<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-23612
GARDNER DENVER MACHINERY INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 76-0419383
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1800 GARDNER EXPRESSWAY
QUINCY, ILLINOIS 62301
(Address of Principal Executive Offices and Zip Code)
(217) 222-5400
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirement for the past 90 days.
Yes X No
------- -------
Number of shares outstanding of the issuer's Common Stock, par value
$.01 per share, as of August 9, 1996: 4,890,073 shares.
===============================================================================
<PAGE> 2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
<TABLE>
GARDNER DENVER MACHINERY INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in thousands, except per share amounts)
(Unaudited)
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
1996 1995
------- -------
<S> <C> <C>
Revenues $48,914 $49,215
Costs and expenses:
Cost of sales (exclusive of depreciation
and amortization) 33,976 35,364
Depreciation and amortization 1,911 2,153
Selling and administrative expenses 6,278 5,852
Interest expense 500 1,351
Loss on investment in and advances to affiliate 98 -
------- -------
Income before income taxes 6,151 4,495
Provision for income taxes 2,460 2,023
------- -------
Net income $3,691 $2,472
======= =======
Earnings per share $0.73 $0.51
======= =======
- ------------------
The accompanying notes are an integral part of this statement.
</TABLE>
2
<PAGE> 3
<TABLE>
GARDNER DENVER MACHINERY INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in thousands, except per share amounts)
(Unaudited)
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1996 1995
------- -------
<S> <C> <C>
Revenues $97,483 $99,189
Costs and expenses:
Cost of sales (exclusive of depreciation
and amortization) 67,532 70,421
Depreciation and amortization 3,798 4,321
Selling and administrative expenses 12,375 12,102
Interest expense 1,094 2,757
Loss on investment in and advances to affiliate 98 -
------- -------
Income before income taxes 12,586 9,588
Provision for income taxes 5,034 4,315
------- -------
Net income $7,552 $5,273
======= =======
Earnings per share $1.50 $1.09
======= =======
- ------------------
The accompanying notes are an integral part of this statement.
</TABLE>
3
<PAGE> 4
<TABLE>
GARDNER DENVER MACHINERY INC.
CONSOLIDATED BALANCE SHEET
(dollars in thousands, except per share amounts)
<CAPTION>
(Unaudited)
JUNE 30, DECEMBER 31,
1996 1995
----------- --------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 7,511 $ 1,869
Receivables, net 35,537 39,933
Inventories, net 40,726 46,318
Deferred income taxes 191 -
Other 1,174 2,217
-------- --------
Total current assets 85,139 90,337
-------- --------
Plant and equipment, net 30,436 32,184
Intangibles, net 41,973 43,050
Deferred income taxes 17,838 17,808
Investment in and advances to affiliate 722 -
Other assets 757 872
-------- --------
Total assets $176,865 $184,251
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 1,147 $ 1,441
Accounts payable and accrued liabilities 29,335 29,675
Deferred income taxes - 486
-------- --------
Total current liabilities 30,482 31,602
-------- --------
Long-term debt, less current maturities 24,237 36,661
Postretirement benefits other than pensions 57,913 60,108
Other long-term liabilities 499 646
-------- --------
Total liabilities 113,131 129,017
-------- --------
Stockholders' equity:
Common stock, $.01 par value; 50,000,000 shares
authorized; 4,877,804 shares issued and
outstanding at June 30, 1996 49 48
Capital in excess of par value 134,145 133,175
Retained deficit (70,437) (77,989)
Cumulative translation adjustment (23) -
-------- --------
Total stockholders' equity 63,734 55,234
-------- --------
Total liabilities and stockholders' equity $176,865 $184,251
======== ========
The accompanying notes are an integral part of this statement.
</TABLE>
4
<PAGE> 5
<TABLE>
GARDNER DENVER MACHINERY INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(dollars in thousands)
(Unaudited)
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1996 1995
-------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 7,552 $ 5,273
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 2,652 3,283
Amortization 1,146 1,038
Loss on investment in and advances to affiliate 98
Stock issued for employee benefit plans 614 621
Deferred income taxes (707) (579)
Changes in assets and liabilities:
Receivables, net 4,396 (4,213)
Inventories, net 5,592 2,991
Accounts payable and accrued liabilities (340) 2,012
Other assets and liabilities, net (1,253) (2,265)
-------- -------
Net cash provided by operating activities 19,750 8,161
-------- -------
Cash flows from investing activities:
Capital expenditures (1,042) (1,072)
Disposals of plant and equipment 138 36
Investment in and advances to affiliate (843) -
-------- -------
Net cash used for investing activities (1,747) (1,036)
-------- -------
Cash flows from financing activities:
Principal payments on long-term debt (12,718) (8,720)
Proceeds from stock options 357 15
-------- -------
Net cash used for financing activities (12,361) (8,705)
-------- -------
Increase (decrease) in cash and cash equivalents 5,642 (1,580)
-------- -------
Cash and cash equivalents, beginning of period 1,869 3,330
-------- -------
Cash and cash equivalents, end of period $ 7,511 $ 1,750
======== =======
The accompanying notes are an integral part of this statement.
</TABLE>
5
<PAGE> 6
NOTES TO FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
Basis of Presentation. The accompanying financial statements include the
accounts of Gardner Denver Machinery Inc. ("Gardner Denver" or the
"Company") and its majority-owned subsidiaries. All transactions between
Gardner Denver Machinery Inc. and its majority-owned subsidiaries have been
eliminated.
The financial information presented as of any date other than December 31
has been prepared from the books and records without audit. The
accompanying consolidated financial statements have been prepared in
accordance with the instructions to Form 10-Q and do not include all of the
information and the footnotes required by generally accepted accounting
principles for complete statements. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of such financial statements, have been included.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
These consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes thereto for the year ended
December 31, 1995 contained in the Company's 1995 Annual Report to
Stockholders.
Interest Rate Swap Agreements. The interest differential to be paid or
received under these agreements is accrued as the interest rates change, and
is recognized over the life of the agreements. See Note 6 in this document
for additional information on these agreements.
Investment in and Advances to Affiliate. The Company uses the equity method
of accounting for its 25% interest in GVM Gesellschaft fur
Schraubenverdichter und Schraubenmotorentechnologie mbH ("GVM"). Due to
losses incurred to date by GVM, consolidated retained earnings of the
Company do not include any undistributed earnings from GVM accounted for by
the equity method at June 30, 1996. There were no equity investments in GVM
at December 31, 1995. For additional information regarding the investment
in and advances to GVM, see Note 7.
NOTE 2. INCOME TAXES.
In the first six months of 1996 and 1995, the Company paid $5.4 million and
$1.0 million, respectively to the various taxing authorities and recognized
$5.0 million and $4.3 million, respectively in tax expense. In addition,
during the first quarter of 1996, the Company received $2.3 million in tax
refunds from an overpayment of federal income taxes in the fourth quarter of
1995.
6
<PAGE> 7
NOTE 3. INVENTORIES.
<TABLE>
<CAPTION>
June 30 December 31,
1996 1995
-------- --------
<S> <C> <C>
Raw Materials $ 7,434 $ 7,398
Work-in-process 7,187 6,702
Finished goods, including parts
and subassemblies 44,753 47,334
Perishable tooling and supplies 3,096 3,096
-------- --------
62,470 64,530
Excess of current standard costs
over LIFO costs (13,541) (10,606)
Excess and slow-moving inventory (8,203) ( 7,606)
-------- --------
Total net inventories $ 40,726 $ 46,318
======== ========
</TABLE>
NOTE 4. LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS.
Long-term debt at June 30, 1996 consisted of certain industrial revenue
bonds and other notes due between 1997 and 2001, as well as $23 million from
a $65 million credit facility entered into on November 30, 1995. Proceeds
from this three-year, unsecured, revolving loan were used to repay a secured
term loan and revolving line of credit, and to provide for general corporate
purposes. At June 30, 1996, $42 million remained available for additional
borrowings. The revolving loan will mature on November 30, 1998.
Maturities of long-term debt for the five years subsequent to June 30, 1996
are $1.1 million for 1997; $0.3 million for 1998; $23.3 million for 1999;
$0.3 million for 2000; and $0.3 million for 2001.
Total interest expense during the first six months of 1996 and 1995 totaled
$1.1 and $2.8 million respectively. Interest paid for each period was not
materially different from the amount expensed.
NOTE 5. EARNINGS PER SHARE.
Earnings per share were calculated for the three month and six month periods
ended June 30, 1996 based on 5,084,382 and 5,047,671 weighted average shares
outstanding for each period respectively, while earnings per share for the
three and six month periods ended June 30, 1995 were calculated based on
4,877,416 and 4,826,844 weighted average shares outstanding respectively.
NOTE 6. INTEREST RATE SWAP AGREEMENTS.
At June 30, 1996, the Company had two interest rate swap agreements with a
commercial bank (the "Counter Party") outstanding, having a cumulative
notional principal amount of $30 million. The swaps provide an average
fixed LIBOR rate of 6%. One interest rate swap terminates in November 1996
and the second in November 1997. The Counter Party has an option to extend
either, or both agreements for one additional year each. The Company is
exposed to credit loss in the event of
7
<PAGE> 8
nonperformance by the Counter Party to the interest rate swap agreements.
However, the Company does not anticipate such nonperformance.
NOTE 7. INVESTMENT IN AND ADVANCES TO AFFILIATE.
On February 13, 1996 the Company exercised an option to purchase 25% of the
common stock in GVM, a privately held German company. The investment is
accounted for using the equity method. As part of the agreement, the
Company has committed to loan GVM a total of $0.9 million over the remainder
of 1996. As of June 30, 1996, the Company has loaned its affiliate $0.6
million of this commitment. The agreement specifies the payment of market
interest rates and the re-payment of the loan at the end of five years. The
loan is included in Investment in and Advances to Affiliate. The Company
has an option to acquire an additional 24% of GVM's aggregate authorized
capital by converting part of its claim to any payments of principal and
accrued interest under the loan into such capital interest.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS.
Revenues
For both the three and six month periods ended June 30, 1996, revenues for
compressor products have remained consistent with the comparable periods of
1995, adjusted to exclude nonrecurring revenues. Revenues for petroleum
products have increased significantly in the three and six month periods of
1996, compared to the comparable periods of 1995, due to incremental demand
resulting from the impact of higher prices of oil and natural gas on
drilling activity.
For the six months ended June 30, 1996, revenues were $97.5 million compared
to $99.2 million in the same period of 1995. Revenues in the first half of
1995 included approximately $3.9 million from sales of castings and drilling
components which did not recur in 1996 since the Company's foundry and
drilling components product line were sold in the fourth quarter of 1995.
Excluding sales of castings and drilling components, revenues increased
approximately $2.2 million (2%) for the six month period of 1996 compared to
the same period of 1995. Revenues in the Compressed Air Products segment,
excluding sales of castings, increased approximately 1% from $84.9 million
for the six month period of 1995 to $85.6 million for the comparable period
of 1996. Excluding drilling components, Petroleum Products segment revenues
increased approximately 14% from $10.4 million for the six month period of
1995 to $11.9 million for the comparable period of 1996.
Revenues in the second quarter of 1996 were $48.9 million compared to $49.2
million in the same quarter of 1995. Revenues in the second quarter of 1995
included approximately $2.0 million from sales of castings and drilling
components which did not recur in 1996. Excluding 1995 casting and drilling
components sales, revenues in the second quarter of 1996 increased
approximately $1.7
8
<PAGE> 9
million (4%) from the same period in 1995. Excluding castings, revenues for the
Compressed Air Products segment rose approximately 1% from $42.1 million in the
second quarter of 1995 to $42.3 million in the same period of 1996. Petroleum
Products segment revenues, excluding drilling components, increased
approximately 29% from $5.1 million in the second quarter of 1995 to $6.6
million in the comparable quarter of 1996.
Sequentially, revenues in the second quarter of 1996 increased $0.3 million,
or 1% from the first quarter of 1996. The Compressed Air Products segment
revenue decreased $1.0 million (2%) in the second quarter compared to the
first quarter of 1996 due to decreased production levels in various
industrial markets, as evidenced by the decreased capacity utilization
rates in manufacturing, and lower levels of aftermarket sales. The
Petroleum Products segment revenue increased $1.3 million (25%) in the
second quarter compared to the first quarter of 1996, due to an increase in
drilling activity related to higher prices for natural gas.
Costs and Expenses
Gross margins (defined as sales less cost of sales exclusive of depreciation
and amortization) for the six month period of 1996 increased $1.2 million
(4%) to $30.0 million from $28.8 million in the same period of 1995, despite
the reduction in revenues. Gross margin as a percentage of sales improved
to 30.7% in the six month period of 1996 from 29.0% in the same period of
1995. If adjusted to exclude castings and drilling components sales, which
generate below average margins, the gross margin percentage for the six
month period of 1995 would have been 29.7%. For the second quarter of 1996
the gross margin percentage improved to 30.5% from 28.1% in the second
quarter of 1995 (28.6% adjusted to exclude casting and drilling components
sales). The improvement for both the six month period and the quarter is
indicative of the combined effect of previously completed cost reduction
efforts and manufacturing process improvements. The results for the first
quarter of 1996 also included increased revenues from aftermarket sales
which generated higher incremental gross margin than unit sales.
Gross margin for the second quarter of 1996 decreased slightly from that of
the first quarter of 1996, primarily as a result of the relative decrease
in revenues from aftermarket sales in the second quarter in comparison to
the first.
Depreciation and amortization decreased 12% to $3.8 million in the first six
months of 1996, compared with $4.3 million for the same period of 1995. For
the second quarter, depreciation and amortization decreased 11% to $1.9
million in 1996, compared to $2.1 million in 1995. The decrease in each
period was primarily a result of the disposal of the foundry assets upon the
completion of the sale in 1995. An expense reduction also results from
existing assets becoming fully depreciated. For both the six and three
month periods, depreciation and amortization expense as a percentage of
revenues decreased from approximately 4.4% in 1995 to 3.9% in 1996 due to
the effect of lower depreciation expense discussed above.
Selling and administrative expenses increased in the first six months of
1996 by 2% to $12.4 million from $12.1 million in the same period of 1995.
As a percentage of revenues, selling and
9
<PAGE> 10
administrative expenses for the six months increased to 12.7% in 1996 from 12.2%
in 1995. For the second quarter, selling and administrative expenses increased
7% to $6.3 million in 1996 from $5.9 million for the same period of 1995. As a
percentage of revenues, selling and administrative expenses for the second
quarter increased to 12.8% in 1996 from 11.9% in 1995. The increases in selling
and administrative expenses for the three and six month periods are partially
due to higher manpower levels and related travel and training expenses since
the Company operated with several employment openings in the previous year.
Additionally, increased professional fees resulted during the analysis and
negotiations associated with the pending acquisitions of TCM Investments,
Inc. and NORAMPTCO, Inc..
During the second quarter of 1996, the Company recognized its proportionate
share ($0.1 million) of the losses incurred by GVM as a loss on investment
in and advances to affiliate. For additional information on this
investment, refer to Notes 1 and 4 of the Notes to Financial Statements
contained in this document.
Interest expense decreased $1.7 million (60%) to $1.1 million for the six
month period of 1996 compared to the same period of 1995, due to a
significantly lower debt level and reduced interest rates in effect during
1996 compared to 1995. During the second quarter of 1996, interest expense
decreased $0.9 million (63%) compared to the same period in 1995, for the
same reasons. In November 1995, the Company executed a new credit facility
which reduced its effective interest rate by approximately 200 basis points.
See Note 4 of the Notes to Financial Statements contained in this document
for further information on the Company's borrowing arrangements.
Compared to the same period of 1995, income before taxes increased $3.0
million (31%) in the first six months of 1996 to $12.6 million, primarily
due to increased gross margin and depreciation and interest expense
reductions. For the second quarter of 1996, income before taxes increased
$1.7 million (37%) from the same period of 1995 to $6.2 million for the same
reasons.
Compared to 1995, provision for income taxes increased by $0.7 million to
$5.0 million for the first six months of 1996, and by $0.4 million to $2.5
million for the second quarter of 1996, as a result of the increase in
income before taxes. The Company's effective tax rate declined to 40% in
1996 from 45% in 1995, which reduced income taxes for the quarter by $0.3
million ($0.06 per share) compared to the previous year. For the six month
period, the lower effective tax rate in 1996 decreased income taxes by $0.6
million ($0.12 per share) compared to 1995. The reduction in the tax rate is
due to benefits generated through the Company's Foreign Sales Corporation
(FSC) and other tax strategies.
Net income for the six months ended June 30, 1996 increased $2.3 million
(43%) to $7.6 million from $5.3 million for the same period in 1995 and
increased $1.2 million (49%) to $3.7 million for the second quarter compared
to 1995, for the reasons previously discussed. During the second quarter of
1996, net income declined $0.2 million (4%) compared to the first quarter of
the year due to the increase in selling and administrative expenses and the
loss on investment in and advances to affiliate.
10
<PAGE> 11
LIQUIDITY AND CAPITAL RESOURCES
Operating Working Capital
During the six months ended June 30, 1996, operating working capital
(defined as receivables plus inventories, less accounts payable and accrued
liabilities) decreased $9.6 million to $46.9 million. Receivables decreased
$4.4 million since the end of 1995, substantially due to the receipt of a
federal income tax refund in the first quarter of 1996 and higher
collections through increased use of progress payments. The refund resulted
from an overpayment of taxes related to the timing of the sale of the
drilling components product line and the associated inventory liquidation.
Taxes were paid assuming that the inventory liquidation would not be
consummated in 1995, but this sale was completed in late December. The $5.6
million decrease in inventories was a result of continued focus on improving
inventory turnover and the shipment of several large orders in 1996 which
had been manufactured in 1995 and held at the customer's request.
Inventories also declined $2.1 million due to increased sales of petroleum
products which are substantially from stock.
Cash Flows
During the six months ended June 30, 1996, the Company generated cash flows
from operations totaling $19.8 million, an increase of $11.6 million (142%)
over the comparable period in 1995. This substantial increase was primarily
the result of the increased net income ($2.3 million) and the decreased
operating working capital ($8.9 million) discussed previously. The cash
flows enabled the Company to expend $1.0 million on capital expenditures,
invest in a joint venture ($0.8 million), and repay $12.7 million of
long-term debt principal, resulting in an increase in the cash balance of
$5.6 million.
Capital Expenditures and Commitments
Capital projects to reduce product costs, improve product quality, increase
manufacturing efficiency and operating flexibility or expand production
capacity resulted in expenditures of $1.0 million in the first six months of
1996, which was not materially different than the level of capital
expenditures in the comparable period in 1995. Commitments for capital
expenditures at June 30, 1996 totaled $6.0 million, although management
expects additional capital authorizations to be committed during the
remainder of the year.
SUBSEQUENT EVENTS
During the second quarter, the Company announced the pending acquisitions of
NORAMPTCO, Inc., a manufacturer of centrifugal blowers and exhausters with
revenues of $41.3 million for the year ended January 31, 1996, and TCM
Investments, Inc., ("TCM") a manufacturer and packager of well stimulation
pumps and compressed natural gas compressors with revenues of $10.6 million
for the year ended April 30, 1996. On August 9, 1996, the Company's
purchase of NORAMPTCO, Inc. was completed. The Company anticipates the
completion of the acquisition of TCM by August 31, 1996.
11
<PAGE> 12
PENDING LITIGATION
The Company is a defendant (together with Cooper) in a lawsuit alleging
misappropriation of trade secrets and interference with contractual
relations in connection with research and development of single screw design
technology and its related manufacturing techniques. The suit requests
$4.66 million in compensatory damages and an unspecified amount in punitive
damages. As part of the spin-off of the Company from Cooper, the Company
agreed to indemnify Cooper for losses incurred in this type of lawsuit.
Although the extent of the liability, if any, remains unknown, management
does not believe the ultimate resolution of this legal action will have a
materially adverse impact on the results of operations or the financial
condition of the Company.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's Annual Meeting of Stockholders (the "Annual Meeting") was held
pursuant to notice on May 7, 1996. At the Annual Meeting Donald G. Barger,
Jr. and Michael J. Sebastian were elected to serve as directors for a
three-year term expiring in 1999. There were 4,056,226 affirmative votes
cast and 72,872 votes withheld concerning Mr. Barger's election as a director,
and 4,055,628 affirmative votes cast and 73,470 votes withheld concerning Mr.
Sebastian's election as a director.
Two amendments to the Company's Long-Term Incentive Plan (the "Incentive
Plan") were also approved at the Annual Meeting. There were 2,947,773
affirmative votes cast for the amendments, 611,201 votes against the
amendments, 22,403 abstaining votes and 547,721 broker non-votes.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) List of Exhibits:
11.1 Computation of earnings per share for the three months ended
June 30, 1996.
11.2 Computation of earnings per share for the six months ended June
30, 1996.
27.0 Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter ended June
30, 1996.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GARDNER DENVER MACHINERY INC.
Date: August 9, 1996 By: /s/Ross J. Centanni
--------------------------------
Ross J. Centanni
President and Chief Executive Officer
Date: August 9, 1996 By: /s/Philip R. Roth
--------------------------------
Philip R. Roth
Vice President, Finance and
Chief Financial Officer
13
<PAGE> 14
GARDNER DENVER MACHINERY INC.
<TABLE>
EXHIBIT INDEX
<CAPTION>
EXHIBIT
NO. DESCRIPTION
<C> <S>
11.1 Computation of earnings per share for the three months ended June 30, 1996.
11.2 Computation of earnings per share for the six months ended June 30, 1996.
27.0 Financial Data Schedule.
</TABLE>
14
<PAGE> 1
Exhibit 11.1
<TABLE>
COMPUTATION OF EARNINGS PER COMMON SHARE
(in thousands, except per share amounts)
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
1996 1995
------ ------
<S> <C> <C>
Primary earnings
Net Income $3,691 $2,472
====== ======
Shares
Weighted average number of common
shares outstanding 4,866 4,747
Assuming conversion of options issued
and outstanding 218 130
------ ------
Weighted average number of common
shares outstanding as adjusted 5,084 4,877
====== ======
Primary earnings per common share $0.73 $0.51
====== ======
Fully diluted earnings<F*>
Net Income $3,691 $2,472
====== ======
Shares
Weighted average number of common
shares outstanding 4,866 4,747
Assuming conversion of options issued
and outstanding 225 183
------ ------
Weighted average number of common
shares outstanding as adjusted 5,091 4,930
====== ======
Fully diluted earnings per common share $0.73 $0.50
====== ======
<FN>
<F*>This calculation is submitted in accordance with Securities Exchange Act of
1934 Release No. 9083 although not required by footnote 2 to paragraph 14 of
APB Opinion No. 15 because it results in dilution of less than 3%.
</TABLE>
15
<PAGE> 1
Exhibit 11.2
<TABLE>
COMPUTATION OF EARNINGS PER COMMON SHARE
(in thousands, except per share amounts)
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1996 1995
------ ------
<S> <C> <C>
Primary earnings
Net Income $7,552 $5,273
====== ======
Shares
Weighted average number of common
shares outstanding 4,847 4,734
Assuming conversion of options issued
and outstanding 201 93
------ ------
Weighted average number of common
shares outstanding as adjusted 5,048 4,827
====== ======
Primary earnings per common share $1.50 $1.09
====== ======
Fully diluted earnings<F*>
Net Income $7,552 $5,273
====== ======
Shares
Weighted average number of common
shares outstanding 4,847 4,734
Assuming conversion of options issued
and outstanding 221 119
------ ------
Weighted average number of common
shares outstanding as adjusted 5,068 4,853
====== ======
Fully diluted earnings per common share $1.49 $1.09
====== ======
<FN>
<F*>This calculation is submitted in accordance with Securities Exchange Act of
1934 Release No. 9083 although not required by footnote 2 to paragraph 14 of
APB Opinion No. 15 because it results in dilution of less than 3%.
</TABLE>
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
Consolidated Financial Statements of Gardner Denver Machinery Inc. for
the year-to-date period ended June 30, 1996 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
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0
0
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