OLGR Oilgear

The Oilgear Company (NASDAQ:OLGR) today reported record sales, orders and backlog for the first quarter ended March 31, 2005. Net sales were a record $26,043,000 for the first quarter of 2005, a 22% increase from sales of $21,291,000 for the same period in 2004. Net earnings were $425,000 or $0.21 per diluted share for the first quarter of 2005, compared to net earnings of $10,000 or $0.00 per diluted share for the first quarter of 2004. Orders in the first quarter of 2005 were a record $29.7 million, a 13% increase from the first quarter of 2004 and a 28% increase from orders in the fourth quarter of 2004. The backlog grew to $37.8 million at the end of the first quarter of 2005, a 12% increase from the backlog of $34.0 million at the end of 2004. "Our industry experienced continued strong growth in the first quarter of 2005. U.S. orders for hydraulic equipment were up 20% over the first quarter of 2004, according to data provided by the National Fluid Power Association (NFPA). U.S. shipments for the first quarter of 2005 were up 22% over the same period last year, according to NFPA data," said David A. Zuege, president and chief executive officer of Oilgear. "We are pleased to be participating in this recovery. Although there are signs that this unsustainable growth rate is beginning to soften, our orders for April continued strong at nearly $10 million." "In addition to the record sales, we are also very pleased with the significant improvement in our bottom line. Margin improvement is our number-one priority, and while we still have a long way to go, we are making significant progress in this area. Gross profit as a percent of sales improved from 24.4% in the first quarter of 2004 to 26.1% in the first quarter of 2005, as higher volumes generated a better absorption of fixed costs and we benefited from our ongoing efforts to improve margins." At the annual meeting of shareholders held today, the shareholders elected Robert D. Drake, Michael H. Joyce and Thomas L. Misiak as directors to serve until the 2008 annual meeting. A leader in the fluid power industry, The Oilgear Company provides advanced technology in the design and production of unique fluid power components and electronic controls. The company serves customers in the primary metals, machine tool, automobile, petroleum, construction equipment, chemical, plastic, glass, lumber, rubber and food industries. Its products are sold as individual components or integrated into high performance applications. Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as the Company "believes," "anticipates," "expects" or words of similar import. Similarly, statements that describe the Company's future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated. In addition to the assumptions and other factors referenced specifically in connection with such statements, the following could impact the business and financial prospects of the Company: factors affecting the economy generally, including the financial and business conditions of the Company's customers, the demand for customers' products and services that utilize the Company's products, and national and international events; factors affecting the Company's financial performance or condition, including restrictions or conditions imposed by current or prospective lenders, tax legislation, and changes in accounting principles; factors affecting percentage of completion contracts, including the accuracy of estimates and assumptions regarding the timing and levels of costs to complete those contracts; factors affecting the Company's international operations, including fluctuations in currencies, changes in laws and political or financial insecurity of foreign governments; factors affecting the Company's ability to hire and retain competent employees, including unionization of non-union employees and strikes or work stoppages; any further decrease in stock price as a result of market conditions; changes in the law or standards applicable to the Company, including environmental laws and accounting pronouncements; availability of raw materials; unanticipated technological developments that result in competitive disadvantages and may impair existing assets; and factors set forth in the Company's periodic reports filed with the SEC in accordance with the Securities Exchange Act. Shareholders, potential investors and other readers are urged to consider these factors and those set forth in the Company's filings with the SEC carefully in evaluating the forward-looking statements. The forward-looking statements made herein are only made as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. -0- *T The Oilgear Company Consolidated Condensed Operating Statement (Unaudited) Three Months Ended March 31, 2005 2004 ----------------------------- Net sales $26,043,000 $21,291,000 Cost of sales 19,235,000 16,101,000 ----------------------------- Gross profit 6,808,000 5,190,000 Selling, general and administrative expenses 5,668,000 4,670,000 ----------------------------- Operating income 1,140,000 520,000 ----------------------------- Interest expense 610,000 330,000 Other non-operating income (loss), net 41,000 (46,000) ----------------------------- Earnings before income taxes 571,000 144,000 Income tax expense 129,000 113,000 ----------------------------- Net earnings before minority interest 442,000 31,000 Minority Interest 17,000 21,000 ----------------------------- Net earnings $425,000 $10,000 ============================= Basic earnings per share of common stock $0.21 $0.005 ============================= Diluted earnings per share of common stock $0.21 $0.005 ============================= Basic weighted average outstanding shares 1,983,000 1,958,000 Diluted weighted average outstanding shares 2,019,000 1,958,000 The Oilgear Company Consolidated Condensed Balance Sheet (Unaudited) March 31, 2005 December 31, 2004 ------------------------------- ASSETS Current Assets Cash and cash equivalents $3,394,000 $4,109,000 Accounts receivable 17,049,000 17,030,000 Inventories 26,217,000 25,529,000 Other current assets 7,564,000 5,861,000 ------------------------------- Total current assets $54,224,000 $52,529,000 ------------------------------- Net property plant and equipment 17,412,000 18,163,000 Other assets 3,143,000 2,123,000 ------------------------------- $74,779,000 $72,815,000 =============================== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Current debt $18,614,000 $21,334,000 Accounts payable 9,746,000 10,830,000 Other current liabilities 7,192,000 8,508,000 ------------------------------- Total current liabilities $35,552,000 $40,672,000 ------------------------------- Long-term debt 8,682,000 1,302,000 Unfunded employee benefit costs 22,892,000 23,024,000 Other non-current liabilities 734,000 694,000 ------------------------------- Total liabilities $67,860,000 $65,692,000 ------------------------------- Minority interest in consolidated subsidiary 1,035,000 1,037,000 Shareholders' equity 5,884,000 6,086,000 ------------------------------- $74,779,000 $72,815,000 =============================== *T