Sauer-Danfoss Inc. Reports Final Fourth Quarter 2008 Results

CHICAGO, March 24 /PRNewswire-FirstCall/ -- Sauer-Danfoss Inc. (NYSE: SHS)
today announced its final results for the fourth quarter and full year ended
December 31, 2008, and the filing of its Annual Report on Form 10-K. These
final results update and supersede the Company's preliminary results released
on March 16, 2009.

Fourth Quarter and Full Year Earnings

The Company reported a net loss of $90.6 million, or $1.88 per share, for the
fourth quarter 2008, compared to net income of $8.7 million, or $0.18 per
share, for the fourth quarter of 2007. The Company's net loss for full year
2008 totaled $29.1 million, or $0.60 per share, compared to net income of
$47.2 million, or $0.98 per share, for the same period last year.

Long-Lived Asset and Goodwill Impairment Charges

When the Company issued its preliminary financial results on March 16, 2009,
it reported that it had not yet completed its required long-lived asset
impairment analysis and preliminary results included an estimated impairment
charge. The Company has now finished that analysis and has recorded an actual
impairment charge of $35.3 million, or $0.53 per share, impacting the Work
Function segment. In addition, the Company had previously reported goodwill
impairment charges of $22.9 million, or $0.44 per share, impacting the Work
Function and Controls segments.

Company Files its Annual Report on Form 10-K

Please refer to the Company's Form 10-K for a complete discussion of the
fourth quarter and full year financial results. An electronic copy of the
10-K is available through the Investor Relations page of the Company's website
at http://ir.sauer-danfoss.com. In addition, shareholders can receive a
printed copy of the Form 10-K, containing the Company's complete audited
financial statements, free of charge by sending a written request to
Sauer-Danfoss Inc., Attn: Investor Relations, 2800 E. 13th Street, Ames, IA
50010.

About Sauer-Danfoss

Sauer-Danfoss Inc. is a worldwide leader in the design, manufacture, and sale
of engineered hydraulic, electric and electronic systems and components for
use primarily in applications of mobile equipment. Sauer-Danfoss had revenues
of $2.1 billion in 2008 and has sales, manufacturing, and engineering
capabilities in Europe, the Americas, and the Asia-Pacific region. The
Company's executive offices are located near Chicago in Lincolnshire,
Illinois.

More details online at www.sauer-danfoss.com.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended Year Ended
(Dollars in thousands December December December December
except per share data) 31, 31, 31, 31,
2008 2007 2008 2007
Net sales 371,388 494,173 2,090,513 1,972,548
Cost of sales 333,375 397,572 1,654,903 1,544,846
Gross profit 38,013 96,601 435,610 427,702
Research and development 20,732 20,014 82,915 70,552
Selling, general and
Administrative 55,664 57,218 258,491 233,809
Loss on sale of businesses
and asset disposals 10,289 177 9,604 9,412
Impairment charges 58,208 -- 58,208 --
Total operating expenses 144,893 77,409 409,218 313,773
Income (loss) from
Operations (106,880) 19,192 26,392 113,929
Nonoperating income
(expenses):
Interest expense,
net (5,318) (6,022) (24,628) (22,741)
Minority interest in
income of consolidated
companies (1,901) (6,051) (17,811) (21,562)
Other, net 4,692 (140) 966 (3,589)
Income (loss) before
income taxes (109,407) 6,979 (15,081) 66,037
Income taxes 18,796 1,718 (14,060) (18,839)
Net income (loss) (90,611) 8,697 (29,141) 47,198
Net income (loss) per share:
Basic net income (loss)
per common share (1.88) 0.18 (0.60) 0.98
Diluted net income (loss)
per common share (1.88) 0.18 (0.60) 0.98
Weighted average shares
outstanding
Basic 48,237 48,099 48,226 48,094
Diluted 48,237 48,493 48,226 48,327
Cash dividends declared
per common share 0.18 0.18 0.72 0.72

BUSINESS SEGMENT INFORMATION

Three Months Ended Year Ended
December December December December
(Dollars in thousands) 31, 31, 31, 31,
2008 2007 2008 2007
Net sales
Propel 184,225 233,327 1,016,609 940,692
Work Function 99,748 134,697 561,416 534,040
Controls 87,415 126,149 512,488 497,816
Total 371,388 494,173 2,090,513 1,972,548
Segment Income (Loss)
Propel 9,501 35,371 156,805 146,617
Work Function (73,208) (5,164) (65,699) (2,886)
Controls (37,182) 985 (21,386) 17,740
Global Services and
Other Expenses, net (1,296) (12,140) (42,362) (51,131)
Total (102,185) 19,052 27,358 110,340

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended
December 31, December 31,
(Dollars in thousands) 2008 2007
Cash flows from operating activities:
Net income (loss) (29,141) 47,198
Depreciation and amortization 112,962 102,303
Impairment Charges 58,208 --
Minority interest in income of
consolidated companies 17,811 21,562
Net change in receivables, inventories,
and payables 40,385 (64,033)
Other, net (16,707) (8,890)
Net cash provided by operating
activities 183,518 98,140
Cash flows from investing activities:
Purchases of property, plant and
equipment (198,634) (135,633)
Proceeds from sale of property,
plant and equipment 11,141 6,496
Proceeds from sale of businesses -- 6,932
Net cash used in investing
activities (187,493) (122,205)
Cash flows from financing activities:
Net borrowings on notes payable and
debt instruments 51,799 71,436
Performance unit compensation excess
tax deduction 1,534 145
Cash dividends (34,728) (33,636)
Distribution to minority interest
partners (13,881) (15,889)
Net cash provided by financing
activities 4,724 22,056
Effect of exchange rate changes (4,393) (314)
Net decrease in cash and cash
equivalents (3,644) (2,323)
Cash and cash equivalents at beginning
of year 26,789 29,112
Cash and cash equivalents at end of
year 23,145 26,789

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, December 31,
(Dollars in thousands) 2008 2007
ASSETS
Current assets:
Cash and cash equivalents 23,145 26,789
Accounts receivable, net 239,881 318,152
Inventories 326,688 318,836
Other current assets 50,754 56,365
Total current assets 640,468 720,142
Property, plant and equipment, net 598,435 562,818
Other assets 228,773 217,462
Total assets 1,467,676 1,500,422

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and bank overdrafts 65,512 59,415
Long-term debt due within one year 58,005 208,819
Accounts payable 149,512 168,015
Other accrued liabilities 146,888 128,358
Total current liabilities 419,917 564,607
Long-term debt 367,922 175,811
Long-term pension liability 90,966 70,777
Deferred income taxes 44,243 40,930
Other liabilities 66,727 62,253
Minority interest in net assets of
consolidated companies 67,655 60,544
Stockholders' equity 410,246 525,500
Total liabilities and stockholders'
equity 1,467,676 1,500,422

Debt to total capital ratio (1) 51% 43%

(1) The debt to total capital ratio is calculated by dividing total
interest bearing debt by total capital. Total interest bearing
debt is the sum of notes payable and bank overdrafts, long-term
debt due within one year, and long-term debt. Total capital is
the sum of total interest bearing debt, minority interest in net
assets of consolidated companies, and stockholders' equity.

SOURCE Sauer-Danfoss Inc.

Investor Relations, Kenneth D. McCuskey, Vice President and Chief Accounting
Officer, +1-515-239-6364, Fax, +1-515-956-5364, kmccuskey@sauer-danfoss.com,
or John N. Langrick, Director of Finance Europe, +49-4321-871-190, Fax,
+49-4321-871-121, both of Sauer-Danfoss Inc.