First Quarter Highlights:

 --  Preliminary Diluted Earnings Per Share ("DEPS"), which do not include     a pending non-cash charge for impairment of intangible assets, were $0.47     for the first quarter of 2009, including expenses for profit improvement     initiatives and non-recurring items that reduced DEPS by $0.11. --  Profit improvement projects are being implemented on schedule. --  Cash provided by operating activities exceeded $55 million for the     quarter. --  Inventory reductions generated more than $7 million in cash provided     by operations in the first quarter of 2009.      

Gardner Denver, Inc. (NYSE: GDI) announced that revenues and preliminary operating income for the three months ended March 31, 2009 were $462.5 million and $37.2 million, respectively, and preliminary net income and diluted earnings per share ("DEPS") were $24.5 million and $0.47, respectively. The first quarter of 2009 included expenses for profit improvement initiatives and non-recurring items that reduced DEPS by $0.11 and a reduction of income tax expense due to the favorable resolution of certain tax matters that increased DEPS by $0.07. The preliminary results reported in this press release do not include a non-cash charge for impairment of intangible assets in the Company's Industrial Products Group discussed in more detail below, as the full impact of the charge has not yet been determined.

Revised Reportable Segment Composition

Effective January 1, 2009, the Company reorganized its five former operating divisions into two major product groups: the Industrial Products Group and the Engineered Products Group. The Industrial Products Group includes the former Compressor and Blower Divisions, plus the multistage centrifugal blower operations formerly managed in the Engineered Products Division. The Engineered Products Group is composed of the former Engineered Products, Thomas Products and Fluid Transfer Divisions. These changes were designed to streamline operations, improve organizational efficiencies and create greater focus on customer needs.

The 2008 reportable segment results included in this press release have been recast to conform to the current presentation. The Company furnished unaudited selected pro forma segment results for each quarter of the year ended December 31, 2008 and for the years ended December 31, 2008, 2007 and 2006 in a Current Report on Form 8-K to the Securities and Exchange Commission on April 23, 2009.

Intangible Asset Impairment

On April 20, 2009, the Company determined that a non-cash impairment charge will be required to reduce the carrying value of certain intangible assets in the Company's Industrial Products Group. The Company currently estimates the consolidated pre-tax charge to be in the range of $225 to $300 million. Under accounting principles generally accepted in the U.S. ("GAAP"), the Company is required to assess goodwill and any indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred. Impairment assessment under GAAP requires that the Company consider, among other factors, differences between the current book value and estimated fair value of its net assets, and comparison of the estimated fair value of its net assets to its current market capitalization. The Company determined that an interim assessment after the first quarter of 2009 was appropriate due to the significant decline in order rates for products of the Industrial Products Group, the uncertain outlook regarding when such order rates might return to levels and growth rates experienced in recent years and the sustained decline in the price of the Company's common stock through March 31, 2009. The Company is currently conducting the extensive financial analysis and asset valuations necessary to determine the amount of the charge and record it appropriately at all of the Company's affected subsidiaries. The preliminary operating results reported in this press release do not include an amount for the charge, but an estimated charge will be recorded and reported by the Company in its quarterly report on Form 10-Q for the period ended March 31, 2009. The Company currently expects to finalize its impairment analysis during the fiscal quarter ending June 30, 2009 and, upon its completion, there could be a material adjustment to the estimated charge to be recorded by the Company for the fiscal quarter ended March 31, 2009. Prior to the adjustment relating to the charge, the carrying value of the net assets of the Industrial Products Group was approximately $1,035 million as of March 31, 2009.

While the intangible asset impairment charge will reduce reported operating income under GAAP, it will be non-cash in nature and will not affect the Company's liquidity, compliance with debt covenants or cash provided by operating activities.

CEO's Comments Regarding Results

"We were encouraged that the rate of decline in demand for our Industrial Products appeared to stabilize during the first quarter of 2009," said Barry L. Pennypacker, Gardner Denver's President and Chief Executive Officer. "For the quarter, orders in this group were less than the first quarter of 2008 in all major product lines but generally consistent with the order rates we experienced in the latter part of the fourth quarter of 2008. We experienced some order cancellations, particularly in products sold for printing applications, as our customers reassessed their demand forecasts. All such cancellations are reflected in our orders (which are reported net of cancellations) and backlog reported for the first quarter of 2009.

"Demand for Engineered Products was very mixed in the first quarter of 2009. Compared to the fourth quarter of 2008, orders for products used in North American OEM applications improved significantly, primarily due to upcoming changes in government reimbursements for home healthcare equipment that provided customers an incentive to purchase such equipment before the changes take effect. However, as expected, lower energy prices led to significant reductions in demand for petroleum pumps and also resulted in some order cancellations and customer-requested delays for engineered packages destined for alternative fuel applications, such as tar sands. Although quotation activity for engineered packages remained relatively steady during the quarter, orders in the second quarter will be an important indicator of revenue opportunities for this product group in the second half of 2009.

"The integration of the CompAir acquisition continues on track and we believe we are beginning to realize the benefit of our combined channels of distribution and supply chain leverage. Our other profit improvement projects are also on plan. In January, we began the consolidation of two German manufacturing operations. Earlier this month, we announced the consolidation of manufacturing in Wisconsin and Louisiana. These projects are part of seven facility consolidation projects we have initiated since September 2008. We believe that upon the completion of our profit improvement activities in early 2010, we will have a leaner manufacturing footprint but will still be well-positioned to satisfy increases in end market demand when macroeconomic conditions improve. We will continue to proactively identify and evaluate further cost reduction and rationalization projects, with a goal of maintaining manufacturing capacity after the facility consolidation projects through the expansion of our lean manufacturing initiatives.

"Our knowledge and implementation of lean continues to build momentum, and we are seeing benefits through inventory reduction and improved cash flows, which we are using primarily to repay debt and strengthen the Company's liquidity position. The progress that we have made in implementing lean contributed significantly to our $55 million in cash provided by operating activities in the first quarter of 2009. This compares to $65 million in the same period of 2008, when revenue levels were considerably higher.

"We believe our lean initiatives and profit improvement efforts will lead to operating margin improvements beginning in 2010 and improved manufacturing flexibility so that we are able to respond more quickly to changes in customers' requirements. In order to achieve these goals, we need to increase velocity in our production and business processes and reduce lead times, which should result in less work-in-process inventory and improved inventory turnover."

Outlook

Commenting on the global demand environment, Mr. Pennypacker stated, "Our limited visibility into future demand trends in key end market segments creates an unusual level of uncertainty and variability in our financial outlook. Orders for our products serving industrial end market segments remained weak in the first quarter, especially in the U.S. and Europe. Demand for these products tends to correlate with the level of manufacturing capacity utilization. The continued contraction in capacity utilization in the U.S. and Europe has resulted in declining demand for capital equipment such as blowers and compressor packages. As a result of our expectation for ongoing weak economic conditions, we anticipate demand for industrial products to remain relatively low for the remainder of 2009 and we remain cautious in our outlook. When demand begins to recover, we expect to initially see increased orders for aftermarket parts and shorter lead-time products that are more susceptible to swings in the economy, such as those that serve light industry and Class 8 trucks and OEM products for medical and environmental applications. At this point, we have not yet seen signs of that demand improving.

"Revenues for Engineered Products depend more on existing backlog levels than revenues for Industrial Products. Although we expect orders for Engineered Products to decline through the balance of 2009, shipments from current backlog provide slightly better visibility than exists in our outlook for Industrial Products.

"Orders for petroleum and industrial pumps continued to fall in the first quarter as a result of declining energy prices and the related reduction in rig count in North America. We expect revenues for this business unit to decline through the balance of the year and at present, we are uncertain how long petroleum pump orders will remain at these depressed levels. However, management has identified opportunities to increase aftermarket sales, which could help mitigate the lower demand for new pumps.

"We continue to streamline our organizational structure and reduce costs as we execute business process improvements identified through the implementation of the Gardner Denver Way. We expect to record profit improvement charges of $9 million in the second quarter and $17 million in the second half of 2009 for these cost reduction initiatives. The cost of these projects does not reflect the potential receipt of government-funded incentives to facilitate the relocation of equipment and personnel and employee training and development."

Mr. Pennypacker stated, "Based on the uncertain economic outlook, our existing backlog and cost reduction plans, we are projecting full-year 2009 DEPS, excluding profit improvement costs and impairment charges, to be in a range of $2.30 to $2.70. Including estimated profit improvement costs (primarily consisting of severance expense), but excluding impairment charges, the full-year 2009 DEPS is expected to be in a range of $1.84 to $2.24. Actual profit improvement costs incurred in 2009 will depend on, among other things, the length and severity of the current economic downturn and the availability of government-funded incentives to partially offset the cost of relocating equipment and personnel. Acquisitions completed in 2008 are expected to generate cash in 2009, but not materially impact DEPS. The second quarter DEPS, excluding profit improvement costs and impairment charges, is expected to be in a range of $0.50 to $0.60. Including profit improvement costs, but excluding impairment charges, the second quarter DEPS is expected to be in a range of $0.38 to $0.48. The full-year DEPS guidance excludes the impact of the expected impairment charge discussed earlier, as the after-tax amount of the charge is not currently known. The effective tax rate assumed in the DEPS guidance for the remainder of 2009 is 29.5 percent, which does not include any potential impact from impairment charges."

Mr. Pennypacker noted, "Cash flow provided by operations in the first quarter was enhanced by working capital reductions. We expect this trend to continue through the balance of 2009, which should result in significant reductions in debt and continued strengthening of the Company's balance sheet. The improvements we continue to make to our businesses, including the CompAir integration, profit improvement activities and other lean initiatives, are expected to continue to improve our cash generating ability over the long term."

The Company invested approximately $9.0 million in capital expenditures during the three-month period of 2009, compared to $9.6 million in the same period of 2008. Depreciation and amortization expense was $16.7 million for the three months ended March 31, 2009, compared to $14.9 million in the three-month period of 2008.