Compressed Air Best Practices - January 2009 - (Page 48)

| 01/09 Compressed Air Industry ENERGY REBATES | WALL STREET WATCH Outlook “The Company expects orders for its compressor and vacuum products to slow in the fourth quarter of 2008, driven by declining demand in the United States and Europe, partially offset by continued growth in Asia. We expect to see stable demand through the end of the year for OEM, marine, locomotive and process applications. Demand is expected to continue to decline for our lower horsepower and general industrial products. We anticipate revenue growth to slow in the fourth quarter of 2008 as a result of this order outlook, partially offset by a reduction in backlog as operational improvements are achieved,” said Mr. Pennypacker. “Demand surged in the third quarter for our petroleum pumps and our production capacity for most of these products is sold out into the first quarter of 2009. To date, demand for new rigs has not appeared to slow, given the need for upgrades to improve efficiencies. In addition, in the third quarter we experienced improved demand for well servicing pumps, as excess capacity is absorbed in North America. However, recent volatility in oil and natural gas prices has caused dramatic shifts in the capital expenditure expectations of certain oil and gas exploration and production companies, which may result in a lower average rig count in North America in 2009. Third Quarter Results Revenues increased $23.1 million (5%) to $480.3 million for the three months ended September 30, 2008, compared to the same period of 2007. Compressor and Vacuum Products segment revenues increased 7% for the three-month period of 2008, compared to the previous year, driven by favorable changes in foreign currency exchange rates and organic growth in most product lines. Fluid Transfer Products segment revenues decreased 3% for the three months ended September 30, 2008, compared to the same period of 2007, primarily resulting from decreased petroleum pump volume, partially offset by incremental sales of all other product lines and favorable changes in foreign currency exchange rates (see “Selected Financial Data Schedule”). Gross profit increased $1.2 million (1%) to $150.4 million for the three months ended September 30, 2008, compared to the same period of 2007, as a result of the higher revenue. Gross profit as a percentage of revenues declined to 31.3% in the three-month period of 2008, from 32.6% in the same period of 2007, due primarily to product mix, partially offset by operational improvements and leveraging fixed and semi-fixed costs over additional sales volume. Net income for the three months ended September 30, 2008 decreased $19.0 million (35%) to $34.6 million, compared to $53.7 million in same period of 2007, due primarily to costs associated with profit improvement initiatives, non-recurring expenses, and mark-to-market currency adjustments incurred in the third quarter of 2008 and the increase in the effective tax rate discussed previously. “We expect to see stable demand through the end of the year for OEM, marine, locomotive and process applications.” 48 www.airbestpractices.com http://www.airbestpractices.com

Table of Contents Feed for the Digital Edition of Compressed Air Best Practices - January 2009

Compressed Air Best Practices - January 2009 Contents From the Editor Utility-Air News Compressed Air Audit of the Month: A Nitrogen Audit at Boeing Air Standards: New ASME & ISO Standards for Compressed Air System Assessments Energy Rebates Assist Industrial Sustainability Initiatives Seven Sustainability Projects for Industrial Energy Savings: Project #1: Lighting Optimization Minimum Supply Wire Size Recommendations for Compressor Packages Utilizing Variable Frequency Drives The Pneumatic Advantage: Pneumatics Bring Precision and Reliability to Furniture Industry Specialist Personal Productivity: Is Afternoon Fatigue Influencing Your Job Performance? The Explanation and Some Solutions. Resources for Energy Engineers: Training Calendar & Product Picks Wall Street Watch Advertiser Index Classifieds

Compressed Air Best Practices - January 2009

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