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PMFG, Inc. (parent of Peerless Mfg. Co.) Reports First Quarter Fiscal Year 2014 Financial Results



PMFG, Inc. (parent of Peerless Mfg. Co.) Reports First Quarter Fiscal Year
2014 Financial Results

DALLAS, Nov. 6, 2013 (GLOBE NEWSWIRE) -- PMFG, Inc. (the "Company")
(Nasdaq:PMFG) today reported financial results for the quarter ended September
28, 2013.

First Quarter Fiscal Year 2014 Compared to First Quarter Fiscal Year 2013

Revenue in the first quarter of fiscal 2014 decreased $3.9 million, or 11.8%,
to $29.1 million as higher revenue in the Environmental Systems segment was
more than offset by lower revenue in the Process Products segment. The decline
in revenue is attributed in part to lower revenue in the EMEA and APAC
geographical regions, as well as the impact of transitioning to new
manufacturing facilities in the United States and China.

Gross profit decreased in the current quarter by $1.7 million, or 14.8%, to
$9.7 million primarily due to the lower revenue. Gross margin decreased as a
percent of revenue from 34.5% to 33.4% on changes in product mix between the
respective quarters, as well as certain one-time costs and inefficiencies
related to the transition of the manufacturing facilities.

Operating expenses increased $0.4 million, or 4.0%, primarily due to higher
sales commissions and personnel-related and consulting costs, partially offset
by lower bad debt expense in the period.

Interest expense increased in the current quarter to $0.4 million from $0.1
million as a result of an increase in borrowings related to the Company's two
new manufacturing facilities. In the first quarter of fiscal 2013, there was a
loss on the extinguishment of debt totaling $0.3 million. There was no similar
activity in the first quarter of fiscal 2014.

The net loss attributable to PMFG, Inc. common stockholders was $1.6 million,
or ($0.07), per diluted share in the current quarter compared to a loss of
$0.3 million, or ($0.01), per diluted share in the prior year quarter.

Reporting Segments

Process Products segment revenue decreased $4.2 million, or 14.6%, to $24.5
million compared to $28.7 million in the prior year. The decline in revenue is
attributed to lower revenue in the EMEA and APAC geographical regions, as well
as the impact of transitioning to new manufacturing facilities in the United
States and China. Segment operating income decreased $2.6 million, or 48.6%,
to $2.8 million as a result of the lower revenue and the fixed nature of the
Company's sales and marketing and engineering costs.

Environmental Systems segment revenue increased $0.3 million, or 7.0%, to $4.6
million compared to $4.3 million in the prior year. The higher revenue in
fiscal 2014 reflects the increase in bookings throughout fiscal 2013. Projects
within the Environmental System segment are generally larger in scope and
duration then those in the Process Products segment, which will increase the
volatility of revenue between quarters. Segment operating income increased
$0.3 million to $0.9 million compared to $0.6 million in the prior year on
relative project profitability.

Bookings and Backlog

New project awards or net bookings in the first quarter of fiscal 2014 totaled
$42.4 million compared to $24.7 million in the prior year and $43.6 million in
the immediately preceding quarter. Backlog at September 28, 2013, which
represents the remaining revenue to be recognized on customer contracts, was
$97.5 million compared to $84.2 million at the end of fiscal 2013. The
increase in backlog reflects the relative strength in bookings both in
comparison to the prior year and the immediately preceding quarter. We
estimate that approximately 80% of the backlog at the end of the quarter will
be recognized as revenue over the next 12 months.

Financial Condition and Cash Flows

At September 28, 2013, the Company reported $59.9 million of cash and cash
equivalents, excluding $5.8 million of cash and cash equivalents which is
restricted as security for outstanding letters of credit, total assets of
$193.2 million, net working capital of $75.2 million and a current ratio of
2.7 to 1.0.

Unrestricted cash and cash equivalents increased $6.9 million during the first
quarter fiscal 2014 compared to an increase of $7.8 million in the first
quarter fiscal 2013. For fiscal year 2014, cash flows included $4.8 million
provided by operating activities, ($4.0) million used in investing activities,
$5.8 million provided by financing activities and $0.3 million effect of
exchange rate changes on cash.

Industry Conditions and Forward Outlook

Peter Burlage, President and Chief Executive Officer, said, "Our outlook for
fiscal 2014 is unchanged and we continue to expect revenue growth of 8% to 13%
over fiscal 2013 with consolidated gross margins of between 32% and 34% and
for operating expenses to increase approximately 4% to 6%. This increase
includes an investment of approximately $800,000 in research and development
and incremental internal capabilities related to nuclear power generation
products and services."

"As we noted last quarter, our fiscal 2014 roadmap and outlook are built
around the Natural Gas Value Chain, Power Generation and the Chemical and
Petrochemical industries and I am glad to say we continue to execute on these
drivers. Within the Natural Gas Value Chain we have seen business for LNG and
pipeline infrastructure in Eastern Europe and China. Power Generation revenue
was relatively flat compared to the fiscal fourth quarter, but expect this
market to gain momentum as the utility industry switches to more natural gas
to meet compliance deadlines and emissions standards in 2015. The Chemical and
Petrochemical industries continued to be a bright spot with strength
continuing into the fiscal second quarter as demonstrated by our recent
announcement of a coal to chemical win in China."

"In conclusion, I remain optimistic about our prospects and believe market
conditions are improving slightly as we anticipated and believe our more
cyclical products are poised for a modest recovery throughout fiscal 2014 and
beyond."

Conference Call

Peter Burlage, President and Chief Executive Officer, and Ron McCrummen, Chief
Financial Officer, will discuss the Company's results for the first quarter
ended September 28, 2013, during a conference call scheduled for Wednesday,
November 6, 2013, at 9:30 a.m. EST.

Stockholders and other interested parties may participate in the conference
call by dialing +1 866.515.2912 (domestic) or +1 617.399.5126 (international)
and entering access code 84052610, a few minutes before 9:30 a.m. EST on
November 6, 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 November 13, 2013 by dialing +1 888.286.8010 (domestic) or
+1 617.801.6888 (international) and entering access code 94962281. 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.

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 29, 2013. 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 September 28,     Three Months Ended September
                                                      29,
                 2013                                 2012
Operating        GAAP       Adjustments(a) Non-GAAP   GAAP      Adjustments Non-GAAP
Results
                                                                             
Revenues          $ 29,071   $ --           $ 29,071   $ 32,977  $ --        $ 32,977
Cost of goods     19,364     50             19,414     21,585    --          21,585
sold
Gross profit      9,707      (50)           9,657      11,392    --          11,392
Operating         11,367     --             11,367     10,932    --          10,932
expenses
Operating income  (1,660)    (50)           (1,710)    460       --          460
(loss)
Other income                                                                 
(expense):
Interest income   18         --             18         10        --          10
Interest expense  (438)      --             (438)      (105)     --          (105)
Loss on
extinguishment    --         --             --         (291)     291         -- 
of debt
Foreign exchange  (203)      --             (203)      (82)      --          (82)
loss
Other income      66         --             66         1         --          1
Income (loss)
before income     (2,217)    (50)           (2,267)    (7)       291         284
taxes
Income tax
(expense)         647        14             661        1         (99)        (98)
benefit
Net earnings      $ (1,570)  $ (36)         $ (1,606)  $ (6)     $ 192       $ 186
(loss)
Less net
earnings (loss)
attributable to   $ 11       --             11         305       --          305
noncontrolling
interest
Net earnings
(loss)            $ (1,581)  $ (36)         $ (1,617)  $ (311)   $ 192       $ (119)
attributible to
PMFG
Earnings (loss)
applicable to     $ (1,581)  $ (36)         $ (1,617)  $ (311)   $ 192       $ (119)
PMFG common
stockholders
                                                                             
Basic loss per    $ (0.07)                  $ (0.08)   $ (0.01)              $ (0.01)
share
Diluted loss per  $ (0.07)                  $ (0.08)   $ (0.01)              $ (0.01)
share
                                                                             
Weighted-average
shares                                                                       
outstanding
Basic             21,077                    21,077     20,917                20,917
Diluted           21,077                    21,077     20,917                20,917
                                                                             
Adjusted EBITDA                                                              
Net earnings                                $ (1,606)                        $ 186
(loss)
Depreciation and                            578                              703
amortization
Interest                                    420                              95
expense, net
Income tax
expense                                     (661)                            98
(benefit)
Adjusted EBITDA                             $ (1,269)                        $ 1,082
                                                                             
                            September 28,  June 29,                          
Condensed
Balance Sheet               2013           2013                              
Information
                                                                             
Current assets               $ 118,453      $ 108,473                        
Non-current                  74,794         71,638                           
assets
Total assets                 $ 193,247      $ 180,111                        
                                                                             
Current                      $ 43,280       $ 33,471                         
liabilities
Other non
current                      17,054         14,754                           
liabilities
Total equity                 132,913        131,886                          
Total
liabilities and              $ 193,247      $ 180,111                        
equity

                     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 certain one-time costs
associated with transitioning to our new manufacturing facilities offset by
the gain on the sale of the former manufacturing facility in Denton, Texas, in
the three months ended September 28, 2013 and the loss on extinguishment of
debt in the three months ended September 29, 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) 353-5545
         Fax: (214) 351-4172
         www.peerlessmfg.com
        
         or
        
         Mr. Shawn Severson
         The Blueshirt Group
         Phone: (415) 489-2198
         Email: shawn@blueshirtgroup.com
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