Global Power Equipment Group Inc. Provides Update on 2005 10-K Filing and Restatement
March 30 2006 - 9:45PM
PR Newswire (US)
TULSA, Okla., March 30 /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 announced that additional time will be required
to complete its financial statements which will delay the filing of
its Form 10-K for 2005 beyond the previously announced March 31,
2006 date. The unanticipated delay in filing is due to additional
time required for review and completion of the previously announced
restatement, as well as for a review of contract cost reporting
issues in connection with several projects in the Company's Heat
Recovery segment. The Audit Committee of the Company's Board of
Directors has retained independent legal counsel, Jones Day, to
conduct a review of the Heat Recovery segment contract cost
reporting issues. As previously announced, the Company expects to
include restated results for fiscal 2004, including the second,
third, and fourth quarters of fiscal 2004 and the first, second and
third quarters of 2005 in its Form 10-K for 2005. Management
continues to believe that the restatement relating to two projects
in China will result in an unaudited adjustment to these quarters
that could cumulatively decrease previously reported operating
income by approximately $7 million. As a result of this delay in
filing the 2005 Form 10-K, the Company will be in technical default
under its senior credit facility and will not be able to access
credit under the credit facility. Additionally, the Company will be
in technical default under its outstanding convertible notes, which
will result in a higher rate of interest and other penalties under
the convertible notes provisions. The Company has been in
discussions with its credit facility lenders, and expects to begin
discussions with the convertible note holders, regarding
appropriate waivers. Management believes it has sufficient cash on
hand to provide liquidity to operate the business until the Form
10-K is filed or until an appropriate waiver is obtained. The
Company expects to have cash and cash equivalents of approximately
$30 million at March 31, 2006 compared to approximately $21 million
at December 31, 2005. Al Brousseau, president and chief executive
officer, said, "Serving our customers and effective management of
our business operations -- including the establishment of the
operational and process improvements cited in our last earnings
update call -- continue to be the top priorities for the entire
senior management team. We are implementing the measures necessary
to ensure that the issues behind our restatement and delayed 10-K
filing are resolved immediately. Across our three businesses units,
we believe our execution has improved significantly and the market
opportunities continue to gain momentum. With the new processes,
systems and controls that we are implementing, we strongly believe
our future financial performance will be significantly enhanced."
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 completion of the
audit of the Company's restated financial statements and 2005
annual financial statements, ability to remain in compliance with,
or obtain waivers under the Company's loan agreements, completion
of the independent review of contract cost reporting issues,
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 and changes
in the economic, social and political conditions in the countries
in which we operate, including fluctuations in foreign currency
exchange rates. Additional information concerning these factors and
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 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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