Global Power Equipment Group Inc. Announces First Quarter 2010 Financial Results

TULSA, Okla., May 19 /PRNewswire-FirstCall/ -- Global Power Equipment Group Inc. (Pink Sheets: GLPW) ("Global Power") today announces its unaudited financial results for the three months ended March 31, 2010.

For the three months ended March 31, 2010, the Company reported revenues of $157.2 million and a net income of $11.2 million, or $0.08 per diluted share.  For the three months ended March 31, 2009, Global Power reported revenues of $126.0 million and net income of $12.6 million, or $0.09 per diluted share.  Services segment revenues as a percentage of consolidated revenues were 78% and 54% for the three months ended March 31, 2010 and 2009, respectively.  

"Our first quarter results clearly reflect the benefit of having two platforms in the power generation industry," said David Keller, President and CEO of Global Power. "Our Services segment continued to execute on capital projects which more than offset a decrease in outage work compared to the prior year.  Our Products segment performance is representative of the OEM market during this depressed part of the cycle.  Products segment revenues and margins are down on a year-over-year basis due to reduced demand for equipment supporting new capacity additions.  Energy regulatory uncertainty in the U.S. is also causing customers to defer capital and maintenance expenditures. Although we are pleased with the operating performance in the quarter, we remain cautious about the underlying fundamentals in our end markets."

The Company generated EBITDA (earnings before interest, taxes, depreciation, and amortization) from continuing operations of $14.9 million for the three months ended March 31, 2010, as compared to $16.8 million for the first three months of 2009.  In addition, the Company's backlog decreased $47.2 million from December 31, 2009 to $267.7 million as of March 31, 2010. EBITDA and backlog are non-GAAP financial measures.  A reconciliation of our net income to EBITDA is included in the schedules attached to this press release.  

During the three months ended March 31, 2010, cash provided by operating activities was $1.4 million.  Cash generated by operations in the quarter was affected by an increase in cost in excess of billings in the Services segment which was primarily the result of timing of collections on capital projects previously referenced.

The Global Power term loan was $24.6 million as of March 31, 2010 net of $40.7 million in payments made during the first quarter of 2010.  Interest expense for the three months ended March 31, 2010 was $2.2 million. As of March 31, 2010, the Company had unrestricted cash of $62.6 million and $25 million of unused capacity on its revolving credit facility.  

In light of our recent filing of a Form 10 registration statement with the SEC, we have determined not to have a quarterly conference call to discuss the information presented in this press release.  The Company filed its Form 10 with the SEC on April 30, 2010 and anticipates amending the Form 10 with financial statements and related footnotes for the three month period ended March 31, 2010 in the process of addressing SEC comments.  Global Power has received notice the SEC intends to conduct a full review of the Form 10 filing.  A copy of this filing may be found on the Global Power Equipment Group website under the "Financials" heading.

About Global Power

Oklahoma based Global Power Equipment Group Inc. is a leading design, engineering and manufacturing firm providing a broad array of equipment and services to the global power generation, energy and process industries. Through its Global Power Services Division, the Company is a leading provider of on-site specialty support and outage management services for commercial nuclear reactors in the United States and provides maintenance services to fossil and hydroelectric power plants and other industrial operations. Through its Global Power Products Division, the Company designs, engineers and manufactures a comprehensive portfolio of equipment for gas turbine power plants and power-related equipment for industrial operations, with over 40 years of power generation industry experience. With a strong competitive position in its product lines, the Company benefits from a large installed base of equipment in domestic and international markets. Additional information about Global Power Equipment Group may be found at www.globalpower.com.

Forward-looking Statement Disclaimer

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 and the publication of any such results, are forward-looking statements within the meaning of U.S. federal securities laws and are subject to a number of known and unknown risks, assumptions and uncertainties that could cause the Company's actual results to differ materially from those projected, including the effects of financial turmoil and global recession, decreased demand for new gas turbine power plants, the loss of any of our major customers, the cancellation of projects, project cost overruns, including increases in prices for energy or for materials such as steel, and unforeseen schedule delays, competition for the sale of our products or services, poor performance by our subcontractors, warranty and product liability claims and changes in the economic, social and political conditions in the United States and other countries in which we operate, including fluctuations in foreign currency exchange rates and the banking environment and monetary policy. The Company assumes no obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise.

The table below represents the operating results of the Company for the periods indicated:

SOURCE Global Power Equipment Group Inc.