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Vikram KiniThank you, Michael and good morning everyone. As a reminder, any statements made by Gardner Denver during this call other than historical facts are forward-looking statements made in reliance upon the Safe Harbor of the Private Securities Litigation Reform Act of 1995. As a general matter, forward-looking statements are those focused upon anticipated events or trends and assumptions, expectations, and beliefs relating to matters that are not historical in nature. Such forward-looking statements are subject to uncertainties and factors related to Gardner Denver’s operations and business environment, all of which are difficult to predict and many of which are beyond the control of the company. These uncertainties and factors could cause actual results to differ materially from those matters expressed in or implied by such forward-looking statements. Please refer to Gardner Denver's second quarter 2012 earnings press release issued on July 20, 2012 for further information regarding potential uncertainties and factors that could cause actual results to differ from anticipated results. Gardner Denver does not undertake or plan to update these forward-looking statements, even though the company’s situation may change. Therefore, you should not rely on these forward-looking statements as representing the company's or its management's view as of any date subsequent to today. As a reminder, this call is being broadcast in listen-only mode through a live webcast. This free webcast will be available for replay up to 90 days, following the call through the Investor Relations page on the Gardner Denver website, at gardnerdenver.com or the Thomson StreetEvents site at earnings.com. And now I’d like to turn the meeting over to Michael. Michael M. Larsen Thanks, Vic. Last night we announced second quarter results that exceeded our expectations in terms of diluted earnings per share. In a more challenging macro environment, the Gardner Denver team delivered margin expansion and a 19% increase in diluted earnings per share exceeding the second quarter guidance communicated on April 18, 2012.
Revenues in the second quarter with $613 million were essentially flat versus the same period last year as the Robuschi acquisition added 4% and currency was a 4% headwind. Operating income for the second quarter was $108 million compared to $99.2 million, an increase of 9% versus the prior-year, reflecting the positive impact of the recent Robuschi acquisition and the impact of operational excellence initiatives.Operating margin in the quarter was 17.6%, a 140 basis points improvement over the second quarter of 2011. Net income was up 12% to $75.3 million and diluted earnings per share of $1.51 were up 19% of the last year’s second quarter and included unfavorable charges of $0.02 resulting in adjusted EPS of $1.53. The more challenging macro environment and expected down cycle in Pressure Pumping contributed to a 17% decline in orders to $526 million. The Robuschi acquisition added 4% and currency was a 4% headwind to orders. Cancellations were about $40 million split evenly between the two segments. The book-to-bill ratio in the quarter was 0.86 and our backlog is $654 million as we entered the second half. Cash flow improved sequentially to $66 million, up 36% over the first quarter. Turning our attention to the individual segments starting with the Engineered Products Group, revenues were $283 million essentially flat as positive revenue growth in our petroleum industrial pump business and our latest cycle project business Nash was offset by declines in Thomas and Emco Wheaton loading arms. EPG operating income increased 4% to $67.2 million and operating margins improved to 23.7%, up 80 basis points from last years second quarter. On orders, EPG orders in the second quarter declined by 36% to $200 million, driven principally by significantly lower demand in the petroleum and industrial pump business, which was down approximately 60% as well as weakness in Thomas and Emco Wheaton, both down approximately 20%.These declines were partially offset by high single-digit order growth in our later cycle project business Nash, driven by strength in chemicals and oil and gas globally.
Cancellations in our OEM Pressure Pump business were only $4.7 million in the quarter, bringing the total to less than $7 million for the year. After working closely with our key customers over the last months, we now have a grounded view of the backlog for the second half of 2012.Read the rest of this transcript for free on seekingalpha.com