DresserRand Group Inc. (DRC) filed Quarterly Report for the period ended 2009-09-30.
Dresser-Rand Group is among the largest global suppliers of rotating equipment solutions to the worldwide oil gas petrochemical and process industries. Their services and products are used for a wide range of applications including oil and gas production high-pressure field injection and enhanced oil recovery pipelines refinery processes natural gas processing and petrochemical production. Dresserrand Group Inc. has a market cap of $2.31 billion; its shares were traded at around $28 with a P/E ratio of 10.5 and P/S ratio of 1.
Highlight of Business Operations:
Operating income. Operating income was $105.6 for the three months ended September 30, 2009, compared to $82.8 for the three months ended September 30, 2008, an increase of $22.8. The increase was primarily attributable to higher gross profit discussed above. As a percentage of revenues, operating income for the three months ended September 30, 2009 was 17.3%, compared to 15.2% for the three months ended September 30, 2008.
Interest expense, net. Interest expense, net was $8.3 for the three months ended September 30, 2009, compared to $7.1 for the three months ended September 30, 2008, including approximately $0.8 of amortization of deferred financing costs for both periods. We experienced lower interest income in the three months ended September 30, 2009 resulting from lower interest rates.
Bookings and backlog. Bookings for the three months ended September 30, 2009, were $290.8 compared to $733.1 for the three months ended September 30, 2008, a decrease of $442.3 or 60.3%. New units segment bookings decreased $363.2, and aftermarket parts and services bookings decreased $79.1. The decline in bookings is discussed further in the segment information below.
Bookings and Backlog. New units bookings for the three months ended September 30, 2009 were $79.0 compared to $442.2 for the three months ended September 30, 2008. The decrease in new units bookings reflects the change in the market as end-users, for tactical reasons, have demonstrated less urgency to place orders. While it is difficult to accurately predict whether the environment will worsen or improve, we believe that the decline is the result of a temporary delay in the placement of orders rather than the cancellation of projects. The backlog was $1,289.2 at September 30, 2009, compared to $1,966.0 at September 30, 2008.
Revenues. Aftermarket parts and services revenues were $264.9 for the three months ended September 30, 2009, compared to $237.2 for the three months ended September 30, 2008, an increase of $27.7 or 11.7%. The Aftermarket segment experienced higher volumes as well as some improved pricing during the three months ended September 30, 2009 as compared to the three months ended September 30, 2008. Elapsed time from order entry to completion in this segment typically ranges from one day to 12 months depending on the nature of the product or service.
Bookings and Backlog. Bookings for the three months ended September 30, 2009 were $211.8, compared to $290.9 for the three months ended September 30, 2008. The decline in bookings in the aftermarket segment for the three months ended September 30, 2009, has principally resulted from a significant decline in order flow from one national oil company client, currency fluctuations and reduced maintenance spending by our clients worldwide. Backlog was $355.7 as of September 30, 2009 compared to $419.9 at September 30, 2008.
DRC is in the portfolios of John Keeley of Keeley Fund Management, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC.
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