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

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

DALLAS, May 9, 2013 (GLOBE NEWSWIRE) -- PMFG, Inc. (the "Company")
(Nasdaq:PMFG) today reported financial results for the third quarter ended
March 30, 2013.

Third Quarter Fiscal Year 2013 Compared to 2012

Revenue for the third quarter of fiscal 2013 of $35.0 million declined
slightly from the prior year as higher revenue from the Environmental Systems
segment was offset by lower revenue from the Process Products segment.

Gross profit for the third quarter of fiscal 2013 of $10.7 million increased
5.9 percent from the prior year on product mix, and the overlap of a loss on
an entrained water separation product that the Company recorded in the third
quarter of the prior fiscal year. Gross profit as a percentage of revenue was
30.7 percent in the third quarter of fiscal 2013 compared to 28.6 percent in
the prior year. Gross profit as a percentage of revenue declined from the
immediately preceding quarter on changes in product mix, project margins, and
higher warranty costs in the quarter. Warranty expense totaled $1.0 million
(2.9% of consolidated revenue) in the quarter compared to $0.6 million (1.6%
of consolidated revenue) in the prior year.

Operating income totaled $1.0 million for the third quarter compared to $1.2
million in the prior period. Operating expenses increased $0.8 million as a
result of higher commission expense and the overlap of costs associated with
additional sales resources added in China in fiscal 2012.

Net income attributable to PMFG was $0.5 million or $0.03 per diluted share,
in the third quarter compared to $1.0 million or $0.05 per diluted share in
the prior year.

Reporting Segments

Process Products segment revenue of $27.4 million in the third quarter
decreased 15.4 percent from $32.4 million in the prior year. Lower demand for
pressure products in the United States combined with continued customer-driven
delays of a significant project contributed to the lower revenue in the
quarter. The segment operating income of $3.6 million decreased 27.7 percent
from $5.0 million in the prior year on lower relative revenue and an increase
in estimated warranty obligations.

Environmental Systems segment revenue of $7.6 million in the third quarter
increased 141.9 percent from $3.1 million in the prior year. The higher
revenue is attributed in part due to recent bookings for retrofit projects
with accelerated fabrication and delivery requirements. Segment operating
income increased in the quarter to $1.5 million compared to $0.4 million in
the comparable quarter in fiscal 2012 largely attributed to the higher
revenue.

Fiscal Year To-Date 2013 Compared to 2012

Revenue for the nine month period ended March 30, 2013 was $99.4 million, down
2.8% from $102.3 million in the comparable prior year period. Revenue growth
in the Asia Pacific region and in our Environmental Systems segment in the
United States was more than offset by the decline in our domestic Process
Products segment revenue.

Net income attributable to PMFG was $0.7 million in the nine months period
compared to a net loss of $51,000 in the prior year. Non-GAAP net income
attributable to PMFG was $0.9 million in the current year or $0.04 per diluted
share compared to net income of $1.6 million or $0.08 per diluted share in the
prior year period.

Bookings and Backlog

New project awards or bookings were $34.8 million in the third quarter of
fiscal 2013 compared to $30.3 million in the prior year and $27.7 million in
the immediately preceding quarter. As expected, we are seeing improvement in
our quarterly bookings as we proceed through the fiscal year with improving
demand in the United States, Latin America, and Asia-Pacific. Year to date net
bookings total $87.2 million compared to $114.2 million, as we overlap two
significant international orders aggregating approximately $22.8 million which
were received in the second quarter of fiscal 2012.

Backlog at March 30, 2013, which represents the remaining revenue to be
recognized on contract purchased orders, was $75.2 million. The backlog amount
is net of two contracts totaling $12.5 million that management is removing
from backlog effective as of March 30, 2013. The Company received notification
this week that the contracts, which were awarded in December 2011, are being
cancelled as the customer redesigns their approach to completing this natural
gas project.

Financial Condition and Cash Flows

At March 30, 2013, the Company reported $64.9 million of cash and cash
equivalents including $8.2 million of cash and cash equivalents which is
restricted as security for outstanding letters of credit, total assets of
$187.6 million, net working capital of $77.5 million and a current ratio of
2.9 to 1.0.

Unrestricted cash and cash equivalents increased $4.4 million during the nine
month period ended March 30, 2013, compared to an increase of $33.2 million in
the prior year. The prior year's cash increase includes an equity offering
which raised $44.4 million and repaid $12.6 million of outstanding debt. Cash
flows in year to-date fiscal 2013 include $9.8 million provided by operating
activities, ($11.6) million used in investing activities, $6.2 million
provided by financing activities and an $85,000 effect of exchange rate
changes on cash and cash equivalents. 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
facilities in the United States and China.

Industry Conditions and Forward Outlook

Peter Burlage, President and Chief Executive Officer, said, "Although the
environment remains challenging, we are seeing better momentum as indicated by
the improved net bookings in the quarter. The Environmental segment bookings
in the third quarter of $8.7 million exceeded the aggregate bookings in that
segment for the first six months of this fiscal year. We remain confident that
our position as a leader in key energy technology sectors including the
natural gas value-chain, power generation and environmental systems will drive
sustainable, long-term growth.

"The construction of our facilities in Denton, Texas and Zhenjiang, China
remain on track and on budget. Both facilities are expected to be operational
in the first quarter of fiscal year 2014. These facilities not only expand our
global supply chain capabilities, they enable us to pursue additional product
and project opportunities in the natural gas infrastructure and nuclear power
generation industries.

"Our bookings and revenue in the quarter benefited from increased demand
across Asia-Pacific and in particular China. Revenue from that region now
contributes approximately 15% of our consolidated revenue with near term
growth expectations that are outpacing those of the Americas and EMEA regions.
The Asia Pacific region is a critical component of our long-term growth
strategy as the natural gas value chain expands throughout the region.
Furthermore, with China's nuclear program beginning to get back on track, we
expect the outlook will remain attractive for many years to come.

"In regards to our segment performance, similar to the prior quarter,
conditions in Process Products remains challenging. North American demand for
pressure products continues to struggle with low natural gas prices negatively
impacting demand across the natural gas value chain. We continue to believe
this is a short-term issue and the longer-term prospects for the North
American natural gas market remain compelling. Environmental Systems revenue
was strong in the quarter on the back of demand for both new construction and
retrofit opportunities. By their nature, retrofit projects have shorter
fabrication and delivery requirements, allowing us to turn the backlog
quicker.

"Quote activity remains very active and supports our belief of significant
growth opportunities in the future; however, our visibility into the timing of
our customer's expenditures in the near term remains limited at this time.
Nonetheless, we believe we are very well positioned both domestically and
internationally to leverage a recovery in global capital expenditures in the
energy infrastructure markets."

Conference Call

Peter Burlage, Chief Executive Officer, and Ron McCrummen, Chief Financial
Officer, will discuss the Company's financial results for the third quarter
ended March 30, 2013 and the outlook for future periods, during a conference
call scheduled for Thursday, May 9, 2013 at 9:00 a.m. ET.

Stockholders and other interested parties may participate in the conference
call by dialing +1 877 415 3186 (domestic) or +1 857 244 7329 (international)
and entering access code 82354161, a few minutes before 9:00 a.m. EDT on May
9, 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 May 16, 2013 by dialing +1 888 286 8010 (domestic) or +1
617 801 6888 (international) and entering access code 75583389.The call will
be archived for 30 days at www.peerlessmfg.com.

About PMFG

PMFG is a leading provider of custom-engineered systems and products designed
to help ensure that the delivery of energy is safe, efficient and clean. PMFG
primarily serves the markets for power generation, natural gas infrastructure
and petrochemical processing. Headquartered in Dallas, Texas, PMFG markets its
systems and products worldwide.

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, performance or achievements of the Company to be materially different
from any future results, performance or achievement expressed or implied by
such forward-looking statements. The words "anticipate," "expect," "believe,"
"intend" and similar expressions identify forward-looking statements. The
Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for
such 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
and experience to differ materially from the anticipated results or other
expectations expressed in such forward-looking statements. These risks and
uncertainties include the Company's ability to raise additional capital and to
execute its 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 theSEC, including the information
under Item 1A. "Risk Factors" in the Company's Annual Report on Form 10-K for
the fiscal year endedJune 30, 2012. The Company undertakes no obligation to
revise any forward-looking statements or to update them to reflect events or
circumstances occurring after the date of this release, or to reflect the
occurrence of unanticipated events. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
hereof. 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 March 30,       Three Months Ended March 31,
                2013                               2012
Operating        GAAP      Adjustments    Non-GAAP  GAAP       Adjustments(b) Non-GAAP
Results
                                                                        
Revenue          $34,970 $--         $34,970 $35,498  $--         $35,498
Cost of goods    24,223   --           24,223   25,352    --           25,352
sold
Gross profit     10,747   --           10,747   10,146    --           10,146
Operating        9,725    --           9,725    8,934     --           8,934
expenses
Operating income 1,022    --           1,022    1,212     --           1,212
Other income                                                             
(expense):
Interest income  12       --           12       6         --           6
Interest expense (148)    --           (148)    (142)     --           (142)
Loss on
extinguishment   --      --           --      (347)     347           --
of debt
Foreign exchange (32)     --           (32)     16        --           16
gain (loss)
Other income     (1)      --           (1)      (17)      --           (17)
(expense), net
Income (loss)
before income    853      --           853      728       347           1,075
taxes
Income tax
benefit          (156)    --           (156)    285       (118)         167
(expense)
Net earnings     697      --           697      1,013     229           1,242
(loss)
Less net income
(loss)
attributable to  152      --           152      (15)      --           (15)
noncontrolling
interest
Net earnings
(loss)           $545    $--         $545    $1,028   $229         $1,257
attributable to
PMFG
                                                                        
Basic earnings   $0.03                 $0.03   $0.05                  $0.07
per share
Diluted earnings $0.03                 $0.03   $0.05                  $0.06
per share
                                                                        
Weighted-average
shares                                                                   
outstanding
Basic           20,920                 20,920   19,137                  19,137
Diluted          20,936                 20,936   19,739                  19,739
                                                                        
Adjusted EBITDA                                                          
Net earnings                            $697                            $1,242
(loss)
Depreciation and                        529                              796
amortization
Interest                                136                              136
expense, net
Income tax
expense                                 156                              (167)
(benefit)
Adjusted EBITDA                         $1,518                          $2,007
                                                                        
                                                                        
PMFG, Inc.
Condensed Financial Information
(In thousands, except per share amounts)
                                                                        
                Nine Months Ended March 30,        Nine Months Ended March 31,
                2013                               2012
Operating        GAAP      Adjustments(a) Non-GAAP  GAAP       Adjustments(c) Non-GAAP
Results
                                                                        
Revenues         $99,399 $--         $99,399 $102,307 $--         $102,307
Cost of goods    65,731   --           65,731   70,977    (34)          70,943
sold
Gross profit     33,668   --           33,668   31,330    34            31,364
Operating        31,326   --           31,326   30,287    (2,064)       28,223
expenses
Operating income 2,342    --           2,342    1,043     2,098         3,141
Other income                                                             
(expense):
Interest income  29       --           29       22        --           22
Interest expense (463)    --           (463)    (1,012)   --           (1,012)
Loss on
extinguishment   (291)    291           --      (347)     347           --
of debt
Foreign exchange 3        --           3        (652)     --           (652)
gain (loss)
Other income     33       --           33       7         --           7
(expense), net
Income (loss)
before income    1,653    291           1,944    (939)     2,445         1,506
taxes
Income tax
benefit          (367)    (99)          (466)    824       (831)         (7)
(expense)
Net earnings     1,286    192           1,478    (115)     1,614         1,499
(loss)
Less net
earnings (loss)
attributable to  584      --           584      (64)      --           (64)
noncontrolling
interest
Net earnings
(loss)           $702    $192         $894    $(51)    $1,614       $1,563
attributable to
PMFG
                                                                        
Basic earnings   $0.03                 $0.04   $(0.00)                $0.09
per share
Diluted earnings $0.03                 $0.04   $(0.00)                $0.08
per share
                                                                        
Weighted-average
shares                                                                   
outstanding
Basic           20,919                 20,919   18,162                  18,162
Diluted          20,935                 20,935   18,162                  18,764
                                                                        
Adjusted EBITDA                                                          
Net earnings                            $1,478                          $1,499
(loss)
Depreciation and                        1,926                            2,108
amortization
Interest                                434                              990
expense, net
Income tax
expense                                 466                              7
(benefit)
Adjusted EBITDA                         $4,304                          $4,604

                                                          
                                                          
                                       March 30,           June 30,
Condensed Balance Sheet Information     2013                2012
                                                          
Current assets                          $118,255          $122,286
Non-current assets                      69,328             60,993
Total assets                            $187,583          $183,279
                                                          
Current liabilities                     $40,805           $45,019
Long term debt                          5,129              --
Other non current liabilities           7,116              7,374
Total equity                            134,533            130,886
Total liabilities and equity            $187,583          $183,279
                                                          
                                                          
(a) Adjustments in the nine months ended March 31, 2013 relate to the loss on
extinguishment of debt.
(b) Adjustments in the three months ended March 31. 2012 relate to the loss on
extinguishment of debt.
(c)Adjustments in the nine months ended March 31, 2012 relate to the loss on
extinguishment of debt and 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 nine months ended March 30, 2013 and from the accelerated
vesting of restricted stock grants in the nine months ended March 31, 2012 and
the loss of extinguishment of debt in the three and nine months ended March
31, 2012. Management believes that excluding these items 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) 357-6181
         Fax: (214) 351-4172
         www.peerlessmfg.com
        
         or

         Mr. Shawn Severson
         The Blue Shirt Group
         Phone: (415) 489-2198
         Email: shawn@blueshirtgroup.com
 
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