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Universal Compression Reports Record Revenue, EBITDA, as Adjusted and Earnings Per Share, and Raises Guidance

May, 09, 2006

HOUSTON, May 9 /PRNewswire-FirstCall/ -- Universal Compression Holdings, Inc. (NYSE: UCO) today reported net income of $20.9 million, or $0.68 per diluted share, in the three months ended March 31, 2006 compared to $19.6 million, or $0.60 per diluted share, in the three months ended December 31, 2005 and a net loss of $4.5 million, or $0.14 per diluted share, in the prior year period. The net loss for the three months ended March 31, 2005 included charges of $26.1 million on a pretax basis, or $0.53 per diluted share on an after-tax basis, related to debt extinguishment costs and $3.1 million on a pretax basis, or $0.06 per diluted share on an after-tax basis, related to an asset impairment expense. Excluding these items, net income for the three months ended March 31, 2005 was $14.8 million, or $0.45 per diluted share.

Revenue was $229.1 million in the three months ended March 31, 2006 compared to $224.8 million in the three months ended December 31, 2005 and $193.6 million in the prior year period. EBITDA, as adjusted (as defined below), was $76.0 million in the three months ended March 31, 2006 compared to $74.5 million in the three months ended December 31, 2005 and $56.9 million in the comparable period of the prior year.

Stephen A. Snider, Universal's Chairman, President and Chief Executive Officer, said, "We are pleased with our financial performance in the first quarter of 2006, which included a 51% increase in earnings per share as compared to the prior year period results, excluding debt extinguishment costs and asset impairment expense. Revenue, EBITDA, as adjusted, and earnings per share were again at record levels as market demand remains strong across all of our business segments. Our outlook for the foreseeable future remains positive, driven by favorable current activity levels as well as customer commitments for compression equipment and services well into next year in both the domestic and international markets."

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 June 30, 2006, we expect revenue of $215 million to $225 million and earnings per diluted share of $0.65 to $0.69. For the twelve months ending December 31, 2006, we now expect revenue of $950 million to $970 million and earnings per diluted share of $2.80 to $2.95. Previously reported guidance was revenue of $910 million to $935 million and earnings per diluted share of $2.65 to $2.80. We continue to expect that capital expenditures, net of sale proceeds, will be $210 million to $240 million in calendar year 2006.

Conference Call

We will host a conference call today, May 9, 2006, at 10:00 a.m. Central Time, 11:00 a.m. 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 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 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 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
                                           March 31,  December 31,  March 31,
                                             2006         2005        2005
    Revenue:
        Domestic contract compression       $94,045      $86,778    $76,918
        International contract compression   33,293       33,455     28,739
        Fabrication                          56,309       59,681     48,037
        Aftermarket services                 45,421       44,921     39,942
            Total revenue                   229,068      224,835    193,636

    Costs and expenses:
        Domestic contract compression -
         direct costs                        32,914       30,533     29,240
        International contract
         compression - direct costs           8,397        7,762      6,967
        Fabrication - direct costs           50,105       51,778     44,996
        Aftermarket services - direct costs  35,807       36,050     33,281
        Depreciation and amortization        29,799       27,827     24,390
        Selling, general and administrative  26,581       23,819     20,072
        Interest expense, net                14,057       14,727     14,396
        Debt extinguishment costs               -            -       26,068
        Asset impairment expense                -            -        3,080
        Foreign currency (gain) loss           (609)         755        103
        Other (income) expense                 (733)         388       (897)
            Total costs and expenses        196,318      193,639    201,696

    Income (loss) before income taxes        32,750       31,196     (8,060)

    Income tax expense (benefit)             11,875       11,642     (3,570)

        Net income (loss)                   $20,875      $19,554    $(4,490)

    Weighted average common and common
     equivalent shares outstanding:
        Basic                                29,629       31,616     31,580

        Diluted                              30,700       32,522     31,580

    Earnings (loss) per share:
        Basic                                 $0.70        $0.62     $(0.14)

        Diluted                               $0.68        $0.60     $(0.14)



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

                                                  Three Months Ended
                                            March 31,   December 31, March 31,
                                              2006         2005        2005
    Revenue:
        Domestic contract compression       $94,045      $86,778    $76,918
        International contract compression   33,293       33,455     28,739
        Fabrication                          56,309       59,681     48,037
        Aftermarket services                 45,421       44,921     39,942
            Total                          $229,068     $224,835   $193,636

    Gross Profit:
        Domestic contract compression       $61,131      $56,245    $47,678
        International contract compression   24,896       25,693     21,772
        Fabrication                           6,204        7,903      3,041
        Aftermarket services                  9,614        8,871      6,661
            Total                          $101,845      $98,712    $79,152

    Selling, General and Administrative     $26,581      $23,819    $20,072
        % of Revenue                             12%          11%        10%

    EBITDA, as adjusted                     $75,997      $74,505    $56,897
        % of Revenue                             33%          33%        29%

    Capital Expenditures                    $38,732      $37,557    $38,283
    Proceeds from Sale of PP&E                1,685        3,532      6,003
    Net Capital Expenditures                $37,047      $34,025    $32,280

    Gross Margin:
        Domestic contract compression            65%          65%        62%
        International contract compression       75%          77%        76%
        Fabrication                              11%          13%         6%
        Aftermarket services                     21%          20%        17%
        Total                                    44%          44%        41%

    Reconciliation of GAAP to Non-GAAP
     Financial Information:
        Net income (loss)                   $20,875      $19,554    $(4,490)
        Income tax expense (benefit)         11,875       11,642     (3,570)
        Depreciation and amortization        29,799       27,827     24,390
        Interest expense, net                14,057       14,727     14,396
        Foreign currency (gain) loss           (609)         755        103
        Debt extinguishment costs               -            -       26,068
        EBITDA, as adjusted (1)             $75,997      $74,505    $56,897


                                          March 31,    December 31, March 31,
                                             2006          2005       2005

    Debt and Capital Lease Obligations     $898,314     $923,341   $858,096
    Stockholders' Equity                   $861,278     $831,312   $861,672
    Total Debt to Capitalization               51.1%        52.6%      49.9%

    (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
                                             March 31,  December 31, March 31,
                                               2006         2005       2005
    Total Available Horsepower (at period
     end):
          Domestic contract compression        1,968        1,965      1,925
          International contract compression     591          584        544
              Total                            2,559        2,549      2,469

    Average Contracted Horsepower:
          Domestic contract compression        1,803        1,787      1,717
          International contract compression     548          538        484
              Total                            2,351        2,325      2,201

    Horsepower Utilization:
          Spot (at period end)                  92.2%        92.3%      90.4%
          Average                               92.1%        91.7%      90.0%

    Fabrication Backlog (in millions)           $228         $145        $69

SOURCE Universal Compression Holdings, Inc.
05/09/2006

CONTACT: David Oatman, Vice President, Investor Relations, +1-713-335-7460, of Universal Compression Holdings, Inc.

2074 05/09/2006 08:00 EDT http://www.prnewswire.com

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