(By Balaseshan) PMFG Inc. (NASDAQ: PMFG), a provider of custom-engineered systems and products, said it has received two orders for separation equipment totaling $1.9 million.
The first sales order is for steam separators to be installed at a nuclear power project in China. This represents the first such order since the Chinese government placed their nuclear expansion program on hold following the tsunami in Fukushima, Japan. These units will be manufactured at a facility in Zhenjiang, China, with delivery scheduled for fall 2013.
These units are expected to be the first of several similar orders which will be released over the fiscal year to serve new nuclear power plant projects in China and at existing nuclear power plants in the U.S. and France as part of plant relicensing and modernization projects.
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Steam dryers or secondary separators are utilized as the final stage of water separation within a reactor vessel (BWR plants) or steam generator vessel (PWR plants). PMFG has been a leader in providing equipment and technology to the nuclear industry for over 30 years.
The second sales order relates to the previously announced contract award by the U.S. Navy's Naval Surface Warfare Center, Carderock Division (NSWCCD) to provide the air inlet moisture separation/filtration systems to replace the existing systems on the Arleigh Burke (DDG 51) class.
The five-year, multiple-award, indefinite delivery, indefinite quantity firm-fixed-price contract could have a potential value of about $13.7 million, if all options are exercised.
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While aggregate potential contract value has been announced, we will only enter amounts into backlog upon receipt of sales orders, which we expect to occur over the next 3-4 years. In general, delivery will be within 9 to 11 months from the receipt of the sales order.
"This order for steam separators represents an important step forward in restarting nuclear power plant construction projects halted in China following the events in Fukushima, Japan. We are in the process of expanding our manufacturing capacity in China to meet the anticipated demand for nuclear steam separators locally," said Peter Burlage, chief executive of PMFG.
The company also is preparing for the expected demand for replacement dryers due to the re-commissioning of nuclear power plants in the U.S. and France. PMFG expects that new nuclear power plant construction, life extension and upgrading will continue to be an important contributor to its business in future periods.
PMFG is trading up 3.29 percent at $5.96 on Tuesday. The stock has been trading between $5.58 and $27.40 for the past 52 weeks.