Otter Tail Corporation Announces Second Quarter 2010 Results

FERGUS FALLS, Minn., Aug. 2, 2010 (GLOBE NEWSWIRE) -- Otter Tail Corporation (Nasdaq:OTTR) today announced financial results for the quarter ended June 30, 2010.

Highlights

• Consolidated revenues rose approximately 9.5% compared with the second quarter of 2009.
• Second quarter 2010 results include a noncash asset impairment charge of $19.7 million ($15.6 million net-of-tax), or $0.44 per share, at ShoreMaster, which primarily caused the year-over-year change from $0.07 per share net income to $0.40 per share net loss.
• The corporation is revising its 2010 diluted earnings per share guidance (see 2010 Expectations).
• Board of Directors declares quarterly common and preferred dividends.

CEO Overview

"Thus far in 2010, signs of economic recovery remain mixed and during the second quarter, this dynamic was reflected in our businesses," said John Erickson, president and chief executive officer of Otter Tail Corporation. "We are encouraged that our consolidated operating revenue improved 9.5% over the same quarter a year ago as some of our businesses saw increases in sales volumes and prices for their products and services. Our electric segment continued to perform well and second quarter financial results were higher than anticipated in our plastics and food-ingredient processing segments. Our metal parts stamping and fabrication company and our custom plastic parts manufacturer also performed well in the second quarter of 2010, and our health services and other business operations segments improved year over year. Corporate general and administrative costs were in line with second quarter 2009 levels and are on track with our expectations for 2010.

"These upticks in performance at several of our operating companies were overshadowed by the asset impairment charge at ShoreMaster, which has been hard hit by the recession, and by near-term challenges facing DMI Industries, Inc. DMI is a leading wind tower provider and a partner of choice for leading wind turbine manufacturers. DMI incurred additional costs to meet demanding fabrication specifications for the production of a customer's new tower design during the quarter. Furthermore, with demand for electricity remaining soft across the country, timetables for wind farm development projects have lengthened, extending some delivery schedules. Our positive long-term outlook for wind energy and for DMI is undiminished."