HOUSTON, Jan. 27 /PRNewswire-FirstCall/ -- Universal Compression Holdings,
Inc. (NYSE: UCO), a leading provider of natural gas compression services,
today reported net income for its fiscal 2003 third quarter of $8.6 million,
or $0.28 per diluted share, on revenues of $164.6 million. The Company
reported net income of $13.8 million, or $0.45 per diluted share, on revenues
of $177.4 million in the third quarter of fiscal 2002. In the prior quarter
ended September 30, 2002, the Company reported net income of $7.7 million, or
$0.25 per diluted share, on revenues of $154.6 million. EBITDA, as adjusted
(as defined below) was $50.2 million compared to $48.2 million in the fiscal
2003 second quarter and $54.8 million in the fiscal 2002 third quarter.
"We are encouraged by progress made despite lackluster activity levels in
energy markets. The utilization of our compression fleet increased during the
quarter due to the implementation of domestic alliance contracts and our
international presence was strengthened as a result of significant fabrication
shipments to a large customer in China. Our financial position was enhanced
by continuing strong cash flow from operations and prudent fiscal management,"
said Stephen A. Snider, Universal's President and Chief Executive Officer.
Capital expenditures were approximately $100 million for the nine months
ended December 31, 2002 compared to $139 million for the comparable period
last year. Cash balance was approximately $50 million at December 31, 2002
compared to $6 million at March 31, 2002.
Beginning in the fourth fiscal quarter, the Company will incur higher
ongoing non-cash depreciation expenses as a result of the consolidation of its
operating leases effective December 31, 2002, which is expected to be
partially offset by the change in the estimated useful life of the compressor
fleet, based on the preliminary findings of the equipment study which is being
conducted. For the three months ending March 31, 2003, we expect that
depreciation expense will increase by approximately $2.5 million, or
approximately $0.05 per share on an after-tax basis, based on the
consolidation of the operating leases and the preliminary findings of the
equipment study that will be completed by March 2003.
"Business conditions in North America are expected to be sluggish for each
of our business segments for the near future. In addition, the scheduled
fourth fiscal quarter startup of two new projects totaling approximately
38,000 horsepower in Brazil and Venezuela has been delayed by an estimated
three months. For the fourth fiscal quarter, we now expect revenues to be
$160 million to $165 million, EBITDA to range from $52 million up to
$53 million, and earnings per diluted share to be $0.22 to $0.24, including
the expected additional depreciation expense discussed earlier. We will
continue efforts to gain market opportunities and enhance financial returns in
these challenging market conditions. We are optimistic that favorable natural
gas market trends will stimulate North American activity levels later in the
year," added Snider.
Third Quarter Statistics
-- Average fleet horsepower utilized was 1,932,000 at December 31, 2002
compared to 1,884,000 at September 30, 2002 and 1,967,000 at
December 31, 2001. Spot utilization was 84% at December 31, 2002
compared to 82% at September 30, 2002 and 88% at December 31, 2001.
Average utilization was 83% in the fiscal third and second quarters
and was 89% in the prior year period.
-- Domestic contract compression gross margins were 64% compared to 63%
in the prior quarter and 64% in the prior year period, and
international contract compression gross margins were 79% compared to
80% in the prior quarter and 72% in the prior year period.
-- Total contract compression horsepower was 2,333,000 at
December 31, 2002 compared to 2,297,000 at September 30, 2002 and
2,206,000 at December 31, 2001. International contract compression
horsepower was 373,000 at December 31, 2002 compared to 363,000 at
September 30, 2002 and 340,000 at December 31, 2001.
-- Fabrication revenues were $50.3 million compared to $42.1 million in
the prior quarter and $55.3 million in the prior year period; gross
margins were 9% compared to 11% in the prior quarter and 12% in the
prior year period. Fabrication backlog was $56 million at
December 31, 2002 compared to $87 million at September 30, 2002 and
$101 million at December 31, 2001.
-- Aftermarket services gross margins were 21% compared to 19% in the
prior quarter and 23% in the prior year period.
Conference Call
Universal will host a conference call on Tuesday, January 28, 2003 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://www.firstcallevents.com/service/ajwz372759923gf12.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 February 4, 2003.
EBITDA, as adjusted, is defined as net income plus income taxes, interest
expense, lease expense, depreciation and amortization, foreign currency gains
or losses, non-recurring items and extraordinary gains or 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
December 31, September 30, December 31,
2002 2002 2001
Revenues:
Contract compression $83,221 $81,765 $85,942
Fabrication 50,258 42,064 55,258
Aftermarket services 31,105 30,753 36,179
Total revenue 164,584 154,582 177,379
Costs and expenses:
Cost of sales - contract
compression 27,648 27,396 29,567
Cost of sales - fabrication 45,576 37,579 48,703
Cost of sales - aftermarket
services 24,609 24,791 27,854
Depreciation and amortization 15,726 14,311 12,233
Selling, general and
administrative 16,923 17,238 16,134
Operating lease 15,239 15,485 14,788
Interest expense 5,671 4,792 5,357
Foreign currency (gain) / loss (353) 1,139 (134)
Other (income) / expense (411) (602) 328
Total costs and expenses 150,628 142,129 154,830
Income before income taxes 13,956 12,453 22,549
Income taxes 5,373 4,794 8,798
Net income $8,583 $7,659 $13,751
Weighted average common and
common equivalent shares
outstanding:
Basic 30,668 30,661 30,567
Diluted 30,859 30,683 30,844
Earnings per share:
Basic $0.28 $0.25 $0.45
Diluted $0.28 $0.25 $0.45
UNIVERSAL COMPRESSION HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands)
Three Months Ended
December 31, September 30, December 31,
2002 2002 2001
Revenues:
Domestic contract
compression $67,065 $65,122 $69,423
International contract
compression 16,156 16,643 16,519
Fabrication 50,258 42,064 55,258
Aftermarket services 31,105 30,753 36,179
Total $164,584 $154,582 $177,379
Gross Profit:
Domestic contract
compression $42,870 $41,102 $44,441
International contract
compression 12,703 13,267 11,910
Fabrication 4,682 4,485 6,555
Aftermarket services 6,496 5,962 8,325
Total $66,751 $64,816 $71,231
Selling, General and
Administrative $16,923 $17,238 $16,134
% of Revenue 10% 11% 9%
EBITDA, as adjusted * $50,239 $48,180 $54,769
% of Revenue 31% 31% 31%
Profit Margin:
Domestic contract
compression 64% 63% 64%
International contract
compression 79% 80% 72%
Fabrication 9% 11% 12%
Aftermarket services 21% 19% 23%
Total 41% 42% 40%
* EBITDA, as adjusted, is defined as net income plus income taxes,
interest expense, leasing expense, depreciation and amortization,
foreign currency gains or losses, non-recurring items and extraordinary
gains or losses.
December 31, March 31, December 31,
2002 2002 2001
Debt $945,052 $226,762 $222,828
Operating Leases $--- $708,500 $708,500
Shareholders' Equity $708,534 $700,344 $745,712
Total Debt to
Capitalization ** 57.2% 57.2% 55.5%
** Total debt includes debt and operating leases.
SOURCE Universal Compression Holdings, Inc.