View all news

Universal Compression Reports 36% Increase in Earnings Per Diluted Share Compared to Prior Year Period

February, 23, 2006

HOUSTON, Feb. 23 /PRNewswire-FirstCall/ -- Universal Compression Holdings, Inc. (NYSE: UCO) today reported net income of $19.6 million, or $0.60 per diluted share, in the three months ended December 31, 2005 compared to $17.7 million, or $0.54 per diluted share, in the three months ended September 30, 2005 and $14.1 million, or $0.44 per diluted share, in the prior year period.

Revenue was $224.8 million in the three months ended December 31, 2005 compared to $181.1 million in the three months ended September 30, 2005 and $192.7 million in the prior year period. EBITDA, as adjusted (as defined below), was $74.5 million in the three months ended December 31, 2005 compared to $66.2 million in the three months ended September 30, 2005 and $61.0 million in the prior year period.

Stephen A. Snider, Universal's President and Chief Executive Officer, said, "We are pleased with our financial performance for the three months ended December 31, 2005 which included record levels of revenue, EBITDA, as adjusted, and earnings per diluted share. Market demand for our products and services continues to be robust, as each of our four business segments achieved higher revenue and gross profit levels as compared to the three month periods ended September 30, 2005 and December 31, 2004. We are excited about our momentum going into 2006, as activity levels and backlog totals remain strong."

Michael Anderson, Universal's Chief Financial Officer, added, "During December, Weatherford International Ltd. sold its remaining 6.75 million share ownership position in Universal. In this transaction, we repurchased 2.4 million shares at a total cost of $100 million, funded largely with borrowings under our senior credit facility. We believe our repurchase of shares was a good investment and expect the repurchase to be accretive to our earnings per share in 2006. Additionally, we believe our recently announced change in fiscal year end from March to December will simplify how investors analyze Universal 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 March 31, 2006, Universal expects revenue of $215 million to $225 million and earnings per diluted share of $0.58 to $0.62. For the twelve months ending December 31, 2006, Universal expects revenue of $910 million to $935 million and earnings per diluted share of $2.65 to $2.80. Capital expenditures, net of sale proceeds, are expected to be $210 million to $240 million in 2006. Universal's earnings per diluted share guidance includes expenses of approximately $0.10 per diluted share for the twelve months ending December 31, 2006 due to the adoption of Statement of Financial Accounting Standards No. 123R, under which non-cash cost relating to common stock-based compensation is recognized in financial statements beginning in calendar year 2006.

Conference Call

Universal will host a conference call today, February 23, 2006, 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; our ability to timely, properly and cost- effectively implement our enterprise resource planning system; employment workforce factors, including our ability to hire, train and retain key employees; 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; and changes in economic conditions, laws or regulatory conditions in the U.S. and other countries in which we operate.

These forward-looking-statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties 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, which are available through our website http://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
                                     December 31,  September 30,  December 31,
                                        2005           2005          2004
    Revenue:
        Domestic contract compression  $86,778       $81,964        $75,170
        International contract
         compression                    33,455        31,076         27,810
        Fabrication                     59,681        28,193         50,823
        Aftermarket services            44,921        39,895         38,873
            Total revenue              224,835       181,128        192,676

    Costs and expenses:
        Domestic contract compression -
         direct costs                   30,533        29,849         27,071
        International contract
         compression - direct costs      7,762         8,087          6,427
        Fabrication - direct costs      51,778        24,769         48,605
        Aftermarket services - direct
         costs                          36,050        31,782         30,917
        Depreciation and amortization   27,827        26,439         23,611
        Selling, general and
         administrative                 23,819        21,012         19,224
        Interest expense, net           14,727        13,034         16,821
        Foreign currency (gain) loss       755          (610)          (238)
        Other (income) expense             388          (524)          (589)
            Total costs and expenses   193,639       153,838        171,849

    Income before income taxes          31,196        27,290         20,827

    Income tax expense                  11,642         9,611          6,702

        Net income                     $19,554       $17,679        $14,125

    Weighted average common and common
       equivalent shares outstanding:
        Basic                           31,616        31,902         31,406

        Diluted                         32,522        32,836         32,082

    Earnings per share:
        Basic                            $0.62         $0.55          $0.45

        Diluted                          $0.60         $0.54          $0.44



                                   UNIVERSAL COMPRESSION HOLDINGS, INC.
                                    UNAUDITED SUPPLEMENTAL INFORMATION
                                          (Dollars in thousands)

                                                  Three Months Ended
                                     December 31,  September 30,  December 31,
                                        2005           2005          2004
    Revenue:
        Domestic contract compression  $86,778       $81,964        $75,170
        International contract
         compression                    33,455        31,076         27,810
        Fabrication                     59,681        28,193         50,823
        Aftermarket services            44,921        39,895         38,873
            Total                     $224,835      $181,128       $192,676

    Gross Profit:
        Domestic contract compression  $56,245       $52,115        $48,099
        International contract
         compression                    25,693        22,989         21,383
        Fabrication                      7,903         3,424          2,218
        Aftermarket services             8,871         8,113          7,956
            Total                      $98,712       $86,641        $79,656

    Selling, General and
     Administrative                    $23,819       $21,012        $19,224
        % of Revenue                        11%           12%            10%

    EBITDA, as adjusted                $74,505       $66,153        $61,021
        % of Revenue                        33%           37%            32%

    Capital Expenditures               $37,557       $38,642        $45,797
    Proceeds from Sale of PP&E           3,532         3,876         13,408
    Net Capital Expenditures           $34,025       $34,766        $32,389

    Gross Margin:
        Domestic contract compression       65%           64%            64%
        International contract
         compression                        77%           74%            77%
        Fabrication                         13%           12%             4%
        Aftermarket services                20%           20%            20%
        Total                               44%           48%            41%

    Reconciliation of GAAP to Non-GAAP
     Financial Information:
        Net income                     $19,554       $17,679        $14,125
        Income tax expense              11,642         9,611          6,702
        Depreciation and amortization   27,827        26,439         23,611
        Interest expense, net           14,727        13,034         16,821
        Foreign currency (gain) loss       755          (610)          (238)
        EBITDA, as adjusted (1)        $74,505       $66,153        $61,021

                                     December 31,  September 30,  December 31,
                                        2005           2005          2004
    Debt and Capital Lease
     Obligations                      $923,341      $818,646       $847,057
    Stockholders' Equity              $831,312      $908,605       $856,334
    Total Debt to Capitalization          52.6%         47.4%          49.7%

    (1) 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
                                     December 31,  September 30,  December 31,
                                        2005           2005          2004
    Total Available Horsepower (at
     period end):
          Domestic contract
           compression                   1,965         1,948          1,908
          International contract
           compression                     584           565            518
              Total                      2,549         2,513          2,426

    Average Contracted Horsepower:
          Domestic contract compression  1,787         1,751          1,696
          International contract
           compression                     538           524            442
              Total                      2,325         2,275          2,138

    Horsepower Utilization:
          Spot (at period end)            92.3%         91.0%          89.9%
          Average                         91.7%         91.0%          89.8%

    Fabrication Backlog (in millions)     $145          $114            $83

SOURCE Universal Compression Holdings, Inc.
02/23/2006

CONTACT: David Oatman, Vice President, Investor Relations of Universal, 1-713-335-7460

2632 02/23/2006 08:00 EST http://www.prnewswire.com

Multimedia Files:

Categories: Press Releases
View all news