HOUSTON, Nov 03, 2005 /PRNewswire-FirstCall via COMTEX News Network/ -- Universal Compression Holdings,
Inc. (NYSE: UCO), a leading provider of natural gas compression services,
today reported net income of $17.7 million, or $0.54 per diluted share, in the
fiscal 2006 second quarter compared to $18.1 million, or $0.56 per diluted
share, in the fiscal 2006 first quarter and $12.2 million, or $0.38 per
diluted share, in the fiscal 2005 second quarter.
Revenue was $181.1 million in the fiscal 2006 second quarter compared to
$207.7 million in the fiscal 2006 first quarter and $191.9 million in the
fiscal 2005 second quarter. EBITDA, as adjusted (as defined below), was
$66.2 million in the fiscal 2006 second quarter compared to $65.2 million in
the fiscal 2006 first quarter and $59.5 million in the fiscal 2005 second
quarter.
Stephen A. Snider, Universal's President and Chief Executive Officer,
said, "We are pleased with our fiscal 2006 second quarter results which
included record levels of EBITDA, as adjusted, and a 42% increase in diluted
earnings per share as compared to prior year period results despite
operational challenges from the recent hurricanes. With overall healthy
market activity levels and a strong demand for new contract units, we have
increased our full year fiscal 2006 guidance for earnings per share and
capital expenditures.
Hurricanes Katrina and Rita had a severe impact during the quarter on
energy industry operations in the Gulf Coast area, but we incurred what we
believe to be relatively minor property damage. Many Universal employees
suffered personal hardships and have not yet been able to return to their
homes; however, we were fortunate that no employees were seriously injured as
a result of these storms. Our dedicated employees are working with our
customers to help restore area operations to more normal activity levels.
We continue to see favorable market growth trends. The energy industry's
efforts to increase the supply of natural gas involve long-term investments in
field production and delivery infrastructure. We are contributing to these
efforts by expanding our installed base of field compressors which we believe
provides Universal with a long-term revenue source and enhances our overall
market competitive position."
Michael Anderson, Universal's Chief Financial Officer, added, "We recently
amended our senior secured credit agreement to provide for, among other
things, a reduction in the interest rate on the term loan portion of the
facility by 0.25%, enhanced ability to issue unsecured debt, and a more
lenient total leverage ratio for any redemption of our common stock. We are
also pleased that we recently were able to refinance our asset backed
securitization facility at attractive rates by issuing privately-placed
long-term notes with investors. Over the past two and one-half years, we have
refinanced all of our debt resulting in a significantly lower cost of
financing and extended maturities. We believe our improved capital structure
enhances our ability to grow the business going forward."
Guidance
The following statements are based on current expectations. These
statements are forward-looking, and actual results may differ materially.
Factors affecting these forward-looking statements are detailed below under
the section titled "Forward-Looking Statements." These statements do not
include the potential impact of any acquisition, disposition, merger, joint
venture or other transactions that could occur in the future.
For the three months ending December 31, 2005, the Company expects revenue
to be $205 million to $215 million and earnings per diluted share to be $0.56
to $0.60. For the twelve months ending March 31, 2006, the Company now
expects earnings per diluted share of $2.25 to $2.35, compared to previous
guidance of $2.15 to $2.30. The Company continues to expect revenue of
$800 million to $820 million in fiscal 2006. Capital expenditures, net of
sale proceeds, are now expected to be $145 million to $155 million in fiscal
2006, compared to previous guidance of $125 million to $140 million.
Conference Call
Universal will host a conference call today, November 3, 2005, 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 live over the
Internet to provide interested persons the opportunity to listen. The call
will also be archived for approximately 90 days 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 "Investor Home" in the
"Investor Relations" section) at least 15 minutes prior to the start of the
call. The replay of the call will be available at the website
http://www.universalcompression.com .
EBITDA, as adjusted, is defined as net income plus income taxes, interest
expense (including debt extinguishment costs and excluding gain on termination
of interest rate swaps), depreciation and amortization, foreign currency gains
or losses, excluding non-recurring items (including facility consolidation
costs), and extraordinary gains or losses.
Forward-Looking Statements
Statements about Universal's outlook and all other statements in this
release (and oral statements made regarding the subjects of this release,
including on the conference call announced herein) 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 factors that could cause results to differ
materially from those indicated by such forward-looking statements are the
worldwide supply and demand for natural gas; the demand for Universal's
products and services; our ability to implement and effect price increases for
our products and services; the ability of our competitors to capture market
share and our ability to retain or increase our market share; our ability to
manage the rising costs and availability of components and materials from our
vendors; changes in our strategic direction; changes in laws or regulatory
conditions in the U.S. and other countries in which we operate; our ability to
timely, properly and cost-effectively implement our enterprise resource
planning system; changes in our assessment of the impact of Hurricanes Katrina
and Rita; and changes in the economic conditions in the U.S. or other
countries in which we operate.
These forward-looking-statements are also affected by the risk factors and
forward-looking statements described in Universal's Annual Report on Form 10-K
for the year ended March 31, 2005 and those set forth from time to time in
Universal's filings with the Securities and Exchange Commission (SEC), which
are available through Universal's website and through the SEC's Electronic
Data Gathering and Analysis Retrieval System (EDGAR) at http://www.sec.gov .
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, 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.
UNIVERSAL COMPRESSION HOLDINGS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended
September 30, June 30, September 30,
2005 2005 2004
Revenue:
Domestic contract compression $81,964 $79,672 $73,178
International contract compression 31,076 30,300 22,872
Fabrication 28,193 55,836 57,772
Aftermarket services 39,895 41,876 38,062
Total revenue 181,128 207,684 191,884
Costs and expenses:
Domestic contract compression -
direct costs 29,849 27,776 26,798
International contract
compression - direct costs 8,087 7,907 5,412
Fabrication - direct costs 24,769 52,972 51,772
Aftermarket services - direct costs 31,782 33,047 30,204
Depreciation and amortization 26,439 25,633 23,123
Selling, general and administrative 21,012 20,438 18,245
Interest expense, net 13,034 12,460 16,154
Foreign currency (gain) loss (610) (837) 882
Other (income) expense (524) 352 (56)
Total costs and expenses 153,838 179,748 172,534
Income before income taxes 27,290 27,936 19,350
Income tax expense 9,611 9,800 7,160
Net income $17,679 $18,136 $12,190
Weighted average common and common
equivalent shares outstanding:
Basic 31,902 31,800 31,336
Diluted 32,836 32,563 32,045
Earnings per share:
Basic $0.55 $0.57 $0.39
Diluted $0.54 $0.56 $0.38
UNIVERSAL COMPRESSION HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
(Dollars in thousands)
Three Months Ended
September 30, June 30, September 30,
2005 2005 2004
Revenue:
Domestic contract compression $81,964 $79,672 $73,178
International contract compression 31,076 30,300 22,872
Fabrication 28,193 55,836 57,772
Aftermarket services 39,895 41,876 38,062
Total $181,128 $207,684 $191,884
Gross Profit:
Domestic contract compression $52,115 $51,896 $46,380
International contract compression 22,989 22,393 17,460
Fabrication 3,424 2,864 6,000
Aftermarket services 8,113 8,829 7,858
Total $86,641 $85,982 $77,698
Selling, General and Administrative $21,012 $20,438 $18,245
% of Revenue 12% 10% 10%
EBITDA, as adjusted $66,153 $65,192 $59,509
% of Revenue 37% 31% 31%
Capital Expenditures $38,642 $41,886 $39,240
Proceeds from Sale of PP&E 3,876 4,400 2,749
Net Capital Expenditures $34,766 $37,486 $36,491
Gross Margin:
Domestic contract compression 64% 65% 63%
International contract compression 74% 74% 76%
Fabrication 12% 5% 10%
Aftermarket services 20% 21% 21%
Total 48% 41% 40%
Reconciliation of GAAP to Non-GAAP
Financial Information:
Net income $17,679 $18,136 $12,190
Income tax expense 9,611 9,800 7,160
Depreciation and amortization 26,439 25,633 23,123
Interest expense, net 13,034 12,460 16,154
Foreign currency (gain) loss (610) (837) 882
EBITDA, as adjusted (A) $66,153 $65,192 $59,509
September 30, June 30, September 30,
2005 2005 2004
Debt and Capital Lease Obligations $818,646 $849,463 $792,966
Stockholders' Equity $908,605 $876,026 $832,604
Total Debt to Capitalization 47.4% 49.2% 48.8%
(A) Management believes disclosure of EBITDA, as adjusted, a non-GAAP
measure, provides useful information to investors because, when viewed
with our GAAP results and accompanying reconciliations, it provides a
more complete understanding of our performance than GAAP results alone.
Management uses EBITDA, as adjusted, as a supplemental measure to review
current period operating performance, a comparability measure, a
performance measure for period to period comparisons and a valuation
measure.
UNIVERSAL COMPRESSION HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
(Horsepower in thousands)
Three Months Ended
September 30, June 30, September 30,
2005 2005 2004
Total Available Horsepower
(at period end):
Domestic contract compression 1,948 1,921 1,896
International contract compression 565 566 437
Total 2,513 2,487 2,333
Average Contracted Horsepower:
Domestic contract compression 1,751 1,740 1,665
International contract compression 524 513 401
Total 2,275 2,253 2,066
Horsepower Utilization:
Spot (at period end) 91.0% 91.4% 89.8%
Average 91.0% 90.7% 88.9%
Fabrication Backlog (in millions) $114 $73 $66
SOURCE Universal Compression Holdings, Inc.
David Oatman, Vice President, Investor Relations of Universal Compression Holdings,
Inc., 1-713-335-7460
http://www.prnewswire.com