QUINCY, IL -- (Marketwire) -- 12/19/08 -- Gardner Denver, Inc. (NYSE: GDI) announced restructuring initiatives that are expected to be completed in 2009. These initiatives are driven by both deteriorating global economic conditions and the integration of the Company's October 2008 acquisition of CompAir Holdings Limited ("CompAir").

The Company began aggressive cost reduction activities in the third quarter of 2009, in recognition of a slowing global economy. As a result of the continued deterioration in end market conditions in excess of previous expectations, the Company is responding with further cost reduction actions, including a reduction of its global salaried workforce, implementing a hiring freeze and strict controls on discretionary spending. The Company notified employees representing approximately 9% of its global salaried workforce that their positions would be eliminated within the next nine months, with the majority of affected employees expected to leave the organization by the second quarter of 2009. The Company also announced a manufacturing plant closure in the U.K. as a part of its integration of CompAir. The Company expects to record an additional charge of approximately $5 million in the fourth quarter of 2008, primarily related to severance expense associated with these actions, reducing diluted earnings per share ("DEPS") by approximately $0.07. These initiatives are expected to reduce costs by approximately $7 million in 2009.

"Orders for our products serving industrial end market segments, in particular in the U.S. and Europe, have slowed significantly faster than was originally expected," stated Barry L. Pennypacker, Gardner Denver's President and Chief Executive Officer. "Demand for these products tends to correlate with the level of manufacturing capacity utilization. The rapid decline in industrial production in the U.S. and Europe has resulted in reduced levels of capacity utilization and deferred purchases of capital equipment such as compressor packages. The decline in demand has translated into lower revenues, operating margin and diluted earnings per share. At present, we are uncertain how long orders will remain at these depressed levels. However, management has proactively identified opportunities to reduce costs and we plan to continue to rationalize our manufacturing footprint.

"Our previously announced plant closures and profit improvement initiatives are on track to be completed by the end of December 2008 and the costs and expected benefits of these projects are consistent with our previous projections. We remain committed to aligning our business structure with our goal of operating excellence using the principles of the 'Gardner Denver Way.' We are pressing ahead with our efforts to lean out our manufacturing and administrative processes, reduce overhead and streamline operations to improve efficiencies. We are pleased with progress made to date in the integration of CompAir and believe incremental synergies are available, including our ability to leverage the combined supply chain to reduce material costs. As a result of these efforts, we expect to be well positioned when demand for industrial equipment recovers and remain focused on progressing toward the Company's long-term operating margin improvement goals.