudited)

While Gardner Denver, Inc. reports financial results in accordance with
accounting principles generally accepted in the U.S. ("GAAP"), this press
release includes non-GAAP measures.  These non-GAAP measures are not in
accordance with, nor are they a substitute for, GAAP measures.  Gardner
Denver, Inc. believes the non-GAAP financial measures of Adjusted Operating
Income and Adjusted DEPS provide important supplemental information to both
management and investors regarding financial and business trends used in
assessing its results of operations.  Gardner Denver believes excluding the
specified items from operating income and DEPS provides management a more
meaningful comparison to the corresponding reported periods and internal
budgets and forecasts, assists investors in performing analysis that is
consistent with financial models developed by investors and research
analysts, provides management with a more relevant measurement of operating
performance, and is more useful in assessing management performance.


                       Three Months Ended         Twelve Months Ended
                       December 31, 2010            December 31, 2010
                   -------------------------  ----------------------------

                             Engine-                     Engine-
                 Industrial   ered           Industrial   ered
                  Products  Products Consoli-  Products Products   Consoli-
                    Group    Group   idated    Group     Group      dated
                   -------  -------  -------  --------  --------  --------

Operating income   $26,921  $53,439  $80,360  $ 93,107  $159,303  $252,410
  % of revenues        8.9%    23.7%    15.2%      8.5%     20.0%     13.3%
Adjustments to
 operating income:
  Profit
   improvement
   initiatives (2)     125     (261)    (136)    3,687    (1,491)    2,196
  Other, net (3)     3,716    1,094    4,810     3,865     1,539     5,404
                   -------  -------  -------  --------  --------  --------
Total adjustments
 to operating
 income              3,841      833    4,674     7,552        48     7,600
Adjusted Operating
 Income            $30,762  $54,272  $85,034  $100,659  $159,351  $260,010
  % of revenues,
   as adjusted        10.1%    24.0%    16.0%      9.2%     20.0%     13.7%




                   Three Months Ended         Twelve Months Ended
                   December 31, 2009           December 31, 2009
                -------------------------  ----------------------------
                           Engine-                     Engine-
               Industrial  ered            Industrial   ered
               Products  Products Consoli-  Products  Products   Consoli-
                 Group    Group   idated     Group     Group      dated
                -------  -------  -------  ---------  --------  ----------

Operating
 income (loss)  $20,749  $33,697  $54,446  $(239,408) $125,738  $ (113,670)
  % of revenues     8.0%    17.7%    12.1%   (23.4%)      16.6%     (6.4%)
Adjustments to
 operating
 income (loss):
  Profit
   improvement
   initiatives
   (2)              177    5,743    5,920     25,790    20,335      46,125
  Impairment
   charges,
   net           (1,205)       -   (1,205)   262,400         -     262,400
  Other, net
   (3)             (233)     318       85       (150)    1,334       1,184
                -------  -------  -------  ---------  --------  ----------
Total
 adjustments to
 operating
 income (loss)   (1,261)   6,061    4,800    288,040    21,669     309,709
Adjusted
 Operating
 Income         $19,488  $39,758  $59,246  $  48,632  $147,407  $  196,039
  % of
   revenues, as
   adjusted         7.5%    20.9%    13.1%       4.8%     19.5%       11.0%



                          Three Months Ended         Twelve Months Ended
                              December 31,               December 31,
                      -------------------------- --------------------------
                                           %                          %
                        2010     2009   Change     2010     2009   Change
                      -------- -------  -------- -------- -------  --------

Diluted earnings
 (loss) per share     $   1.08 $  0.71        52 $   3.28 $ (3.18)       NM

Adjustments to
 diluted earnings
 (loss) per share:
  Profit improvement
   initiatives  (2)          -    0.08               0.03    0.63
  Impairment
   charges, net              -   (0.02)                 -    4.81
  Incremental
   (benefit) cost of
   cash repatriation
   (4)                       -   (0.04)                 -    0.01
  Non-cash income
   tax items  (5)            -       -                  -    0.10
  Other, net  (3)         0.07       -               0.08    0.03
                      -------- -------           -------- -------
Total adjustments to
 diluted earnings
 (loss) per share         0.07    0.02               0.11    5.58
Adjusted Diluted
 Earnings Per Share   $   1.15 $  0.73        58 $   3.39 $  2.40        41

(2) Costs, consisting primarily of employee termination benefits, to
    streamline operations, reduce overhead costs and rationalize the
    Company's manufacturing footprint.

(3) Consists primarily of costs associated with corporate relocation and
    acquisition due diligence, and the gain on the sale of a foundry.

(4) The provision for income taxes for the year 2009 reflects incremental
    tax expense of $0.6 million associated with cash repatriations.
    Benefits recorded in the fourth quarter of 2009 included
    approximately $2.3 million, or $0.04 per share, associated ratably
    with prior quarters of 2009.

(5) Includes an $8.6 million ($0.17 per share) write-off of deferred tax
    assets related to net operating losses recorded in connection with the
    acquisition of CompAir, partially offset by the reversal of an income
    tax reserve and related interest totaling $3.6 million
    ($0.07 per share) associated with the completion of a foreign tax
    examination.


Contact Information

  • Contact:
    Michael M. Larsen
    Vice President and CFO
    (610) 249-2002