Oilgear Reports First Quarter Results

MILWAUKEE--May 10, 2002--The Oilgear Company today reported sales and earnings for the first quarter ended March 31, 2002.

The manufacturer of fluid power components and electronic controls posted sales of $20,597,000 for the first quarter of 2002, compared to sales of $21,541,000 for the same period in 2001. Net earnings were $24,000 or $0.01 per share for the first quarter of 2002, compared to earnings of $187,000 or $0.10 per share in the first quarter of 2001.

"Our first quarter sales reflect the extended softness in the U.S. fluid power market and the negative effect of the strong U.S. dollar on sales outside the United States," said David A. Zuege, president and chief executive officer. "The much talked about recovery has not yet reached the Fluid Power Industry. According to data provided by the National Fluid Power Association, U.S. shipments of hydraulic equipment were down 7.5% in the first quarter of 2002 from 2001. Our domestic shipments were down by a slightly lesser amount and we believe that we did not lose market share. And, in addition, we are pleased to see that we continue to be most successful in obtaining the more technically sophisticated customer projects, which is a tribute to our high level of technology."

Zuege indicated that margins suffered in the first quarter of 2002 due to the increased price competition brought on by the long downturn in the industry, a decrease in sales which resulted in lower utilization of our production facilities and a less profitable mix of business.

Zuege said that orders in the first quarter of 2002 were $20.8 million, down 8.0% from orders in the first quarter of 2001 while backlog reached $20.7 million at the end of the first quarter, up slightly from the backlog at the end of fiscal 2001. "While overall orders were down slightly from last year's first quarter, we're pleased to see orders from our European operations come in ahead of last year's first quarter," Zuege said.

A leader in the fluid power industry, The Oilgear Company provides advanced technology in the design and production of unique fluid power components and electronic controls. The company serves customers in the primary metals, machine tool, automobile, petroleum, construction equipment, chemical, plastic, glass, lumber, rubber and food industries. Its products are sold as individual components or integrated into high performance applications.