Universal Compression Reports Fiscal 2002 Fourth Quarter Results

May 29, 2002

HOUSTON, May 29 /PRNewswire-FirstCall/ -- Universal Compression Holdings, Inc. (NYSE: UCO), a leading provider of natural gas compression services, today reported net income for its fiscal 2002 fourth quarter ended March 31, 2002 of $12.3 million, or $0.40 per diluted share, on revenues of $187.9 million. In the fourth quarter of fiscal 2001, the Company reported net income of $5.9 million, or $0.26 per diluted share, excluding special charges, on revenue of $99.1 million. EBITDA (net income plus income taxes, interest expense, leasing expense, management fees, depreciation and amortization, excluding non-recurring items and extraordinary gains or losses) increased 56 percent to $53.6 million from $34.4 million in the prior year period.

For the year ended March 31, 2002, net income was $49.4 million, or $1.63 per diluted share, compared to $10.5 million, or $0.70 per diluted share, excluding special charges, in the prior year. The Company had revenue of $680.0 million and EBITDA of $207.6 million, compared to revenue of $232.8 million and EBITDA of $88.6 million in the prior year.

"We are pleased with the progress made throughout fiscal 2002 in the execution of strategic growth initiatives. We expanded core services, added complementary business lines and entered new geographic markets, in addition to integrating the Weatherford Global operation, which generated significant synergistic benefits," said Stephen A. Snider, Universal's President and Chief Executive Officer. "Looking ahead, we will continue to seek opportunities to expand our quality line of compression products and services while seeking to improve margins through operational and system enhancements. We expect increased annual earnings in fiscal 2003 as compared to fiscal 2002, with reduced profitability for one to two quarters followed by improved results in the second half of the year."

The Company continues to have productive discussions with its customers in Argentina regarding contract payment terms and expects to reach settlements in the near future. The impact from the Argentina economic situation reduced EBITDA by approximately $4.0 million in the three and twelve month periods ended March 31, 2002. Also, the Company has recorded a non-cash adjustment to stockholders' equity at March 31, 2002 of approximately $55 million pertaining to translation of the Argentina balance sheet.

Segment Information

Contract compression revenues in the fourth fiscal quarter of 2002 totaled $80.7 million, an increase of 39 percent from the prior year period. The Company's contract compression compressor fleet increased by 350,000 horsepower to over 2.2 million horsepower from March 2001 to March 2002. Average fleet horsepower utilization for the quarter was 87 percent compared to 89 percent in the year ago period. International contract compression revenue for the quarter was $13.3 million, an increase of 37 percent from the prior year period. At March 31, 2002, the Company's international fleet totaled approximately 345,000 horsepower.

The fabrication segment recorded revenue of $66.9 million, an increase of 135 percent from the prior year period. Fabrication backlog was $80 million at March 31, 2002, $101 at December 31, 2001 and $34 million at March 31, 2001. The aftermarket services segment recorded revenue of $40.3 million, including used equipment revenue of $4.8 million, compared to $12.6 million in the prior year period.

"Compression activity has declined somewhat in a period of reduced energy service industry activity. The Company's contract compression utilization, which declined from a recent high of 90% in the second quarter of fiscal 2002, has been approximately 84% for the past several weeks," added Snider. "In what we believe may be an early sign of a firming of market conditions, fabrication backlog has increased to approximately $110 million currently due to a rise in orders over the last six weeks. Assuming continuing economic growth and reasonable levels of commodity prices, we are expecting business activity in general to improve by the second half of fiscal 2003."

Conference Call

Universal will host a conference call on Thursday, May 30, 2002 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://www.universalcompression.com (click "Company Overview" in the "Company Information" section) or http://videonewswire.com/event.asp?id=5420 at least 15 minutes prior to the start of the call. A replay of the call will remain available at the Web sites www.universalcompression.com and http://www.prnewswire.com through June 6, 2002.

Universal Compression, 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, the demand for Universal's products and services and worldwide economic and political conditions. 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)

                                                                     Twelve
                                                                     Months
                                        Three Months Ended           Ended
                                  March 31, December 31, March 31,  March 31,
                                    2002       2001        2001       2002
     Revenue:
       Contract compression        $80,653    $85,942    $58,108    $327,735
       Fabrication                  66,942     55,258     28,471     211,265
       Aftermarket services         40,346     36,179     12,559     140,989
         Total revenue             187,941    177,379     99,138     679,989

     Costs and expenses:
       Cost of sales -
        contract compression        27,551     29,567     21,213     114,432
       Cost of sales -
        fabrication                 59,397     48,703     24,019     186,918
       Cost of sales -
        aftermarket services        31,552     27,854     10,335     110,293
       Depreciation and
        amortization                13,275     12,233     11,588      48,600
       Selling, general and
        administrative              16,267     16,134      9,121      60,890
       Operating lease              15,047     14,788      8,220      55,401
       Interest expense              5,555      5,357      4,623      23,017
       Non-recurring charges           ---        ---      1,640         ---
       Other                          (331)       194          4          99
         Total costs and
          expenses                 168,313    154,830     90,763     599,650

     Income before income taxes     19,628     22,549      8,375      80,339

     Income taxes                    7,309      8,798      3,482      30,931

       Income before
        extraordinary items        $12,319    $13,751     $4,893     $49,408

       Extraordinary loss, net
        of income tax benefit          ---        ---     (3,239)        ---

       Net income                  $12,319    $13,751     $1,654     $49,408

     Weighted average common
      and common equivalent
      shares outstanding:
       Basic                        30,590     30,567     22,264      30,008

       Diluted                      30,823     30,844     22,653      30,250

     Earnings per share:
       Income before
        extraordinary items          $0.40      $0.45      $0.22       $1.65
       Extraordinary loss              ---        ---      (0.15)        ---
       Basic                         $0.40      $0.45      $0.07       $1.65

       Income before
        extraordinary items          $0.40      $0.45      $0.22       $1.63
       Extraordinary loss              ---        ---     $(0.14)        ---
       Diluted                       $0.40      $0.45      $0.07       $1.63


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

                                                                      Twelve
                                                                      Months
                                        Three Months Ended            Ended
                                 March 31,  December 31, March 31,  March 31,
                                   2002        2001        2001       2002
     Revenue:
       Domestic contract
        compression               $67,336     $69,423    $48,369    $267,550
       International contract
        compression                13,317      16,519      9,739      60,185
       Fabrication                 66,942      55,258     28,471     211,265
       Aftermarket services        40,346      36,179     12,559     140,989
         Total                   $187,941    $177,379    $99,138    $679,989

     Gross Profit:
       Domestic contract
        compression               $42,797     $44,465    $30,177    $169,893
       International contract
        compression                10,304      11,910      6,718      43,410
       Fabrication                  7,545       6,555      4,452      24,347
       Aftermarket services         8,794       8,325      2,224      30,696
       Other                          ---         ---         (4)        ---
         Total                    $69,440     $71,255    $43,567    $268,346

     Selling, General and
      Administrative              $16,267     $16,134     $9,121     $60,890
       % of Revenue                    9%          9%         9%          9%

     EBITDA, as adjusted *        $53,567     $55,097    $34,446    $207,584
       % of Revenue                   29%         31%        35%         31%

     Profit Margin:
       Domestic contract
        compression                   64%         64%        62%         63%
       International contract
        compression                   77%         72%        69%         72%
       Fabrication                    11%         12%        16%         12%
       Aftermarket services           22%         23%        18%         22%
       Total                          37%         40%        44%         39%

     *    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.


                                March 31,  December 31,  March 31,
                                   2002        2001        2001

     Debt                        $227,745    $222,828   $215,107
     Operating Leases            $708,500    $708,500   $527,500

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SOURCE Universal Compression Holdings, Inc.
Web site: http: //www.universalcompression.com
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CONTACT: David Oatman, Vice President, Investor Relations and Planning of Universal Compression Holdings, Inc., +1-713-335-7460
Audio: http: //videonewswire.com/event.asp?id=5420
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