DALLAS, TEXAS (May 23, 2006-Dresser, Inc. today announced that it will restate its 2004 annual and quarterly financial statements and first, second and third quarter 2005 financial statements. 

The company had reported on May 9, 2006, that it was assessing the need for a restatement.  Based on management's assessment, the Audit Committee of the Board of Directors determined at its meeting today that the company will proceed with the restatements and that financial statements being restated should no longer be relied upon. The company is also evaluating the potential need to restate its financial statements for periods prior to 2004. 

The restatements relate in part to errors associated with the company's businesses which were sold in November 2005. The errors associated with the divested businesses relate to hedge accounting documentation for derivative transactions under FAS 133, Accounting for Derivative Instruments and Hedging Activities, and to the accounting treatment of income tax associated with the inter-company transfer of inventory between tax jurisdictions. As previously reported, the 2005 third quarter financial statements will be restated to allocate a portion of interest expense from continuing to discontinued (divested) operations.

In addition, certain other accounting errors to be corrected relate to the company's continuing operations including the timing of the recognition of certain revenue and expense items.  For example, one of the revenue recognition matters is related to the timing of the transfer of title of goods under the terms and conditions associated with a limited number of contracts.  The company no longer utilizes contracts with these terms and conditions. 

Based on current information, the company does not believe the restatements will have a significant impact on annual adjusted EBITDA (earnings from continuing operations before interest, taxes, depreciation and amortization) or its financial position, including its cash position and total debt. Because the company's restatement process is not yet finished, further revisions may be identified prior to completion.

Currently the company is soliciting consents from holders of record as of May 8, 2006, of its 9 3/8% Senior Subordinated Notes to extend to Dec. 31, 2006, its obligation to file financial statements with the Securities and Exchange Commission (SEC) for the year ended Dec. 31, 2005 and the quarters ended March 31, June 30 and Sept. 30, 2006.  In addition, the consent solicitation would provide for a waiver of all past and present defaults under the indenture's reporting requirements. 

Other Matters

The company said it is assessing its alternatives for delivery of financial reports to lenders under its senior secured credit facility and senior unsecured term loan.

            About Dresser, Inc.

Dresser, Inc. is a worldwide leader in the design, manufacture and marketing of highly engineered equipment and services sold primarily to customers in the flow control, measurement systems, and compression and power systems segments of the energy industry.  Headquartered in Dallas, Texas, Dresser has a comprehensive global presence, with approximately 6,500 employees and a sales presence in more than 100 countries worldwide.  The company's website can be accessed at www.dresser.com.

Safe Harbor Statement

This document contains forward-looking statements made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, without limitation, the company's expectations regarding the completion of the 2005 audit, the completion of the unaudited financial statements for the first, second and third quarters of 2006, the restatement of its prior financial statements, and  the filing of the company's periodic reports with the SEC.  Actual results may differ from the expectations described in these forward-looking statements, which are subject to factors that are not in every case under the company's control.  Factors that could affect the company's forward-looking statements may include, among other things:  the discovery of unanticipated adjustments to the company's historical financial statements during the restatement process, the identification of unexpected control deficiencies, and the existence of unexpected effects from the restatement process on the company's EBITDA from continuing operations or its financial position, including its cash position and total debt.  Because the information herein is based solely on data currently available at this time, it is subject to change as a result of situations over which the company may have no control or influence, and should not therefore be viewed as an assurance regarding such information.  Additionally, the company is not obligated to make public disclosure of such changes unless required to do so under applicable rules and regulations.

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COMPANY CONTACT:

Jenny Haynes

Vice President of Investor Relations and Communications

(972) 361-9933

Jenny.haynes@dresser.com