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Universal Compression Reports Fiscal 2002 Second Quarter Results

October, 24, 2001

Record Quarterly EBITDA and Earnings Per Share

HOUSTON, Oct. 24 /PRNewswire/ -- Universal Compression Holdings, Inc. (NYSE: UCO), a leading provider of natural gas compression services, today reported net income for its fiscal 2002 second quarter ended September 30, 2001 of $12.8 million, or $0.42 per diluted share, on revenues of $174.1 million. In the second quarter of fiscal 2001, the Company reported net income of $1.8 million, or $0.13 per diluted share, on revenue of $38.9 million. EBITDA for the second quarter of fiscal 2002 was $52.1 million, an increase of 212 percent compared to $16.7 million in the prior year period.

EBITDA (net income plus income taxes, interest expense, leasing expense, management fees, depreciation and amortization excluding non-recurring items and extraordinary gains or losses) for the second quarter of fiscal 2002 increased 11 percent and net income increased 21 percent compared to the previous quarter ended June 30, 2001.

"We are pleased with the company's record financial performance in the second fiscal quarter," said Stephen A. Snider, Universal's President and Chief Executive Officer. "With continuing strong demand and healthy backlog, we expect EBITDA of approximately $213 million and earnings per share of approximately $1.72 for the fiscal year ending March 31, 2002."

Segment Information

Contract compression revenue for the second quarter of fiscal 2002 was $85.2 million, an increase of 12 percent from the previous quarter and 197 percent higher than the prior year period. The Company's contract compression compressor fleet totaled 2.2 million horsepower at September 30, 2001, compared to 2.0 million horsepower at June 30, 2001 and 810,000 horsepower at September 30, 2000. The increase in fleet size in the second quarter of fiscal 2002 was driven by the purchase of KCI, Inc. in July 2001 and the Company's ongoing capital expenditure program. The Company's average horsepower utilization increased to 90 percent for the quarter from 89 percent in the quarter ended June 30, 2001 and 86 percent in the prior year period. International contract compression revenue for the quarter was $16.3 million, an increase of 16 percent from the previous quarter and 281 percent higher than the prior year period. At September 30, 2001, the Company's international fleet totaled approximately 339,000 horsepower.

Fabrication revenue for the quarter was $56.8 million, up 76 percent from the quarter ended June 30, 2001 and an increase of 583 percent from the prior year period. Fabrication backlog was $101 million at September 30, 2001, up from $46.9 million at June 30, 2001 and $26.8 million at September 30, 2000. The addition of KCI's fabrication operations enhanced fabrication activity levels during the second quarter of fiscal 2002 as well as period-end backlog. Parts sales and service revenue for the quarter was $32.3 million, a slight increase from the previous quarter which included approximately $5 million in used equipment sales, and was $1.8 million in the prior year period.

"Expanded product and service offerings and a larger operational footprint are enhancing our ability to seize market opportunities. Areas of significant new business activity include the Rocky Mountain and Gulf Coast regions of the United States and Latin America," added Snider.

Conference Call

Universal will host a conference call on Thursday, October 25, 2001 at 10:00 am Central Time, 11:00 am Eastern Time to discuss the quarter's results and other corporate matters. The conference call will be broadcast over the Internet to provide interested persons the opportunity to listen to it live. The call will also be archived for one week to provide an opportunity to those unable to listen to the live broadcast. Both the live broadcast and replay of the archived version are free of charge to the user.

Persons wishing to listen to the conference call live may do so by logging onto http://videonewswire.com/event.asp?id=1638 at least 15 minutes prior to the start of the call. A replay of the call will remain available at the Web site http://www.prnewswire.com through November 1, 2001.

Universal, headquartered in Houston, Texas, is a leading natural gas compression services company, providing a full range of contract compression, sales, operations, maintenance and fabrication services to the domestic and international natural gas industry.

Statements about Universal's outlook and all other statements in this release other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors, many of which are outside Universal's control, which could cause actual results to differ materially from such statements. While Universal believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of its business. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are integration of acquisitions and the demand for Universal's products and services. These and other risk factors are discussed in Universal's filings with the Securities and Exchange Commission, copies of which are available to the public. Universal expressly disclaims any intention or obligation to revise or update any forward-looking statements whether as a result of new information, future events, or otherwise.

                     UNIVERSAL COMPRESSION HOLDINGS, INC.
               UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                   (In thousands, except per share amounts)

                                                Three Months Ended
                                       September 30,   June 30,  September 30,
                                            2001         2001          2000
    Revenue:
      Contract compression                 $85,190      $75,950       $28,681
      Fabrication                           56,831       32,234         8,318
      Parts sales and service               32,287       32,177         1,813
      Other                                   (189)         (47)           41
         Total revenue                     174,119      140,314        38,853

    Costs and expenses:
      Cost of sales - contract compression  29,749       27,565         9,903
      Cost of sales - fabrication           50,780       28,038         6,955
      Cost of sales - parts sales and
       service                              25,650       25,237         1,525
      Depreciation and amortization         11,712       11,380         6,679
      Selling, general and administrative   15,813       12,676         3,769
      Operating lease                       12,973       12,593         1,995
      Interest expense                       6,573        5,532         5,221
         Total costs and expenses          153,250      123,021        36,047

    Income before income taxes and
     extraordinary items                    20,869       17,293         2,806

    Income taxes                             8,076        6,748         1,053

      Net income                           $12,793      $10,545        $1,753

    Weighted average common and common
     equivalent shares outstanding:
      Basic                                 30,396       28,481        13,504

      Diluted                               30,606       28,811        13,881

    Earnings per share:
      Basic                                  $0.42        $0.37         $0.13

      Diluted                                $0.42        $0.37         $0.13


                     UNIVERSAL COMPRESSION HOLDINGS, INC.
                      UNAUDITED SUPPLEMENTAL INFORMATION
                                (In thousands)

                                                   Three Months Ended
                                        September 30,  June 30,  September 30,
                                             2001         2001        2000
    Revenue:
      Domestic contract compression         $68,871      $61,919     $24,396
      International contract compression     16,319       14,031       4,285
      Fabrication                            56,831       32,234       8,318
      Parts sales and service                32,287       32,177       1,813
      Other                                    (189)         (47)         41
         Total                             $174,119     $140,314     $38,853

    Gross Profit:
      Domestic contract compression         $43,882      $38,749     $15,524
      International contract compression     11,559        9,636       3,254
      Fabrication                             6,051        4,196       1,363
      Parts sales and service                 6,637        6,940         288
      Other                                    (189)         (47)        ---
         Total                              $67,940      $59,474     $20,429

    Selling, General and Administrative     $15,813      $12,676      $3,769
      % of Revenue                               9%           9%         10%

    EBITDA, as adjusted                     $52,127      $46,798     $16,701
      % of Revenue                              30%          33%         43%

    Profit Margin:
      Domestic contract compression             64%          63%         64%
      International contract compression        71%          69%         76%
      Fabrication                               11%          13%         16%
      Parts sales and service                   21%          22%         16%
         Total                                  39%          42%         53%

EBITDA, as adjusted, is defined as net income plus income taxes, interest expense, leasing expense, management fees, depreciation and amortization, excluding non-recurring items and extraordinary gains and losses.

                                        September 30,       March 31,
                                            2001              2001

    Debt                                  $274,185          $215,107
    Operating Leases                      $607,500          $527,500
    Shareholders' Equity                  $732,699          $652,574

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SOURCE Universal Compression Holdings, Inc.
Web site: http: //www.universalcompression.com
Photo: NewsCom: http: //www.newscom.com/cgi-bin/prnh/20011008/UCOLOGO AP Archive: http://photoarchive.ap.org PRN Photo Desk, +1-888-776-6555 or +1-212-782-2840
CONTACT: David Oatman, Director, Investor Relations of Universal Compression Holdings, Inc., +1-713-335-7460
Audio: http: //videonewswire.com/event.asp?id=1638
CAPTION: UCOLOGO UNIVERSAL COMPRESSION HOLDINGS LOGO Universal, headquartered in Houston, Texas, is a leading natural gas compression services company, providing a full range of contract compression, sales, operations, maintenance and fabrication services to the domestic and international natural gas industry. (PRNewsFoto)[TK] HOUSTON, TX USA 10/08/2001

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