HOUSTON, June 28 /PRNewswire-FirstCall/ -- Dresser-Rand Group Inc. ("Dresser-Rand" or the "Company") , reported today that it will record additional costs and interest expense in connection with the final resolution of its litigation with Maersk Oil UK Limited.
The Company said its expectation for 2007 operating income continues to be in the range of $250 to $270 million including the above mentioned charge. The Company also confirmed that its operating income for second quarter 2007 is expected to be in the range of 21 to 23 percent of the total year.
The litigation with Maersk Oil UK Limited resulted from alleged defects in compressors manufactured at a Dresser-Rand facility that discontinued operations in December 1998. In the second quarter, the Company and Maersk Oil UK Limited reached a full and final settlement resulting in an additional total charge of approximately $4.2 million ($2.6 million after-tax or $0.03 per diluted share) for damages, interest and claimant's costs ($3.0 million recorded as operating expenses and $1.2 million recorded as interest expense). The Company had previously reported that it planned to dispute the amount of costs claimed by Maersk, but on further review of the facts and circumstances, it decided to settle the matter.
Dresser-Rand is among the largest suppliers of rotating equipment solutions to companies that operate in the worldwide oil, gas, petrochemical, and process industries. Dresser-Rand operates manufacturing facilities in the United States, France, Germany, Norway and India and maintains a network of 26 service and support centers worldwide.
This news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements concerning The Company's plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, business trends, executive compensation and other information that is not historical information. The words "anticipates," "believes," "expects", "intends," and similar expressions identify such forward-looking statements. Although the Company believes that such statements are based on reasonable assumptions, these forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors, risks and uncertainties include, among others, the following: material weaknesses in its internal controls; economic or industry downturns; its inability to implement its business strategy to increase aftermarket parts and services revenue; competition in its markets; failure to complete or achieve the expected benefits from, any future acquisitions; economic, political, currency and other risks associated with international sales and operations; loss of senior management; the Company's brand name may be confused with others; environmental compliance costs and liabilities; failure to maintain safety performance acceptable to its clients; failure to negotiate new collective bargaining agreements; ability to operate as a stand-alone company; unexpected product claims and regulations; and infringement on its intellectual property or infringement on others' intellectual property. These and other risks are discussed in greater detail in the Company's filings with the Securities and Exchange Commission at http://www.sec.gov/. Actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking statements. The Company can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them does, what impact they will have on results of operations and financial condition. The Company undertakes no obligation to update or revise forward-looking statements, which may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. For information about Dresser-Rand, go to its website at http://www.dresser-rand.com/.
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