<PAGE> 1
UNIVERSAL COMPRESSION REPORTS FISCAL SECOND QUARTER RESULTS
COMPANY REPORTS 11 PERCENT INCREASE IN REVENUES; 23 PERCENT INCREASE IN EBITDA
HOUSTON, NOVEMBER 7, 2000 -- UNIVERSAL COMPRESSION HOLDINGS, INC. (NYSE: UCO), a
leading provider of natural gas compression services, today reported increased
total revenue, EBITDA (as defined below) and net income for the fiscal 2001
second quarter ended September 30, 2000. Total revenue for the quarter was $38.9
million, compared with $35.0 million in the year earlier period, an increase of
11.1 percent. EBITDA increased 23 percent to $16.7 million from $13.5 million
for the same period last year. Net income was $1.8 million for the quarter, or
13 cents per share, compared to a loss of $1.6 million in the second quarter of
last year. In the first fiscal quarter of this year Universal completed an
initial public offering of equity and a concurrent with the refinancing of its
debt facilities.
The improved performance was driven by a 21 percent increase in rental revenue,
which totaled $28.7 million compared with $23.7 million in the year ago period.
This revenue growth reflects an increase in Universal's available horsepower
from an average of 600,000 during the quarter a year ago to an average of
697,000 for the quarter just ended. Revenues from fabrication and parts sales
for the quarter totaled $10.2 million versus $11.3 million in the year earlier
period. The difference in fabrication revenues is primarily related to the
timing of completion and shipment of orders between the two quarters. Total
margin contribution from fabrication was approximately the same for each period.
Underlying the improvement in rental revenues was an improvement in gross rental
margin and an increase in the Company's average horsepower utilization rate from
79 percent for the same period a year ago to 86 percent during the quarter.
These improvements helped to increase EBITDA as a percentage of total revenues
over the second quarter of last year. EBITDA is defined as net income plus
income taxes, interest expense, leasing expense, management fees, depreciation
and amortization.
The Company also benefited from the acquisition of Gas Compression Services,
Inc. (GCSI) in the middle of September. GCSI added approximately $1.1 million of
revenues and $0.6 million of EBITDA to Universal's results for the quarter. The
quarter included 15 days of contribution from GCSI.
"This was a very successful quarter for us," said Universal Compression's
President and Chief Executive Officer, Stephen A. Snider. "We grew the size of
our rental fleet approximately 200,000 horsepower since the end of last year's
second quarter, while improving margins and increasing utilization of our
equipment. At the end of September we had 810,000 horsepower in our compression
rental fleet and another 165,000 of
<PAGE> 2
managed horsepower. The strong demand for natural gas is continuing to increase
the demand for gas compression services both in the US and internationally.
"Universal's international operations continued to perform well as revenues
increased 30 percent from the year earlier period. International rental revenues
totaled $4.3 million in the second quarter of fiscal 2001, compared with $3.3
million in the same quarter last year, and represented 11% of total revenues.
International demand for compression services is strong," added Mr. Snider.
With the strong customer demand for gas compression, the Company plans to
continue its internal growth and will invest approximately $95 million on
capital expenditures this fiscal year, not including acquisitions such as GCSI
or the pending merger as described below. The Company will soon begin its first
compression service project in Mexico. The project will involve 10,000
horsepower to be started by December 1. Fabrication and sales has continued to
experience strong demand, as the backlog in this area is $26.8 million, up from
$5.2 million in the second quarter of last year.
On October 24, 2000, the Company announced the signing of an agreement to
acquire substantially all of the assets of Weatherford Global Compression (WGC),
the gas compression services division of Weatherford International. The
combination will create the second largest natural gas compression services
provider with an aggregate of approximately 1,800,000 horsepower. Consideration
for WGC includes 13.75 million shares of the Company's common stock, which will
represent approximately 48% of the outstanding shares of the combined company,
and the assumption of WGC's debt and operating leases. The transaction is
subject to approval by the Company's stockholders, regulatory approval,
financing conditions, and other customary closing conditions.
Universal will host a conference call at 9:00 am Central Standard Time, 10:00
Eastern Standard Time, on November 7 to discuss results from the second quarter
as well as other corporate matters. Persons wishing to participate may do so by
dialing 703-871-3029 approximately five minutes before the designated start
time. A replay of the call will be available through November 14 at 12:00
midnight Eastern Time by dialing 703-925-2435 code 4734051.
A spokesperson for Universal Compression Holdings indicated that the conference
call will be simultaneously broadcast over the internet to provide interested
persons the opportunity to listen to it live. The call will also be archived for
one week 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 on to
www.vcall.com <http://www.vcall.com> approximately 15 minutes prior to the
designated start time and following the directions provided there including
entering Universal Compression (UCO) in the box located at the top of the web
page. This will allow time to install any software needed to access the call.
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The entire conference call will be archived at www.vcall.com
<http://www.vcall.com> through November 14.
Statements about Universal Compression Holdings' outlook and all other
statements in 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 Universal Compression Holdings' control,
which could cause actual results to differ materially from such statements.
While Universal Compression Holdings believes that the assumptions concerning
future events are reasonable, it cautions that there are inherent difficulties
in predicting certain important factors that could impact the future performance
or results of its business. Among the important factors that could cause actual
results to differ materially from those indicated by such forward-looking
statements are actual capital expenditures, successful completion of growth and
service projects and proposed acquisitions and integration of recent
acquisitions. These risk factors, when applicable, are discussed in Universal
Compression Holdings' filings with the Securities and Exchange Commission,
copies of which are available to the public. Universal Compression Holdings
disclaims any intention or obligation to revise or update any forward-looking
statements whether as a result of new information, future events, or otherwise.
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UNIVERSAL COMPRESSION HOLDINGS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rentals $28,681 $ 23,675 $ 54,955 $ 46,863
Sales 10,131 11,255 18,401 21,874
Other 41 58 257 59
------- -------- -------- --------
Total revenues 38,853 34,988 73,613 68,796
Costs and expenses:
Rentals, exclusive of depreciation
and amortization 9,903 8,502 18,873 17,104
Cost of sales, exclusive of depreciation
and amortization 8,480 9,648 15,028 18,750
Depreciation and amortization 6,679 6,061 14,177 11,678
Selling, general and administrative 3,769 4,116 7,224 8,654
Operating lease 1,995 -- 2,684 --
Interest expense 5,221 8,500 13,225 16,446
Non-recurring charges -- -- 7,059 --
------- -------- -------- --------
Total costs and expenses 36,047 36,827 78,270 72,632
------- -------- -------- --------
Income (loss) before income taxes and
extraordinary items 2,806 (1,839) (4,657) (3,836)
Income taxes (benefit) 1,053 (261) (1,746) (1,020)
------- -------- -------- --------
Income (loss) before extraordinary items $ 1,753 $ (1,578) $ (2,911) $ (2,816)
======= ======== ======== ========
Extraordinary loss, net of $3,759
income tax benefit -- -- 6,264 --
------- -------- -------- --------
Net income (loss) $ 1,753 $ (1,578) $ (9,175) $ (2,816)
======= ======== ======== ========
Weighted average common and common
equivalent shares outstanding:
Basic 13,504 -- 11,173 --
------- -------- -------- --------
Diluted 13,881 -- 11,173 --
------- -------- -------- --------
Earnings per share - basic:
Income (loss) before extraordinary items $ 0.13 $ -- $ (0.26) $ --
Extraordinary loss -- -- (0.56) --
------- -------- -------- --------
Net income (loss) $ 0.13 $ -- $ (0.82) $ --
======= ======== ======== ========
Earnings per share - diluted:
Income (loss) before extraordinary items $ 0.13 $ -- $ (0.26) $ --
Extraordinary loss -- -- (0.56) --
------- -------- -------- --------
Net income (loss) $ 0.13 $ -- $ (0.82) $ --
======= ======== ======== ========
</TABLE>
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UNIVERSAL COMPRESSION HOLDINGS, INC.
UNAUDITED SEGMENTED INFORMATION
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE THREE
MONTHS MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999
------- -------
<S> <C> <C>
Revenues
Domestic Rental and Maintenance $24,396 $20,351
International Rental and Maintenance 4,286 3,324
Engineered Products 8,318 8,909
Corporate and Other 1,853 2,404
------- -------
Total $38,853 $34,988
Gross Margins
Domestic Rental and Maintenance $15,525 $12,816
International Rent 3,254 2,358
Engineered Products 1,363 1,157
Corporate and Other 253 479
------- -------
Total $20,395 $16,810
Selling, General, and Administrative $ 3,769 $ 3,291
SG&A % of Revenue 9.7% 9.4%
EBITDA $16,701 $13,546
EBITDA % of Revenue 43.0% 38.8%
Margin percent
Domestic Rent 63.6% 63.0%
International Rent 75.9% 70.9%
Fabrication 16.4% 13.0%
Other 13.7% 19.9%
------- -------
Total 52.5% 48.0%
</TABLE>
EBITDA is defined as net income plus income taxes, interest expense, leasing
expense, management fees, depreciation and amortization.
