PMFG, Inc. (Parent of Peerless Mfg. Co.) Reports Second Quarter Fiscal Year 2013 Financial Results

PMFG, Inc. (Parent of Peerless Mfg. Co.) Reports Second Quarter Fiscal Year
2013 Financial Results

DALLAS, Feb. 7, 2013 (GLOBE NEWSWIRE) -- PMFG, Inc. (the "Company")
(Nasdaq:PMFG) today reported financial results for the second quarter ended
December 29, 2012.

Second Quarter Fiscal Year 2013 Compared to 2012

Revenue in the second quarter of fiscal 2013 decreased $6.3 million or 16.6
percent to $31.5 million. The decrease in revenue resulted from
customer-driven delays on projects previously awarded, as well as delays in
the timing of anticipated bookings. Increased revenue in the Asia-Pacific and
Middle East regions were more than offset by decreased revenue in North
America.

Gross profit decreased in the quarter by $0.9 million, or 7.6 percent, to
$11.5 million on lower revenue. Gross profit as a percent of revenue increased
to 36.7 percent in the quarter from 33.1 percent in the prior year. The
improvement in gross margin percentage is attributed to changes in product and
geographical mix, lower than previously expected costs on completed and in
process projects, as well as an improvement in manufacturing efficiencies.

Operating expenses decreased $0.8 million or 7.2 percent in the quarter as the
Company overlapped a $2.1 million one-time charge from the accelerated vesting
of restricted stock in the second quarter of fiscal 2012. On a non-GAAP basis,
operating expenses increased $1.2 million in the quarter largely attributed to
higher commission expense and increased costs associated with additional sales
resources located in China. For reconciliations of GAAP to non-GAAP results
and other non-GAAP amounts, see the accompanying tables to this release.

Interest expense declined 52.6 percent in the quarter to $0.2 million on lower
average balances outstanding. Foreign exchange gain increased to $0.1 million
this quarter compared to a $0.2 million loss in the prior year quarter.

Net income attributable to PMFG, Inc. common stockholders was $0.5 million or
$0.02 per diluted share in the quarter compared to net income of $0.1 million
and break even earnings per diluted share in the prior year. The second
quarter fiscal 2012 non-GAAP net income attributable to PMFG, Inc. common
stockholders was $1.5 million or $0.08 per diluted share.

Reporting Segments

Process Products segment revenue decreased $4.2 million or 12.8 percent to
$28.5 million. Customer-driven delays in the required completion dates on
certain orders in our backlog have resulted in lower revenue this quarter than
in the comparable period in the prior year. Segment operating income decreased
$0.8 million or 14.8 percent to $4.7 million on lower revenue, partially
offset by an improvement in relative gross margin. The segment gross margin
was positively impacted by product and geographical mix in the quarter.

The Environmental Systems segment revenue decreased $2.1 million or 41.2
percent to $3.0 million. The decrease in revenue is attributed to the dampened
demand for SCR equipment in the United States resulting from delays in the
release of finalized environmental regulations. Operating income decreased
$0.4 million to $0.5 million for the quarter on the lower revenue.

Fiscal Year To-Date 2013 Compared to 2012

Revenue for the six month period ended December 29, 2012 decreased $2.4
million or 3.6 percent to $64.4 million. Revenue growth in the Asia-Pacific
region and the benefit of the acquisition of Burgess-Manning GmbH in November
2011 were more than offset by declines in domestic revenue in both our Process
Products and Environmental Systems segments. Net income attributable to PMFG,
Inc. common stockholders was $0.2 million compared to a net loss of $1.1
million in the prior year. Net income attributable to PMFG, Inc. common
stockholders on a non-GAAP basis of $0.3 million or $0.02 per diluted share in
fiscal 2013 held constant with the prior year.

Net Bookings and Backlog

Net bookings totaled $27.7 million and $52.4 million during the three and six
month periods ended December 29, 2012, respectively. As anticipated, net
bookings in the quarter and year to date decreased significantly from the
prior year as we overlapped significant international bookings received in the
second quarter of fiscal 2012. The backlog at December 29, 2012 was $87.9
million of which approximately 14% remains on customer hold. Although the
customer has communicated that they expect the capital project to move
forward, the timing and impact on our project scope is not yet known.

Financial Condition and Cash Flows

At December 29, 2012, the Company reported $69.2 million of cash and cash
equivalents including $8.5 million of cash and cash equivalents which is
restricted as security for outstanding letters of credit, total assets of
$185.0 million, net working capital of $79.7 million and a current ratio of
2.9 to 1.0.

Unrestricted cash and cash equivalents increased $8.3 million during the six
month period ended December 29, 2012, compared to a decrease of $0.4 million
in the prior year, attributed in part to an improvement in the collection of
accounts receivable. Cash flows in year to-date fiscal 2013 include $10.4
million provided by operating activities, ($3.8) million used in investing
activities, $1.6 million provided by financing activities and $0.2 million
effect of exchange rate changes on cash. Investing activities in the period
include payment of deferred consideration from the acquisition of
Burgess-Manning GmbH and capital expenditures related to the construction of
new facilities in the United States and China.

Industry Conditions and Forward Outlook

Peter Burlage, President and Chief Executive Officer of PMFG, stated, "While
we continue to experience delays in energy-related capital expenditures, we
believe the long-term outlook for the Company remains strong.

"Our investment in incremental sales resources in China focused on driving
growth in the Process Products segment is expected to create significant
opportunities for us in the future. The demand for Process Products in the
Asia-Pacific region resulting from the investment of natural gas
infrastructure combined with a re-start of the China nuclear energy program
make the Asia-Pacific region critical to our future growth. The construction
of the new facility to be located in Zhenjiang, China remains on track and
critical to meeting the increased demand within the region. Further, the
increased focus on air quality within China should allow us to expand our
product offerings within the region.

"A year ago we announced a significant booking for natural gas skids in Latin
America. The customer is re-evaluating the size, throughput, and construction
approach to its facility, which has resulted in a delay in our realization of
revenue from this project. While we expect the project to move forward, it now
appears that we will not recognize significant project revenue until fiscal
2014.

"Our quote activity in both reporting segments remains strong in most regions
and we believe we are well positioned to benefit from an improvement in the
global demand for energy infrastructure. However, given the current global
economic environment, we expect to continue to see delays in capital
expenditures throughout the balance of 2013."

Updated Guidance

Due to customer driven delays of projects in backlog, as well as lengthening
sales cycles, the Company has reduced its revenue guidance for fiscal 2013 to
be roughly flat in comparison to fiscal 2012. Product and geographic mix are
expected to result in a blended gross margin percentage higher than the range
previously communicated.

Conference Call

Peter Burlage, President and Chief Executive Officer, and Ron McCrummen, Chief
Financial Officer, will discuss the Company's results for the second quarter
ended December 29, 2012, during a conference call scheduled for Thursday,
February 7, 2013, at 9:00 a.m. EST.

Stockholders and other interested parties may participate in the conference
call by dialing +1 800.299-9086 (domestic) or +1 617.786-2903 (international)
and entering access code 76187504, a few minutes before 9:00 a.m. EST on
February 7, 2013. Those who wish to listen to the live conference call and
view the accompanying presentation slides should visit "Event Calendar" in the
"Investor Relations"portion of the PMFG, Inc. website at www.peerlessmfg.com.

A replay of the conference call will be accessible two hours after its
completion through February 14, 2013 by dialing +1 888.286-8010 (domestic) or
+1 617.801-6888 (international) and entering access code 96551811. The call
also will be archived for 30 days at www.peerlessmfg.com.

About PMFG

We are a leading provider of custom engineered systems and products designed
to help ensure that the delivery of energy is safe, efficient and clean. We
primarily serve the markets for natural gas infrastructure, power generation
and petrochemical processing. Headquartered in Dallas, Texas, we market our
systems and products worldwide.

The PMFG, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5676

Safe Harbor Under The Private Securities Litigation Reform Act of 1995

Certain statements contained in this press release that are not historical
facts are forward-looking statements that involve a number of known and
unknown risks, uncertainties and other factors that could cause the actual
results to be materially different from those expressed or implied by such
forward-looking statements. The words "anticipate," "preliminary," "expect,"
"believe," "intend" and similar expressions identify forward-looking
statements. The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for these forward-looking statements. In order to comply with
the terms of the safe harbor, the Company notes that a variety of factors
could cause actual results to differ materially from the anticipated results
expressed in these forward-looking statements. The risks and uncertainties
that may affect the Company's results include the growth rate of the Company's
revenue and market share; the receipt of new, and the non-termination of
existing, contracts; the Company's ability to effectively manage its business
functions while growing its business in a rapidly changing environment; the
Company's ability to achieve financial and nonfinancial covenants and
requirements of our debt agreements; the Company's ability to adapt and expand
its services in such an environment; the quality of the Company's plans and
strategies; and the Company's ability to execute such plans and strategies.
Other important information regarding factors that may affect the Company's
future performance is included in the public reports that the Company files
with the Securities and Exchange Commission, including the information under
Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the fiscal year
ended June 30, 2012. The Company undertakes no obligation to update any
forward-looking statements to reflect events or circumstances occurring after
the date of this release, or to reflect the occurrence of other events.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this release. The inclusion of
any statement in this release does not constitute an admission by the Company
or any other person that the events or circumstances described in such
statement are material.

PMFG, Inc.
Condensed Financial Information
(In thousands, except per share amounts)
                                                                         
                Three Months Ended December 29,     Three Months Ended December 31,
                2012                                2011
Operating        GAAP      Adjustments    Non-GAAP   GAAP       Adjustments(b) Non-GAAP
Results
                                                                         
Revenues         $31,452 $--         $31,452  $37,721  $--         $37,721
Cost of goods    19,923   --           19,923    25,245    (34)          25,211
sold
Gross profit     11,529   --           11,529    12,476    34            12,510
Operating        10,669   --           10,669    11,498    (2,064)       9,434
expenses
Operating income 860      --           860       978       2,098         3,076
(loss)
Other income                                                              
(expense):
Interest income  7        --           7         7         --           7
Interest expense (210)    --           (210)     (443)     --           (443)
Loss on
extinguishment   --      --           --       --       --           --
of debt
Foreign exchange 117      --           117       (211)     --           (211)
gain (loss)
Other income     32       --           32        3         --           3
Income (loss)
before income    806      --           806       334       2,098         2,432
taxes
Income tax
(expense)        (213)    --           (213)     (292)     (713)         (1,005)
benefit
Net earnings     $593    $--         $593     $42      $1,385       $1,427
(loss)
Less net
earnings (loss)
attributable to  127      --           127       (30)      --           (30)
noncontrolling
interest
Net earnings
(loss)           $466    $--         $466     $72      $1,385       $1,457
attributible to
PMFG
Earnings (loss)
applicable to    $466    $--         $466     $72      $1,385       $1,457
PMFG common
stockholders
                                                                         
Basic loss per   $0.02                 $0.02    $0.00                  $0.08
share
Diluted loss per $0.02                 $0.02    $0.00                  $0.08
share
                                                                         
Weighted-average
shares                                                                    
outstanding
Basic           20,920                 20,920    17,679                  17,679
Diluted          20,935                 20,935    18,327                  18,327
                                                                         
Adjusted EBITDA                                                           
Net earnings                            $593                             $1,427
(loss)
Depreciation and                        693                               634
amortization
Interest                                203                               436
expense, net
Income tax
expense                                 213                               1,005
(benefit)
Adjusted EBITDA                         $1,702                           $3,502
                                                                         
                Six Months Ended December 29,       Six Months Ended December 31,
                2012                                2011
Operating        GAAP      Adjustments(a) Non-GAAP   GAAP       Adjustments(b) Non-GAAP
Results
                                                                         
Revenues         $64,429 $--         $64,429  $66,809  $--         $66,809
Cost of goods    41,508   --           41,508    45,625    (34)          45,591
sold
Gross profit     22,921   --           22,921    21,184    34            21,218
Operating        21,601   --           21,601    21,353    (2,064)       19,289
expenses
Operating income 1,320    --           1,320     (169)     2,098         1,929
(loss)
Other income                                                              
(expense):
Interest income  17       --           17        16        --           16
Interest expense (315)    --           (315)     (870)     --           (870)
Loss on
extinguishment   (291)    291           --       --       --           --
of debt
Foreign exchange 35       --           35        (668)     --           (668)
gain (loss)
Other income     33       --           33        24        --           24
Income (loss)
before income    799      291           1,090     (1,667)   2,098         431
taxes
Income tax
(expense)        (212)    (99)          (311)     539       (713)         (174)
benefit
Net earnings     $587    $192         $779     $(1,128) $1,385       $257
(loss)
Less net
earnings (loss)
attributable to  432      --           432       (49)      --           (49)
noncontrolling
interest
Net earnings
(loss)           $155    $192         $347     $(1,079) $1,385       $306
attributible to
PMFG
Earnings (loss)
applicable to    $155    $192         $347     $(1,079) $1,385       $306
PMFG common
stockholders
                                                                         
Basic loss per   $0.01                 $0.02    $(0.06)                $0.02
share
Diluted loss per $0.01                 $0.02    $(0.06)                $0.02
share
                                                                         
Weighted-average
shares                                                                    
outstanding
Basic           20,919                 20,919    17,675                  17,675
Diluted          20,934                 20,934    17,675                  18,276
                                                                         
Adjusted EBITDA                                                           
Net earnings                            $779                             $257
(loss)
Depreciation and                        1,397                             1,312
amortization
Interest                                298                               854
expense, net
Income tax
expense                                 311                               174
(benefit)
Adjusted EBITDA                         $2,785                           $2,597
                                                                         
                         December 29,   June 30,                           
Condensed
Balance Sheet             2012           2012                               
Information
                                                                         
Current assets            $122,540     $122,286                         
Non-current               62,447        60,993                            
assets
Total assets              $184,987     $183,279                         
                                                                         
Current                   $42,791      $45,019                          
liabilities
Other non
current                   8,720         7,374                             
liabilities
Total equity              133,476       130,886                           
Total
liabilities and           $184,987     $183,279                         
equity
                                                                         
(a) Adjustments in the six months ended December 29, 2012 relate to the loss on
extinguishment of debt.
(b) Adjustments in the three and six months ended December 31, 2011 relate to the
accelerated vesting of restricted stock grants

                     STATEMENT REGARDING NON-GAAP RESULTS

PMFG, Inc. has provided a reconciliation of non-GAAP measures in order to
provide the users of this financial information with a better understanding of
the impact on our financial results resulting from the loss of extinguishment
of debt in the six months ended December 29, 2012 and from the accelerated
vesting of restricted stock grants in the three and six months ended December
31, 2011. Management believes that excluding this item from the Company's
financial results provides investors with a clearer perspective of the current
underlying operating performance of the Company, a clearer comparison between
results in different periods and greater transparency regarding supplemental
information used by management in its financial and operational decision
making. These non-GAAP measures are not measurements under accounting
principles generally accepted in the United States. These measures should be
considered in addition to, but not as a substitute for, the information
contained in our financial statements prepared in accordance with GAAP.

CONTACT: Mr. Peter J. Burlage, Chief Executive Officer
         Mr. Ronald L. McCrummen, Chief Financial Officer
         PMFG, Inc.
         14651 North Dallas Parkway, Suite 500
         Dallas, Texas 75254
         Phone: (214) 353-5545
         Fax: (214) 351-4172
         www.peerlessmfg.com
        
         or
        
         Kevin McGrath, Managing Partner
         Cameron Associates
         (212) 245-4577
         Kevin@cameronassoc.com

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