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Global Power Equipment Group Inc. Reports First Quarter FY2005 Results; Firm Backlog at $321 Million, 60 Percent Above Prior Year TULSA, Okla., May 9 /PRNewswire-FirstCall/ -- Global Power Equipment Group Inc. (NYSE:GEG), a leading design, engineering and manufacturing firm providing a broad array of equipment and services to the global energy, power infrastructure and process industries, today reported financial results for the first quarter ended March 31, 2005. Global Power Equipment Group reported breakeven results for the first quarter of fiscal 2005 or $0.00 per share, on revenues of $67.4 million. This compares to net earnings of $0.8 million, or $0.02 per diluted share, on revenues of $55.1 million for the first quarter of fiscal 2004. First quarter 2005 earnings include the effect of the previously announced restructuring charge of approximately $0.2 million or $0.00 per share. First quarter 2004 earnings included the effect of $2.0 million, or $0.03 per share, of restructuring charges. The Company's gross profit for the first quarter of 2005 totaled $9.8 million representing a 14.5 percent gross margin compared to a gross profit of $11.8 million and a gross margin of 21.4 percent in the first quarter of last year. A more competitive market environment coupled with cost pressures resulting from continued higher steel and energy prices contributed to the lower gross margin performance during the first quarter. The Company generated EBITDA (earnings before income taxes, plus interest, depreciation and amortization) of $1.8 million for the first quarter of 2005, down from the $2.4 million recorded during the same period in 2004, which included $2.0 million of restructuring charges. The decrease in EBITDA was principally due to the lower gross profit. The Company had total cash on hand of $99.4 million at March 31, 2005, $65.7 million of which was restricted for the acquisition of Williams Industrial Services Group, which closed on April 11, 2005. At the end of the first quarter, the Company's firm backlog totaled $321 million compared to $200 million at the end of March 2004 and $309 million at the end of December 2004. Approximately 63 percent of the March 31, 2005 backlog consists of orders from international customers as compared to approximately 72 percent at March 27, 2004. Al Brousseau, Global Power Equipment Group's president and chief operating officer, stated, "Clearly the activity being reported by the major gas turbine manufacturers and our own recent awards and increased backlog point to a stronger 2006." Mr. Brousseau further stated, "With the current cost improvement initiatives we have underway, we believe we are well positioned to improve our results." Earnings Estimate Based upon information management currently has evaluated, in conjunction with this release, the Company estimates fiscal year 2005 revenue of between $440 and $490 million and diluted earnings per share of between $0.15 and $0.21, excluding an estimated $0.03 per diluted share of restructuring charges for the entire year related mainly to the retirement of the Company's CEO on June 30, 2005. Management estimates second quarter 2005 earnings of approximately $0.03 to $0.05 per share, excluding an estimated $0.02 per diluted share of restructuring charges related to the CEO's retirement, on estimated revenues of approximately $110 to $120 million and gross margins of 12.0% to 13.5%. These estimates incorporate the recently completed acquisition of Williams Industrial Services Group, which closed on April 11, 2005. Non-GAAP Financial Measures This release contains disclosure of EBITDA and estimated earnings per diluted share for fiscal 2005 that exclude the effect of estimated restructuring charges, which are non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. The Company believes that EBITDA is a useful measure of evaluating its financial performance because of its focus on the Company's results from operations before interest, income taxes, depreciation and amortization. EBITDA is not a measure of financial performance under generally accepted accounting principles. However, EBITDA is a common alternative measure of operating performance used by investors, financial analysts and rating agencies. A reconciliation of EBITDA to net income (loss) and of estimated earnings per diluted share excluding restructuring charges to estimated earnings are included in the exhibits to this release. About Global Power Equipment Group 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 energy, power infrastructure and process industries. The Company designs, engineers and manufactures a comprehensive portfolio of equipment for gas turbine power plants and power-related equipment for industrial operations, and has over 30 years of power generation industry experience. The Company's equipment is installed in power plants and in industrial operations in more than 40 countries on six continents and believes, in its product lines, it has one of the largest installed bases of equipment for power generation in the world. In addition, the Company provides its customers with value-added services including engineering, retrofit, maintenance, repair and general plant services. Additional information about Global Power Equipment Group may be found at http://www.globalpower.com/ . 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, are forward-looking statements within the meaning of U.S. federal securities laws and are subject to a number of risks, assumptions and uncertainties that could cause the Company's actual results to differ materially from those projected, including 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, delays in integrating the operations of Williams Industrial Services Group and the Company, and changes in the economic, social and political conditions in the countries in which we operate, including fluctuations in foreign currency exchange rates. Information concerning some of the other factors that could cause actual results to differ materially from those in, or implied by, the forward-looking statements are set forth under "Risk Factors" in the Company's Form 10-K for the period ended December 31, 2004, and other reports on file with the U.S. Securities and Exchange Commission. The Company assumes no obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise. Company Contact: Bob Zwerneman Director of Investor Relations (918) 274-2398 GLOBAL POWER EQUIPMENT GROUP INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) Three Months Ended March 31, March 27, 2005 2004 Revenues $67,387 $55,126 Cost of sales 57,606 43,313 Gross profit 9,781 11,813 Selling and administrative expenses 8,916 10,261 Operating income 865 1,552 Interest expense 896 200 Income (loss) before income taxes and minority interest (31) 1,352 Income tax provision (benefit) (11) 514 Income (loss) before minority interest (20) 838 Minority interest 10 --- Net income (loss) $(30) $838 Basic income per common share Weighted average shares outstanding - basic 46,813 45,657 Net income (loss) $--- $0.02 Diluted income per common share Weighted average shares outstanding - diluted* 46,813 46,727 Net income (loss) $--- $0.02 * Diluted income per common share for the three months ended March 31, 2005 excludes potentially dilutive common shares as the inclusion of the shares would be anti-dilutive. GLOBAL POWER EQUIPMENT GROUP INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) March 31, December 31, 2005 2004 ASSETS Current assets: Cash and cash equivalents $24,682 $24,331 Restricted cash 16,720 16,669 Accounts receivable, net of allowance of $882 and $894 37,693 40,260 Inventories 11,102 8,857 Costs and estimated earnings in excess of billings 61,303 60,861 Deferred tax assets 10,189 10,576 Other current assets 17,459 15,966 Total current assets 179,148 177,520 Property, plant and equipment, net 22,409 22,983 Deferred tax assets 52,237 51,030 Goodwill, net 45,000 45,000 Restricted cash 58,000 57,688 Other assets 12,927 12,673 Total assets $369,721 $366,894 LIABILITIES AND EQUITY Current liabilities: Current maturities of long-term debt $18,054 $16,854 Accounts payable 28,130 27,852 Accrued compensation and employee benefits 4,572 4,545 Accrued warranty 9,954 9,758 Billings in excess of costs and estimated earnings 55,266 52,707 Other current liabilities 7,967 8,005 Total current liabilities 123,943 119,721 Other long-term liabilities 4,102 4,374 Long-term debt, net of current maturities 77,500 78,750 Commitments and contingencies Minority interest 1,639 1,629 Stockholders' equity Common stock 469 468 Paid-in capital deficit (17,034) (17,698) Deferred compensation (77) (91) Accumulated comprehensive income 3,104 3,636 Retained earnings 176,075 176,105 Total stockholders' equity 162,537 162,420 Total liabilities and equity $369,721 $366,894 GLOBAL POWER EQUIPMENT GROUP INC. SUPPLEMENTAL STATISTICAL INFORMATION (in thousands) Three Months Ended March 31, March 27, 2005 2004 Net income (loss) $(30) $838 Add back: Income tax provision (benefit) (11) 514 Interest expense 896 200 Depreciation and amortization 978 838 EBITDA (A) $1,833 $2,390 (A) EBITDA represents net income plus income taxes, interest, depreciation and amortization. While considered the most common definition used by investors and financial analysts, the EBITDA presented above may not be comparable to similarly titled measures reported by other companies. The Company believes that EBITDA, while providing useful information, should not be considered in isolation or as an alternative to other financial measures determined under GAAP. GLOBAL POWER EQUIPMENT GROUP INC. RECONCILIATION OF NON-GAAP ESTIMATED EARNINGS TO A GAAP BASIS Three Months Ended Twelve Months Ended June 30, 2005 December 31, 2005 (Low (High (Low (High estimate) estimate) estimate) estimate) Estimated earnings per share on a non-GAAP basis $0.03 $0.05 $0.15 $0.21 Impact of estimated restructuring charges (0.02) (0.02) (0.03) (0.03) Estimated earnings per share on a GAAP basis $0.01 $0.03 $0.12 $0.18 DATASOURCE: Global Power Equipment Group Inc. CONTACT: Bob Zwerneman, Director of Investor Relations of Global Power Equipment Group Inc., +1-918-274-2398 Web site: http://www.globalpower.com/

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