StockSelector.com
  Research, Select, & Monitor Thursday, January 17, 2019 3:34:17 AM ET  
Trade Ideas The Market Industries Stocks Portfolio

 
Ticker Lookup
Ultra DJ-UBS Crude Oil Proshares$17.22$.191.12%

  Quote | Ranking | Chart | Valuations | Sentiment | Industry | News | Earnings | Analysts | More...

Your Target?

 Universal Compression Holdings and Universal Compression Partners Report Second Quarter 2007 Results
   Tuesday, August 07, 2007 7:45:00 AM ET

Universal Compression Holdings, Inc. (UCO ) and Universal Compression Partners, L.P. (UCLP ) today reported earnings for the second quarter of 2007.

Universal Compression Holdings, Inc. Financial Results

Universal Compression Holdings reported net income of $25.2 million, or $0.81 per diluted share, in the three months ended June 30, 2007, including a charge of $4.8 million on a pretax basis for merger-related expenses. Excluding this charge, earnings per diluted share would have been $0.91 in the second quarter. Net income was $14.3 million, or $0.46 per diluted share, in the three months ended March 31, 2007, including a charge of $1.4 million on a pretax basis for merger-related expenses. Excluding this charge, earnings per diluted share would have been $0.49 in the first quarter. Net income was $21.8 million, or $0.70 per diluted share, in the comparable period of the prior year.

Revenue was $334.6 million in the three months ended June 30, 2007, compared to $239.4 million in the three months ended March 31, 2007 and $218.7 million in the prior year period. EBITDA, as adjusted (as defined below), was $93.3 million in the three months ended June 30, 2007, as compared to $72.3 million in the three months ended March 31, 2007 and $75.2 million in the comparable period of the prior year.

"We are pleased with our second quarter results which included record levels of revenue, EBITDA, as adjusted, and earnings per share. With continuing robust worldwide demand for our products and services, each of our business segments recorded strong sequential growth in revenue and profitability," commented Stephen A. Snider, Universal Compression Holdings’ Chairman, President and Chief Executive Officer. "Our business outlook remains optimistic due to favorable market conditions and company activity levels and the expected benefits from our proposed merger with Hanover Compressor Company."

Merger Update

Universal Compression Holdings and Hanover have scheduled annual stockholder meetings for August 16, 2007 for their respective stockholders to vote on, among other things, the proposed merger of the two companies. A joint proxy statement/prospectus was mailed to stockholders on or about July 13, 2007. Universal Compression Holdings and Hanover expect the merger to close on or about August 20, 2007, if both companies’ shareholders have approved the merger and the other closing conditions are satisfied as of that date. Subject to and effective upon the closing of this merger, the combined new company will be named Exterran Holdings, Inc. (expected trading symbol NYSE: EXH) and Universal Compression Partners, L.P. will be renamed Exterran Partners, L.P. (expected trading symbol Nasdaq: EXLP).

Universal Compression Partners, L.P. Financial Results

Universal Compression Partners reported revenue of $18.8 million and net income of $2.3 million in the three months ended June 30, 2007, compared to revenue of $17.6 million and net income of $2.3 million in the three months ended March 31, 2007. EBITDA, as further adjusted (as defined below), totaled $10.4 million in the three months ended June 30, 2007 compared to $9.5 million in the three months ended March 31, 2007. Distributable cash flow (as defined below) totaled $6.9 million in the three months ended June 30, 2007 compared to $6.0 million in the three months ended March 31, 2007. Universal Compression Partners commenced operations in October 2006 upon the contribution of certain contract compression assets in the United States from Universal Compression Holdings in connection with the initial public offering of Universal Compression Partners.

On July 30, 2007, Universal Compression Partners announced a cash distribution of $0.35 per unit, which reflected the partnership’s minimum quarterly distribution. The distributable cash flow generated in the second quarter is approximately 1.2 times the amount of the cash distribution to unitholders, including distributions owed to new units issued in early July to finance the acquisition from Universal Compression Holdings described below. Excluding the distributions owed for these new units, distributable cash flow generated in the second quarter would have been approximately 1.5 times the amount of cash distribution to unitholders.

"Universal Compression Partners experienced a strong second quarter and generated significant distributable cash flow as a result. Additionally, Universal Compression Partners completed its previously announced acquisition from Universal Compression Holdings of a fleet of compressor units totaling approximately 280,000 horsepower and associated customer contracts for approximately $233 million in early July. As a result of this acquisition, management expects to recommend to the board of directors that it raise cash distributions for the third quarter by approximately $0.0375 to $0.05 per unit, or approximately $0.15 to $0.20 per unit on an annualized basis," commented Mr. Snider, Chairman, President and Chief Executive Officer of Universal Compression Partners’ general partner. "The proposed merger of Hanover and Universal Compression Holdings will result in a combined company with a larger pool of contract compression assets in the United States that can be offered for sale over time to the partnership, further enhancing our growth prospects. Hanover reported that it had approximately 2.4 million horsepower of compression in the United States at June 30, 2007."

Conference Call

Universal Compression Holdings and Universal Compression Partners will host a joint conference call today, August 7, 2007, at 10:00 a.m. Central Time, 11:00 a.m. Eastern Time, to discuss the quarter’s results and certain 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 UCO or UCLP "Investor Information" section) at least 15 minutes prior to the start of the call. The replay of the call will be available at the website http://www.universalcompression.com .

With respect to Universal Compression Holdings, EBITDA, as adjusted, a non-GAAP measure, 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 expense, foreign currency gains or losses, merger related expenses, minority interest, excluding non-recurring items (including facility consolidation costs), and extraordinary gains or losses.

With respect to Universal Compression Partners, distributable cash flow, a non-GAAP measure, is defined as net income plus income taxes, depreciation and amortization expense, non-cash selling, general and administrative expenses, interest expense and any amounts by which cost of sales and selling, general and administrative costs are reduced as a result of caps on these costs contained in the omnibus agreement to which Universal Compression Holdings and Universal Compression Partners are parties (the "Omnibus Agreement"), which amounts are treated as capital contributions from Universal Compression Holdings for accounting purposes, less cash interest expense and maintenance capital expenditures.

With respect to Universal Compression Partners, EBITDA, as further adjusted, a non-GAAP measure, is defined as net income plus income taxes, interest expense, depreciation and amortization expense, non-cash selling, general and administrative expenses and any amounts by which cost of sales and selling, general and administrative costs are reduced as a result of caps on these costs contained in the Omnibus Agreement, which amounts are treated as capital contributions from Universal Compression Holdings for accounting purposes.

With respect to Universal Compression Holdings, Gross Margin, a non-GAAP measure, is defined as total revenue less cost of sales (excluding depreciation and amortization expense).

With respect to Universal Compression Partners, Gross Margin, as adjusted, a non-GAAP measure, is defined as total revenue less cost of sales (excluding depreciation and amortization expense) plus any amounts by which cost of sales are reduced as a result of caps on these costs contained in the Omnibus Agreement, which amounts are treated as capital contributions from Universal Compression Holdings for accounting purposes.

Forward-Looking Statements

All statements in this release (and oral statements made regarding the subjects of this release) 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 the control of Universal Compression Holdings and Universal Compression Partners (the "Companies"), which could cause the Companies’ actual results to differ materially from such statements. Forward-looking information includes, but is not limited to, statements regarding: the belief that the Companies will be able to continue to take advantage of strong market conditions; the Companies’ optimism regarding business outlook; the existence of growth opportunities for Universal Compression Partners’ and the basis for those opportunities; the expectation that Universal Compression Holdings or Exterran will contribute assets to Universal Compression Partners in the future; the ability of Universal Compression Holdings and Hanover to complete their proposed merger; the expected timing of the closing of the merger; and the expectation that Universal Compression Partners’ management will recommend to its board of directors that cash distributions for the third quarter be raised by approximately $0.0375 to $0.05 per unit, or approximately $0.15 to $0.20 per unit on an annualized basis. While the Companies believe that the assumptions concerning future events are reasonable, they caution that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of their or Exterran’s business. Among the factors that could cause results to differ materially from those indicated by such forward-looking statements are: the failure to receive the approval of the merger by the shareholders of Universal Compression Holdings and Hanover and satisfaction of various other conditions to the closing of the merger contemplated by their merger agreement; the failure to realize anticipated synergies from the proposed merger; conditions in the oil and gas industry, including a sustained decrease in the level of supply or demand for natural gas and the impact on the price of natural gas; employment workforce factors, including Universal Compression Holdings’ ability to hire, train and retain key employees; Universal Compression Holdings’ ability to timely and cost-effectively obtain components necessary to conduct the Companies’ business; changes in political or economic conditions in key operating markets, including international markets; the Companies’ ability to timely and cost-effectively implement their enterprise resource planning systems; changes in safety and environmental regulations pertaining to the production and transportation of natural gas; and, as to each of the Companies, the performance of the other entity.

These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties described in Universal Compression Holdings’ Annual Report on Form 10-K for the year ended December 31, 2006, as amended by Amendment No. 1 thereto, and Universal Compression Partners’ Annual Report on Form 10-K for the year ended December 31, 2006 and those set forth from time to time in the Companies’ filings with the Securities and Exchange Commission ("SEC"), which are available through http://www.universalcompression.com . Except as required by law, the Companies expressly disclaim any intention or obligation to revise or update any forward-looking statements whether as a result of new information, future events, or otherwise.

Universal Compression Holdings, headquartered in Houston, Texas, is a leading natural gas compression services company, providing a full range of contract compression, sales, operations, maintenance and fabrication services to the domestic and international natural gas industry.

Universal Compression Partners was formed by Universal Compression Holdings to provide natural gas contract compression services to customers throughout the United States. Universal Compression Holdings owns approximately 51% of Universal Compression Partners.



                     UNIVERSAL COMPRESSION HOLDINGS, INC.
               UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
               (Dollars in thousands, except per share amounts)


                                                  Three Months Ended
                                          June 30,     March 31,  June 30,
                                            2007         2007       2006
    Revenue:
      Domestic contract compression       $103,596     $102,034   $101,460
      International contract compression    40,014       38,534     35,010
      Fabrication                          134,988       54,616     38,528
      Aftermarket services                  55,989       44,179     43,718
        Total revenue                      334,587      239,363    218,716

    Costs and expenses:
      Cost of sales (excluding
       depreciation and amortization expense):
        Domestic contract compression       40,543       41,056     35,792
        International contract
         compression                        10,637       10,315      8,430
        Fabrication                        112,602       47,237     33,797
        Aftermarket services                41,262       34,436     36,359
      Depreciation and amortization         35,792       34,863     30,013
      Selling, general and administrative   36,802       35,741     29,461
      Interest expense, net                 14,063       14,039     14,605
      Merger-related expenses                4,792        1,373         --
      Foreign currency (gain) loss            (962)        (693)       299
      Minority interest                      1,642        1,324         --
      Other (income) expense, net             (518)      (1,731)      (360)
        Total costs and expenses           296,655      217,960    188,396

    Income before income taxes              37,932       21,403     30,320

    Income tax expense                      12,765        7,079      8,504

        Net income                         $25,167      $14,324    $21,816

    Weighted average common and common
     equivalent shares outstanding:
        Basic                               30,003       29,820     29,891

        Diluted                             31,182       30,881     31,040

    Earnings per share:
        Basic                                $0.84        $0.48      $0.73

        Diluted                              $0.81        $0.46      $0.70



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

                                                 Three Months Ended
                                          June 30,     March 31,  June 30,
                                            2007         2007       2006
    Revenue:
      Domestic contract compression       $103,596     $102,034   $101,460
      International contract compre         40,014       38,534     35,010
      Fabrication                          134,988       54,616     38,528
      Aftermarket services                  55,989       44,179     43,718
        Total                             $334,587     $239,363   $218,716

    Gross Margin:
      Domestic contract compression        $63,053      $60,978    $65,668
      International contract compress       29,377       28,219     26,580
      Fabrication                           22,386        7,379      4,731
      Aftermarket services                  14,727        9,743      7,359
        Total (1)                         $129,543     $106,319   $104,338

    Selling, General and Administrative    $36,802      $35,741    $29,461
      % of Revenue                              11%          15%        13%

    EBITDA, as adjusted (1)                $93,259      $72,309    $75,237
      % of Revenue                              28%          30%        34%

    Capital Expenditures                   $72,019      $59,560    $59,402
    Proceeds from Sale of PP&E               3,814        3,690      4,070
    Net Capital Expenditures               $68,205      $55,870    $55,332

    Gross Margin Percentage:
      Domestic contract compression             61%          60%        65%
      International contract compression        73%          73%        76%
      Fabrication                               17%          14%        12%
      Aftermarket services                      26%          22%        17%
      Total                                     39%          44%        48%

    Reconciliation of GAAP to Non-GAAP
     Financial Information:
      Net income                           $25,167      $14,324    $21,816
      Income tax expense                    12,765        7,079      8,504
      Depreciation and amortization         35,792       34,863     30,013
      Interest expense, net                 14,063       14,039     14,605
      Foreign currency (gain) loss            (962)        (693)       299
      Merger-related expenses                4,792        1,373         --
      Minority interest                      1,642        1,324         --
      EBITDA, as adjusted (1)               93,259       72,309     75,237
      Selling, general and administrative   36,802       35,741     29,461
      Other (income) expense, net             (518)      (1,731)      (360)
      Gross Margin (1)                    $129,543     $106,319   $104,338



                                           June 30,     March 31,  June 30,
                                             2007         2007       2006

    Debt and Capital Lease Obligations    $872,997     $856,582   $898,855
    Stockholders’ Equity                  $986,075     $935,856   $904,308
    Total Debt to Capitalization              47.0%        47.8%      49.8%

    (1) Management believes disclosure of EBITDA, as adjusted, and Gross
        Margin, non-GAAP measures, provide useful information to investors
        because, when viewed with our GAAP results and accompanying
        reconciliations, they provide a more complete understanding of our
        performance than GAAP results alone.  Management uses EBITDA, as
        adjusted, and Gross Margin as supplemental measures to review current
        period operating performance, comparability measures and performance
        measures for period to period comparisons.  In addition, EBITDA, as
        adjusted, is used by management as a valuation measure.



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

                                                   Three Months Ended
                                            June 30,     March 31,  June 30,
                                              2007         2007       2006
    Total Available Horsepower
     (at period end):
      Domestic contract compression           2,147        2,098      1,989
      International contract compression        614          608        595
          Total                               2,761        2,706      2,584

    Average Operating Horsepower:
      Domestic contract compression           1,825        1,822      1,794
      International contract compression        556          552        549
          Total                               2,381        2,374      2,343

    Horsepower Utilization:
      Spot (at period end)                     87.1%        87.7%      90.2%
      Average                                  87.3%        88.3%      91.1%

    Fabrication Backlog (in millions)          $223         $280       $275



                     UNIVERSAL COMPRESSION PARTNERS, L.P.
               UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                            (Dollars in thousands)

                                                       Three Months Ended
                                                   June 30,          March 31,
                                                     2007              2007

    Revenue                                        $18,804            $17,585
    Costs and expenses:
      Cost of sales (excluding depreciation and
       amortization expense)                         7,573              7,018
      Depreciation                                   2,968              2,782
      Selling, general and administrative            3,915              3,259
      Interest expense, net                          2,093              2,133
      Other (income) expense, net                       (3)                (6)
          Total costs and expenses                  16,546             15,186
    Income before income taxes                       2,258              2,399
    Income tax (benefit) expense                        (6)                56
      Net income                                    $2,264             $2,343

    General partner interest in net income             $45                $47

    Limited partner interest in net income          $2,219             $2,296

    Weighted average limited partners’ units
     outstanding:
      Basic                                         12,650             12,650

      Diluted                                       12,709             12,671

    Earnings per limited partner unit:
      Basic                                          $0.18              $0.18

      Diluted                                        $0.17              $0.18



                     UNIVERSAL COMPRESSION PARTNERS, L.P.
                      UNAUDITED SUPPLEMENTAL INFORMATION
               (Dollars in thousands, except per unit amounts)

                                                      Three Months Ended
                                                   June 30,          March 31,
                                                     2007               2007

    Revenue                                        $18,804            $17,585

    Gross Margin, as adjusted (1)                  $12,908            $11,974

    EBITDA, as further adjusted (1)                $10,411             $9,480
      % of Revenue                                      55%                54%

    Capital Expenditures                           $10,071             $6,079
    Proceeds from Sale of PP&E                          --                 --
    Net Capital Expenditures                       $10,071             $6,079

    Gross Margin percentage, as adjusted                69%                68%

    Reconciliation of GAAP to Non-GAAP
        Financial Information:
        Net income                                  $2,264             $2,343
        Income tax (benefit) expense                    (6)                56
        Depreciation                                 2,968              2,782
        Cap on operating and selling,
         general and administrative costs
         provided by Universal Compression
         Holdings ("UCO")                            1,789              1,578
        Non-cash selling, general and
         administrative costs                        1,303                588
        Interest expense, net                        2,093              2,133
        EBITDA, as further adjusted (1)             10,411              9,480
        Cash selling, general and
         administrative costs                        2,612              2,671
        Less: cap on selling, general and
         administrative costs provided by
         UCO (1)                                      (112)              (171)
        Other income, net                               (3)                (6)
        Gross Margin, as adjusted for
         operating cost caps provided by
         UCO (1)                                   $12,908            $11,974
        Less: Cash interest expense                 (2,085             (2,077)
        Less:  Cash selling, general and
         administrative, as adjusted for
         cost caps provided by UCO (1)              (2,500)            (2,500)
        Less: Maintenance capital expenditures      (1,438)            (1,373)
        Distributable cash flow (2)                 $6,885             $6,024

        Distributions per Unit                       $0.35              $0.35
        Distribution to All Unitholders             $5,957             $4,518
        Distributable Cash Flow Coverage              1.16x              1.33x

                                                   June 30,          March 31,
                                                     2007              2007

    Debt                                          $121,000           $125,000
    Total Partners’ Capital                        $74,861            $71,064
    Total Debt to Capitalization                      61.8%              63.8%
    Total Debt to Annualized EBITDA, as
     further adjusted UCO (1)                          2.9x               3.3x
    EBITDA, as further adjusted (1) to
     Interest Expense                                  5.0x               4.4x

    (1) Management believes disclosure of EBITDA, as further adjusted, and
        Gross Margin, as adjusted, non-GAAP measures, provide useful
        information to investors because, when viewed with our GAAP results
        and accompanying reconciliations, they provide a more complete
        understanding of our performance than GAAP results alone.  Management
        uses EBITDA, as further adjusted, and Gross Margin, as adjusted, as
        supplemental measures to review current period operating performance,
        comparability measures and performance measures for period to period
        comparisons.  In addition, EBITDA, as further adjusted, is used by
        management as a valuation measure.

    (2) Distributable cash flow, a non-GAAP measure, is a significant
        liquidity metric used by management to compare basic cash flows
        generated by us to the cash distributions we expect to pay our
        partners. Using this metric, management can quickly compute the
        coverage ratio of estimated cash flows to planned cash distributions.



                     UNIVERSAL COMPRESSION PARTNERS, L.P.
                      UNAUDITED SUPPLEMENTAL INFORMATION
                          (Horsepower in thousands)

                                                       Three Months Ended
                                                    June 30,         March 31,
                                                      2007              2007

    Total Available Horsepower (at period end)         387               358

    Average Operating Horsepower                       348               331

    Horsepower Utilization:
        Spot (at period end)                          92.7%             93.4%
        Average                                       93.1%             94.8%

    Combined Domestic Contract Compression
     Horsepower of Universal Compression
     Holdings and Universal Compression Partners
     covered by contracts converted to
     service agreements                              1,194             1,154

    Total Available Domestic Contract
     Compression Horsepower of Universal
     Compression Holdings and Universal Compression
     Partners  (at period end):                      2,147             2,098

        % of Domestic Contract Compression
         Horsepower of Universal Compression
         Holdings and Universal Compression
             Partners under Converted
             Contract Form                            55.6%             55.0%


SOURCE Universal Compression Holdings, Inc.

David Oatman, Vice President, Investor Relations of Universal Compression,
+1-713-335-7460
http://www.universalcompression.com 


Register |  Password |  Feedback |  Copyright |  Usage Agreement |  Privacy Policy |  Advertising |  About Us |  Contact Us |  FAQ 

Past performance is not indicative of future results

StockSelector.com, the StockSelector.com logo, and News Selects are trademarks of StockSelector.com.
Copyright © 1998 - 2019 StockSelector.com. All rights reserved.