Global Power Reports First and Second Quarter 2017 Financial Results and Announces New Strategic Initiative

December 19, 2017

IRVING, Texas–(BUSINESS WIRE)–Global
Power Equipment Group Inc. (OTC: GLPW) (“Global Power” or the
“Company”) today reported its financial results for the quarter ended
March 31, 2017, and the quarter and six months ended June 30, 2017. The
delay in reporting the Company’s financial results for the first half of
2017 was due to the time it took to prepare and audit the Company’s
Annual Report on Form 10-K for the year ended December 31, 2015 (the
“2015 Report”), which included the restatement of certain prior period
financial results and was filed on March 15, 2017, as well as the
subsequent time required to file the Annual Report on Form 10-K for the
year ended December 31, 2016, which was filed on September 12, 2017.

The Company also reported on its operational progress in 2017 and its
current strategic initiatives.

Craig Holmes and Tracy Pagliara, Co-Presidents and Co-CEOs of Global
Power, commented, “As we had previously disclosed, financial results of
the first half of 2017 reflect many of the on-going operational
challenges that we have been diligently addressing. We believe we have
made substantial progress in better positioning the Company for
long-term success, but we recognize that these operational challenges,
combined with liquidity constraints, restrict our ability to invest in
our businesses.”

They added, “After having successfully divested substantially all of the
operating assets and liabilities of the Mechanical Solutions segment in
October of this year, we are now currently evaluating strategic
alternatives for our Electrical Solutions segment. This business has
great employees, customers, manufacturing capabilities, suppliers and
end markets. Consequently, we believe Electrical Solutions could benefit
from a new strategic partner that can provide increased liquidity and
capital for the business to improve operations and pursue greater growth
in its diversified end markets. This will also allow us to further
reduce debt and focus efforts on enhancing our Services segment, which
has recently entered into a significant joint venture and is continuing
to pursue a pipeline of solid and diverse opportunities. It will also
help accelerate our ongoing efforts to reduce costs in our
administrative and corporate functions.”

Consolidated Results for the Six Months ended
June 30, 2017 (compared with the corresponding period in
2016 unless noted otherwise)

Revenue was $157.9 million compared with $229.5 million, a $71.6
million decline. Items impacting revenue included:
- The sale of various businesses and a plant closure had a combined
  negative impact to revenue of $21.8 million.
- The timing of projects, as well as the decreased number and
  magnitude of projects, were the primary reasons for reduced
  revenue in both the Services and Mechanical Solutions segments.
  Delays in completing projects was the primary reason for a $6.0
  million decline in volume in Electrical Solutions.
Cost reductions and expense management helped to drive a $3.4 million,
or 13.2%, decline in general and administrative expenses. These
measures also reduced selling and marketing expenses by
$1.5
million, or 29.2%. Restatement expenses were down $2.0 million, as the
restatement of 2014 and certain prior-period financial results was
completed in March 2017.
The $0.8 million reduction in interest expense was the result of a
lower average debt balance.
The income tax benefit was mainly related to a $2.2 million decrease
in indefinite-lived intangible deferred tax liabilities resulting from
the disposition of Hetsco, Inc., a wholly owned subsidiary (“Hetsco”).
Net loss was $31.7 million, or $1.81 per share.
At the end of the period, backlog was $215.5 million, of which $122.8
million, or 57.0%, was related to the Services segment.

Focused on Execution in First Half 2017

In January, the Company sold the stock of Hetsco, to Chart Industries,
Inc. (NASDAQ: GTLS) for net proceeds of $20.2 million.
In March, Global Power completed the restatement of 2014 and certain
prior-period financial results and filed the 2015 Report.
In June, the Company secured a $45.0 million senior secured term loan,
which matures in December 2021, and used part of the proceeds to repay
in full all outstanding loans and obligations under the Company’s
previous credit agreement.

Business Segment Review for the Three Months
Ended March 31, 2017 (compared with the corresponding
period in 2016 unless noted otherwise)

Services segment:

Services revenue of $41.2 million was down $27.5 million due primarily
to completion in 2016 of construction and support services for the
restart of a new build nuclear reactor that contributed
$19.8
million in revenue for the prior-year period. Also, approximately $3.1
million of the decline was related to the sale of Hetsco.
Services operating loss was $9.2 million, a $12.8 million decrease,
due primarily to $13.1 million of costs recognized to reflect
estimated losses on several large non-recurring fixed-price contracts
under which Services performed change orders in the interest of
keeping projects on track that are currently in dispute with the
customer. In such cases, the costs are recognized when incurred, but
revenue recognition is deferred subject to the resolution of the
dispute. No estimated losses on contracts were recorded in the first
quarter of 2016.

Electrical Solutions segment:

Revenue for the segment was $13.5 million, a $4.1 million decline,
mostly as the result of the closure of the Chattanooga facility, which
led to the loss of a major customer.
Electrical Solutions operating loss increased $1.3 million to $4.0
million due primarily to a $1.8 million increase in estimated losses
on certain contracts.

Mechanical Solutions segment:

Revenue was $16.7 million, down $19.7 million as the segment had
declining demand for its products and was not able to replace projects.
Despite measurable cost reduction efforts, the significant reduction
in revenue was the primary cause of Mechanical Solutions’ $0.2 million
operating loss compared with $1.5 million of operating income in the
prior-year period.

Business Segment Review for the Three Months
Ended June 30, 2017 (compared with the corresponding
period in 2016 unless noted otherwise)

Services segment:

Services revenue increased $2.2 million as the timing of a
customer-scheduled nuclear facility outage more than offset the impact
of the sale of Hetsco and completion of significant work in 2016
associated with the restart of a new build nuclear plant. Services
revenue was up $16.7 million compared with the first quarter of 2017,
given the impact of the timing of outage work.
Operating income for the segment was $3.1 million compared with an
operating loss of $8.7 million in the second quarter of 2016. The
$11.8 million increase was largely due to the non-recurrence of an
$8.2
million loss related to net assets held for sale for Hetsco that was
recognized in the prior-year period, a $2.6 million reduction of loss
contract charges and a $0.7 million reduction in operating expenses
from the reorganization of the Williams business unit.
Backlog at the end of the period was $122.8 million compared with
$138.6 million at the end of 2016. Approximately $18.3 million of the
decline in Services backlog was due to the completion of the spring
outage work related to a maintenance and modification contract.

Electrical Solutions segment:

Revenue was $10.5 million in the quarter, down from $22.2 million in
the second quarter of 2016. The decline was primarily related to the
Chattanooga plant closure, which had a $5.5 million negative impact,
and lower production volume due to delays in project completion. This
had a $6.2 million negative impact on revenue.
Operating loss increased to $4.3 million compared with $0.5 million in
the prior-year period due to the significant revenue decline and
resulting $2.0 million decrease in gross profit. Additionally,
estimated losses on certain contracts increased $2.0 million. The
losses were the result of incurring liquidated damages from missed
delivery dates and operating inefficiencies, primarily in the Houston
facility.
Electrical Solutions backlog at June 30, 2017 increased $3.7 million
from December 31, 2016 due to delays in production and shipments.

Mechanical Solutions segment:

Revenue was $17.9 million, down $10.9 million, as the segment had
declining demand for its products and was not able to replace projects.
Operating loss was $0.2 million compared with $1.8 million in the
prior-year period, due primarily to an increase in gross profit of
$1.1 million due to $2.0 million of loss contract accruals that were
recorded in the same period of the prior year and measurable cost
reduction efforts, offset by the significant reduction in revenue.
Mechanical Solutions backlog at June 30, 2017 was $33.1 million, a
$4.7 million decline from December 31, 2016.

Creating Liquidity; Driving Operational and
Organizational Progress

Messrs. Holmes and Pagliara noted, “The hard work and dedicated effort
of our employees resulted in a great number of accomplishments in 2017.
We recognize that more work remains to address significant operational
and liquidity issues, and we are defining a path to alleviate these
challenges.”

Successful efforts in second half of 2017 include the following:

Sold the Mechanical Solutions segment and its related Mexico facility
and equipment for total net proceeds of $44.5 million.
With proceeds from the sale of Mechanical Solutions, the Company
reduced debt by $35.9 million in October 2017, including full
repayment of a $10.0 million first-out term loan from August 2017,
which enables the Company to avoid an increase in the facility’s
payable-in-kind interest rate in 2018.
Realigned and strengthened management team within Electrical Solutions
by adding experienced industry personnel in key operational leadership
positions.
Initiated the process for the evaluation of strategic alternatives for
Electrical Solutions segment, which could provide liquidity, pay down
additional debt and provide the segment with increased investment
capital.
Formed joint venture between Services business and prime construction
contractor to supply craft labor for the new nuclear power plant
construction at Plant Vogtle Units 3 & 4. The Services segment will
also provide supervision and ancillary support services to the joint
venture. The segment is well-positioned for a variety of potential
multi-year, multi-discipline projects including, for example, site
coatings, insulation and perimeter security. Later this month, the
Georgia Public Service Commission is expected to issue final approval
or denial related to continued construction at Plant Vogtle Units 3 &
4.
Awarded new nuclear and fossil-power contracts by long-standing
customers of the Services segment.
Negotiated receipt of $6.4 million of outstanding receivables for
pre-petition services rendered to a customer that filed for bankruptcy
protection. Expect to be paid for the remaining $2.3 million in
outstanding pre-petition receivables as well.
Became more current in the filing of our financial reports with the
Securities and Exchange Commission, including filing the comprehensive
Annual Report on Form 10-K for the year ended December 31, 2016 and
the quarterly reports on Form 10-Q for the first and second quarters
of 2017.

Planned efforts for facilitating improved performance in 2018 and beyond
include the following:

Seek a new asset-based lending facility, which would provide
additional liquidity through new borrowings, the release of restricted
cash that is currently collateral for standby letters of credit and
the ability to issue new standby letters of credit.
Expand decommissioning business by leveraging nuclear experience and
capabilities, developing partnerships and pursuing new opportunities
in this large and growing market.
Work toward a diversified pipeline of opportunities to compete in
transmission and distribution, oil and gas and petrochemical markets
and consider potential market expansion opportunities in Canada.
Seek to refinance the term-loan debt pending a successful conclusion
of the Electrical Solutions strategic alternatives process.
Focus on improving days sales outstanding and days payable outstanding.
Aggressively continue to reduce corporate and other operating costs.
Become current with the SEC by filing the annual report on Form 10-K
for the year ended December 31, 2017 by April 2, 2018.

Liquidity Update

As of December 14, 2017, the Company had $15.4 million in cash and
equivalents on-hand, including $11.8 million in restricted cash, and had
an outstanding gross debt balance of approximately $25.1 million.

For the six months ended June 30, 2017, the Company had negative cash
flow from operations of $5.8 million. Since June 2017, the Company’s
liquidity has remained very constrained as a result of continued losses,
inconsistent cash flows from operations and the inability to borrow
additional amounts for short-term working capital needs or issue
additional standby letters of credit. Management continues to assess and
implement steps in its liquidity plan.

Update on Financial Reporting for 2017

The Company expects to file its quarterly report on Form 10-Q for the
three and nine months ended September 30, 2017 during January 2018 and
its annual report on Form 10-K for the year ended December 31, 2017 by
the filing deadline on April 2, 2018.

Webcast and Teleconference

The Company will host a conference call on Wednesday, December 20, 2017,
at 10:00 a.m. Eastern time (9:00 a.m. Central). A webcast of the call
and an accompanying slide presentation will be available at www.globalpower.com.
To access the conference call by telephone, listeners should dial
201-493-6780.

An audio replay of the call will be available from 1:00 p.m. Eastern
time (12:00 p.m. Central) on the day of the teleconference until the end
of day on January 3, 2018. To listen to the audio replay, dial
412-317-6671 and enter conference ID number 13674323. Alternatively, you
may access the webcast replay at http://ir.globalpower.com/,
where a transcript will be posted once available.

About Global Power

Global Power is a design, engineering and manufacturing firm providing a
broad array of equipment and services to the global power
infrastructure, energy and process industries.

Additional information about Global Power can be found on its website: www.globalpower.com.

Forward-looking Statement Disclaimer

This press release contains “forward-looking statements” within the
meaning of the term set forth in the Private Securities Litigation
Reform Act of 1995. The forward-looking statements include statements or
expectations regarding the Company’s ability to comply with the terms of
its debt instruments, the timing and the Company’s ability to file its
remaining 2017 financial results and regain SEC reporting compliance, if
at all, the timing or outcome of its strategic alternative initiatives
with its Electrical Solutions segment, the expected timing of shipments
and other related matters. These statements reflect our current views of
future events and financial performance and are subject to a number of
risks and uncertainties, including our ability to comply with the terms
of our credit facility and enter into new lending facilities and access
letters of credit and to remain as a publicly reporting entity pursuant
to Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our
actual results, performance or achievements may differ materially from
those expressed or implied in the forward-looking statements. Additional
risks and uncertainties that could cause or contribute to such material
differences include, but are not limited to, decreased demand for new
gas turbine power plants, reduced demand for, or increased regulation
of, nuclear power, loss of any of our major customers, whether pursuant
to the loss of pending or future bids for either new business or an
extension of existing business, termination of customer or vendor
relationships, cost increases and project cost overruns, unforeseen
schedule delays, poor performance by our subcontractors, cancellation of
projects, competition for the sale of our products and services,
including competitors being awarded business by our customers that we
previously provided, shortages in, or increases in prices for, energy
and materials such as steel that we use to manufacture our products,
damage to our reputation, warranty or product liability claims,
increased exposure to environmental or other liabilities, failure to
comply with various laws and regulations, failure to attract and retain
highly-qualified personnel, loss of customer relationships with critical
personnel, effective integration of acquisitions, volatility of our
stock price, deterioration or uncertainty of credit markets, changes in
the economic and social and political conditions in the United States
and other countries in which we operate, including fluctuations in
foreign currency exchange rates, the banking environment or monetary
policy, and any suspension of our continued reporting obligations under
the Exchange Act.

Other important factors that may cause actual results to differ
materially from those expressed in the forward-looking statements are
discussed in our filings with the SEC, including the section of the 2016
10-K titled “Risk Factors.” Any forward-looking statement speaks only as
of the date of this press release. Except as may be required by
applicable law, we undertake no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information,
future events or otherwise, and we caution you not to rely upon them
unduly.

Financial Tables Follow.

GLOBAL POWER EQUIPMENT GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended March 31,	Three Months Ended June 30,
($ in thousands, except share and per share amounts)	2017	2016	2017	2016
Revenue
Services	$	41,232	$	68,729	$	57,981	$	55,809
Electrical Solutions	13,547	17,637	10,532	22,202
Mechanical Solutions	16,678	36,356	17,901	28,776
Total revenue	71,457	122,722	86,414	106,787
Cost of revenue
Services	47,187	59,125	51,227	50,345
Electrical Solutions	15,170	17,654	12,560	20,223
Mechanical Solutions	13,530	31,132	14,963	26,933
Total cost of revenue	75,887	107,911	78,750	97,501
Gross profit	(4,430)	14,811	7,664	9,286
Gross margin	(6.2)%	12.1%	8.9%	8.7%
Selling and marketing expenses	1,836	2,578	1,858	2,639
General and administrative expenses	11,223	13,059	11,107	12,652
Restatement expenses	1,720	2,913	713	1,542
(Gain) loss on sale of business and net assets held for sale	(239)	—	—	8,193
Depreciation and amortization expense(1)	1,274	2,216	1,228	2,193
Total operating expenses	15,814	20,766	14,906	27,219
Operating loss	(20,244)	(5,955)	(7,242)	(17,933)
Operating margin	(28.3)%	(4.9)%	(8.4)%	(16.8)%
Interest expense, net	1,708	2,660	2,108	1,997
Foreign currency gain	156	308	301	(129)
Other expense, net	(1)	(5)	1	64
Total other expenses (income), net	1,863	2,963	2,410	1,932
Loss before income tax	(22,107)	(8,918)	(9,652)	(19,865)
Income tax expense (benefit)	(636)	867	541	247
Net loss	$	(21,471)	$	(9,785)	$	(10,193)	$	(20,112)
Loss per common share – basic and diluted	$	(1.23)	$	(0.57)	$	(0.58)	$	(1.16)
Weighted average common shares outstanding – basic and diluted	17,470,817	17,223,901	17,551,664	17,338,255

(1)	Excludes depreciation and amortization for the three months ended March 31, 2017 and 2016 of $0.3 million and $0.6 million, respectively, and for the three months ended June 30, 2017 and 2016 of $0.4 million and $0.6 million, respectively included in cost of revenue.

GLOBAL POWER EQUIPMENT GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Six Months Ended June 30,
($ in thousands, except share and per share amounts)	2017	2016
Revenue
Services	$	99,213	$	124,538
Electrical Solutions	24,079	39,839
Mechanical Solutions	34,579	65,132
Total revenue	157,871	229,509
Cost of revenue
Services	98,414	109,470
Electrical Solutions	27,730	37,877
Mechanical Solutions	28,493	58,065
Total cost of revenue	154,637	205,412
Gross profit	3,234	24,097
Gross margin	2.0%	10.5%
Selling and marketing expenses	3,694	5,217
General and administrative expenses	22,330	25,711
Restatement expenses	2,433	4,455
(Gain) loss on sale of business and net assets held for sale	(239)	8,193
Depreciation and amortization expense(1)	2,502	4,409
Total operating expenses	30,720	47,985
Operating loss	(27,486)	(23,888)
Operating margin	(17.4)%	(10.4)%
Interest expense, net	3,816	4,657
Foreign currency gain	457	179
Other expense, net	—	59
Total other expenses (income), net	4,273	4,895
Loss before income tax	(31,759)	(28,783)
Income tax expense (benefit)	(95)	1,114
Net loss	$	(31,664)	$	(29,897)
Loss per common share – basic and diluted	$	(1.81)	$	(1.73)
Weighted average common shares outstanding – basic and diluted	17,511,232	17,280,866

(1)	Excludes depreciation and amortization for the six months ended June 30, 2017 and 2016 of $0.7 million and $1.2 million, respectively, included in cost of revenue.

GLOBAL POWER EQUIPMENT GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
March 31,	June 30,	December 31,
($ in thousands, except share and per share amounts)	2017	2017	2016
ASSETS
Current assets:
Cash and cash equivalents	$	6,544	$	8,509	$	2,805
Restricted cash	11,588	14,685	8,765
Accounts receivable, net of allowance of $1,545, $1,636 and $1,634, respectively	52,315	55,776	59,280
Inventories:
Raw material	4,313	4,872	4,210
Finished goods	629	753	699
Inventory reserve	(1,024)	(1,070)	(981)
Costs and estimated earnings in excess of billings	47,963	47,948	52,696
Assets held for sale	—	—	22,832
Other current assets	7,544	6,189	7,936
Total current assets	129,872	137,662	158,242
Property, plant and equipment, net	12,300	11,819	12,596
Goodwill	36,456	36,456	36,456
Intangible assets, net	24,129	23,457	24,801
Other long-term assets	754	641	747
Total assets	$	203,511	$	210,035	$	232,842
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	22,182	$	19,868	$	19,076
Accrued compensation and benefits	16,320	12,146	10,640
Billings in excess of costs and estimated earnings	9,432	11,977	6,754
Accrued warranties	5,411	4,572	5,806
Liabilities related to assets held for sale	—	—	1,151
Other current liabilities	34,932	36,231	33,915
Total current liabilities	88,277	84,794	77,342
Long-term debt	25,873	43,500	45,341
Deferred tax liabilities	14,465	15,264	15,499
Other long-term liabilities	8,091	7,742	7,526
Total liabilities	136,706	151,300	145,708
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 170,000,000 shares authorized and 18,916,983, 18,947,127 and 18,855,409 shares issued, respectively, and 17,565,465, 17,587,751 and 17,485,941 shares outstanding, respectively	189	189	188
Paid-in capital	77,463	78,079	76,708
Accumulated other comprehensive income	(8,924)	(7,417)	(9,513)
Retained earnings	(1,910)	(12,103)	19,764
Treasury stock, at par (1,351,518, 1,359,376 and 1,369,468 common shares, respectively)	(13)	(13)	(13)
Total stockholders’ equity	66,805	58,735	87,134
Total liabilities and stockholders’ equity	$	203,511	$	210,035	$	232,842

GLOBAL POWER EQUIPMENT GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months ended March 31,	Six Months ended June 30,
(in thousands)	2017	2016	2017	2016
Operating activities:
Net loss	$	(21,471)	$	(9,785)	$	(31,664)	$	(29,897)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Deferred income tax expense (benefit)	(1,034)	247	(234)	465
Depreciation and amortization on plant, property and equipment and intangible assets	1,607	2,834	3,170	5,638
Amortization of deferred financing costs	35	59	81	116
Loss on disposals of property, plant and equipment	30	39	45	39
(Gain) loss on sale of business and net assets held for sale	(239)	—	(239)	8,193
Bad debt expense	(51)	23	(9)	(233)
Stock-based compensation	1,006	790	1,858	1,366
Payable-in-kind interest	78	—	531	—
Changes in operating assets and liabilities, net of business sold:
Accounts receivable	6,548	30,895	3,974	17,624
Inventories	42	(1,139)	(508)	(250)
Costs and estimated earnings in excess of billings	5,634	(21,941)	6,553	(11,749)
Other current assets	4,432	(2,005)	5,940	(132)
Other assets	480	219	244	145
Accounts payable	3,008	(6,083)	446	(2,365)
Accrued and other liabilities	4,065	6,174	168	6,744
Accrued warranties	(404)	(160)	(1,251)	(1,423)
Billings in excess of costs and estimated earnings	2,596	305	5,136	(4,538)
Net cash provided by (used in) operating activities	6,362	472	(5,759)	(10,257)
Investing activities:
Proceeds from sale of business, net of restricted cash and transaction costs	20,206	—	20,206	—
Net transfers of restricted cash	(2,815)	(175)	(2,608)	(3,129)
Proceeds from sale of property, plant and equipment	14	44	14	5
Purchase of property, plant and equipment	(301)	(425)	(583)	(508)
Net cash provided by (used in) investing activities	17,104	(556)	17,029	(3,632)
Financing activities:
Repurchase of stock-based awards for payment of statutory taxes due on stock-based compensation	(185)	(110)	(223)	(153)
Debt issuance costs	(57)	—	(1,704)	—
Dividends paid	(9)	—	(9)	—
Proceeds from long-term debt	83,100	—	161,599	—
Payments of long-term debt	(102,647)	(500)	(165,515)	(1,000)
Net cash provided by (used in) financing activities	(19,798)	(610)	(5,852)	(1,153)
Effect of exchange rate changes on cash	71	275	286	219
Net change in cash and cash equivalents	3,739	(419)	5,704	(14,823)
Cash and cash equivalents, beginning of year	2,805	22,239	2,805	22,239
Cash and cash equivalents, end of quarter	$	6,544	$	21,820	$	8,509	$	7,416
Supplemental Disclosures:
Cash paid for interest	$	1,863	$	1,697	$	3,416	$	3,343
Cash paid for income taxes, net of refunds	$	86	$	229	$	992	$	789
Noncash repayment of revolving credit facility	$	—	—	$	(36,224)	—
Noncash upfront fee related to senior secured term loan facility	$	—	—	$	(3,150)	—