HOUSTON, Nov. 7 /PRNewswire-FirstCall/ -- Universal Compression Holdings,
Inc. (NYSE: UCO) today reported record net income of $25.0 million, or $0.80
per diluted share, in the three months ended September 30, 2006, including
approximately $0.07 per diluted share of benefit related to employee benefit
programs. Without this benefit, earnings per diluted share would have been
$0.73. Universal reported net income of $21.8 million, or $0.70 per diluted
share, in the three months ended June 30, 2006 and $17.7 million, or $0.54 per
diluted share, in the prior year period.
Revenue was $246.9 million in the three months ended September 30, 2006,
compared to $218.7 million in the three months ended June 30, 2006 and $181.1
million in the prior year period. EBITDA, as adjusted (as defined below), was
a record $84.0 million in the three months ended September 30, 2006 as
compared to $75.2 million in the three months ended June 30, 2006 and $66.2
million in the comparable period of the prior year.
Stock Repurchase Program
Universal's Board of Directors has authorized the repurchase of up to $200
million of Universal's common stock. This authorization extends until
November 2008. Universal intends to make purchases from time to time as
market conditions warrant and hold the repurchased shares in treasury for
general corporate purposes.
Comments
"Our overall strong financial results in the third quarter reflect
continued favorable business conditions in each of our contract compression,
fabrication and aftermarket services segments. Due to the high activity
levels in our fabrication facilities during the most recently completed
quarter, we experienced some unexpected delays in the production of new units
for third-party sales and for our contract compression fleet, delaying revenue
recognition in both the contract compression and fabrication segments. We are
incurring continuing expenses related to our new enterprise resource planning
system and incremental costs associated with our newly formed public entity,
Universal Compression Partners, L.P. (Nasdaq: UCLP). We believe both of these
initiatives are important steps in driving our long term growth strategy,"
commented Stephen A. Snider, Universal's Chairman, President and Chief
Executive Officer. "The outlook for domestic and international markets
continues to be positive as reflected by a strong level of customer inquiries
and orders for compression services and products well into 2007."
"We are very excited that the initial public offering of Universal's
subsidiary, UCLP, was successfully completed last month and that UCLP has been
well-received by investors. We believe that UCLP will create significant
value to Universal's stockholders, as Universal intends to utilize UCLP's
lower cost of capital to purchase the remainder of Universal's domestic
contract compression fleet and for UCLP to be the primary growth vehicle for
the domestic contract compression business," added Snider.
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 material transactions that could occur in the future,
including any additional future contributions of contract compression
contracts and equipment from Universal to UCLP.
For the three months ending December 31, 2006, we expect revenue of $240
million to $250 million and earnings per diluted share of $0.70 to $0.74. For
the twelve months ending December 31, 2006, we now expect revenue of $935
million to $945 million, earnings per diluted share of $2.88 to $2.92 and
capital expenditures, net of sale proceeds, of approximately $210 million;
this compares to previously reported guidance of revenue of $950 million to
$970 million, earnings per diluted share of $2.85 to $2.95 and capital
expenditures, net of sale proceeds, of $210 million to $240 million. Guidance
for earnings per diluted share does not include any special charges associated
with our recent refinancing activities in the fourth quarter.
Conference Call
Universal will host a conference call today, November 7, 2006, at 10:00
a.m. Central Time, 11:00 a.m. Eastern Time, to discuss the quarter's results
and certain 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 UCO "Investor Information"
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 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.
Forward looking information includes, but is not limited to, statements
regarding: the belief that UCLP will create significant value to Universal's
stockholders; the intention of Universal for UCLP to be the primary growth
vehicle for the domestic contract compression business; Universal's optimistic
expectation regarding the positive outlook for domestic and international
markets; Universal's expected revenue and earnings per diluted share for the
fourth quarter of 2006; Universal's intentions with respect to acquiring its
shares as part of the stock repurchase program; and Universal's expected
revenue, earnings per diluted share and capital expenditures, net of sales
proceeds, for the full year 2006. 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 conditions in the oil and gas industry,
including a sustained decrease in the level of supply or demand for natural
gas and the impact on the price of natural gas; employment workforce factors,
including our ability to hire, train and retain key employees; our ability to
timely and cost-effectively obtain components necessary to conduct our
business; changes in political or economic conditions in key operating
markets, including international markets; our ability to timely and cost-
effectively implement our enterprise resource planning system; changes in
safety and environmental regulations pertaining to the production and
transportation of natural gas; and the performance of UCLP.
These forward-looking statements are also affected by the risk factors,
forward-looking statements and challenges and uncertainties described in
Universal's Transition Report on Form 10-K for the nine months ended December
31, 2005 and those set forth from time to time in Universal's filings with the
Securities and Exchange Commission, which are available through our website
www.universalcompression.com. 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,
2006 2006 2005
Revenue:
Domestic contract compression $101,058 $101,460 $81,964
International contract compression 36,251 35,010 31,076
Fabrication 57,642 38,528 28,193
Aftermarket services 51,981 43,718 39,895
Total revenue 246,932 218,716 181,128
Costs and expenses:
Cost of sales (excluding depreciation
and amortization expense):
Domestic contract compression 34,866 35,792 29,849
International contract
compression 8,968 8,430 8,087
Fabrication 47,594 33,797 24,769
Aftermarket services 41,304 36,359 31,782
Depreciation and amortization 31,154 30,013 26,439
Selling, general and
administrative 30,149 29,461 21,012
Interest expense, net 15,152 14,605 13,034
Foreign currency (gain) loss (45) 299 (610)
Other (income) loss, net 3 (360) (524)
Total costs and expenses 209,145 188,396 153,838
Income before income taxes 37,787 30,320 27,290
Income tax expense 12,827 8,504 9,611
Net income $24,960 $21,816 $17,679
Weighted average common and common
equivalent shares outstanding:
Basic 30,037 29,891 31,902
Diluted 31,163 31,040 32,836
Earnings per share:
Basic $0.83 $0.73 $0.55
Diluted $0.80 $0.70 $0.54
UNIVERSAL COMPRESSION HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
(Dollars in thousands)
Three Months Ended
September 30, June 30, September 30,
2006 2006 2005
Revenue:
Domestic contract compression $101,058 $101,460 $81,964
International contract
compression 36,251 35,010 31,076
Fabrication 57,642 38,528 28,193
Aftermarket services 51,981 43,718 39,895
Total $246,932 $218,716 $181,128
Gross Margin:
Domestic contract compression $66,192 $65,668 $52,115
International contract
compression 27,283 26,580 22,989
Fabrication 10,048 4,731 3,424
Aftermarket services 10,677 7,359 8,113
Total $114,200 $104,338 $86,641
Selling, General and Administrative $30,149 $29,461 $21,012
% of Revenue 12% 13% 12%
EBITDA, as adjusted $84,048 $75,237 $66,153
% of Revenue 34% 34% 37%
Capital Expenditures $58,552 $59,402 $38,642
Proceeds from Sale of PP&E 5,175 4,070 3,876
Net Capital Expenditures $53,377 $55,332 $34,766
Gross Margin Percentage:
Domestic contract compression 65% 65% 64%
International contract
compression 75% 76% 74%
Fabrication 17% 12% 12%
Aftermarket services 21% 17% 20%
Total 46% 48% 48%
Reconciliation of GAAP to Non-GAAP
Financial Information:
Net income $24,960 $21,816 $17,679
Income tax expense 12,827 8,504 9,611
Depreciation and amortization 31,154 30,013 26,439
Interest expense, net 15,152 14,605 13,034
Foreign currency (gain) loss (45) 299 (610)
EBITDA, as adjusted(1) 84,048 75,237 66,153
Selling, general and
administrative 30,149 29,461 21,012
Other (income) loss, net 3 (360) (524)
Gross Margin(1) $114,200 $104,338 $86,641
September 30, June 30, September 30,
2006 2006 2005
Debt and Capital Lease Obligations $914,116 $898,855 $818,646
Stockholders' Equity $927,662 $904,308 $908,605
Total Debt to Capitalization 49.6% 49.8% 47.4%
(1) Management believes disclosure of EBITDA, as adjusted and Gross
Margin, non-GAAP measures, provide useful information to investors
because, when viewed with our GAAP results and accompanying
reconciliations, they provide a more complete understanding of our
performance than GAAP results alone. Management uses EBITDA, as
adjusted and Gross Margin, as supplemental measures to review current
period operating performance, comparability measures and performance
measures for period to period comparisons. In addition, EBITDA, as
adjusted is used by management as a valuation measure.
UNIVERSAL COMPRESSION HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
(Horsepower in thousands)
Three Months Ended
September 30, June 30, September 30,
2006 2006 2005
Total Available Horsepower
(at period end):
Domestic contract compression 2,017 1,989 1,948
International contract
compression 599 595 565
Total 2,616 2,584 2,513
Average Operating Horsepower:
Domestic contract compression 1,792 1,794 1,751
International contract
compression 547 549 524
Total 2,339 2,343 2,275
Horsepower Utilization:
Spot (at period end) 89.8% 90.2% 91.0%
Average 90.0% 91.1% 91.0%
Fabrication Backlog (in millions) $268 $275 $114
SOURCE Universal Compression Holdings, Inc.
11/07/2006
CONTACT: David Oatman, Vice President, Investor Relations, of Universal
Compression Holdings, Inc., +1-713-335-7460
9859 11/07/2006 07:00 EST http://www.prnewswire.com