8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  July 21, 2005

UNIVERSAL COMPRESSION HOLDINGS, INC.
UNIVERSAL COMPRESSION, INC.

(Exact name of registrants as specified in their charters)

Delaware Texas	001-15843 333-48279	13-3989167 74-1282680
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
4444 Brittmoore Road Houston, Texas		77041
(Address of principal executive offices)		(Zip Code)

Registrants’ telephone number, including area code: (713) 335-7000

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.   Results of Operations and Financial Condition.

On July 27, 2005, Universal Compression Holdings, Inc. issued a press release announcing earnings for its fiscal quarter ended June 30, 2005.  A copy of the press release is furnished herewith as Exhibit 99.1.

Item 5.02.  Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

(c)Appointment of Principal Officer.

Effective July 21, 2005, Kenneth R. Bickett, age 43, joined Universal Compression, Inc. as Vice President, Accounting and Corporate Controller.  In this position, Mr. Bickett will also serve as the principal accounting officer of Universal Compression, Inc.

Effective July 26, 2005, Mr. Bickett was appointed Vice President, Accounting and Corporate Controller of Universal Compression Holdings, Inc.  In this position, Mr. Bickett will also serve as the principal accounting officer of Universal Compression Holdings, Inc.

Prior to joining Universal, Mr. Bickett most recently served as Vice President and Assistant Controller for Reliant Energy, Inc., an electricity and energy services provider.  Prior to joining Reliant Energy in 2002, Mr. Bickett was employed by Azurix Corp., a water and wastewater utility and services company, since 1998 where he most recently served as Vice President and Controller.

Item 9.01.  Financial Statements and Exhibits.

(c)           Exhibits.

99.1         Press Release, dated July 27, 2005 (regarding earnings for the fiscal quarter ended June 30, 2005)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.

	UNIVERSAL COMPRESSION HOLDINGS, INC. UNIVERSAL COMPRESSION, INC.
	(Registrants)
Date: July 27, 2005
	By:	/s/ J. Michael Anderson
		J. Michael Anderson
		Senior Vice President and Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Exhibit
99.1	Press Release, dated July 27, 2005 (regarding earnings for the fiscal quarter ended June 30, 2005)

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EX-99.1

Exhibit 99.1

Universal Compression Holdings, Inc.
4444 Brittmoore Road
Houston, Texas 77041
NYSE: UCO

Contact:

David Oatman

Vice President, Investor Relations

713-335-7460

FOR IMMEDIATE RELEASE

WEDNESDAY, JULY 27, 2005

UNIVERSAL COMPRESSION REPORTS RECORD EARNINGS OF

$0.56 PER SHARE IN FISCAL 2006 FIRST QUARTER AND RAISES GUIDANCE

Houston, July 27, 2005 — Universal Compression Holdings, Inc. (NYSE: UCO), a leading provider of natural gas compression services, today reported net income of $18.1 million, or $0.56 per diluted share, in the fiscal 2006 first quarter compared to a net loss of $4.5 million, or $0.14 per diluted share, in the fiscal 2005 fourth quarter and net income of $11.8 million, or $0.37 per diluted share, in the fiscal 2005 first quarter.

Revenue was a record $207.7 million in the fiscal 2006 first quarter compared to $193.6 million in the fiscal 2005 fourth quarter and $184.9 million in the fiscal 2005 first quarter.  EBITDA, as adjusted (as defined below), was a record $65.2 million in the fiscal 2006 first quarter compared to $56.9 million in the fiscal 2005 fourth quarter and $55.1 million in the fiscal 2005 first quarter.

“We are pleased with our overall performance in the fiscal 2006 first quarter, which included a 75% increase in earnings per share as compared to the fiscal 2005 first quarter results before gain on termination of interest rate swaps and debt extinguishment costs,” said Stephen A. Snider, Universal’s President and Chief Executive Officer.  “With continuing robust market conditions, we are selectively adding new, large-horsepower units to our contract compression fleet to meet customer requirements in domestic and international markets.”

Fiscal 2005 fourth quarter net income 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, fiscal 2005 fourth quarter net income was $14.8 million, or $0.45 per diluted share.  Fiscal 2005 first quarter net income included a gain of $3.2 million on a pretax basis, or $0.06 per diluted share on an after-tax basis, related to the termination of interest rate swaps and a charge of $0.5 million on a pretax basis, or $0.01 per diluted share on an after-tax basis, related to debt extinguishment costs.  Excluding these items, fiscal 2005 first quarter net income was $10.1 million, or $0.32 per diluted share.

MORE

“We are investing in key initiatives to help support the future growth of our company.  These initiatives include an increased marketing and business development commitment targeted at aftermarket service and international expansion, and a new company-wide enterprise resource planning system, which is being implemented during fiscal 2006,” added Michael Anderson, Universal’s Chief Financial Officer.

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 September 30, 2005, the Company expects revenue to be $180 million to $190 million and earnings per diluted share to be $0.51 to $0.55.  For the twelve months ending March 31, 2006, the Company now expects revenue of $800 million to $820 million and earnings per diluted share of $2.15 to $2.30; previous guidance was revenue of $775 million to $800 million and earnings per diluted share of $2.05 to $2.20.  The Company continues to expect that capital expenditures, net of sale proceeds, will be $125 million to $140 million in fiscal 2006.

Conference Call

Universal will host a conference call today, July 27, 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 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

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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; 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.

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UNIVERSAL COMPRESSION HOLDINGS, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	Three Months Ended
	June 30, 2005			March 31, 2005			June 30, 2004
Revenue:
Domestic contract compression	$	79,672		$	76,918		$	70,973
International contract compression	30,300			28,739			22,746
Fabrication	55,836			48,037			57,362
Aftermarket services	41,876			39,942			33,793
Total revenue	207,684			193,636			184,874
Costs and expenses:
Domestic contract compression - direct costs	27,776			29,240			26,265
International contract compression - direct costs	7,907			6,967			4,913
Fabrication - direct costs	52,972			44,996			53,336
Aftermarket services - direct costs	33,047			33,281			26,612
Depreciation and amortization	25,633			24,390			22,673
Selling, general and administrative	20,438			20,072			18,215
Interest expense, net	12,460			14,396			16,817
Foreign currency (gain) loss	(837		)	103			(358		)
Other (income) expense	352			(897		)	417
Debt extinguishment costs	—			26,068			475
Gain on termination of interest rate swaps	—			—			(3,197		)
Asset impairment costs	—			3,080			—
Total costs and expenses	179,748			201,696			166,168
Income (loss) before income taxes	27,936			(8,060		)	18,706
Income tax expense (benefit)	9,800			(3,570		)	6,921
Net income (loss)	$	18,136		$	(4,490	)	$	11,785
Weighted average common and common equivalent shares outstanding:
Basic	31,800			31,580			31,248
Diluted	32,563			31,580			31,880
Earnings (loss) per share:
Basic	$	0.57		$	(0.14	)	$	0.38
Diluted	$	0.56		$	(0.14	)	$	0.37

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UNIVERSAL COMPRESSION HOLDINGS, INC.

UNAUDITED SUPPLEMENTAL INFORMATION

(Dollars in thousands)

	Three Months Ended
	June 30, 2005			March 31, 2005			June 30, 2004
Revenue:
Domestic contract compression	$	79,672		$	76,918		$	70,973
International contract compression	30,300			28,739			22,746
Fabrication	55,836			48,037			57,362
Aftermarket services	41,876			39,942			33,793
Total	$	207,684		$	193,636		$	184,874
Gross Profit:
Domestic contract compression	$	51,896		$	47,678		$	44,708
International contract compression	22,393			21,772			17,833
Fabrication	2,864			3,041			4,026
Aftermarket services	8,829			6,661			7,181
Total	$	85,982		$	79,152		$	73,748
Selling, General and Administrative	$	20,438		$	20,072		$	18,215
% of Revenue	10		%	10		%	10		%
EBITDA, as adjusted	$	65,192		$	56,897		$	55,116
% of Revenue	31		%	29		%	30		%
Capital Expenditures	$	41,886		$	38,283		$	20,345
Proceeds from Sale of PP&E	4,400			6,003			1,910
Net Capital Expenditures	$	37,486		$	32,280		$	18,435
Profit Margin:
Domestic contract compression	65		%	62		%	63		%
International contract compression	74		%	76		%	78		%
Fabrication	5		%	6		%	7		%
Aftermarket services	21		%	17		%	21		%
Total	41		%	41		%	40		%
Reconciliation of GAAP to Non-GAAP Financial Information:
Net income (loss)	$	18,136		$	(4,490	)	$	11,785
Income tax expense (benefit)	9,800			(3,570		)	6,921
Depreciation and amortization	25,633			24,390			22,673
Interest expense, net	12,460			14,396			16,817
Foreign currency (gain) loss	(837		)	103			(358		)
Debt extinguishment costs	—			26,068			475
Gain on termination of interest rate swaps	—			—			(3,197		)
EBITDA, as adjusted (1)	$	65,192		$	56,897		$	55,116

	June 30, 2005			March 31, 2005			June 30, 2004
Debt and Capital Lease Obligations	$	849,463		$	858,096		$	792,665
Stockholders’ Equity	$	876,705		$	861,672		$	813,508
Total Debt to Capitalization	49.2		%	49.9		%	49.4		%

(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.

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UNIVERSAL COMPRESSION HOLDINGS, INC.

UNAUDITED SUPPLEMENTAL INFORMATION

(Horsepower in thousands)

	Three Months Ended
	June 30, 2005			March 31, 2005			June 30, 2004
Total Available Horsepower (at period end):
Domestic contract compression	1,921			1,925			1,899
International contract compression	566			544			424
Total	2,487			2,469			2,323
Average Contracted Horsepower:
Domestic contract compression	1,740			1,717			1,626
International contract compression	513			484			388
Total	2,253			2,201			2,014
Horsepower Utilization:
Spot (at period end)	91.4		%	90.4		%	87.6		%
Average	90.7		%	90.0		%	86.7		%
Fabrication Backlog (in millions)	$	73		$	69		$	81

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