Mr. Pennypacker: This year we are celebrating our sesquicentennial. We have been in business for 150 years. The company was started by Robert Gardner when he refined the flyball governor that was used to control steam engines, such as steamships on the Mississippi River, to stop them from blowing up. That was a very important part of the industrial revolution in America. And the company has continued to grow over time. We have made substantial acquisitions. In fact, the company doubled its size back in 1927 as a result of a merger with its largest customer, the Denver Rock Drill Company, evolving from the Gardner Governor Company to the Gardner Denver Co. Cooper Industries acquired the business in 1979, and then in 1994 Cooper spun off its industrial machinery division as a publicly traded company, which became known as Gardner Denver, Inc. The business was loaded with a substantial amount of debt, and I don't think there were a lot of people who thought that Gardner Denver would survive. But I think due to the leadership team at the time and their vision, the company did in fact survive, substantially paid down its debt and then became a very acquisitive company to build the infrastructure that we have today. We have gone from a company with revenues of $175 million in 1993 to a $2 billion company in a matter of 15 years, and most of that has been through acquisition. And as we completed acquisitions, we continued to diversify our end markets as well as our geographic presence.
TWST: What are your major products?
Mr. Pennypacker: Our products are used to move air, liquids and gasses. The Gardner Denver¨ brand is well-known for compressor and blower products, as well as petroleum pumps. We also sell compressors under the brands CompAir¨ and Champion¨. We sell liquid ring pumps, which are low-pressure products used in severe-duty process applications, such as refining and petrochemical applications, and the power industry under the brand Nash¨, and fluid transfer products called loading arms under the brand Emco Wheaton¨.
Depending on the product being moved and the application, different pressures and flow rates are required. For example, to convey dry bulk material, such as cement, does not require a lot of pressure, but it does require a certain amount of air flow. To blow plastic bottles, such as are used to hold beverages, requires much higher oil-free air pressure. We describe products that are used to move gasses, including air, as "blowers" if the pressure is less than 50 pounds per square inch (PSI) and "compressors" if the pressure exceeds 50 PSI. We also manufacture pumps, which are primarily used in upstream petroleum applications, such as well drilling and servicing for oil and natural gas.
We are organized into two groups, primarily based on each group's channels to market and therefore customer focus. For example, over 50% of Industrial Products Group revenues occur through independent distributors, while nearly 60% of the Engineered Products Group revenues are direct to the end customer. Our product offering is extremely diversified in size and breadth within each group, and each group manufactures products that are used for either compression or vacuum applications. And they each offer a broad range of product sizes, depending on the volume of air flow or vacuum required. The Industrial Products Group primarily serves industrial manufacturing and transportation applications, which generate more than 50% of this group's revenues. The Engineered Products Group is much more focused on energy, medical and environmental applications, which in aggregate provide nearly 60% of revenues for this group. Products sold for medical and environmental applications include small compressors that are used to generate either purified air for portable oxygen concentrators or bubbling of the affluent used in wastewater treatment.
Tickers included in this excerpt: GDI
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