8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) October 25, 2004

GLOBAL POWER EQUIPMENT GROUP INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

001-16501	73-1541378
(Commission File Number)	(IRS Employer Identification No.)
6120 S. Yale, Suite 1480, Tulsa, Oklahoma	74136
(Address of Principal Executive Offices)	(Zip Code)

(918) 488-0828

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On October 25, 2004, Global Power Equipment Group Inc. (the “Company”) issued a press release announcing its results for the third quarter period ended September 25, 2004. A copy of such press release is furnished as Exhibit 99.1 hereto.

On October 26, 2004, the Company participated in a telephone conference call relating to its earnings release for the third quarter period ended September 25, 2004. The transcript of the conference call and a copy of the accompanying slide show presentation are furnished as Exhibits 99.2 and 99.3 hereto, respectively.

The information being furnished hereunder discloses (i) EBITDA and (ii) estimated earnings per dilutive share, excluding estimated restructuring charges, with respect to the fourth quarter of fiscal 2004 and fiscal 2004, all of which are non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. The Company believes that EBITDA is a useful measure of evaluating its financial performance because of its focus on the Company’s results from operations before interest, income taxes, depreciation and amortization. EBITDA is utilized for internal analysis of the Company and its operating subsidiaries. EBITDA is not a measure of financial performance under generally accepted accounting principles (“GAAP”) and should not be considered in isolation or as an alternative to other financial measures determined under GAAP. However, EBITDA is widely used by investors, financial analysts and rating agencies as an alternative measure of evaluating, comparing and rating operating performance. EBITDA presented by the Company may not be comparable to similarly titled measures reported by other companies. In addition, the Company has provided estimated earnings per dilutive share adjusted to exclude estimated restructuring charges, which is not a measure of financial performance under GAAP as such estimates exclude the effect of estimated restructuring charges to be incurred by the Company. The Company has provided this estimate because it excludes typically non-recurring items that the Company generally excludes from its earnings guidance and makes such information more comparable to prior disclosures for investors and financial analysts. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures is included in the press release furnished as Exhibit 99.1 hereto.

The information in this Form 8-K, including exhibits, is being furnished pursuant to this Item 2.02 of this report and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

2

Item 9.01. Financial Statements and Exhibits.

(c) The following exhibits are furnished herewith:

99.1	Press Release dated October 25, 2004, issued by the Company.
99.2	Transcript of the Company’s October 26, 2004 telephone, conference call.
99.3	Slide Show Presentation of the Company dated October 26, 2004.

3

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GLOBAL POWER EQUIPMENT GROUP INC.
Date: October 29, 2004	By:	/s/ Candice L. Cheeseman
		Candice L. Cheeseman
		General Counsel and Secretary

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated October 25, 2004, issued by the Company.
99.2	Transcript of the Company’s October 26, 2004, telephone conference call.
99.3	Slide Show Presentation of the Company dated October 26, 2004.

EX-99.1

Exhibit 99.1

Global Power Equipment Group Inc.

Reports Third Quarter FY2004 Results

Strong International Bookings Boosts Backlog to $218 Million

TULSA, Oklahoma, October 25, 2004 – Global Power Equipment Group Inc. (NYSE: GEG), a leading design, engineering and fabrication firm providing a broad array of equipment and services to diversified global companies engaged in the power and process industries, today reported financial results for the third quarter ended September 25, 2004.

Global Power Equipment Group reported earnings for the third quarter of fiscal 2004 of $90,000 or $0.00 per diluted share, on revenues of $59.7 million. This compares to net earnings of $3.0 million, or $0.07 per diluted share, on revenues of $57.3 million for the third quarter of fiscal 2003. For the nine months ended September 25, 2004, the Company reported net earnings of $1.2 million, or $0.03 per diluted share, on revenues of $171.9 million. This compares to net earnings for the same period last year of $14.7 million, or $0.32 per diluted share, on revenues of $198.3 million. Earnings for the third quarter of fiscal 2004 and the first nine months of 2004 include the effect of restructuring charges totaling $1.1 million and $3.4 million, respectively or $0.01 and $0.04 per share, respectively.

The Company’s gross profit for the third quarter of 2004 totaled $9.1 million representing a 15.2 percent gross margin compared to a gross profit of $13.8 million and a gross margin of 24.2 percent in the third quarter last year. As previously announced, the Company’s gross profit has been impacted by sharply higher steel costs during fiscal year 2004 and again in the most recent quarter. For the first nine months of 2004, the Company’s gross profit totaled $30.0 million representing a 17.5 percent gross margin compared to 26.2 percent in the same period of 2003.

The Company generated EBITDA (earnings plus income taxes, interest, depreciation and amortization) of $1.4 million for the third quarter of 2004, down from the $6.1 million recorded during the same period in 2003. The decrease in EBITDA was principally due to the lower gross margin during the third quarter of 2004. The Company had cash and cash equivalents of $32.6 million on hand at the end of the third quarter of 2004, up slightly from the $31.2 million from the end of June 2004.

“International market conditions for new power generation continued to gain strength during the third quarter as evidenced by our bookings to firm backlog” stated Larry Edwards, Global Power Equipment Group’s chairman, president and chief executive officer. “Our recent acquisition in China, which we closed during the third quarter, is supporting our business in China and has been instrumental in helping us secure new orders for markets outside of China.”

Mr. Edwards further stated, “Our third quarter margins were impacted by significantly higher steel costs, as well as rising transportation costs, which were largely the result of higher global energy prices. During the third quarter, international steel prices were nearly 90 percent higher than a year before and were 14 percent higher than the second quarter of this year. While we continue to work with our suppliers, international manufacturing partners and our customers to deal with the impact of higher steel costs, our lower gross profit margin clearly reflects the effect of this key input.”

Global Power Equipment Group Inc.

Third Quarter 2004 Earnings – Page 2

At the end of the third quarter, the Company’s firm backlog totaled $218 million compared to $171 million at the end of June 2004 and $185 million at the end of September 2003. Approximately 71 percent of the Company’s new bookings during the first nine months of 2004 originated from projects outside of the United States compared to 54 percent during the first nine months of 2003.

Earnings Estimate

Based upon information management currently has evaluated, in conjunction with this release, management expects fiscal year 2004 revenue and earnings guidance as follows: revenue of between $220 million and $240 million and diluted earnings per share of between $0.07 and $0.08, before the effect of previously announced estimated management restructuring charges which total approximately $5.2 million or $0.07 per diluted share. The company establishes fiscal year 2005 earnings guidance of between $0.16 and $0.24 per diluted share on revenues of between $325 and $375 million and a gross margin of between 14.0 percent to 16.0 percent.

Special notice: The Company’s Board of Directors has approved a change in the fiscal year-end for the Company from the last Saturday in December to December 31, and will be effective for the fourth quarter of 2004 and periods beyond.

Non-GAAP Financial Measures

This release contains disclosure of EBITDA and estimated earnings per diluted share for fiscal 2004 and the third quarter of 2004 that exclude the effect of estimated restructuring charges, which are non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. A reconciliation of EBITDA to net income available to common stockholders and of estimated earnings per diluted share excluding restructuring charges to estimated earnings per diluted share are included in the exhibits to this release.

About Global Power Equipment Group

Oklahoma based Global Power Equipment Group Inc. is a leading designer, engineer and fabricator of a comprehensive portfolio of equipment for gas turbine power plants and power-related equipment for industrial operations, with over 30 years of power generation industry experience. The Company’s equipment is installed in power plants and in industrial operations in more than 40 countries on six continents and believes, in its product lines, it has one of the largest installed bases of equipment for power generation in the world. In addition, the Company provides its customers with value-added services including engineering, retrofit, maintenance and repair. Additional information about Global Power Equipment Group may be found at www.globalpower.com.

Statements contained in this release regarding the Company’s or management’s intentions, beliefs, expectations, or predictions for the future, including, but not limited to, those regarding anticipated operating results, are forward looking statements within the meaning of U.S. federal securities laws and are subject to a number of risks, assumptions and uncertainties that could cause the Company’s actual results to differ materially from those projected, including decreased demand for new gas turbine power plants, the loss of any of our major customers, the cancellation of projects, project cost overruns, including increases in prices for materials such as steel, and unforeseen schedule delays, competition for the sale of our products or services, poor performance by our subcontractors, warranty and product liability claims, and changes in the economic, social and political conditions in the countries in which we operate, including fluctuations in foreign currency exchange rates. Information concerning some of the other factors that could cause actual results to differ materially from those in, or implied by, the forward looking statements are set forth under “Risk Factors” in the Company’s Form 10-K for the period ended December 27, 2003, and other reports on file with the U.S. Securities and Exchange Commission. The Company assumes no obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise.

Company Contact:

Bob Zwerneman

Director of Investor Relations

(918) 274-2398

Global Power Equipment Group Inc., 6120 S. Yale, Suite 1480, Tulsa, OK 74136 U.S.A.

Phone: 1-918 488-0828 FAX: 1-918 488-8389

Global Power Equipment Group Inc.

Third Quarter 2004 Earnings – Page 3

GLOBAL POWER EQUIPMENT GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

	Three Months Ended				Nine Months Ended
	September 25, 2004		September 27, 2003		September 25, 2004		September 27, 2003
Revenues	$	59,720	$	57,301	$	171,867	$	198,329
Cost of sales		50,621		43,454		141,826		146,314
Gross profit		9,099		13,847		30,041		52,015
Selling and administrative expenses		8,769		8,578		27,571		26,697
Operating income		330		5,269		2,470		25,318
Interest expense		185		326		496		1,218
Income before income taxes		145		4,943		1,974		24,100
Income tax provision		55		1,928		750		9,399
Net income available to common stockholders	$	90	$	3,015	$	1,224	$	14,701
Basic income per common share
Weighted average shares outstanding- basic		46,330		44,785		46,104		44,327
Net income available to common stockholders	$	0.00	$	0.07	$	0.03	$	0.33
Diluted income per common share
Weighted average shares outstanding- diluted		46,921		45,996		46,869		45,788
Net income available to common stockholders	$	0.00	$	0.07	$	0.03	$	0.32

Global Power Equipment Group Inc., 6120 S. Yale, Suite 1480, Tulsa, OK 74136 U.S.A.

Phone: 1-918 488-0828 FAX: 1-918 488-8389

Global Power Equipment Group Inc.

Third Quarter 2004 Earnings – Page 4

GLOBAL POWER EQUIPMENT GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

	September 25, 2004			December 27, 2003
ASSETS
Current assets:
Cash and cash equivalents	$	32,554		$	51,315
Accounts receivable, net of allowance of $2,307 and $ 1,325		36,533			42,582
Inventories		8,360			3,013
Costs and estimated earnings in excess of billings		64,997			40,706
Deferred tax assets		12,410			17,315
Other current assets		14,782			3,983
Total current assets		169,636			158,914
Property, plant and equipment, net		24,521			20,740
Deferred tax assets		50,660			55,094
Goodwill, net		45,000			45,000
Other assets		7,225			1,248
Total assets	$	297,042		$	280,996
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	21,011		$	14
Accounts payable		20,143			18,974
Accrued compensation and employee benefits		3,803			7,285
Accrued warranty		13,093			15,004
Billings in excess of costs and estimated earnings		65,663			53,293
Other current liabilities		4,831			5,203
Total current liabilities		128,544			99,773
Other long-term liabilities		6,511			1,888
Long-term debt, net of current maturities		—			24,949
Commitments and contingencies
Minority interest		1,708			—
Stockholders’ equity
Common stock		463			452
Paid-in capital deficit		(19,480	)		(25,492	)
Accumulated comprehensive income		1,262			2,616
Retained earnings		178,034			176,810
Total stockholders’ equity		160,279			154,386
Total liabilities and equity	$	297,042		$	280,996

Global Power Equipment Group Inc., 6120 S. Yale, Suite 1480, Tulsa, OK 74136 U.S.A.

Phone: 1-918 488-0828 FAX: 1-918 488-8389

Global Power Equipment Group Inc.

Third Quarter 2004 Earnings – Page 5

GLOBAL POWER EQUIPMENT GROUP INC.

SUPPLEMENTAL STATISTICAL INFORMATION

(in thousands)

	Three Months Ended				Nine Months Ended
	September 25, 2004		September 27, 2003		September 25, 2004		September 27, 2003
Net income	$	90	$	3,015	$	1,224	$	14,701
Add back:
Income tax provision		55		1,928		750		9,399
Interest expense		185		326		496		1,218
Depreciation and amortization		1,110		874		2,773		2,680
EBITDA (a)	$	1,440	$	6,143	$	5,243	$	27,998

(a) EBITDA represents net income plus income taxes, interest, depreciation and amortization. While considered the most common definition used by investors and financial analysts, the EBITDA presented above may not be comparable to similarly titled measures reported by other companies. The Company believes that EBITDA, while providing useful information, should not be considered in isolation or as an alternative to other financial measures determined under GAAP.

GLOBAL POWER EQUIPMENT GROUP INC.

RECONCILIATION OF NON-GAAP ESTIMATED EARNINGS TO A GAAP BASIS

	Three Months Ended December 31, 2004						Twelve Months Ended December 31, 2004
	(Low estimate)			(High estimate)			(Low estimate)			(High estimate)
Estimated earnings per share on a non-GAAP basis	$	—		$	0.01		$	0.07		$	0.08
Impact of estimated restructuring charges		(0.03	)		(0.02	)		(0.08	)		(0.07	)
Estimated earnings per share on a GAAP basis	$	(0.03	)	$	(0.01	)	$	(0.01	)	$	0.01

EX-99.2

Exhibit 99.2

Global Power Equipment Group Inc.

Third Quarter, 2004 Earnings Conference Call Transcript

October 26, 2004 – 9:00 AM EDT

Operator

Good morning. My name is Bonnie and I will be your conference facilitator today. At this time, I would like to welcome everyone to the third quarter 2004 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer period. Thank you. Mr. Bob Zwerneman, you may begin your conference.

Bob Zwerneman, Global Power Equipment Group - Director of Investor Relations

Thank you Bonnie. Good morning everyone. I would like to welcome you to the Global Power Equipment Group’s third quarter 2004 earnings conference call. Joining me today on this call is Larry Edwards, Global Power Equipment Group’s Chairman, President and Chief Executive Officer; and Jim Wilson, our Chief Financial Officer.

On the homepage on our Web site, there is a link to the presentation that we will be using this morning. That site is www.globalpower.com. Within that presentation, slide 2 presents our Safe Harbor and Regulation G statements. In the interest of time today, we will move straight to our prepared remarks and handle the legal statements at the end of this call. So with that, I will turn the call over to Larry Edwards.

Larry Edwards, Global Power Equipment Group -Chairman, President and Chief Executive Officer

Thank you Bob and good morning everyone. Please turn with me to slide number 3. I will cover just a few topics this morning before turning it over to Jim to discuss the third quarter results. Let me start out with our marketing initiatives during the most recent quarter and provide some details on what we’re pursuing today.

We had a very successful third quarter in terms of bookings, where we totaled — booked a total of $107 million of new business into our firm backlog. That’s about what we booked in the first 9 months of 2003, and the highest quarter since the first quarter of 2002.

On a year-to-date basis, we’re close to $50 million ahead of what we booked for the entire year of 2003. Over $70 million of our third quarter orders, or around two-thirds, are for jobs outside the United States. This sharp rise in the volume of new orders underscores how the international market continues to gain strength.

Over half of the orders we booked in the United States during the quarter were for specialty boiler jobs, with much the balance falling under our retrofit business. What may surprise many of you is China accounted for only $6 million of our third quarter bookings, with our new acquisition Deltak China contributing approximately $12 million to third quarter bookings, about half of which were new orders placed during August and September. All in all, the market for power generation continues to gain strength. Our bookings are improving and we remain optimistic.

We have continued to focus much of our sales efforts in East and Southeast Asia, and I personally have been engaged in that effort. At an industry conference held in Bangkok a couple of weeks ago, which was very well attended, the discussions we held with customers and prospective customers were very promising.

Southeast Asian countries plan to spend several billion dollars each year for new power plants in order to keep up with power demand growth. Fortunately, many of these new plants will be gas turbines. Funding appears to be available for these capacity additions in both Southeast Asia as well as in China. In China, for auxiliary power equipment segment, we are in a good position to win significant business in the fourth quarter of this year.

On the HRSG side, timing for bookings for in country Chinese projects appears to be in the early 2005 time frame. In the Middle East, there are a number of very large projects in Saudi Arabia that we’re following, as well as new projects in Libya, Iraq, Jordan, the Emirates, Kuwait and Egypt. Some of the prospects are for desalinization and petrochemical projects as well as for additional power. Jim will provide greater details on our bookings and our revenues from this important area in a few minutes.

We also booked a number of special specialty boiler jobs during the most recent quarter that are integral components of LNG facilities for the Middle East. As we mentioned our second quarter call, a new project in Mexico quickly came onto our radar and we were successful in landing the order.

We’ve already begun engineering and plan to start fabrication work soon at our facility in Nanjing, China. This project is the first major HRSG project to be built for export from our facility in Nanjing, and we believe emphasizes why we felt so strongly about acquiring Nanjing Boiler Works, now Deltak China.

While I’m on the subject of Deltak China, we are having good success in staffing the operation there with Global Power employees that are Chinese nationals in the areas of finance, operation, and engineering.

In addition to Mexico, we have seen some strengthening in other areas of South America, markets that have been an inactive for quite some time. So as demonstrated by our approved bookings, the international market continues to strengthen.

Unfortunately, we do have a major challenge that is impacting the cost side of our business — increasing steel prices. If you will turn slide 4, you can see the trend in world steel prices over the past couple of years and why our 2005 guidance for gross margins are quite low compared to historical margins over the past 5 years.

We continue to take every step on the operating side of our business to control overhead, ship work to low-cost sources, and work with our suppliers and customers to minimize, where possible, the impact of higher steel costs.

As shown on this chart, steel prices continued to climb during the third quarter, up 90 percent over a year ago. While stabilized for the present, they are very high on a historical basis.

Higher nickel prices also have increased the surcharges we’re paying for stainless steel, something we also use a great deal of in our products. As stated in yesterday’s press release, we issued our initial earnings guidance for 2005 with revenues expected to range between $325 to $375 million. That’s up sharply from our 2004 expectation of between $220 to $240 million.

As a result of higher costs, though, we’re estimating our gross margin will range between 14 to 16 percent, similar to what we are experiencing in the second half of this year. Once steel prices stabilize or possibly even decline, we do expect our margins will return to more historical levels, somewhere around 3 to 4 percentage points above our 2005 guidance.

As to year-end 2004 backlog, based upon what we know today we can see another $20 to $40 million backlog addition by the end of the year, possibly more. We’ve already received firm indications for close to 40 percent of our estimated fourth quarter bookings as of last Friday. With that, I will turn the call over to Jim.

Jim Wilson, Global Power Equipment Group - Chief Financial Officer

Thanks Larry. Good morning everyone. If you will please turn to slide number 5, we will look at some of the highlights from the income statement. As we reported, earnings for the third quarter were $90,000 or break even on a diluted earnings per share basis, versus $3.0 million or 7 cents per diluted share last year. The third quarter results include previously announced restructuring charges of approximately $1.0 million, mainly tied to the closing of 2 facilities as previously discussed on our second quarter conference call.

Revenue for the third quarter was $59.7 million, up about 4 percent from the $57.3 million we reported in the third quarter of 2003. Our third quarter gross margin of 15.2 percent was lower than last year’s margin of 24.2 percent. This is at the bottom end of the range, which we provided for, in our third quarter earnings guidance. And as with the second quarter, higher steel costs were primarily responsible for the additional decline in our gross margins.

As Larry pointed out, steel prices rose another 14 percent sequentially from the second quarter. And we were unable to fully distribute those costs to our customers for jobs already bid.

EBITDA for the third quarter it was $1.4 million, compared to $6.1 million and the same period last year. Management restructuring charges had a $1.0 million effect on reported EBITDA during the period. The figures for the third quarter also include 2 months of our 90 percent interest in Deltak China located in Nanjing, China. That facility became part of our consolidated operations effective July 30.

Our Deltak China operation contributed approximately $2.7 million of revenue during the third quarter and around break even operating results. While the gross margins for the packaged boilers sold domestically within China range between 25 and 30 percent, we expect that the Deltak China operating results will be approximately break even for the near-term until we sell all the finished goods inventory which were written up to fair value as a result of our purchase.

Let me emphasize that our decision to purchase the Nanjing business was not based upon its packaged boiler business, but rather the manufacturing infrastructure, the local presence with 24 sales offices and the other essential elements as we discussed during our second quarter call.

If you turn slide number 6, you can see our P&L on a year-to-date basis. On our previous call we addressed some of the key variances in our gross margin and SG&A line items. I would like to address some of the same point again this morning.

Our year-to-date margin of 17.5 percent is less than the range of 18.5 to 19.5 percent that we provided in our annual earnings estimate a year ago, mainly as a result of significantly increased raw material prices as well as increasing competitive pressures.

In addition, year-to-date operating expenses are $4.7 million greater than expected. This is mainly due to a combination of $3.4 million of restructuring charges, along with $1.3 million of other higher than expected operating expenses such as — A, higher design and engineering costs relating to our high level of proposal activity which did give rise to sharply higher bookings to the third quarter; and B, additional costs related to the documentation, testing, and audit internal controls as required by section 404 of Sarbanes-Oxley. These costs are more than double what we originally estimated a year ago, something other companies are also experiencing. And C, costs relating to start up of our Chinese operations, including 2 months of operating expenses for Deltak China. Partially offsetting these higher costs are lower-than-expected accrued compensation costs.

Turning to slide number 7, you can see our third quarter and year-to-date revenue on a segment and geographic basis compared to last year. Revenue was up about $2.5 million in our heat recovery segment and flat in our auxiliary power segment from the same quarter last year. For the first 9 months, those segments are down somewhat with auxiliary power revenues down slightly more falling $16.4 million, while heat recovery is off 10.0 million, or by 16 and 10 percent respectively.

The United States represented 29 percent of our third quarter revenue and 37 percent of our 9-month revenue, as compared to 72 percent and 71 percent respectively for the comparable prior year period. This downward trend should continue, although the steepest part of the decline has taken place over the past year. Almost two-thirds of our third quarter revenue was tied to Asia and the Middle East, with Asia now our largest market at just under 50 percent of our third quarter revenue.

Turning to slide number 8, you can see the historical margins on a quarterly basis. The third quarter gross margin of 15.2 percent is below the historical average of 20.3 percent and at the bottom end of our second half estimate of between 15 to 17 percent. Based upon the full two-year 2004 figures we provided in yesterday’s earnings release, that should put our fourth quarter gross margins somewhere in the 14 to 16 percent range, the same range we’re expecting for 2005 fiscal year estimate.

In the fourth quarter we expect to record another $2.0 million of non-recurring structuring charges, broken down as follows — a 1.1 million non-cash charge related to the write-down of a

facility we’re closing and will place for sale during the fourth quarter and it is described previously. Another $700,000 is for severance-related manufacturing management restructuring charges, which includes around $500,000 that were slated to be recorded next fiscal year but will now fall into our 2004 fiscal year, given that our new year end will fall on December 31; and a write-off of approximately $200,000 costs relating to the early termination of the credit facility that was replaced on October 1. I will speak more about this issue in a couple of minutes.

We do not expect to record any significant restructuring charges in 2005. For our 2005 earnings estimate, we are including full 12 months for the Nanjing operation. That operation is projected to generate between $20 and $25 million in revenue for the packaged boiler business sold within China and add approximately $4 to $5 million of operating expenses.

Please turn to slide number 9 and we will review our firm backlog.

As Larry mentioned earlier, we booked $107 million of new orders during the third quarter. That figure includes roughly $10 million of orders on the Deltak China books, $6 million of which were already in Deltak China backlog as of July 30. The total bookings boosted our firm backlog at the end of September to $218 million, up nearly $47 million over the end of June.

Based on what we expect the book as both revenue and new orders during the fourth quarter, our year-end firm backlog could rise even more by the end of the year, especially if we are awarded one or more of the large projects we are tracking and have talked about previously.

Turning to slide number 10, which is our abbreviated cash-flow slide, you can see that we ended the quarter with approximately $32.5 million in cash, up slightly from the end of June but down $19 million from the beginning of the year.

On our second quarter call, we addressed the major reasons for the decline in cash since the start of the year, including approximately $7 million of payments on our previous credit facility as well as the impact of less favorable payment terms for a number of international projects we booked during the first half of this year.

However, since the close of the third quarter, as we have previously announced we closed a new $100 million credit facility on October 1. Full details of the new facility will be included in our next 10-Q filing. As of October 1, our total debt was just under $30 million. $25 million is borrowed under the new 5-year term note. And just under $5 million is borrowed in China under various loan agreements. Our cash balance at the beginning of October 1 was slightly over $30 million.

Turning to slide 12, you can see that our debt to cap ratio at the end of the fourth quarter remained low at 13 percent. Although not shown on the slide, based in the figures I just provided, we remained net debt free as of our debt refinancing date, October 1, after including impact of the new credit facility. With that, let’s open the call to questions. Bonnie? Can you queue them up for the question-and-answer session?

Questions and Answers

Sanjay Shrestha, First Albany - Analyst

First of all, congratulations here on these fantastic bookings. Just a couple of quick questions here. First one, in terms of those 6 large size projects that you guys were tracking when you had your quarterly conference call quarter ago I guess, it seems like the Mexico materialized. But I just wanted to get some sense in terms of how many of those actually really came in this quarter so that you had the — kind of the bookings that you did. And how many of them are still live and you’re still looking to book them maybe fourth quarter this year or beginning of ‘05?

Larry Edwards, Global Power Equipment Group - Chairman, President and Chief Executive Officer

Actually, the project I just mentioned — this is Larry — in Mexico is the one that was awarded. And fortunately we have that project. We’re going to fabricate it in Nanjing. The other 5, and there — a couple more have been added to that since our last call — they are still on the slate to be awarded yet. Some of those are in Southeast Asia and Europe that we spoke to. None of those have been awarded and none have gone away.

Sanjay Shrestha, First Albany - Analyst

Wow, okay. So when you — and also talking about the potential opportunity here in China, Larry, I think you mentioned that you are actually looking for more of the auxiliary power-related stuff in the fourth quarter this year rather than the first 6. And is that related to one of your major OEMs’ comment in their quarterly conference call that they shipped about — they are looking at about 8 or so turbines going into China? Is that what that’s related to and that’s not the part of the bundled buy?

Larry Edwards, Global Power Equipment Group - Chairman, President and Chief Executive Officer

Well, it’s a mixture. It’s units that are within the bundle buy and units that are outside of the bundle buy. We are of course going after both of those. It really doesn’t matter to us. But it’s in both areas actually.

Sanjay Shrestha, First Albany - Analyst

Okay. So kind of trying to gather then this $20 to $40 million additional — addition to the backlog by the end of 2004, I just want to be absolutely certain about this, that doesn’t take into consideration you actually winning turbine- related work in China in the fourth quarter of this year.

Larry Edwards, Global Power Equipment Group - Chairman, President and Chief Executive Officer

No, it does not, that’s right.

Sanjay Shrestha, First Albany - Analyst

Okay one last question and I will hop back in the queue. Obviously, steel is steel — it is the way it is. But in this margin guidance here of 14 to 16 percent, can you talk a little bit more about that and maybe try to quantify, because obviously the HRSG-related stuff tends to be a lower margin business for you guys. But if the auxiliary power kind of kicks-in in China, that should carry somewhat of a better margin.

Is there a pricing pressure from a competitive standpoint? Or is it and absolutely worst scenario that we’re looking at? And once steel stabilizes and starts to sort of trend down, are we going to start to see some nice growth in the margin front going into 2006?

Larry Edwards, Global Power Equipment Group - Chairman, President and Chief Executive Officer

Well, you are right in the assigning margins to our product offering. The HRSG has traditionally and still attracts smaller margins or larger projects, larger dollar projects. Competition seems to be stronger with HRSG as well. And as you move up to the auxiliary power equipment, we traditionally have better margins. And we’re already seeing signs of those margins improving, certainly in some of the bookings that we’re getting now. So I think in ‘05, we will see margins trending up again in auxiliary power.

And the other thing you didn’t mention, though, on our specialty boiler side, we’re doing really well there. And the margins, I think we commented on our call before, those are the highest margins of all. We have less competition in the sector as well. So we’re seeing improving revenue and improving margins in the specialty boiler side as well.

So on a combined basis, as I said in my comments, when we see steel prices stabilize, and let us do our job and work those through the system, we really believe you are going to see several percentage points higher margins as those work through our projects.

Sanjay Shrestha, First Albany - Analyst

Okay. So just to wrap this up, but — so in your guidance here of 14 to 16 percent, what are you sort of baking in — continuous rise in the price of steel, or the stabilizing of the price of steel, or steel prices potentially going down by the latter part of ‘05?

Larry Edwards, Global Power Equipment Group - Chairman, President and Chief Executive Officer

We’re baking in basically steel prices staying the same — roughly the same.

Jim Wilson, Global Power Equipment Group - Chief Financial Officer

Yes, staying at a high level.

Larry Edwards, Global Power Equipment Group - Chairman, President and Chief Executive Officer

A high level, but the same. Not retreating any.

Leone Young, Smith Barney CitiGroup - Analyst

Could you — also related to the margins, not to beat a dead horse, but Larry in your comments that you think margins can go back 3 to 4 percentage points, that’s also taking into account that — just the characteristics of the Chinese market in what competition you could find there?

Larry Edwards, Global Power Equipment Group - Chairman, President and Chief Executive Officer

Leone, it’s more than just I think just the Chinese market. It’s markets in general. I think we’re starting to see some of these costs, not just us, but our competitors were able to pass some of these costs along. We’re starting to see some improvement in margins already. And part of that is simply demand driven. We’re starting to see better demand in some of these markets and believe it or not, even some capacity constraints on the part of the supplier base, our competitors. So, it’s rationalizing these steel prices. And I think demand is what’s created trending these up, both in China and elsewhere.

Leone Young, Smith Barney CitiGroup - Analyst

So to wrap that up then, it’s really a function of steel prices and not the level of profitability that you think will be ongoing, say for instance as you move into Southeast Asia?

Larry Edwards, Global Power Equipment Group - Chairman, President and Chief Executive Officer

That’s exactly right. We can attribute most of this erosion to steel prices. It’s been incredible — you see the numbers. You see the statistics. It’s been an incredible impact to our business as well as others.

Leone Young, Smith Barney CitiGroup - Analyst

And how quickly can you start to recoup those steel prices? What is the lag factor here?

Larry Edwards, Global Power Equipment Group - Chairman, President and Chief Executive Officer

We’re doing it now. There are a lot of programs in place — a lot of initiatives that we have internally to do that. And we’re very hopeful by the second half of next year we will start to see those pay off. It’s a gradual process. But we’re already seen good signs of that, really.

Leone Young, Smith Barney CitiGroup - Analyst

Lastly, on the revenue side, obviously that’s a very nice pickup in 2005 revenue guidance. And I was wondering if you could give us a little color as to what is baked into that vis-à-vis what you see coming in the fourth quarter, and maybe a little color into what gets pushed into 2005.

Jim Wilson, Global Power Equipment Group - Chief Financial Officer

Yes, just in terms of the division by segment Leone, it’s going to be probably more like two-thirds HRSG segment and on-third auxiliary power, which is quite a bit different than what we’re seeing right now because it’s about 50 to 50. So we’re going to be seeing a lot more on that side. And then the composition of that, kind of in reference to some of the margins, the composition of that is going to be a lot more really large projects in there, which as Larry mentioned have a historically little bit lower margin just because of the sheer size of the projects, or lower margin in terms of percentage.

Leone Young, Smith Barney CitiGroup - Analyst

So it is in essence baking in some of these things you see coming into the backlog early in 2005 then?

Larry Edwards, Global Power Equipment Group - Chairman, President and Chief Executive Officer

Right.

Rich Wesolowski, Sidoti & Company - Analyst

I was hoping, aside from the steel, on the margin subject competitive pressures were mentioned a couple times. I was hoping you can expand on either the geographic markets or the product offering — is that you’re seeing a big difference in the competition versus a year ago.

Larry Edwards, Global Power Equipment Group - Chairman, President and Chief Executive Officer

There’s really not much of a difference, basically the same players in the markets and product offerings that we’ve had in the past. I think probably the only surprise, or maybe a little bit of a disappointment, is that there were — as in any industry, there are rumors and so on of people maybe exiting our space and — which in some markets and some product offerings that would’ve been a good thing. But that did not happen. And essentially, the playing field is the same playing field that we had a year ago.

Rich Wesolowski, Sidoti & Company - Analyst

Okay. Another statement in the release was that the recent acquisition was instrumental in getting business outside of China. I know you guys mentioned the Mexico job. Were there any other markets? And could you describe how the acquisition helped to get that business?

Larry Edwards, Global Power Equipment Group - Chairman, President and Chief Executive Officer

As you mentioned, the Mexico job is the most noteworthy job. That particular project, even though it’s destined for Mexico, had a requirement that it would be built in China. I don’t want to be too specific here, but there are other projects that fall in to the same category. The reason for that is cost, because the cost basis of China-produced projects generally — a lot of factors go into this obviously, the biggest factor being transportation. They are generally cheaper to build in China than other places.

So we’re using it as a marketing tool. We’re inviting customers to our facility. We hosted a very large customer there, in fact, yesterday. And they were well pleased. We’re doing that with almost any of the customers that we think would be attracted to this facility. But it is cost driven.

Greg Macosko, Lord Abbett - Analyst

I know we’ve talked an awful lot about the gross margins. But I want to understand. The first half of the year, are you saying that basically the gross margins based on the contract wins, etc. and price of steel that you’ve locked in, you really are — those gross margins are in effect locked in?

Jim Wilson, Global Power Equipment Group - Chief Financial Officer

That is essentially correct. These are fixed-price contracts. And so once we get these orders, we do everything we can to try to lock in as much as we can on the purchasing side. But that’s really not possible on everything. To the extent that prices continue to escalate, that’s where the margins have gone down. And so like I said, we’re trying to do everything we can and trying to at least lock in the margins — which we’re estimating these.

Greg Macosko, Lord Abbett - Analyst

And so, no matter what steel does, your gross margin should not be affected that much, other than if there is greater volume on an overhead basis?

Jim Wilson, Global Power Equipment Group - Chief Financial Officer

That’s pretty well correct. Greg, I guess the other thing is, we don’t get a lot of walk through over the transom in such a short period of time that it would convert to revenue in that 3 or 4-month basis. So it’s pretty much what we have in our backlog today — is what we based our margin guidance on.

Greg Macosko, Lord Abbett - Analyst

What about Mexico?

Jim Wilson, Global Power Equipment Group - Chief Financial Officer

That’s in that.

Greg Macosko, Lord Abbett - Analyst

But Mexico happened within a couple of months, right?

Larry Edwards, Global Power Equipment Group - Chairman, President and Chief Executive Officer

Yes, in fact it happened approximately 2 weeks ago. But that’s part of that guidance. In fact, if anything in Mexico, it was one where we did not really see much competition for bidding that particular job — simply dealing with our customer on a negotiated basis.

Greg Macosko, Lord Abbett - Analyst

Okay, but that is a unique situation, Mexico?

Larry Edwards, Global Power Equipment Group - Chairman, President and Chief Executive Officer

That was very unique and probably not unique going forward, though.

Greg Macosko, Lord Abbett - Analyst

So in other words, there could be more Mexicos in the future?

Larry Edwards, Global Power Equipment Group - Chairman, President and Chief Executive Officer

There was something in I think from the trade press that really talked about how big Mexico — and how much it will be spending over the next 9 or 10 years. It’s also quite — billions of dollars.

Greg Macosko, Lord Abbett - Analyst

I see. But again, there could be sort of last-minute projects or it could come up more quickly than is normal for your industry?

Larry Edwards, Global Power Equipment Group - Chairman, President and Chief Executive Officer

Yes, that’s true. There’s a lot of activity in Asia, particularly Southeast Asia. Things are improving fairly rapidly. So if I was to pick an area where that is likely to happen, it would be in that area. It is demand driven, which is the best kind of requirements to have.

Greg Macosko, Lord Abbett - Analyst

So we could see something similar to that in Asia as well — possibly?

Larry Edwards, Global Power Equipment Group - Chairman, President and Chief Executive Officer

It’s possible, yes.

Bob Zwerneman, Global Power Equipment Group - Director of Investor Relations

Are there any further questions?

Operator

At this time, there are no further questions.

Bob Zwerneman, Global Power Equipment Group - Director of Investor Relations

Well, with that, thank you Bonnie. And thanks to everyone for participating in this morning’s conference call. Before we close, I would like to refer everyone to slide 2 that we showed earlier, as well as our press release and Web site, for the Safe Harbor and Reg G. compliance statements.

Also, our call has been taped today. And the replay will be available until November 9 by dialing 800-340-2806, or outside of North America at 801-350-8082. No pin code is needed to access that replay. Again, those numbers are at 800-340-2806 or outside North America at 801-350-8082. We will also have an archive posted on the homepage of our Web site. Thank you for participating. This concludes our call.

EX-99.3

Exhibit 99.3

Slide 1

Third Quarter 2004 Earnings Call

October 26, 2004

9:00 AM EDT

Slide 2

“Forward Looking Statements”

Statements made during this presentation are based on management’s beliefs as well as assumptions made by, and information currently available to management, pursuant to “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995. While these statements reflect our best judgment, they are subject to risks and uncertainties that could cause a change in focus and direction. Information concerning some of the factors that could cause actual results to differ materially from those in, or implied by, the forward looking statements are set forth under “Risk Factors” in the Company’s Form 10-K for the period ended December 27, 2003.

Non-GAAP Financial Measure

This presentation contains disclosure of EBITDA, which is a non-GAAP financial measure within the meaning of Regulation G promulgated by the Securities and Exchange Commission. A reconciliation of EBITDA to net income available to common stockholder before income taxes, the most directly comparable GAAP financial measure, as well as additional information concerning EBITDA, is included in the exhibits to Global Power Equipment Group’s second quarter earnings release of October 25, 2004. This press release is available at http://www.globalpower.com by accessing Press Releases through the Investor Relations tab.

Slide 3

Global Power’s Operating Environment

1. Market Environment

2. Operations

3. 2005 Fiscal Guidance

Slide 4

World Carbon Steel Price

Hot Rolled Plate

$ per Metric Ton

2002

2003

2004

2005

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4QE

1QE

2QE

3QE

0

100

200

300

400

500

600

700

800

Average 3Q04 prices were 90% greater than a year ago

MEPS Forecast

Source: MEPS (International) Ltd.

Slide 5

Financial Results – 3Q04 vs. 3Q03

In $000s, except per share and % chg

3Q04 3Q03 % Chg

Revenues $59,720 $57,301 +4.2%

Direct Costs $50,621 $43,454 +16.5%

Gross Margin $9,099 $13,847 -34.3%

Gross Margin Percent 15.2% 24.2% -9.0pts

Operating Expenses

G&A $6,084 $5,088 +19.6%

Other $2,685 $3,490 -23.1%

Total Operating Expenses $8,769 $8,578 +2.2%

Operating Profit $330 $5,269 -93.7%

Net Interest Expense $185 $326 -43.3%

Net Income Before Income Taxes $145 $4,943 -97.1%

Income Tax Provision $55 $1,928 -97.1%

Net Income $90 $3,015 -97.0%

Diluted Shares Outstanding 46,921 45,996 +2.0%

EPS $0.00 $0.07 NM

EBITDA $1,440 $6,143 -76.6%

Slide 6

Financial Results – YTD04 vs. YTD03

In $000s, except per share and % chg

YTD04 YTD03 % Chg

Revenues $171,867 $198,329 -13.3%

Direct Costs $141,826 $146,314 -3.1%

Gross Margin $30,041 $52,015 -42.2%

Gross Margin Percent 17.5% 26.2% -8.7pts

Operating Expenses

G&A $19,507 $17,098 +14.1%

Other $8,064 $9,599 -16.0%

Total Operating Expenses $27,571 $26,697 +3.3%

Operating Profit $2,470 $25,318 -90.2%

Net Interest Expense $496 $1,218 -59.3%

Net Income Before Income Taxes $1,974 $24,100 -91.8%

Income Tax Provision $750 $9,399 -92.0%

Net Income $1,224 $14,701 -91.7%

Diluted Shares Outstanding 46,869 45,788 +2.4%

EPS $0.03 $0.32 -90.6%

EBITDA $5,243 $27,998 -81.3%

Slide 7

Financial Results

Segment and Geographic Details

3Q04 vs. 3Q03 and YTD04 vs. YTD03

In $000s, except % chg

Revenues 3Q04 3Q03 Change % Chg

Heat Recovery Equipment $31,973 $29,428 $2,545 8.6%

Auxiliary Power Equipment 27,747 27,873 (126) (0.5)%

Total $59,720 $57,301 $2,419 4.2%

United States $14,945 $41,450 $(26,505) (63.9)%

Asia 28,778 409 28,369 6,936.2%

Europe 3,990 11,370 (7,380) (64.9)%

Middle East 10,005 - 10,005 NA

Other 2,002 4,072 (2,070) (50.8)%

Revenues YTD04 YTD03 Change %Chg

Heat Recovery Equipment $86,571 $96,605 $(10,034) (10.4)%

Auxiliary Power Equipment 85,296 101,724 (16,428) (16.1)%

Total $171,867 $198,329 $(26,462) (13.3)%

United States $62,778 $140,585 $(77,807) (55.3)%

Asia 50,176 8,487 41,689 491.2%

Europe 15,445 25,769 (10,324) (40.1)%

Middle East 37,541 12,601 24,940 197.9%

Other 5,927 10,887 (4,960) (45.6)%

Slide 8

Gross Margins

By Quarter

1999

2000

2001

2002

2003

2004

Average

20.3%

Average for year

17.9%

17.0%

18.2%

22.4%

27.1%

17.5%

15.2%

10%

15%

20%

25%

30%

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

Slide 9

Historical Backlog

At End of Quarter

1999

2000

2001

2002

2003

2004

$ MMs

0

250

500

750

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

Slide 10

Financial Results – Through Q3004

Cash & Cash Usage

In $000s

FY2001 FY2002 FY2003 YTD2004

Beginning of period cash $26,308 $2,435 $59,042 $51,315

EBITDA 94,361 92,936 36,977 5,243

Other operating, investing, financing activities 6,790 12,123 (9,183) (10,560)

Change in debt (113,465) (45,556) (35,110) (3,952)

Capital expenditures (11,559) (2,896) (411) (976)

Purchase of a business, net of cash acquired - - - (8,516)

Change in cash (23,873) 56,607 (7,727) (18,761)

Cash at end of period $2,435 $59,042 $51,315 $32,554

Total Debt / Net Debt as of:

12/30/00 Total Debt $219,094

Net Debt 192,786

12/29/01 Total Debt $105,629

Net Debt 103,194

12/28/02 Total Debt $60,073

Net Debt 1,031

12/27/03 Total Debt $24,963

Net Debt (26,352)

9/25/04 Total Debt $21,011

Net Debt (11,543)

Note: Net Debt is Total Debt less Cash & Cash Equivalents.

Slide 11

Key Financial Statistics

As of 9/25/04

Net working capital (average LTM) - $000s $(9,983)

EBITDA - $000s $5,243

Total debt - $000s $21,011

Cash & Cash Equivalents - $000s $32,554

Net debt - $000s $(11,543)

Stockholders’ equity - $000s $160,279

Total capital invested (Stockholders’ equity + LT-Debt) - $000s $160,279

Total debt to total capitalization 13.1%

Pre-tax Return on Average Invested Capital (LTM) 9.9%

Pre-tax Return on Average Equity (LTM) 6.2%

*Pre-tax returns are based on reported pre-tax earnings over the past four quarters for average invested capital and average equity

Note: Net Debt is Total Debt less Cash & Cash Equivalents.

Slide 12

Thank You

For Additional Information Please Contact:

Bob Zwerneman

Director, Investor Relations

Global Power Equipment Group Inc.

(918) 274-2398

bobz@globalpower.com