HOUSTON, May 15 /PRNewswire-FirstCall/ -- Universal Compression Holdings,
Inc. (NYSE: UCO), a leading provider of natural gas compression services,
today reported net income for its fiscal 2003 fourth quarter of $6.9 million,
or $0.22 per diluted share, on revenues of $154.6 million. The Company
reported net income of $12.3 million, or $0.40 per diluted share, on revenues
of $187.9 million in the fiscal 2002 fourth quarter. EBITDA, as adjusted
(as defined below), was $51.0 million in the fiscal 2003 fourth quarter,
compared to $50.2 million in the fiscal 2003 third quarter and $53.3 million
in the fiscal 2002 fourth quarter.
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For the year ended March 31, 2003, net income was $33.5 million, or
$1.08 per diluted share, compared to $49.4 million, or $1.63 per diluted share
in the prior year. The Company had revenues of $625.2 million and EBITDA of
$201.2 million in fiscal 2003, compared to revenues of $680.0 million and
EBITDA of $207.3 million in the prior year.
Capital expenditures were approximately $121 million for the twelve months
ended March 31, 2003 compared to $188 million for the comparable period last
year. The Company's cash balance increased to approximately $72 million at
March 31, 2003 from $6 million at March 31, 2002.
"In fiscal 2003 we made considerable progress despite reduced industry
demand in a period of sluggish economic activity. We strengthened our balance
sheet and streamlined our operating structure to improve our current and
future performance," said Stephen A. Snider, Universal's President and Chief
Executive Officer. "We are optimistic about prospects for market conditions
improving this year as higher industry drilling counts are expected to lead to
additional production-related activity."
Capital Structure
On May 14, 2003, the Company's wholly-owned subsidiary, Universal
Compression, Inc., initiated an offer to purchase its $229.75 million of
9 7/8% senior discount notes due 2008 in order to reduce ongoing interest
expense levels. The tender offer is subject to the completion of a new senior
notes offering, and is expected to be financed by a combination of the new
senior notes offering, excess cash and borrowings under an existing revolving
credit agreement. This event will result in a pre-tax charge of approximately
$15 million, or $(0.30) per diluted share on an after-tax basis, in the first
fiscal quarter.
"We are pleased with the opportunity to reduce our cost of capital," said
Michael Anderson, Senior Vice President and Chief Financial Officer. "We
expect to enhance our financial position further in fiscal 2004 with
continuing strong levels of cash generated by operating activities and a
conservative capital expenditure program of approximately $90 million to
$110 million."
Guidance
For the three months ending June 30, 2003, the Company expects revenues to
be $150 million to $160 million and earnings per diluted share to be $0.21 to
$0.25. For the twelve months ending March 31, 2004, the Company expects
revenues of $650 million to $700 million and earnings per diluted share of
$1.20 to $1.40. This guidance excludes non-recurring costs related to the
offer to purchase the 9 7/8% senior discount notes and the previously
announced consolidation of fabrication operations. Including these costs, the
Company expects a net loss per diluted share of $0.07 to $0.13 in its first
fiscal quarter and earnings per diluted share of $0.86 to $1.06 in fiscal year
2004.
Fourth Quarter Statistics
-- Average fleet horsepower utilized was 1,948,000 in the fourth quarter
compared to 1,932,000 in the third quarter and 1,922,000 in the prior
year period. Spot utilization was 84% at March 31, 2003 and December
31, 2002 compared to 85% at March 31, 2002. Average utilization was
83% in the fourth and third quarters and 87% in the prior year period.
-- Domestic contract compression gross margins were 64% in the fourth
quarter, third quarter and prior year period, and international
contract compression gross margins were 84% compared to 79% in the
prior quarter and 77% in the prior year period.
-- Total contract compression horsepower was 2,325,000 at March 31, 2003
compared to 2,333,000 at December 31, 2002 and 2,236,000 at March 31,
2002. International contract compression horsepower was 368,000 at
March 31, 2003 compared to 373,000 at December 31, 2002 and 345,000 at
March 31, 2002.
-- Fabrication revenues were $34.9 million compared to $50.3 million in
the prior quarter and $66.9 million in the prior year period;
fabrication gross margins were 11% compared to 9% in the prior quarter
and 11% in the prior year period. Fabrication backlog was $56 million
at March 31, 2003 and December 31, 2002 compared to $80 million at
March 31, 2002. The current fabrication backlog is approximately
$75 million.
-- Aftermarket services gross margins were 22% in the fourth quarter, 21%
in the third quarter and 22% in the prior year period.
Conference Call
Universal will host a conference call today, May 15, 2003 at 12:00 pm
Central Time, 1:00 pm 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/ajwz381439374gf12.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 May 22, 2003.
EBITDA, as adjusted, is defined as net income plus income taxes, interest
expense, leasing expense, depreciation and amortization, foreign currency
gains or losses, excluding non-recurring items and extraordinary gains or
losses. Beginning with the quarter ended September 30, 2002, the Company
changed its definition of EBITDA, as adjusted, to exclude foreign currency
gains or losses. All periods prior to September 30, 2002 have been
recalculated from amounts previously disclosed by the Company to be consistent
with this new definition of EBITDA, as adjusted.
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 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 Twelve Months Ended
March 31, December 31, March 31, March 31,
2003 2002 2002 2003 2002
Revenues:
Domestic contract
compression $67,788 $67,065 $67,336 $265,465 $267,550
International
contract compression 16,428 16,156 13,317 66,505 60,185
Fabrication 34,881 50,258 66,942 162,678 211,265
Aftermarket services 35,492 31,105 40,346 130,570 140,989
Total revenue 154,589 164,584 187,941 625,218 679,989
Costs and expenses:
Cost of sales -
domestic contract
compression 24,422 24,195 24,539 95,597 97,658
Cost of sales -
international
contract
compression 2,674 3,453 3,012 12,736 16,774
Cost of sales -
fabrication 31,099 45,576 59,397 146,603 186,918
Cost of sales -
aftermarket
services 27,712 24,609 31,552 102,314 110,293
Depreciation and
amortization 19,619 15,726 13,275 63,706 48,600
Selling, general and
administrative 17,539 16,923 16,267 67,944 60,890
Operating lease 0 15,239 15,047 46,071 55,401
Interest expense 20,247 5,671 5,555 36,421 23,017
Foreign currency
(gain) / loss (156) (353) (219) 459 (42)
Other (income) /
expense 179 (411) (112) (1,126) 141
Total costs and
expenses 143,335 150,628 168,313 570,725 599,650
Income before income
taxes 11,254 13,956 19,628 54,493 80,339
Income taxes 4,331 5,373 7,309 20,975 30,931
Net income $6,923 $8,583 $12,319 $33,518 $49,408
Weighted average
common and common
equivalent shares
outstanding:
Basic 30,709 30,668 30,590 30,665 30,008
Diluted 30,943 30,859 30,823 30,928 30,250
Earnings per share:
Basic $0.23 $0.28 $0.40 $1.09 $1.65
Diluted $0.22 $0.28 $0.40 $1.08 $1.63
UNIVERSAL COMPRESSION HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands)
Three Months Ended Twelve Months Ended
March 31, December 31, March 31, March 31,
2003 2002 2002 2003 2002
Revenues:
Domestic
contract
compression $67,788 $67,065 $67,336 $265,465 $267,550
International
contract
compression 16,428 16,156 13,317 66,505 60,185
Fabrication 34,881 50,258 66,942 162,678 211,265
Aftermarket
services 35,492 31,105 40,346 130,570 140,989
Total $154,589 $164,584 $187,941 $625,218 $679,989
Gross Profit:
Domestic
contract
compression $43,366 $42,870 $42,797 $169,868 $169,892
International
contract
compression 13,754 12,703 10,304 53,769 43,411
Fabrication 3,782 4,682 7,545 16,075 24,347
Aftermarket
services 7,780 6,496 8,794 28,256 30,696
Total $68,682 $66,751 $69,440 $267,968 $268,346
Selling,
General and
Administrative $17,539 $16,923 $16,267 $67,944 $60,890
% of Revenue 11% 10% 9% 11% 9%
EBITDA, as
adjusted $50,964 $50,239 $53,286 $201,150 $207,315
% of Revenue 33% 31% 28% 32% 30%
Capital
Expenditures $21,602 $39,978 $48,652 $120,750 $188,019
Average
Utilization 83% 83% 87% 83% 89%
Profit Margin:
Domestic
contract
compression 64% 64% 64% 64% 63%
International
contract
compression 84% 79% 77% 81% 72%
Fabrication 11% 9% 11% 10% 12%
Aftermarket
services 22% 21% 22% 22% 22%
Total 44% 41% 37% 43% 39%
Reconciliation
of GAAP to
Non-GAAP
Financial
Information:
Net income 6,923 8,583 12,319 33,518 49,408
Income taxes 4,331 5,373 7,309 20,975 30,931
Depreciation and
amortization 19,619 15,726 13,275 63,706 48,600
Operating lease 0 15,239 15,047 46,071 55,401
Interest expense 20,247 5,671 5,555 36,421 23,017
Foreign currency
(gain) / loss (156) (353) (219) 459 (42)
EBITDA,
as adjusted * $50,964 $50,239 $53,286 $201,150 $207,315
March 31, December 31, March 31,
2003 2002 2002
Debt $945,155 $945,051 $226,762
Operating Leases $-- $-- $708,500
Shareholders' Equity $744,451 $722,857 $700,344
Total Debt to Capitalization ** 55.9% 56.7% 57.2%
* Beginning with the quarter ended September 30, 2002, the Company
changed its definition of EBITDA, as adjusted, to exclude foreign
currency gains or losses. All periods prior to September 30, 2002 have
been recalculated from amounts previously disclosed by the Company to
be consistent with this new definition of EBITDA, as adjusted.
** Total Debt includes Debt and Operating Leases.
SOURCE Universal Compression Holdings, Inc.