EX-99.1 2 a06-5650_1ex99d1.htm EXHIBIT 99

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

THURSDAY, FEBRUARY 23, 2006

 

UNIVERSAL COMPRESSION REPORTS 36% INCREASE IN EARNINGS PER
DILUTED SHARE COMPARED TO PRIOR YEAR PERIOD

 

Houston, February 23, 2006 — 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.”

 

MORE

 


 

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 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 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

 

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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 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.

 

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UNIVERSAL COMPRESSION HOLDINGS, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

 

 

 

Three Months Ended

 

 

 

December 31,
2005

 

September 30,
2005

 

December 31,
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

 

 

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UNIVERSAL COMPRESSION HOLDINGS, INC.

UNAUDITED SUPPLEMENTAL INFORMATION

(Dollars in thousands)

 

 

 

Three Months Ended

 

 

 

December 31,
2005

 

September 30,
2005

 

December 31,
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,
2005

 

September 30,
2005

 

December 31,
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.

 

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UNIVERSAL COMPRESSION HOLDINGS, INC.

UNAUDITED SUPPLEMENTAL INFORMATION

(Horsepower in thousands)

 

 

 

Three Months Ended

 

 

 

December 31,
2005

 

September 30,
2005

 

December 31,
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

 

 

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