We are embarking on the pleasant task of adjusting our pump forecasts upward. The U.S. economy is bettering expectations and China is red hot. In addition to continually revising forecasts, we report each month on performance of individual companies. We are providing excerpts from our October Pump Market Updates below. For more information on Pumps: World Markets, click on http://www.mcilvainecompany.com/water.html#N019 .
October Pump Update
Industry News
Gardner Denver Posts 9 Percent Revenue Increase in 3rd Quarter
Gardner Denver, Inc. announced that revenues for the three months ended September 30, 2003 were $112.1 million, a 9 percent increase compared with the third quarter of the previous year. "Demand for well stimulation pumps and pump replacement parts also increased significantly year-over-year. Although orders for drilling pumps have not yet increased appreciably, I believe that demand for petroleum products in 2004 will exceed that of 2003. We are positioning drilling pump inventory to capitalize on this projected upturn to minimize lead-time and capture incremental demand," stated Ross J. Centanni, Chairman, President and CEO.
Revenues for the three-month period increased $9.3 million (9%) to $112.1 million, compared to the same period of 2002, due to favorable changes in foreign currency exchange rates and increased shipments of rotary screw compressors, reciprocating compressor packages, well stimulation pumps and petroleum pump parts. Pump Products revenues for the three-month period increased $3.2 million (19%) to $20.5 million compared to the same period of 2002, primarily as a result of increased demand for well stimulation pumps and petroleum pump parts.
Revenues for the nine-month period of 2003 increased 3 percent to $322.9 million compared to the same period of 2002, due to favorable changes in foreign currency exchange rates which contributed $12.4 million to revenues in the nine-month period. Pump Products revenues for the nine-month period increased $0.8 million (1%) to $51.76 million compared to the same period of 2002 as a result of the increased shipments of well stimulation pumps and petroleum pump replacement parts. In 2002, drilling pump backlog carried over from 2001 orders primarily supported Pump Products segment revenues.
Sulzer's Order Intake Increases 7 Percent
Order intake by the Sulzer Corporation for the first nine months of 2003 totaled CHF 1482 million. Compared with the prior year period, this represents strong growth of 7 percent in local currencies and adjusted for acquisition effects, or 1 percent nominal. The third quarter significantly improved on that of prior year, with a 13 percent nominal rise in order intake. Further stabilization of the market situation increasingly indicates an economy upswing – even if only modest. For 2003 as a whole, Sulzer expects a higher order intake than in 2002.
Sulzer Pumps, the largest division, continued this year’s upward trend in the third quarter. Order volume of CHF 747 million for the first nine months represents an impressive growth of 12 percent in local currencies compared with the prior year period, due not least to an excellent third quarter (+24%). Despite negative currency developments, nominal growth was also positive at 3 percent. The encouraging market situation in Asia is still contrasted by disappointing developments in North America. Sulzer Pumps faces the remainder of 2003 with confidence.
IDEX Reports Improved Third Quarter Results
IDEX Corporation reported that orders, sales and earnings for the three months ended September 30, 2003, improved from the same quarter of last year, and, as expected, were below this year's second quarter levels primarily due to seasonal factors. Compared to last year's third quarter, orders increased 3 percent, sales were up 4 percent and diluted earnings per share rose 9 percent. Diluted earnings per share for the quarter were 49 cents versus 45 cents in the year-ago period. For the first nine months of 2003, orders and sales increased 8 percent, while diluted earnings per share rose 7 percent to $1.39 from $1.30 a year earlier.
Sales of $197.3 million increased 4 percent, reflecting almost 4 percent growth from favorable foreign currency translation, a slight increase in base business activity, and no net change due to
acquisitions. Domestic sales in the quarter were 1 percent lower and international sales -- net of foreign currency translation -- increased 3 percent. Sales to international customers -- including the impact of currency translation -- were 44 percent of the total, up from 43 percent last year.
Sales for the first nine months increased 8 percent to $600.0 million from $554.5 million a year ago. First nine months' operating margins were 13.7 percent versus 14.0 percent in the prior-year period. This decline was principally attributable to 3 percent lower base sales in the Pump Products Group -- net of foreign currency impact -- and an increase in SG&A expenses. For the year-to-date, the Pump Products Group contributed 56 percent of sales and 53 percent of operating income, the Dispensing Equipment Group accounted for 21 percent of both sales and operating income, and the Other Engineered Products Group represented 23 percent of sales and 26 percent of operating income.
In September, IDEX acquired Classic Engineering, Inc. with sales of $4 million. Based in Jacksonville, Florida, Classic Engineering is a supplier of fully integrated pump and metering systems to chemical companies and municipal water treatment facilities. This company engineers, designs and manufactures a complete line of standard and custom chemical-feed systems for the water, wastewater, chemical OEM, pulp and paper, cement and general industrial markets. Commenting on the acquisition, IDEX Chairman, President and Chief Executive Officer Dennis K. Williams said, "Classic Engineering is a key addition to our Pulsafeeder business, enabling us to provide an engineered solution to our customers' increasing demand for turnkey chemical injection systems. This acquisition reflects our move from a component manufacturer to a total solutions provider in this important segment."
IDEX recently established an initial base of operations in Suzhou, China, just outside of Shanghai. The company's new 65,000-square foot facility is designed to provide assembly and manufacturing capability to service many of IDEX's business units. "We are excited to be on the ground in China and making progress," Williams said. "We produced our first pump in this facility last month. Through this operation, we expect both to export products from China to North America and Europe, and to produce and sell Chinese- manufactured products in Asian markets."
Pentair's EPS Improves in Third Quarter
Pentair (NYSE: PNR) reported earnings per share (EPS) of $0.77 for the third quarter 2003, noting that third quarter margins in the Company's Water Technologies Group improved to the same level as in last year's third quarter. Pentair's third quarter net sales totaled $685.0 million, up nine percent from sales of $629.3 million in the same period a year ago. Third quarter 2003 EPS of $0.77 reflects a three percent increase over EPS of $0.75 in the same period last year. The third quarter marked Pentair's sixth consecutive quarter of favorable quarter-over-quarter EPS comparisons.
In the Water Technologies Group, third quarter 2003 sales of $270.9 million increased 21 percent versus the same period last year, driven by acquisitions, pool equipment, residential and commercial pumps and the European water business. Operating income of $36.2 million gained 21 percent over the same period last year, with pump margins increasing due to productivity improvements and material savings. Pentair noted that, on a year-to- date basis, the Water Technologies Group is its largest business and it has been the largest contributor to the Company's operating income each year since 2000.
For nine months of 2003, sales were $2.042 million compared to $1.940 million last year. Earnings per share in nine months of 2003 were $2.23 compared to $2.07 last year.
Robbins & Myers' Sales Up 19 Percent for Fourth Quarter
Sales for the fourth quarter ended August 31, 2003 were $156.9 million, an increase of $24.7 million or 19 percent over the same period of the prior fiscal year. Sales for the fiscal year ended August 31, 2003 were $560.8 million, an increase of $34.4 million or 7 percent over the prior fiscal year.
During fiscal 2003, the Energy segment's notable accomplishments included:
· Development of the Venezuela market where sales increased from $0.9 million in fiscal 2002, the year we established a presence in the country, to $4.7 million in fiscal 2003;
· Initiation of plans to continue the future globalization of the business including establishing a presence in Eastern Europe and Central Asia (using the Venezuela model);
· New product development, in particular the even-wall stator, Sentry™ pipeline closure, high-flow down hole drivehead, and new rod guide designs.
Sales of the Energy segment, which represent 17 percent of the Company's total sales, were $26.6 million for the quarter and $95.5 million for the year, 15.8 percent and 4.5 percent higher than the respective periods of the prior year.
While the Industrial segment's business has clearly been depressed for sometime, Robbins & Myers saw an improvement in fiscal 2003, particularly the second half of the year. Accomplishments during fiscal 2003 include:
· New product development activities such as mixers, vertical pumps and pumps capable of handling liquids with high solids content;
· Lower cost product designs and cost effective outsourcing;
· Technology license that strategically expands the market range for coating applications;
· Teflon coated ductwork for effluent control.
The Industrial segment had sales of $31.1 million in the fourth quarter of fiscal 2003, increasing $5.5 million from the same period of the prior year. A third of this increase is attributable to the Tarby acquisition closed at the end of the first quarter of fiscal 2003, with the remaining two-thirds reflecting the general improving industrial economic environment in North America. For the year, sales in this segment were $122.9 million, $7.3 million higher than the prior year.
Flowserve's EPS Rose $.02 in Third Quarter
Flowserve Corp reported net income of $10.6 million, or 19 cents a share, in the third quarter of 2003, compared with $9.3 million, or 17 cents a share, in the year-ago quarter. Third quarter 2003 sales declined 4 percent to $565.1 million compared with $586.7 million in the prior year period. The decline primarily reflects the ongoing weakness in the company's quick-turnaround business, mainly in the chemical and general industrial sectors. Additionally, the power business was down year over year.
In the Flowserve Pump Division (FPD), third quarter 2003 bookings declined 3 percent to $281.4 million compared with the prior year period. Third quarter 2003 sales were $262.8 million compared with $291.9 million in last year's quarter. "The year-over-year decline in FPD's third quarter operating results reflects lower sales, unfavorable mix and, to a lesser extent, some cost overruns, which we discussed last quarter," Flowserve Chairman, President and Chief Executive Officer C. Scott Greer said. "Reduced overhead absorption, resulting from the lower sales in the quarter, also negatively impacted operating income."
ITT Industries Reported Third Quarter Results
ITT Industries, Inc. announced third quarter 2003 diluted earnings per share of $1.16, which includes a net positive of $0.20 per share impact from special items. Third quarter 2003 revenues rose 11 percent to $1.38 billion, due mainly to growth in Defense and Fluid Technology and the positive impact of foreign currency translation. Organic revenue growth was 5 percent for the corporation.
Third quarter 2003 Fluid Technology Division revenues rose 16 percent or $79.4 million to $564.1 million, driven by organic growth in water/wastewater, acquisitions and the positive impact of foreign currency translation. The water/wastewater business continues its growth trend with revenues up 20 percent and orders up 17 percent, following a strategy of taking products into new markets. Excluding acquisitions and currency translation, the revenue growth for water and wastewater was 10 percent for the quarter. The business secured three $1 million orders for wastewater pumps and services, two in China and one in France. Improved orders for custom industrial pumps in the Middle East and Asia-Pacific contributed to a 10 percent increase in revenue in this business, more than offsetting continued softness in the chemical and pulp/paper markets.
New Pump Products
A-C Pump Offers High Efficiency Horizontal Splitcase Pumps for Municipal Water Supply
ITT A-C Pump offers the double suction, splitcase pump in the water/wastewater industry are designed for a wide range of municipal and industrial applications, including high flow, low lift, raw water and wastewater. There are over 100 sizes available in a variety of materials from bronze-fitted to all stainless steel. The splitcase lines offer capacities to 225,000 gpm, heads to 850 feet, temperatures to 275F and working pressures to 400 psi.
ABS Launches New Wastewater Pump
ABS launches the new IP 900. This pump replaces the current IP 700 – 1200 series. The IP 900 is a complete stainless steel pump suitable for use in corrosive media; it is fitted with Vortex hydraulics and offers 30 mm for solids passage. The IP 900 has primarily designed for de-watering of buildings and sites, and for the pumping of effluent. Testing has also shown that it can be used for emptying containers of every type, septic tanks, as well as for drainage and emptying flooded cellars. A combination of a high grade (AISI 316) stainless steel, static seals of viton and mechanical seal of the silicon carbide, make this the ideal pump for chemically contaminated wastewater, industrial effluent and for use in agriculture.
KNF Neuberger Develops New Vacuum Pump for Autoclaves
Large amounts of liquid in the pump gas can cause problems for pumps, e.g. due to condensation. Compared with many other pump types, the diaphragm pump is not very sensitive to condensation. However, a high percentage of liquid in the pump medium means the process will take much more time if some of the condensation collects in the pump head.
KNF Neuberger GmbH has now added a further model to its large line of diaphragm vacuum pumps specifically for steam sterilization in autoclaves. For this new product as well, priority was given to eliminating the condensation efficiently, to enable processes to run quickly. For instance, the new pump model has outstanding flow properties, due to condensation-repellent surfaces in the transfer area of the pump and optimized flow channels. Those parts of the device that contact the medium are, of course, corrosion-resistant. It produces an ultimate vacuum of 10 mbar abs. and transfers 28 l/min at atmospheric pressure.
For more information on Pumps: World Markets and on project databases click on www.mcilvainecompany.com
Bob McIlvaine
847-784-0012