Compressed Air Best Practices - April 2008 - (Page 47)

Compressed Air Industry PLASTICS BLOW-MOLDING | 04/08 | Mr. Centanni continued, “Compressor and Vacuum Products segment operating income1 as a percentage of revenues expanded to 12.5% in the fourth quarter, the highest level achieved since 1998. The improvement is the result of the segment’s strong flow-through profitability on organic revenue growth, cost reductions and the benefits of acquisition integration activities. Further improvement is expected to be realized in 2008, as I am pleased to report that during the fourth quarter we substantially completed the company's integration project in Schopfheim, Germany. This was the final significant integration project from Gardner Denver’s 2005 acquisition of Thomas Industries. In 2008, these process improvements are expected to increase productivity while reducing lead times and inventory, generating annualized incremental operating earnings of approximately $6 million.” Mr. Centanni continued, “For the full-year 2007, we used cash provided by operating activities to repay $125.2 million of debt, reducing debt to total capital to 20%. In addition, in 2007 the company substantially completed the integration projects related to the Nash Elmo and Thomas Industries acquisitions. We feel we are well positioned to consider potential future strategic acquisitions.” activities in Europe and Australia to further streamline operations and reduce administrative expenses. These restructuring activities are expected to reduce DEPS for the first quarter and full year by $0.02 and $0.04, respectively.” Mr. Centanni continued, “The company invested approximately $47.8 million in capital expenditures during 2007, compared to $41.1 million in 2006, due primarily to spending to complete acquisition integration projects. Depreciation and amortization expense was approximately $58.6 million in 2007, compared to $52.2 million in 2006. For the fullyear 2008, capital spending is expected to be approximately $45 million to $50 million. The 2008 capital spending plan includes investments to expand the company's manufacturing capacity for compressor and vacuum products in China, which are expected to occur in the second half of the year.” Hamilton, Bermuda, February 14, 2008 — Ingersoll-Rand Company Limited (NYSE:IR), a leading diversified industrial firm, announced today that total revenues increased by 8% and pre-tax earnings from continuing operations increased by 16% in the fourth quarter of 2007, compared with the 2006 fourth quarter. The company reported diluted earnings per share (EPS) of $9.06 ($2,518.5 million) for the fourth quarter of 2007. EPS from discontinued operations were $8.45 ($2,347.5 million). The earnings of discontinued operations include three components: a gain on the sale of the Bobcat, Utility Equipment and Attachments (Compact Equipment) businesses of $9.30 per share ($2,584.6 million); a charge of EPS -$1.00 (-$277.0 million), to increase the reserve for expected future asbestos costs; and EPS of $0.15 ($39.9 million), which represent the earnings and retained costs from discontinued businesses. EPS from continuing operations of $0.61 ($171.0 million) were negatively impacted by $0.18 per share from a significantly higher effective tax rate of 38.4% in the quarter (see Taxes page 3). Additionally, fourth-quarter earnings from continuing operations included EPS of approximately -$0.03 related to work force reductions throughout the company. Reported net earnings per share totaled $0.72 ($222.0 million) for the fourth quarter of 2006, with EPS of $0.04 ($11.9 million) from discontinued operations and EPS from continuing operations of $0.68 ($210.1 million). Outlook “Although we expect global economic growth to slow in 2008, we are still optimistic that orders for compressor and vacuum products will remain strong through the first half of 2008, driven by demand in Europe and Asia. Specifically, we expect to see strong demand for OEM applications and engineered products, as well as marine and European mobile applications. The rate of order growth in the second half of 2008 is expected to slow slightly, however, reflecting an anticipated downturn in the European economy’s rate of growth. From a revenue perspective, we anticipate continued growth throughout 2008 as a result of the order outlook and a reduction in backlog due to the achievement of operational improvements. The Compressor and Vacuum Products segment ended 2007 with a record level of backlog, which should help drive results in 2008,” said Mr. Centanni. “Based on our current economic outlook, existing backlog and the expected benefit of operational improvements from completed integration projects, we are raising our full-year 2008 DEPS outlook range to $3.20 to $3.40, with first-quarter DEPS expected to be $0.75 to $0.80. This outlook includes the expected first-quarter shipment of the remaining contract for liquid natural gas and compressed natural gas loading arms destined for South America and some restructuring 1 Segment operating margin www.airbestpractices.com 47 http://www.airbestpractices.com

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Compressed Air Best Practices - April 2008 Contents From the Editor Utility-Air News The Compressed Air Audit of the Month: Minimizing Blow-Molding Pressure Fluctuations AF Compressors: Focused on 40 Bar, Oil-Free Air for the PET Industry Real World Best Practices: PET Plants Using Boosters for High-Pressure Air Guaranteeing Audit ROI for Blow-Molders Managing Vacuum Pressure Differential Are You Taking Full Advantage of Pneumatic Valve Technology? Are You Strategic? Resources for Energy Engineers: Training Calendar & Product Picks Wall Street Watch Advertiser Index Job Market

Compressed Air Best Practices - April 2008

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