-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Re4Iav7GJr3OfUGXTpZ0jHoLKlDDRnTkVvaRFiSwSqjhF3tkoXwAOGb0qMdoRw7X lPHtsPbgqsx6l3jM1khFiA== 0000899243-02-002158.txt : 20020806 0000899243-02-002158.hdr.sgml : 20020806 20020806125620 ACCESSION NUMBER: 0000899243-02-002158 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020805 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020806 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HANOVER COMPRESSOR CO / CENTRAL INDEX KEY: 0000909413 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 752344249 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13071 FILM NUMBER: 02720417 BUSINESS ADDRESS: STREET 1: 12001 N HOUSTON ROSSLYN CITY: HOUSTON STATE: TX ZIP: 77086 BUSINESS PHONE: 2814478787 MAIL ADDRESS: STREET 1: 12001 NORTH HOUSTON ROSSLYN CITY: HOUSTON STATE: TX ZIP: 77086 FORMER COMPANY: FORMER CONFORMED NAME: HANOVER COMPRESSOR CO DATE OF NAME CHANGE: 19960716 8-K 1 d8k.txt CURRENT REPORT ON FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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): August 5, 2002 HANOVER COMPRESSOR COMPANY (Exact Name of Registrant as Specified in Charter) Delaware 1-13071 76-0625124 (State or Other Jurisdiction (Commission File (IRS Employer of Incorporation) Number) Identification No.) 12001 North Houston Rosslyn Houston, Texas 77086 77086 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (281) 447-8787 Item 5. Other Events. Hanover Compressor Company (NYSE: HC), the leading provider of outsourced natural gas compression services, today reported higher revenues and lower cash flow and earnings per share for the second quarter ended June 30, 2002, compared with the same period a year earlier. The lower results include the impact of several charges the Company recognized in the second quarter. An independent committee of the board of directors, aided by outside legal counsel, recently completed an extensive investigation. One result of that investigation is an additional restatement of 2000 and 2001 financial results. Quarterly Results - Summary Second quarter total revenue was $267.2 million compared with $245.4 million a year earlier. Cash flow (net income before interest expense, leasing expense, distributions on mandatorily redeemable convertible preferred securities, income taxes, and depreciation and amortization) decreased to $50.2 million ($76.4 million excluding write downs) compared with $74.1 million for the same quarter a year earlier. Net loss for the second quarter was $55.2 million or $0.70 per fully diluted share, burdened by impairment charges of $0.77 per share along with an increase in the effective tax rate and other unusual items. "Hanover's core businesses of compression, fabrication and parts and services before write downs held up well during the second quarter compared to the first quarter despite difficult market conditions and significant operation distractions that occurred in the first and second quarter," said Victor E. Grijalva, chairman and chief executive officer. "This was achieved thanks to the competence and dedication of Hanover's people, and to the support of our valued customers during this difficult period. "Hanover's directors are taking significant steps to position the Company for the next phase of earnings recovery while focusing on liquidity and capital discipline, corporate governance and transparency," Grijalva said. "Although our domestic markets continued to be sluggish due to lower commodity prices affecting the profitability of our customers, our international markets continue to strengthen. We have a solid business foundation, and we intend to take a disciplined approach to build upon the entrepreneurial spirit of this organization." Quarterly Results - Revenue & Profit Compression rental revenues for the quarter grew 44% over the second quarter of 2001 to $129.3 million. Gross profit margins for the compression rental segment in the second quarter of 2002 were 70% compared to 66% in the second quarter 2001. Related compression parts and service segment revenues increased 36% over the second quarter a year ago to $67.9 million, delivering gross profit margins of 19% (excluding inventory write downs) for the second quarter 2002 versus 32% in the second quarter 2001. Compressor fabrication revenue decreased 44% over the same quarter a year earlier to $32.4 million. Compressor fabrication gross profit margin for the quarter was 13% versus 16% in the second quarter 2001. Production and processing equipment fabrication revenue was $31.6 million compared with $43.8 million in the year earlier quarter, while that business segment generated gross profit margins of 13% for the quarter compared with 22% in the second quarter 2001. Second quarter earnings included charges for unusual items, including FAS 133, the ongoing impact of Argentina legislation changes, S-4 delay fees and related costs, and costs associated with the independent committee review. The second quarter 2002 results reflect a reduction in amortization expense of $2.9 million resulting from the required adoption of FAS 142. The Company's second quarter 2002 results were also impacted by a change in the estimated useful life of certain types of the Company's compression equipment. This change in estimate was previously announced in the Company's third quarter 2001 earnings release. For the second quarter 2002, depreciation expense was reduced because of this change by approximately $3.7 million. The Company estimates that its compression fabrication and production and processing equipment fabrication backlogs are currently approximately $70 million. Impairment Second quarter 2002 net income reflects a non-cash pretax charge of $47.5 million, ($44.2 million after tax) for FAS 142, "Goodwill and Other Intangible Assets," impairment that reduced earnings per fully diluted share by $0.56. Under FAS 142, Hanover is required to periodically review for impairment the goodwill allocated to the Company's five business segments. The Company conducted a review during the quarter and recorded an estimated $47.5 million, pretax, goodwill impairment charge related to the Production and Processing Equipment Fabrication business. The results also reflect $14.1 million, pretax, of non-core asset writedowns and $12.1 million, pretax, of parts and power generation inventory writedowns. The Company determined that these assets and inventory were either obsolete, excess or carried at a price above current market. Net income before these charges was $6.0 million or $0.08 per fully diluted share, compared with $21.2 million or $0.28 per fully diluted share a year earlier. Fully diluted shares outstanding for the quarter ended June 30, 2002, were 79.4 million compared with 79.2 million for the year earlier period. Cash flow excluding the impact of the charges was $76.4 million. Liquidity & Other The Company had capital expenditures during the quarter of approximately $73 million, within the Company's self-funded level for the quarter. As a result, liquidity available under the Company's revolver increased from approximately $85 million in March to more than $120 million as of June 30, 2002. For 2002, the Company expects to spend approximately $250 million on rental equipment fleet additions, including equipment overhauls and other maintenance capital, but may increase this amount somewhat to take advantage of attractive opportunities. During the second quarter, the Company also amended its bank credit facility to allow, subject to certain limitations, the Company to issue $300 million in subordinated debt. "We have made a concerted effort to reduce our capital expenditures to a self-funded level," said John Jackson, chief financial officer. "Hanover's liquidity position continues to improve and reflects the Company's disciplined approach to capital management. During the remainder of 2002, Hanover's goal will be to continue the integration of the Company's acquisitions while carefully managing our liquidity position." The Company's horsepower utilization rate as of June 30, 2002, was 89 percent, down from 93 percent in the year earlier period. The Company has traditionally excluded from the rental utilization certain units from newly acquired companies requiring major maintenance and upgrade to Hanover's standards. A more complete report on available units and utilization will be provided starting with the third quarter report. The rental fleet, which totaled approximately 3.6 million horespower and includes approximately 0.8 million horsepower in international markets, increased 42% over June 30, 2001, reflecting the impact of both acquisitions and continued organic growth. The Company has successfully negotiated arrangements with the majority of its customers in Argentina to receive a partial reimbursement for the legislative currency adjustment adopted earlier this year. Reimbursements from these negotiations commenced in late June and are expected to continue in the third quarter. The Company received approximately $1 million in partial reimbursements in the second quarter and expects to receive approximately $8 million to $9 million in the third quarter. Restatement An independent committee of the board of directors, aided by outside legal counsel, recently completed an extensive investigation of transactions recorded during 2000 and 2001, including those transactions restated by the Company last February. The investigation ultimately focused on a group of additional transactions similar to those included in the February restatement and involving revenues of $15.3 million and net income of $5.0 million. As a result of this investigation, the Company determined and its independent auditors agreed that several transactions will be restated, including one that was the subject of restatement last February. For 2001, the Company reduced revenue by $7.1 million of the total $1.1 billion, and reduced pretax expenses by $7.4 million. The results, after taxes, added $0.2 million to the total $72.6 million of net income for the year ended December 31, 2001, with fully diluted per share earnings remaining $0.95. The restatement also reduced 2000 revenue by $2.2 million of the total $566.1 million and $1.5 million of the total $51.2 million of net income for the year ended December 31, 2000, and reduced fully diluted per share earnings of $0.77 by $0.02. On February 26, 2002, the Company announced a restatement based upon an investigation that was concluded by counsel under the direction of the Audit Committee. While the Company did not believe any additional matters would require restatement when it made its February announcement, and although the amounts involved in the present restatement are small in the context of the Company's overall revenues and net income, additional information came to light as part of the investigation conducted by a committee of the board since February that made the current restatement necessary under the circumstances. The Company will provide information concerning its internal investigations to the Securities and Exchange Commission. "The committee spent months conducting an extensive investigation which involved thousands of documents and numerous interviews," Grijalva said. "Our Board has taken this matter very seriously, and we are now eager to focus our energy and attention on addressing our customers' needs and on building a solid foundation for the future. We believe that Hanover will be well positioned to meet the challenges that lie ahead with new leadership at the helm to direct the outstanding talent at the Company." The restated transactions include the correction of $7.5 million of revenue and $0.8 million of net income from the sale of a power generation unit. The sale was one of three such turbine sales the Company restated last February after determining that the revenue should have been recognized on these transactions at the time that collection of the sales price was reasonably assured. The transaction in question was restated last February to reflect the fact that the Company did not receive full payment on the $7.5 million turbine sale until the fourth quarter of 2001 and, therefore, recorded the related $0.8 million net income in that quarter. The Company subsequently determined, based on new information related to this transaction, that the turbine sale in question should have been accounted for as an exchange of equipment rather than an asset sale and, consequently, revenue and net income for both the full year and fourth quarter 2001 need to be reduced accordingly. In addition, the Company, with the concurrence of its auditors, restated several other smaller transactions. Conference Call Details The Company will host a conference call at 1:00 p.m. ET, Monday, August 5th, to discuss financial results and other recent announcements. To access the call, participants should dial 913-981-4900 at least ten minutes before the scheduled start time. For those unable to participate, a replay will be available from 4:00 p.m. ET on Monday, August 5th, until midnight on Monday, August 12th. To listen to the replay, please dial 719-457-0820, access code 263214. Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because of the context of the statement and will include words such as "believes," "anticipates," "expects," "estimates," or words of similar import. Similarly, statements that describe Hanover's future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those anticipated as of the date of this press release. These risks and uncertainties include: the loss of market share through competition; the introduction of competing technologies by other companies; a prolonged, substantial reduction in oil and gas prices which could cause a decline in the demand for Hanover's compression and oil and gas production equipment; new governmental safety, health and environmental regulations which could require Hanover to make significant capital expenditures; inability to successfully integrate acquired businesses; currency fluctuations; changes in economic or political conditions in the countries in which Hanover operates; adverse results of regulatory inquiries or shareholder litigation; and legislative changes in the various countries in which Hanover does business. The forward-looking statements included in this press release are only made as of the date of this press release, and Hanover undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. A discussion of these factors is included in the Company's periodic reports filed with the Securities and Exchange Commission. A copy of the press release issued by Hanover with respect to these matters is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements of Business Acquired. Not applicable. (b) Pro Forma Financial Information. Not applicable. (c) Exhibits. 10.75 Amendment dated June 26, 2002 to the (i) the Credit Agreement dated as of December 15, 1997, as amended and restated as of December 3, 2001, among the Company, certain of the Company's subsidiaries, JPMorgan Chase Bank, as administrative agent, and the lenders parties thereto and (ii) certain Synthetic Guarantees referenced in the amendment. 99.1 Press Release, issued August 5, 2002. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. HANOVER COMPRESSOR COMPANY Date: August 6, 2002 By: /s/ Mark S. Berg ------------------------------------- Name: Mark S. Berg Title: Senior Vice President-General Counsel EXHIBIT INDEX Exhibit Number Description - ------- ----------- 10.75 Amendment dated June 26, 2002 to the (i) the Credit Agreement dated as of December 15, 1997, as amended and restated as of Decemeber 3, 2001, among the Company, certain of the Company's subsidiaries, JPMorgan Chase Bank, as administrative agent, and the lenders parties thereto and (ii) certain Synthetic Guarantees referenced in the amendment. 99.1 Press Release, issued August 5, 2002. EX-10.75 3 dex1075.txt AMENDMENT TO CREDIT AGREEMENT Exhibit 10.75 AMENDMENT AMENDMENT, dated as of June 26, 2002 (this "Amendment"), under (i) the Guarantee (the "2000B Guarantee") and the Credit Agreement (the "2000B Credit Agreement"), as defined in the Participation Agreement, dated as of October 27, 2000 (as the same may have been, amended, supplemented or otherwise modified from time to time, the "2000B Participation Agreement"), among Hanover Compression Limited Partnership (formerly known as Hanover Compression Inc., "HCC"), Hanover Equipment Trust 2000B, (the "2000B Lessor"), Bank Hapoalim B.M. and FBTC Leasing Corp., as investors, the lenders parties thereto (the "2000B Lenders") and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), a New York banking corporation, as the administrative agent for the 2000B Lenders (the "Administrative Agent"), (ii) the Guarantee (the "2000A Guarantee") and the Credit Agreement (the "2000A Credit Agreement"), as defined in the Participation Agreement, dated as of March 13, 2000 (as the same may have been, amended, supplemented or otherwise modified from time to time, the "2000A Participation Agreement"), among HCC, Hanover Equipment Trust 2000A (the "2000A Lessor"), First Union National Bank and Scotiabanc Inc., as investors, the lenders parties thereto (the "2000A Lenders") and the Administrative Agent, as agent for the 2000A Lenders, (iii) the Guarantee (the "1999 Guarantee") and the Credit Agreement (the "1999 Credit Agreement"), as defined in the Participation Agreement, dated as of June 15, 1999 (as the same may have been, amended, supplemented or otherwise modified from time to time, the "1999 Participation Agreement"), among HCC, Hanover Equipment Trust 1999A (the "1999 Lessor"), Societe Generale Financial Corporation and FBTC Leasing Corp., as investors, the lenders parties thereto (the "1999 Lenders") and the Administrative Agent, as agent for the 1999 Lenders, and (iv) the Credit Agreement (as the same may have been, amended, supplemented or otherwise modified from time to time, the "Senior Credit Agreement"), dated as of December 15, 1997, as amended and restated on December 3, 2001, among Hanover Compressor Company ("Holdings"), HCC, the Administrative Agent and the lenders parties thereto (the "Senior Credit Lenders"). The 2000B Participation Agreement, the 2000A Participation Agreement and the 1999 Participation Agreement are collectively hereinafter referred to as the "Participation Agreements". The 2000B Guarantee, the 2000A Guarantee and the 1999 Guarantee are collectively hereinafter referred to as the "Synthetic Guarantees", and the 2000B Credit Agreement, the 2000A Credit Agreement and the 1999 Credit Agreement are collectively referred to herein as the "Synthetic Credit Agreements". W I T N E S S E T H: - - - - - - - - - - WHEREAS, Holdings and HCC have requested that the Administrative Agent and the Required Lenders under each of the Synthetic Guarantees and the Senior Credit Agreement amend certain of the provisions of each of the Synthetic Guarantees and the Senior Credit Agreement; and WHEREAS, the Administrative Agent and the Required Lenders under each of the Synthetic Guarantees and the Senior Credit Agreement are agreeable to the requested amendments, but only on the terms and subject to the conditions set forth herein; NOW THEREFORE, in consideration of the premises herein contained and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows: I. Defined Terms. As used in this Amendment, terms defined in the preamble hereof and the recitals hereto are used herein as so defined, and terms defined in any of the Participation Agreements, the Synthetic Guarantees and the Senior Credit Agreement and not defined herein are used herein as therein defined. II. Amendments to the Senior Credit Agreement, the Synthetic Guarantees and Annex A of the Participation Agreements. Amendments to Subsection 1.1 of the Senior Credit Agreement and Annex A of the Participation Agreements. (a) Subsection 1.1 of the Senior Credit Agreement and Annex A of each of the Participation Agreements is hereby amended by adding the following defined terms in proper alphabetical order: "Amendment Effective Date": June 21, 2002. "Holdings Subordinated Notes": subordinated notes to be offered and issued by Holdings in an aggregate principal amount not to exceed $300,000,000 on terms and conditions then customary for high-yield subordinated debt securities issued in a public offering or a Rule 144A offering (as reasonably determined by the Administrative Agent) and having subordination terms customary for high-yield subordinated debt securities (as reasonably determined by the Administrative Agent). "Non-Recourse Indebtedness": (i) Indebtedness of Unrestricted Subsidiaries or Unqualified Subsidiaries (a) as to which neither Holdings nor any of its Qualified Subsidiaries (x) provides any guarantee or credit support of any kind (including any undertaking, guarantee, indemnity, agreement or instrument that would constitute Indebtedness), or (y) is directly or indirectly liable (as guarantor or otherwise) and (b) the explicit terms of which provide that there is no recourse against any of the assets of Holdings or its Qualified Subsidiaries (other than the Capital Stock of an Unqualified Subsidiary) or that recourse is limited to assets which do not include the assets of Holdings or its Qualified Subsidiaries (other than the Capital Stock of an Unqualified Subsidiary) or (ii) Indebtedness of Unrestricted Subsidiaries or Unqualified Subsidiaries incurred solely to finance the acquisition or construction of specific property that is acquired after the Amendment Effective Date provided that payment of such Indebtedness is expressly stated to be recourse solely to such specified property and the proceeds thereof and such Indebtedness is incurred contemporaneously with the acquisition or construction of such property. "Tranche B Balance Sheet Loans": any Obligations of Holdings and its Subsidiaries under the Equipment Lease Tranche B Loans or the Investor Contributions (as defined in each of the Participation Agreements) that are required to be reflected as Indebtedness on the consolidated balance sheet of Holdings. "Pigap II Contingent Obligation": the obligation to make a payment pursuant to Section 1.2(a)(ii) of that certain Purchase Agreement entered into as of June 28, 2001 among Schlumberger Technology Corporation, Camco International, Inc., Schlumberger Oilfield Holdings, Ltd., Holdings and HCC, as amended, restated, supplemented or otherwise modified from time to time. (b) Section 1.1 of the Senior Credit Agreement is hereby amended by adding the following defined term in proper alphabetical order: "Equipment Lease Refinancing": as defined in subsection 8.2(o). (c) Annex A of each of the Participation Agreements is hereby amended by adding the following defined term in proper alphabetical order: "Equipment Lease Refinancing": as defined in subsection 11.2(o). (d) Subsection 1.1 of the Senior Credit Agreement and Subsection 1(b) of each of the Synthetic Guarantees is hereby amended by deleting therefrom the definitions of the following defined terms and substituting in place thereof the following new definitions: "Consolidated Senior Indebtedness": at a particular date, as to any Person, Consolidated Indebtedness of such Person and its Subsidiaries other than (i) subordinated guarantees of the 2001A Equipment Lease Securities, (ii) the subordinated guarantee of the 2001B Equipment Lease Securities, (iii) any convertible notes of Holdings, (iv) the TIDES Debentures (and any subordinated debt securities issued in connection with a structured equity financing similar to the TIDES), (v) the Holdings Subordinated Notes, (vi) the Seller Note and (vii) any unsecured subordinated debt or any subordinated guarantees not included in clauses (i)-(vi) above and otherwise permitted herein. (e) Subsection 1.1 of the Senior Credit Agreement and Annex A of each of the Participation Agreements is hereby amended by deleting therefrom the definitions of the following defined terms and substituting in place thereof the following new definitions: "Consolidated EBITDA": for any period, with respect to any Person, the sum of, without duplication, (a) Consolidated Earnings Before Interest and Taxes for such Person for such period plus (b) all amounts attributable to depreciation and amortization, determined in accordance with GAAP (to the extent such amounts have been deducted in determining Consolidated Earnings Before Interest and Taxes for such period) plus (c) all amounts classified as extraordinary charges for such period (to the extent such amounts have been deducted in determining Consolidated Earnings Before Interest and Taxes for such period) plus (d) cash dividends received by Holdings or any Restricted Subsidiary from any Joint Venture or from any Unrestricted Subsidiary or Unqualified Subsidiary that has any Non-Recourse Indebtedness outstanding (to the extent such amounts have been deducted in determining Consolidated Earnings Before Interest and Taxes for such period) plus (e) any non-recurring non-cash expenses or losses (including, non-cash currency charges) (to the extent such amounts have been deducted in determining Consolidated Earnings Before Interest and Taxes for such period), and minus (a) any increase in Consolidated Earnings Before Interest and Taxes to the extent that such increase is a result of the actions underlying the charges referred to in clause (e) above subsequent to the fiscal quarter in which the relevant non-cash expenses or losses were reflected as a charge in the statement of Consolidated Earnings Before Interest and Taxes, all as determined on a consolidated basis and (b) all amounts classified as extraordinary income for such period (to the extent such amounts have been included in determining Consolidated Earnings Before Interest and Taxes for such period); provided that, if during such period such Person shall have made a Material Acquisition, Consolidated EBITDA for such period shall be calculated after giving pro forma effect to such Material Acquisition as if such Material Acquisition had occurred on the first day of such period; provided further that, the foregoing proviso shall have effect only if the Agent has been furnished with unaudited, or, if available, audited, consolidated financial statements of the acquired property for such period, such financial statements to include the balance sheet and statements of income and cash flows reflecting the historical performance of the acquired property for such period to the extent applicable. As used in this definition, "Material Acquisition" means any acquisition of property or series of related acquisitions of property that (a) constitutes assets or constitutes all or substantially all of the equity interests of a Person and (b) involves the payment of consideration of at least $15,000,000. In calculating Consolidated EBITDA, the financial performance of Joint Ventures, Unrestricted Subsidiaries and Unqualified Subsidiaries that have any Non-Recourse Indebtedness outstanding shall be disregarded except as provided in clause (d) above. "Consolidated Interest Expense": for any period, with respect to any Person, the amount which, in conformity with GAAP, would be set forth opposite the caption "interest expense" or any like caption (including, without limitation, imputed interest included in Financing Lease payments) on a consolidated income statement of such Person and its Subsidiaries for such period, plus, to the extent not so included, payments by such Person and its Subsidiaries under the Equipment Leases attributable to (i) interest payments under the Equipment Lease Tranche A Loans and Equipment Lease Tranche B Loans and (ii) the yield to the Investors in connection with the Equipment Lease Transactions and minus, for purposes of calculating the ratio in Section 8.1(e) only, payment in kind of interest on the Seller Note and the Pigap II Contingent Obligation. (f) Subsection 1.1 of the Senior Credit Agreement is hereby amended by deleting therefrom the definition of "Consolidated Indebtedness" and substituting in place thereof the following new definition: "Consolidated Indebtedness": at a particular date, as to any Person, the sum of (without duplication) (a) all Indebtedness of such Person and its Subsidiaries determined on a consolidated basis in accordance with GAAP, excluding (i) Indebtedness in respect of Financing Leases, (ii) the Seller Note plus the principal amount of any additional notes issued in payment of interest thereon and (iii) for purposes of subsections 8.1(a), (c), (d) and (f) only, Non-Recourse Indebtedness and the Tranche B Balance Sheet Loans plus (b) (i) Guarantee Obligations of Holdings and its Subsidiaries in respect of Indebtedness (other than in respect of the Tranche B Balance Sheet Loans), (ii) the Equipment Lease Tranche A Loans, (iii) the Tranche A Portion of the 2001A Equipment Lease Transaction and (iv) the Tranche A Portion of the 2001B Equipment Lease Transaction. (g) Annex A of each of the Participation Agreements is hereby amended by deleting therefrom the definition of "Consolidated Indebtedness" and substituting in place thereof the following new definition: "Consolidated Indebtedness": at a particular date, as to any Person, the sum of (without duplication) (a) all Indebtedness of such Person and its Subsidiaries determined on a consolidated basis in accordance with GAAP, excluding (i) Indebtedness in respect of Financing Leases, (ii) the Seller Note plus the principal amount of any additional notes issued in payment of interest thereon and (iii) for purposes of subsections 11.1(a), (c), (d) and (f) only, Non-Recourse Indebtedness and the Tranche B Balance Sheet Loans plus (b) (i) Guarantee Obligations of Holdings and its Subsidiaries in respect of Indebtedness (other than in respect of the Tranche B Balance Sheet Loans), (ii) the Equipment Lease Tranche A Loans, (iii) the Tranche A Portion of the 2001A Equipment Lease Transaction and (iv) the Tranche A Portion of the 2001B Equipment Lease Transaction. Amendment to Section 5.18 of the Senior Credit Agreement. Section 5.18 of the Senior Credit Agreement is hereby amended by adding the following at the end thereof: From and after the date the Holdings Subordinated Notes are issued (x) the obligations of Holdings under the Holdings Guarantee will constitute "Senior Indebtedness" or "Senior Debt" under the Holdings Subordinated Notes and (y) with respect to each Subsidiary, if any, which has guaranteed the Holdings Subordinated Notes, the obligations of each Subsidiary under the Guarantees will constitute "Guarantor Senior Indebtedness" under the Holdings Subordinated Notes. Amendments to Subsection 8.1 of the Senior Credit Agreement and Subsection 11.1 of each of the Synthetic Guarantees. (a) Subsection 8.1 of the Senior Credit Agreement is hereby amended by deleting Subsection 8.1(d) in its entirety and inserting the following new paragraph in lieu thereof: (d) Consolidated Indebtedness to Consolidated EBITDA. Permit the ratio of Consolidated Indebtedness to Consolidated EBITDA of Holdings for the four consecutive fiscal quarters of Holdings most recently ended ("Consolidated Leverage Ratio") to be greater than 5.0 to 1.0 for the fiscal quarter ending June 30, 2002, 4.75 to 1.0 for the fiscal quarter ending September 30, 2002 and 4.5 to 1.0 thereafter; provided that for purposes of calculating the numerator of the foregoing ratio, Consolidated Indebtedness of Holdings shall exclude seventy percent (70%) of the Indebtedness in respect of the TIDES Debentures. (b) Subsection 11.1 of each of the Synthetic Guarantees is hereby amended by deleting Subsection 11.1(d) in its entirety and inserting the following new paragraph in lieu thereof: (d) Consolidated Indebtedness to Consolidated EBITDA. Permit the ratio of Consolidated Indebtedness to Consolidated EBITDA of Holdings for the four consecutive fiscal quarters of Holdings most recently ended ("Consolidated Leverage Ratio") to be greater than 5.0 to 1.0 for the fiscal quarter ending June 30, 2002, 4.75 to 1.0 for the fiscal quarter ending September 30, 2002 and 4.5 to 1.0 thereafter; provided that for purposes of calculating the numerator of the foregoing ratio, Consolidated Indebtedness of Holdings shall exclude seventy percent (70%) of the Indebtedness in respect of the TIDES Debentures. Amendments to Subsection 8.2 of the Senior Credit Agreement and Subsection 11.2 of each of the Synthetic Guarantees. (a) Subsection 8.2 of the Senior Credit Agreement is hereby amended by deleting paragraph (g) in its entirety and inserting the following new paragraph in lieu thereof: (g) Non-Recourse Indebtedness in an aggregate amount not to exceed $200,000,000 at any time; (b) Subsection 8.2 of the Senior Credit Agreement is hereby amended by deleting the word "and" from the end of paragraph (m), deleting paragraph (n) in its entirety and inserting the following new paragraphs: (n) Indebtedness of Holdings evidenced by the Holdings Subordinated Notes in an aggregate principal amount not to exceed $300,000,000; (o) Indebtedness of Holdings or HCC in an aggregate principal amount not to exceed the amount required to repurchase the Equipment subject to an Equipment Lease (described in clause (i), (ii) or (iii) of the definition thereof) pursuant to the purchase option set forth in Section 20 of such Equipment Lease, provided that the proceeds of such Indebtedness are used solely to purchase such Equipment pursuant to such purchase option (the "Equipment Lease Refinancing"); and (p) unsecured Indebtedness not otherwise permitted by clauses (a)-(o) above not exceeding $125,000,000 in the aggregate at any time outstanding. (c) Subsection 11.2 of each of the Synthetic Guarantees is hereby amended by deleting paragraph (g) in its entirety and inserting the following new paragraph in lieu thereof: (g) Non-Recourse Indebtedness in an aggregate amount not to exceed $200,000,000 at any time; (d) Subsection 11.2 of each of the Synthetic Guarantees is hereby amended by deleting the word "and" from the end of paragraph (m), deleting paragraph (n) in its entirety and inserting the following new paragraphs: (n) Indebtedness of Holdings evidenced by the Holdings Subordinated Notes in an aggregate principal amount not to exceed $300,000,000; (o) Indebtedness of Holdings or HCC in an aggregate principal amount not to exceed the amount required to repurchase the Equipment subject to an Equipment Lease (described in clause (i), (ii) or (iii) of the definition thereof) pursuant to the purchase option set forth in Section 20 of such Equipment Lease, provided that the proceeds of such Indebtedness are used solely to purchase such Equipment pursuant to such purchase option (the "Equipment Lease Refinancing"); and (p) unsecured Indebtedness not otherwise permitted by clauses (a)-(o) above not exceeding $125,000,000 in the aggregate at any time outstanding. Amendments to Subsection 8.4 of the Senior Credit Agreement and Subsection 11.4 of each of the Synthetic Guarantees. Subsection 8.4 of the Senior Credit Agreement and subsection 11.4 of each of the Synthetic Guarantees are hereby amended by (x) deleting the word "and" from the end of paragraph (h), (y) deleting the period from the end of paragraph (i) and inserting the a ";" in lieu thereof and (z) inserting the following new paragraphs: (j) Guarantee Obligations of Subsidiaries of Holdings in respect of the Holdings Subordinated Notes to the extent such Subsidiaries are then acting as Guarantors under the Credit Documents provided that such Guarantee Obligations are subordinated to such Subsidiaries' obligations under the Credit Documents on terms customary for high-yield subordinated debt securities as reasonably determined by the Administrative Agent; and (k) Guarantee Obligations of Holdings and any of its Subsidiaries arising pursuant to the Equipment Lease Refinancing. Amendments to Subsection 8.8 of the Senior Credit Agreement and Subsection 11.8 of each of the Synthetic Guarantees. Subsection 8.8 of the Senior Credit Agreement and Subsection 11.8 of each of the Synthetic Guarantees are hereby amended by inserting the phrase "or the Holdings Subordinated Notes" immediately after the phrase "New Convertible Notes" in clause (viii) thereof. Amendments to Subsection 8.11 of the Senior Credit Agreement and Subsection 11.11 of each of the Synthetic Guarantees. Subsection 8.11 of the Senior Credit Agreement and Subsection 11.11 of each of the Synthetic Guarantees are hereby amended by (x) inserting the phrase "the Holdings Subordinated Notes (other than scheduled cash interest payments, subject to the subordination provisions thereof)," immediately after the phrase "New Convertible Notes (other than scheduled cash interest payments)," in clause (i) thereof and (y) adding the following at the end of the first sentence thereof: to Holdings and its Subsidiaries and if such amendment, modification or change does not affect any applicable subordination provisions and is not adverse to the Lenders. Amendment to Section 9 of the Senior Credit Agreement. Section 9 of the Senior Credit Agreement is hereby amended by adding at the end of paragraph (k) thereof the following: or a "change of control" (however denominated) shall occur under, or for purposes of, the Holdings Subordinated Notes; (l) the obligations of Holdings and its Subsidiaries, if any, under the Holdings Subordinated Notes (when issued), the Seller Note, the lease related to the 2001A Equipment Lease Transaction, the lease related to the 2001B Equipment Lease Transaction or any guarantees thereof shall cease, for any reason, to be validly subordinated to the Obligations or the obligations of the Guarantors under the Guarantees, as the case may be, as provided in the applicable documentation, or any Credit Party, Affiliate of a Credit Party, trustee or holders (representing at least 30% of any series of such subordinated obligations) shall so assert in writing); Effectiveness. This Amendment shall become effective (the "Effective Date") upon fulfillment of the following conditions precedent: (a) Holdings and HCC shall have delivered to the Administrative Agent duly executed copies of this Amendment, (b) the Administrative Agent shall have received duly executed copies of this Amendment from the Required Lenders under each of the Senior Credit Agreement and the Synthetic Guarantees and (c) no Default or Event of Default shall have occurred and be continuing on the date hereof after giving effect to this Amendment. Representations and Warranties. Holdings and HCC hereby represent and warrant that the representations and warranties contained in each of the Senior Credit Agreement, the Loan Documents and the Operative Agreements (as defined in each of the Synthetic Guarantees) will be, after giving effect to this Amendment, true and correct in all material respects, as if made on and as of the date hereof (except those which expressly speak as of a certain date). Continuing Effect of the Senior Credit Agreement, Participation Agreements and Operative Agreements. This Amendment shall not constitute an amendment or waiver of any other provision of the Senior Credit Agreement, the Loan Documents or the Operative Agreements not expressly referred to herein and shall not be construed as a waiver or consent to any further or future action on the part of HCC, Holdings, the 2000B Lessor, the 2000A Lessor or the 1999 Lessor that would require a waiver or consent of the Administrative Agent and/or the 2000B Lenders, the 2000A Lenders or the 1999 Lenders. Except as expressly amended hereby, the provisions of each of the Senior Credit Agreement, the Loan Documents and the Operative Agreements are and shall remain in full force and effect. Counterparts. This Amendment may be executed in counterparts and all of the said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Amendment by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. Expenses. Holdings and HCC agree to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and expenses incurred in connection with the preparation, negotiation and execution of this Amendment, including, without limitation, the fees and disbursements of counsel to the Administrative Agent. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written. HANOVER COMPRESSOR COMPANY By: ----------------------------------------- Name: Title: HANOVER COMPRESSION LIMITED PARTNERSHIP By: ----------------------------------------- Name: Title: JPMORGAN CHASE BANK, as Administrative Agent By: ----------------------------------------- Name: Title: HANOVER COMPRESSOR COMPANY AMENDMENT DATED AS OF JUNE , 2002 ----------------------------------------- [LENDER] By: ----------------------------------------- Title: EX-99.1 4 dex991.txt PRESS RELEASE OF AUGUST 5, 2002 Exhibit 99.1 Hanover Compressor Reports 2nd Quarter 2002 Results and Determinations of Independent Committee Conference Call Scheduled For 1:00 p.m. ET, Monday, August 5th HOUSTON--Aug. 5, 2002--Hanover Compressor Company (NYSE: HC), the leading provider of outsourced natural gas compression services, today reported higher revenues and lower cash flow and earnings per share for the second quarter ended June 30, 2002, compared with the same period a year earlier. The lower results include the impact of several charges the Company recognized in the second quarter. An independent committee of the board of directors, aided by outside legal counsel, recently completed an extensive investigation. One result of that investigation is an additional restatement of 2000 and 2001 financial results. Quarterly Results - Summary Second quarter total revenue was $267.2 million compared with $245.4 million a year earlier. Cash flow (net income before interest expense, leasing expense, distributions on mandatorily redeemable convertible preferred securities, income taxes, and depreciation and amortization) decreased to $50.2 million ($76.4 million excluding write downs) compared with $74.1 million for the same quarter a year earlier. Net loss for the second quarter was $55.2 million or $0.70 per fully diluted share, burdened by impairment charges of $0.77 per share along with an increase in the effective tax rate and other unusual items. "Hanover's core businesses of compression, fabrication and parts and services before write downs held up well during the second quarter compared to the first quarter despite difficult market conditions and significant operation distractions that occurred in the first and second quarter," said Victor E. Grijalva, chairman and chief executive officer. "This was achieved thanks to the competence and dedication of Hanover's people, and to the support of our valued customers during this difficult period. "Hanover's directors are taking significant steps to position the Company for the next phase of earnings recovery while focusing on liquidity and capital discipline, corporate governance and transparency," Grijalva said. "Although our domestic markets continued to be sluggish due to lower commodity prices affecting the profitability of our customers, our international markets continue to strengthen. We have a solid business foundation, and we intend to take a disciplined approach to build upon the entrepreneurial spirit of this organization." Quarterly Results - Revenue & Profit Compression rental revenues for the quarter grew 44% over the second quarter of 2001 to $129.3 million. Gross profit margins for the compression rental segment in the second quarter of 2002 were 70% compared to 66% in the second quarter 2001. Related compression parts and service segment revenues increased 36% over the second quarter a year ago to $67.9 million, delivering gross profit margins of 19% (excluding inventory write downs) for the second quarter 2002 versus 32% in the second quarter 2001. Compressor fabrication revenue decreased 44% over the same quarter a year earlier to $32.4 million. Compressor fabrication gross profit margin for the quarter was 13% versus 16% in the second quarter 2001. Production and processing equipment fabrication revenue was $31.6 million compared with $43.8 million in the year earlier quarter, while that business segment generated gross profit margins of 13% for the quarter compared with 22% in the second quarter 2001. Second quarter earnings included charges for unusual items, including FAS 133, the ongoing impact of Argentina legislation changes, S-4 delay fees and related costs, and costs associated with the independent committee review. The second quarter 2002 results reflect a reduction in amortization expense of $2.9 million resulting from the required adoption of FAS 142. The Company's second quarter 2002 results were also impacted by a change in the estimated useful life of certain types of the Company's compression equipment. This change in estimate was previously announced in the Company's third quarter 2001 earnings release. For the second quarter 2002, depreciation expense was reduced because of this change by approximately $3.7 million. Impairment Second quarter 2002 net income reflects a non-cash pretax charge of $47.5 million, ($44.2 million after tax) for FAS 142, "Goodwill and Other Intangible Assets," impairment that reduced earnings per fully diluted share by $0.56. Under FAS 142, Hanover is required to periodically review for impairment the goodwill allocated to the Company's five business segments. The Company conducted a review during the quarter and recorded an estimated $47.5 million, pretax, goodwill impairment charge related to the Production and Processing Equipment Fabrication business. The results also reflect $14.1 million, pretax, of non-core asset writedowns and $12.1 million, pretax, of parts and power generation inventory writedowns. The Company determined that these assets and inventory were either obsolete, excess or carried at a price above current market. Net income before these charges was $6.0 million or $0.08 per fully diluted share, compared with $21.2 million or $0.28 per fully diluted share a year earlier. Fully diluted shares outstanding for the quarter ended June 30, 2002, were 79.4 million compared with 79.2 million for the year earlier period. Cash flow excluding the impact of the charges was $76.4 million. Liquidity & Other The Company had capital expenditures during the quarter of approximately $73 million, within the Company's self-funded level for the quarter. As a result, liquidity available under the Company's revolver increased from approximately $85 million in March to more than $120 million as of June 30, 2002. "We have made a concerted effort to reduce our capital expenditures to a self-funded level," said John Jackson, chief financial officer. "Hanover's liquidity position continues to improve and reflects the Company's disciplined approach to capital management. During the remainder of 2002, Hanover's goal will be to continue the integration of the Company's acquisitions while carefully managing our liquidity position." The Company's horsepower utilization rate as of June 30, 2002, was 89 percent, down from 93 percent in the year earlier period. The Company has traditionally excluded from the rental utilization certain units from newly acquired companies requiring major maintenance and upgrade to Hanover's standards. A more complete report on available units and utilization will be provided starting with the third quarter report. The total rental fleet increased 42% over June 30, 2001, reflecting the impact of both acquisitions and continued organic growth. The Company has successfully negotiated arrangements with the majority of its customers in Argentina to receive a partial reimbursement for the legislative currency adjustment adopted earlier this year. Reimbursements from these negotiations commenced in late June and are expected to continue in the third quarter. Restatement An independent committee of the board of directors, aided by outside legal counsel, recently completed an extensive investigation of transactions recorded during 2000 and 2001, including those transactions restated by the Company last February. The investigation ultimately focused on a group of additional transactions similar to those included in the February restatement and involving revenues of $15.3 million and net income of $5.0 million. As a result of this investigation, the Company determined and its independent auditors agreed that several transactions will be restated, including one that was the subject of restatement last February. For 2001, the Company reduced revenue by $7.1 million of the total $1.1 billion, and reduced pretax expenses by $7.4 million. The results, after taxes, added $0.2 million to the total $72.6 million of net income for the year ended December 31, 2001, with fully diluted per share earnings remaining $0.95. The restatement also reduced 2000 revenue by $2.2 million of the total $566.1 million and $1.5 million of the total $51.2 million of net income for the year ended December 31, 2000, and reduced fully diluted per share earnings of $0.77 by $0.02. On February 26, 2002, the Company announced a restatement based upon an investigation that was concluded by counsel under the direction of the Audit Committee. While the Company did not believe any additional matters would require restatement when it made its February announcement, and although the amounts involved in the present restatement are small in the context of the Company's overall revenues and net income, additional information came to light as part of the investigation conducted by a committee of the board since February that made the current restatement necessary under the circumstances. The Company will provide information concerning its internal investigations to the Securities and Exchange Commission. "The committee spent months conducting an extensive investigation which involved thousands of documents and numerous interviews," Grijalva said. "Our Board has taken this matter very seriously, and we are now eager to focus our energy and attention on addressing our customers' needs and on building a solid foundation for the future. We believe that Hanover will be well positioned to meet the challenges that lie ahead with new leadership at the helm to direct the outstanding talent at the Company." The restated transactions include the correction of $7.5 million of revenue and $0.8 million of net income from the sale of a power generation unit. The sale was one of three such turbine sales the Company restated last February after determining that the revenue should have been recognized on these transactions at the time that collection of the sales price was reasonably assured. The transaction in question was restated last February to reflect the fact that the Company did not receive full payment on the $7.5 million turbine sale until the fourth quarter of 2001 and, therefore, recorded the related $0.8 million net income in that quarter. The Company subsequently determined, based on new information related to this transaction, that the turbine sale in question should have been accounted for as an exchange of equipment rather than an asset sale and, consequently, revenue and net income for both the full year and fourth quarter 2001 need to be reduced accordingly. In addition, the Company, with the concurrence of its auditors, restated several other smaller transactions. Conference Call Details The Company will host a conference call at 1:00 p.m. ET, Monday, August 5th, to discuss financial results and other recent announcements. To access the call, participants should dial 913-981-4900 at least ten minutes before the scheduled start time. For those unable to participate, a replay will be available from 4:00 p.m. ET on Monday, August 5th, until midnight on Monday, August 12th. To listen to the replay, please dial 719-457-0820, access code 263214. About Hanover Compressor Hanover Compressor Company (www.hanover-co.com) is the global market leader in full service natural gas compression and a leading provider of service, financing, fabrication and equipment for contract natural gas handling applications. Hanover provides this equipment on a rental, contract compression, maintenance and acquisition leaseback basis to natural gas production, processing and transportation companies that are increasingly seeking outsourcing solutions. Founded in 1990 and a public company since 1997, Hanover's customers include premier independent and major producers and distributors throughout the Western Hemisphere. Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because of the context of the statement and will include words such as "believes," "anticipates," "expects," "estimates," or words of similar import. Similarly, statements that describe Hanover's future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those anticipated as of the date of this press release. These risks and uncertainties include: the loss of market share through competition; the introduction of competing technologies by other companies; a prolonged, substantial reduction in oil and gas prices which could cause a decline in the demand for Hanover's compression and oil and gas production equipment; new governmental safety, health and environmental regulations which could require Hanover to make significant capital expenditures; inability to successfully integrate acquired businesses; currency fluctuations; changes in economic or political conditions in the countries in which Hanover operates; adverse results of regulatory inquiries or shareholder litigation; and legislative changes in the various countries in which Hanover does business. The forward-looking statements included in this press release are only made as of the date of this press release, and Hanover undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. A discussion of these factors is included in the Company's periodic reports filed with the Securities and Exchange Commission. HANOVER COMPRESSOR COMPANY CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS) (in thousands of dollars, except per share amounts)(unaudited)
Three Months Ended Six Months Ended June 30, June 30, 2002 2001 2002 2001 -------------- ------------- --------------- -------------- Revenues: Rentals $ 129,284 $ 89,873 $ 258,155 $ 169,735 Parts, service and used equipment 67,859 50,025 135,446 100,359 Compressor fabrication 32,444 57,839 58,502 112,490 Production and processing equipment fabrication 31,617 43,785 64,749 85,397 Equity in income of non-consolidated affiliate 5,214 1,313 10,146 2,063 Other 791 2,594 1,117 5,329 -------------- ------------- -------------- -------------- 267,209 245,429 528,115 475,373 Expenses: Rentals 38,327 30,561 81,001 57,273 Parts, service and used equipment 67,000 34,203 123,194 64,043 Compressor fabrication 28,241 48,733 50,640 94,989 Production and processing equipment fabrication 27,536 34,210 56,073 67,978 Selling, general and administrative 40,066 23,645 74,737 44,381 Depreciation and amortization 27,387 19,581 51,763 36,984 Leasing expense 23,946 15,639 46,874 30,927 Interest expense 9,174 3,069 17,436 6,055 Distributions on mandatorily redeemable convertible preferred securities 1,594 1,594 3,187 3,187 Foreign currency translation 197 8 12,878 163 Change in fair value of derivative financial instruments 977 15 (1,033) 3,007 Goodwill impairment 47,500 -- 47,500 -- Other 14,626 -- 14,837 -- -------------- ------------- -------------- -------------- 326,571 211,258 579,087 408,987 -------------- ------------- -------------- -------------- Income (loss) before income taxes (59,362) 34,171 (50,972) 66,386 Provision (benefit) for income taxes (4,121) 12,977 (765) 25,219 -------------- ------------- -------------- -------------- Net income (loss) before cumulative effect of accounting (55,241) 21,194 (50,207) 41,167 change Cumulative effect of accounting change for derivative instruments, net of income tax -- -- -- (164) -------------- ------------- -------------- -------------- Net income (loss) $ (55,241) $ 21,194 $ (50,207) $ 41,003 ============== ============= ============== ============== Diluted net income (loss) per share: Net income (loss) before cumulative effect of accounting change $ (55,241) $ 21,194 $ (50,207) $ 41,167 Distributions on mandatorily redeemable convertible preferred securities, net of income tax -- 1,036 -- 2,072 Cumulative effect of accounting change, net of income tax -- -- -- (164) -------------- ------------- -------------- -------------- Net income (loss) for purposes of computing diluted net income (loss) per share $ (55,241) $ 22,230 $ (50,207) $ 43,075 ============== ============= ============== ============== Earnings (loss) per common share: Basic $ (0.70) $ 0.30 $ (0.63) $ 0.60 Diluted $ (0.70) $ 0.28 $ (0.63) $ 0.56 Weighted average common and common equivalent shares outstanding: Basic 79,382 70,243 79,288 68,555 Diluted 79,382 79,205 79,288 77,557
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