EX-99.1 2 a06-11470_1ex99d1.htm PRESS RELEASE DATED MAY 9, 2006

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

TUESDAY, MAY 9, 2006

 

UNIVERSAL COMPRESSION REPORTS RECORD REVENUE, EBITDA, AS ADJUSTED AND EARNINGS PER SHARE, AND RAISES GUIDANCE

 

Houston, May 9, 2006 — 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.”

 

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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 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 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

 

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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 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

 

 

 

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

)

 

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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.

 

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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

 

 

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