Flood at Dresser-Rand's Wellsville Plant Disrupts Operations

HOUSTON, May 20, 2011 /PRNewswire/ -- Dresser-Rand Group Inc. ("Dresser-Rand" or "the Company") (NYSE: DRC) reported today that on Friday, May 13, 2011, the Village of Wellsville, New York declared a state of emergency in response to severe localized rainfall resulting in flash flooding.  As a result of this severe storm, a creek adjacent to Dresser-Rand's Wellsville facility overflowed its banks and flooded the manufacturing portion of the facility with up to two feet of water, mud and silt in various parts of the building.  The main office was unaffected.

All personnel evacuated the facility safely.  Local management has implemented its existing Business Continuity Plan and is addressing the needs of various functional areas and stakeholders.

Plant personnel are currently implementing plans for the resumption of facility-wide operations.  Certain parts of the facility have already resumed operations with the vast majority of the manufacturing centers expected to come back up successively by the middle of June.

The Company believes that the impact on its operating results for the full year 2011 will be immaterial as the financial loss is currently expected to be principally confined to its insurance deductible of $2.5 million.  

As to the second quarter 2011, the Company currently estimates that its operating income is likely to be reduced by $12 to $15 million, net of recordable amounts for insurance recoveries.  Approximately half of the impact to the second quarter is the result of one-time costs associated with restoring operations and the balance is attributable to the deferral of certain shipments to future periods.  

About Dresser-Rand

Dresser-Rand is among the largest suppliers of rotating equipment solutions to the worldwide oil, gas, petrochemical, and process industries.  The Company operates manufacturing facilities in the United States, France, United Kingdom, Germany, Spain, Norway, India, and China, and maintains a network of 39 service and support centers covering more than 140 countries.  Dresser-Rand has principal offices in Paris, France, and Houston, Texas. For more information, visit www.dresser-rand.com.

This news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements include, without limitation, the Company's plans, objectives, goals, strategies, future events, future bookings, revenues, or performance, capital expenditures, financing needs, plans, or intentions relating to acquisitions, business trends, executive compensation, and other information that is not historical information.  The words "anticipates", "believes", "expects", "intends", "appears", "outlook", and similar expressions identify such forward-looking statements.  Although the Company believes that such statements are based on reasonable assumptions, these forward-looking statements are subject to numerous factors, risks, and uncertainties that could cause actual outcomes and results to be materially different from those projected.  These factors, risks and uncertainties include, among others, the following: potential for material weaknesses in its internal controls; economic or industry downturns; the variability of bookings due to volatile market conditions, subjectivity clients exercise in placing orders, and timing of large orders; volatility and disruption of the credit markets; its inability to generate cash and access capital on reasonable terms and conditions; its inability to implement its business strategy to increase aftermarket parts and services revenue; competition in its markets; failure to complete or achieve the expected benefits from any future acquisitions; economic, political, currency and other risks associated with international sales and operations; fluctuations in currencies and volatility in exchange rates; loss of senior management; environmental compliance costs and liabilities; failure to maintain safety performance acceptable to its clients; failure to negotiate new collective bargaining agreements; unexpected product claims and regulations; infringement on its intellectual property or infringement on others' intellectual property; its pension expenses and funding requirements; difficulty in implementing an information management system; and the Company's brand name may be confused with others.  These and other risks are discussed in detail in the Company's filings with the Securities and Exchange Commission at www.sec.gov.  Actual results, performance, or achievements could differ materially from those expressed in, or implied by, the forward-looking statements.  The Company can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them does, what impact they will have on results of operations and financial condition.  The Company undertakes no obligation to update or revise forward-looking statements, which may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, except as required by applicable law.  For information about Dresser-Rand, go to its website at www.dresser-rand.com.

DRC-FIN

SOURCE Dresser-Rand Group Inc.