Gardner Denver's fourth quarter 2011 revenues of $613.7 million were up 16 percent over the $530.0 million reported in the fourth quarter of 2010. Operating income for the fourth quarter of 2011 was $108.1 million, a 35 percent increase from $80.4 million recorded in the same period of 2010. Operating margin improved 240 basis points to 17.6 percen in the fourth quarter of 2011. Net income in the fourth quarter of 2011 increased 36 percent to a record $77.4 million, or $1.52 per diluted share, from the fourth quarter 2010 level of $57.1 million, or $1.08 per diluted share. Excluding profit improvement costs and other items from DEPS as reflected on the reconciliation schedule below, fourth quarter 2011 Adjusted DEPS were $1.54, a 34 percent increase over fourth quarter 2010. (1)
"Gardner Denver had a solid fourth quarter to cap off a record year in 2011. Organic revenue growth in the fourth quarter of 15 percent was driven by continued strength in energy and our later cycle businesses in the Engineered Products Group ('EPG'). Operating margins expanded 240 basis points driven by higher revenue, our operational excellence initiatives and pricing in our energy business. The majority of our businesses continued to experience healthy order intake as we ended the year with a backlog of $670 million," said Barry L. Pennypacker, Gardner Denver's President and Chief Executive Officer.
"With the solid performance in the fourth quarter, we finished a record-setting 2011 with regards to revenue, operating income, operating margins, net income and DEPS," continued Mr. Pennypacker. "The strength we saw across our portfolio of businesses, particularly in energy, led to full year revenues of $2.371 billion, up 25 percent from 2010, of which 20 percent was organic growth. Additionally, operating margins increased to 16.9 percent for the total year of 2011, an increase of 360 basis points from 2010 and a reflection of the team's commitment to operational excellence, supported by the principles of the Gardner Denver Way.
"Cash flow provided by operating activities for the quarter was $88 million, an increase of 80 percent over last year. For the total year, cash provided by operating activities was $300 million, or 108 percent of net income. In 2011, we completed the acquisition of Robuschi for approximately $200 million, repurchased shares for $131 million and invested $56 million in capital equipment, with a focus on increasing capacity and enhancing operational efficiency. Our strong balance sheet and cash generation coupled with our disciplined capital allocation strategy should provide the flexibility to continue to make selective acquisitions and repurchase shares in 2012 if the appropriate opportunities become available.
"Looking forward, we expect our portfolio of businesses to grow in 2012, led by our higher margin, energy and later cycle EPG businesses and associated aftermarket services. We remain more cautious in our outlook for the Industrial Products Group ('IPG'), particularly in Europe, and we continue to actively work on profit improvement programs across IPG in an effort to expand margins in a slower growth environment. For the first quarter of 2012, we anticipate DEPS to be approximately $1.20 to $1.30, and we project our full-year 2012 DEPS to be in the range of $5.85 to $6.05. These projections include acquisition related and profit improvement costs totaling $0.10 per diluted share for the first quarter and $0.15 per diluted share for the total year. First quarter 2012 Adjusted DEPS are expected to be in a range of $1.30 to $1.40 and full year 2012 Adjusted DEPS are expected to be in a range of $6.00 to $6.20. Ultimately, our focus on operational excellence, investment in innovation, progress on aftermarket initiatives, expansion in emerging markets and track record of accretive acquisitions should enable us to perform well in 2012," stated Mr. Pennypacker.