HOUSTON, Oct. 30 -- Universal Compression Holdings,
Inc. (NYSE: UCO), a leading provider of natural gas compression services,
today reported net income for its fiscal 2003 second quarter of $7.7 million,
or $0.25 per diluted share, on revenues of $154.6 million. The Company
reported net income of $12.8 million, or $0.42 per diluted share, on revenues
of $174.3 million in the second quarter of fiscal 2002. EBITDA, as adjusted
(as defined below) was $48.2 million compared to $52.1 million in the prior
year period.
"The Company recorded lower profitability in the second fiscal quarter due
largely to reduced energy industry activity in a period of sluggish economic
growth. We are working on several fronts to enhance the Company's performance
in this time of lackluster market conditions. We continue to review our
organizational structure, and have selectively consolidated functions and
reduced employment levels. Another company productivity initiative has been
the selection of a remote monitoring system to enhance the operation of our
contract compression units," said Stephen A. Snider, Universal's President and
Chief Executive Officer. "We continue to actively seek new business
opportunities in domestic and international markets. In the United States, we
began reactivating approximately 60,000 horsepower of idle compressors during
the September quarter that are scheduled to begin operation throughout the
second half of this fiscal year. Additional new contract compression business
includes approximately 22,000 horsepower of new units in Brazil that are
expected to begin operation in the fourth quarter of this fiscal year. Going
forward, we will continue our efforts to enhance our financial returns by
improving the productivity of our existing operations and maintaining prudent
standards on new capital investments," added Snider.
Second Quarter Highlights
-- Average fleet horsepower utilization was 83% compared to 84% in the
prior quarter and 90% in the prior year period.
-- Total contract compression horsepower was 2,297,000 at
September 30, 2002 compared to 2,254,000 at June 30, 2002 and
2,189,000 at September 30, 2001. International contract compression
horsepower was 363,000 at September 30, 2002 compared to 356,000 at
June 30, 2002 and 339,000 at September 30, 2001.
-- In contract compression, domestic gross margins were 63% compared to
65% in the prior quarter and 64% in the prior year period, while
international gross margins were 80% compared to 81% in the prior
quarter and 71% in the prior year period.
-- In our fabrication segment, revenues were $42.1 million compared to
$35.5 million in the prior quarter and $56.8 million in the prior year
period; gross margins were 11% compared to 9% in the prior quarter and
11% in the prior year period. Fabrication backlog was $87 million at
September 30, 2002 compared to $96 million at June 30, 2002 and
$101 million at September 30, 2001.
-- Aftermarket services gross margins were 19% compared to 24% in the
prior quarter and 21% in the prior year period.
Conference Call
Universal will host a conference call on Thursday, October 31, 2002 at
8:00 am Central Time, 9:00 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://www.firstcallevents.com/service/ajwz368723424gf12.html 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 November 7, 2002.
EBITDA, as adjusted, is defined as net income plus income taxes, interest
expense, lease expense, depreciation and amortization, excluding non-recurring
items and extraordinary gains and losses.
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 the demand for Universal's
products and services, integration of acquisitions 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)
Three Months Ended
September 30, June 30, September 30,
2002 2002 2001
Revenues:
Contract compression $81,765 $82,770 $85,190
Fabrication 42,064 35,475 56,831
Aftermarket services 30,753 33,219 32,287
Total revenue 154,582 151,464 174,308
Costs and expenses:
Cost of sales - contract
compression 27,396 26,194 29,749
Cost of sales - fabrication 37,579 32,349 50,780
Cost of sales - aftermarket
services 24,791 25,203 25,650
Depreciation and amortization 14,311 14,050 11,712
Selling, general and
administrative 17,238 16,245 15,813
Operating lease 15,485 15,345 12,973
Interest expense 4,792 5,711 6,573
Other 537 (461) 189
Total costs and expenses 142,129 134,636 153,439
Income before income taxes 12,453 16,828 20,869
Income taxes 4,794 6,477 8,076
Net income $7,659 $10,351 $12,793
Weighted average common and
common equivalent shares
outstanding:
Basic 30,661 30,619 30,396
Diluted 30,863 30,940 30,606
Earnings per share:
Basic $0.25 $0.34 $0.42
Diluted $0.25 $0.33 $0.42
UNIVERSAL COMPRESSION HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands)
Three Months Ended
September 30, June 30, September 30,
2002 2002 2001
Revenues:
Domestic contract compression $65,122 $65,491 $68,871
International contract compression 16,643 17,279 16,319
Fabrication 42,064 35,475 56,831
Aftermarket services 30,753 33,219 32,287
Total $154,582 $151,464 $174,308
Gross Profit:
Domestic contract compression $41,102 $42,531 $43,882
International contract compression 13,267 14,045 11,559
Fabrication 4,485 3,126 6,051
Aftermarket services 5,962 8,016 6,637
Total $64,816 $67,718 $68,129
Selling, General and Administrative $17,238 $16,245 $15,813
% of Revenue 11% 11% 9%
EBITDA, as adjusted * $48,152 $51,839 $52,127
% of Revenue 31% 34% 30%
Profit Margin:
Domestic contract compression 63% 65% 64%
International contract compression 80% 81% 71%
Fabrication 11% 9% 11%
Aftermarket services 19% 24% 21%
Total 42% 45% 39%
* EBITDA, as adjusted, is defined as net income plus income taxes,
interest expense, leasing expense, depreciation and amortization,
excluding non-recurring items and extraordinary gains or losses.
September 30, March 31, September 30,
2002 2002 2001
Debt $231,322 $226,762 $274,185
Operating Leases $708,500 $708,500 $607,500
Shareholders' Equity $708,073 $700,344 $732,699