<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 1-13071
HANOVER COMPRESSOR COMPANY
(Exact name of registrant as specified in its charter)
Delaware 75-2344249
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12001 North Houston Rosslyn
Houston, Texas 77086
(Address of principal executive offices)
(281) 447-8787
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes
No X
As of August 12, 1997, there were 28,335,821 shares of the Company's common
stock, $0.001 par value, outstanding.
<PAGE> 2
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
HANOVER COMPRESSOR COMPANY
HANOVER COMPRESSOR COMPANY
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
<TABLE>
<CAPTION>
December 31, June 30, 1997
ASSETS 1996 (Unaudited)
---- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 7,322 $ 7,142
Accounts receivable, net 28,012 30,349
Inventory 18,134 34,275
Costs and estimated earnings in excess of billings
on uncompleted contracts 7,774 7,711
Prepaid taxes 4,372 6,307
Other current assets 1,025 2,811
--------- ---------
Total current assets 66,639 88,595
--------- ---------
Property, plant and equipment:
Compression equipment 296,060 340,740
Land and buildings 5,236 8,460
Transportation and shop equipment 10,788 12,550
Other 3,892 4,711
--------- ---------
315,976 366,461
Accumulated depreciation 49,570 62,320
--------- ---------
Net property, plant and equipment 266,406 304,141
--------- ---------
Intangible and other assets 8,342 9,312
--------- ---------
$ 341,387 $ 402,048
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 492 $ 331
Accounts payable, trade 9,051 15,708
Accrued liabilities 8,214 6,577
Advance billings 6,701 6,903
Billings on uncompleted contracts in excess of
costs and estimated earnings 668 4,417
--------- ---------
Total current liabilities 25,126 33,936
Long-term debt 122,756 163,005
Other obligations 1,161 913
Deferred income taxes 15,449 19,186
--------- ---------
Total liabilities 164,492 217,040
--------- ---------
Commitments and contingencies
Stockholders' equity:
Common stock, $.001 par value; 100 million shares authorized;
22,938,541 and 22,943,693 (unaudited) shares issued,
respectively $ 23 23
Additional paid-in capital 171,342 171,405
Notes receivable - employee stockholders (6,770) (5,590)
Retained earnings 12,518 19,388
Treasury stock - 31,347 common shares, at cost (218) (218)
--------- ---------
Total stockholders' equity 176,895 185,008
--------- ---------
$ 341,387 $ 402,048
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 3
HANOVER COMPRESSOR COMPANY
CONSOLIDATED STATEMENT OF INCOME
(unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three months Six months
Ended June 30, Ended June 30,
--------------------------- ---------------------------
1996 1997 1996 1997
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
Revenues:
Rentals and maintenance $ 19,282 $ 26,256 $ 37,122 $ 50,576
Compressor fabrication 5,080 13,946 6,846 21,473
Production equipment fabrication 5,982 8,690 11,656 17,362
Other 90 305 278 709
--------- --------- --------- ----------
30,434 49,197 55,902 90,120
--------- --------- --------- ----------
Expenses:
Rentals and maintenance 7,367 10,206 14,119 19,661
Compressor fabrication 4,323 12,138 5,839 18,497
Production equipment fabrication 4,515 6,236 8,685 12,226
Selling, general and administrative 3,826 4,713 7,621 9,405
Depreciation and amortization 5,136 7,059 9,650 13,305
Interest expense 1,519 3,099 2,738 5,670
--------- --------- --------- ----------
26,686 43,451 48,652 78,764
--------- --------- --------- ----------
Income before income taxes 3,748 5,746 7,250 11,356
Provision for income taxes 1,553 2,270 2,863 4,486
--------- --------- --------- ----------
Net income $ 2,195 $ 3,476 $ 4,387 $ 6,870
========= ========= ========= ==========
Net income available to stockholders:
Net income $ 2,195 $ 3,476 $ 4,387 $ 6,870
Dividends on Series A and Series B
preferred stock (514) 0 (1,027) 0
--------- --------- --------- ----------
Net income available to stockholders 1,681 3,476 3,360 6,870
Weighted average common and common
equivalent shares outstanding 22,583 24,538 22,529 24,515
--------- --------- --------- ----------
Earnings per common share $ .07 $ .14 $ .15 $ .28
========= ========= ========= ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 4
HANOVER COMPRESSOR COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
1996 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,387 $ 6,870
Adjustments:
Depreciation and amortization 9,650 13,305
Amortization of debt issuance and debt discount 341 504
Gain on sale of assets (143) (158)
Deferred income taxes 1,413 3,737
Changes in assets and liabilities, net of effects of
business combinations:
Accounts receivable (1,938) (2,337)
Inventory (4,320) (16,139)
Costs and estimated earnings versus billings on 3,812
uncompleted contracts 929
Accounts payable and other liabilities 1,834 5,020
Advance billings 696 202
Other (1,030) (3,969)
---------- ---------
Net cash provided by operating activities 11,819 10,847
Cash flows from investing activities:
Capital expenditures (35,674) (52,991)
Proceeds from sale of fixed assets 1,723 888
Cash used for business acquisitions (6,489) -
---------- ---------
Net cash used in investing activities (40,440) (52,103)
Cash flows from financing activities:
Proceeds from long-term debt 26,500 41,000
Issuance of common stock 584 75
Debt issuance costs (452) (12)
Repayment of long-term debt (506) (1,167)
Other 147 1,180
---------- ---------
Net cash provided by financing activities 26,273 41,076
---------- ---------
Net decrease in cash and cash equivalents (2,348) (180)
Cash and cash equivalents at beginning of period 2,989 7,322
---------- ---------
Cash and cash equivalents at end of period $ 641 $ 7,142
========== =========
Supplemental disclosure of cash flow information:
Interest paid $ 2,327 $ 3,960
Income taxes paid $ 1,544 $ 3,418
Supplemental disclosure of noncash transactions:
Common stock issued in exchange for notes receivable $ 2,300 -
Acquisitions of businesses:
PP&E acquired $ 6,714 -
Common stock issued $ (225) -
Preferred stock dividend $ (1,027) -
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 5
HANOVER COMPRESSOR COMPANY
Notes to Consolidated Financial Statements
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Hanover
Compressor Company (the "Company") included herein have been prepared in
accordance with generally accepted accounting principles for interim financial
information and in conjunction with the rules and regulations of the Securities
and Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. The Company believes, however, the
disclosures are adequate to make the information presented not misleading.
In the opinion of management, the information furnished includes all
adjustments, consisting only of normal recurring adjustments, which are
necessary to present fairly the financial position, results of operations, and
cash flows of the Company for the periods indicated. The financial statement
information included herein should be read in conjunction with the consolidated
financial statements and the notes thereto included in the Prospectus dated June
30, 1997, constituting part of the Company's Registration Statement on Form S-1
(No. 333-24953) under the Securities Act of 1933, as amended (the "Act") filed
with the Securities and Exchange Commission. These interim results are not
necessarily indicative of results for a full year.
2. INVENTORIES
Inventory consisted of the following amounts (in thousands):
<TABLE>
<CAPTION>
December 31, June 30,
1996 1997
---- ----
(unaudited)
<S> <C> <C>
Parts and supplies $ 11,582 $ 16,561
Work in progress 6,219 14,377
Finished goods 333 3,337
--- -----
$ 18,134 $ 34,275
====== ======
</TABLE>
3. EARNINGS PER COMMON SHARE AND SUPPLEMENTAL EARNINGS PER COMMON SHARE
Earnings per common share is calculated using the weighted average number of
common and dilutive common equivalent shares outstanding during each period. In
conformity with the requirements of the Act and/or the Rules thereunder, common
and common equivalent shares issued during the twelve months prior to the filing
of the registration statement for the Company's initial public offering of
shares of its common stock, par value $.001 (the "Common Stock") have been
included in the calculation as if they were outstanding for all periods
presented, using the treasury stock method and at the initial public offering
price of $19.50 per share.
<PAGE> 6
Supplemental earnings per share is based on the number of shares of common stock
outstanding after the Company's initial public offering (see Note 5 below) and
the increase in net income for the three months and six months ended June 30,
1997 as a result of the reduction in interest expense of $1.495 million and
$2.979 million, respectively, net of tax of $.590 million and $1.177 million,
respectively, related to the indebtedness presumed to have been repaid with the
net proceeds of the offering. Supplemental earnings per common share for the
three months and six months ended June 30, 1997 were $.15 and $.30,
respectively.
4. RECENT ACCOUNTING PRONOUNCEMENT
In 1997, Statement of Financial Accounting Standards No. 128 (FAS 128),
Earnings per Share, was issued. FAS 128 is effective for periods ended after
December 15, 1997. At that time, the Company will be required to change the
method currently used to compute earnings per share and to restate all prior
periods. The following table presents pro forma earnings per common share
amounts computed using FAS 128:
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Pro forma earnings per common share:
Basic $.08 $.14 $.16 $.28
Diluted $.07 $.14 $.15 $.28
</TABLE>
5. SUBSEQUENT EVENT
On July 7, 1997, the Company completed its initial public offering of 5,158,691
shares of its Common Stock (including 992,024 shares of Common Stock issued upon
exercise of the underwriters' over-allotment option), which provided the Company
with net proceeds of approximately $93.8 million of which approximately $87.4
million were used to partially repay indebtedness and the balance of
approximately $6.4 million was utilized for working capital.
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
The Company is a leading provider of a broad array of natural gas
compression rental, operations and maintenance services in the United States
and select international markets. The Company's operations consist of providing
gas compression services through renting, maintaining and operating natural gas
compressors and engineering, fabricating and selling gas compression and oil
and gas production equipment. As of June 30, 1997, the Company had a fleet of
1,727 compression rental units with an aggregate capacity of approximately
643,000 horsepower. The Company's products and services are essential to the
production, transportation, processing and storage of natural gas and are
provided primarily to energy producers and processors.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THREE MONTHS ENDED JUNE 30, 1996
REVENUES
The Company's total revenues increased by $18.8 million, or 62%, to
$49.2 million during the three months ended June 30, 1997 from $30.4 million
during the three months ended June 30, 1996. This increase resulted from growth
of the Company's natural gas compressor rental fleet as well as increased demand
for both compressor equipment and production equipment fabrication.
Revenues from rentals and maintenance increased by $7.0 million, or
36%, to $26.3 million during the three months ended June 30, 1997 from $19.3
million during the three months ended June 30, 1996. Domestic revenues from
rentals and maintenance increased by $4.3 million, or 26%, to $20.9 million
during the three months ended June 30, 1997 from $16.6 million during the three
months ended June 30, 1996. International revenues from rentals and maintenance
increased by $2.7 million, or 99%, to $5.4 million during the three months
ended June 30, 1997 from $2.7 million during the three months ended June 30,
1996. The increase in both domestic and international rental and maintenance
revenues resulted primarily from expansion of the Company's rental fleet.
Domestic horsepower in the rental fleet increased by 29% from approximately
444,000 horsepower at June 30, 1996 to approximately 572,000 horsepower at
June 30, 1997. In addition, international horsepower increased by 54% from
approximately 46,000 horsepower at June 30, 1996 to approximately 71,000
horsepower at June 30, 1997.
Revenues from the fabrication and sale of compressor equipment to
third parties increased by $8.8 million, or 174%, to $13.9 million during the
three months ended June 30, 1997 from $5.1 million during the three months
ended June 30, 1996. During the three months ended June 30, 1997, an aggregate
of 39,013 horsepower of compression equipment was fabricated, 30% of which was
placed in the rental fleet and 70% of which was sold to third party customers.
During the three months ended June 30,
<PAGE> 8
1996, 24,567 horsepower was fabricated of which 41% was sold to third party
customers and 59% of which was placed in the Company's rental fleet. The
increase in horsepower produced resulted from increased demand in the overall
natural gas compression market. In addition, the increase in compressor
equipment fabrication revenue resulted from a shift in production of
compression equipment for the Company's rental fleet to production of such
equipment for sale to third parties for the three months ended June 30, 1997 as
compared to the three months ended June 30, 1996.
Revenues from the fabrication and sale of production equipment
increased by $2.7 million, or 45%, to $8.7 million during the three months
ended June 30, 1997 from $6.0 million during the three months ended June 30,
1996. The increase in revenues reflects increased demand for such equipment,
primarily in the Gulf of Mexico.
EXPENSES
Rentals and maintenance operating expenses increased by $2.8 million,
or 38%, to $10.2 million during the three months ended June 30, 1997 from $7.4
million during the three months ended June 30, 1996. The increase results
primarily from the corresponding 36% increase in revenues from rentals and
maintenance during the three months ended June 30, 1997 over the corresponding
period in 1996.
Operating expenses of compressor fabrication increased by $7.8
million, or 181%, to $12.1 million during the three months ended June 30, 1997
from $4.3 million during the three months ended June 30, 1996. This expense
increase was a result of the corresponding increase in compressor fabrication
revenue. In addition, the operating expenses attributable to production
equipment fabrication increased by $1.7 million, or 38%, to $6.2 million during
the three months ended June 30, 1997 from $4.5 million during the three months
ended June 30, 1996. This increase also resulted from the corresponding increase
in production equipment fabrication revenue.
Selling, general and administrative expenses increased $0.9 million,
or 23%, to $4.7 million during the three months ended June 30, 1997 from $3.8
million during the three months ended June 30, 1996. The increase in these
expenses resulted from the increased activity in each of the Company's three
business segments as described above.
Depreciation and amortization increased by $2.0 million, or 37%, to
$7.1 million during the three months ended June 30, 1997 from $5.1 million
during the three months ended June 30, 1996. The increase resulted from
expansion of the rental fleet and other capital expenditures which increased
the amount invested in property, plant and equipment from approximately $268
million at June 30, 1996 to approximately $366 million at June 30, 1997.
INTEREST EXPENSE
Interest expense increased by $1.6 million, or 104%, to $3.1 million
during the three months ended June 30, 1997 from $1.5 million during the three
months ended June 30, 1996. The interest expense increase resulted
<PAGE> 9
from new indebtedness incurred to finance the increase in inventory and capital
expenditures for property, plant and equipment.
INCOME TAXES
The provision for income taxes increased by $0.7 million, or 46%, to
$2.3 million during the three months ended June 30, 1997 from $1.6 million
during the three months ended June 30, 1996. The increase resulted primarily
from the corresponding increase in income before income taxes. The average
effective tax rate during the three months ended June 30, 1997 was 40% compared
to 41% for the three months ended June 30, 1996.
NET INCOME
Net income increased $1.3 million, or 58%, to $3.5 million during the
three months ended June 30, 1997 from $2.2 million during the three months
ended June 30, 1996 for the reasons discussed above.
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996
REVENUES
The Company's total revenues increased $34.2 million, or 61%, to $90.1
million during the six months ended June 30, 1997 from $55.9 million during the
six months ended June 30, 1996. The increase resulted from growth of the
Company's natural gas compressor rental fleet as well as increased demand for
both compressor equipment and production equipment fabrication.
Revenues from rentals and maintenance increased by $13.5 million, or
36%, to $50.6 million during the six months ended June 30, 1997 from $37.1
million during the six months ended June 30, 1996. Domestic revenues from
rentals and maintenance increased by $8.9 million, or 28%, to $40.9 million
during the six months ended June 30, 1997 from $32.0 million during the six
months ended June 30, 1996. International revenues from rentals and maintenance
increased by $4.6 million, or 90%, to $9.7 million during the six months ended
June 30, 1997 from $5.1 million during the six months ended June 30, 1996. The
increase in both domestic and international rental and maintenance revenues
resulted primarily from expansion of the Company's rental fleet.
Revenues from the fabrication and sale of compressor equipment to third
parties increased by $14.6 million, or 214%, to $21.5 million during the six
months ended June 30, 1997 from $6.9 million during the six months ended June
30, 1996. During the six months ended June 30, 1997, an aggregate of 76,732
horsepower of compression equipment was fabricated, 40% of which was placed in
the rental fleet and 60% of which was sold to third party customers. During the
six months ended June 30, 1996, 49,138 horsepower was fabricated of which 29%
horsepower was sold to third party customers and 71% of which was placed in the
Company's rental fleet. The increase in horsepower produced resulted from
increased demand in the overall natural gas compression market. In addition, the
increase in compressor equipment fabrication revenue resulted from a shift in
production of compression equipment for the Company's rental fleet to production
of such equipment for sale to third parties for the six months ended June 30,
1997 as compared to the six months ended June 30, 1996.
<PAGE> 10
Revenues from the fabrication and sale of production equipment
increased by $5.7 million, or 49%, to $17.4 million during the six months ended
June 30, 1997 from $11.7 million during the six months ended June 30, 1996. The
increase in revenues reflects increased demand for such equipment, primarily in
the Gulf of Mexico.
EXPENSES
Rentals and maintenance operating expenses increased by $5.6 million,
or 39%, to $19.7 million during the six months ended June 30, 1997 from $14.1
million during the six months ended June 30, 1996. This increase results
primarily from the corresponding 36% increase in revenues from rentals and
maintenance during the six months ended June 30, 1997 over the corresponding
period in 1996.
Operating expenses of compressor fabrication increased by $12.7
million, or 217%, to $18.5 million during the six months ended June 30, 1997
from $5.8 million during the six months ended June 30, 1996. This expense
increase was a result of the corresponding increase in compressor fabrication
revenue. In addition, the operating expenses attributable to production
equipment fabrication increased by $3.5 million, or 41%, to $12.2 million during
the six months ended June 30, 1997 from $8.7 million during the six months ended
June 30, 1996. This expense increase was also a result of the corresponding
increase in production equipment fabrication revenue.
Selling, general and administrative expenses increased $1.8 million, or
23%, to $9.4 million during the six months ended June 30, 1997 from $7.6 million
during the six months ended June 30, 1996. The increase in these expenses
resulted from the increased activity in each of the Company's three business
segments as described above.
Depreciation and amortization increased by $3.7 million, or 38%, to
$13.3 million during the six months ended June 30, 1997 from $9.6 million
during the six months ended June 30, 1996. The increase resulted from rental
fleet expansion and other capital expenditures.
INTEREST EXPENSE
Interest expense increased by $3.0 million, or 107%, to $5.7 million
during the six months ended June 30, 1997 from $2.7 million during the six
months ended June 30, 1996. The increase resulted from additional indebtedness
incurred to finance the increase in inventory and capital expenditures for
property, plant and equipment.
INCOME TAXES
The provision for income taxes increased by $1.6 million, or 57%, to
$4.5 million during the six months ended June 30, 1997 from $2.9 million during
the six months ended June 30, 1996. The increase resulted primarily from the
corresponding increase in income before income taxes. The average effective tax
rate during the six months ended June 30, 1997 and 1996 was 39%.
<PAGE> 11
NET INCOME
Net income increased $2.5 million, or 57%, to $6.9 million during the
six months ended June 30, 1997 from $4.4 million during the six months ended
June 30, 1996 for the reasons discussed above.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically utilized internally generated funds and
equity and debt financing in order to finance the growth of its compressor
fleet and maintain sufficient compression and production equipment inventory.
Cash flows from operating activities, before changes in assets and liabilities,
were $24.3 million for the six months ended June 30, 1997 as compared to $15.6
million for the six months ended June 30, 1996. Capital expenditures for
property, plant and equipment were $53.0 million for the six months ended June
30, 1997 as compared to $42.2 million for the six month period ended June 30,
1996. Inventory increased $16.1 million for the six months ended June 30, 1997
due to expansion of compressor and production equipment fabrication operations
and compression rental operations. Bank borrowings were $41.0 million for the
six months ended June 30, 1997 as compared to $26.5 million for the six months
ended June 30, 1996.
On July 7, 1997, the Company completed its initial public offering of
its Common Stock. The net proceeds to the Company from the offering amounted to
approximately $93.8 million, of which approximately $87.4 million were used to
partially repay indebtedness and the balance of approximately $6.4 million was
utilized for working capital. The Company believes that after the initial public
offering and the application of the proceeds therefrom, the Company's available
credit facilities, available cash and internally generated funds will be
sufficient to meet its liquidity, debt service and capital requirements assuming
no material acquisitions.
<PAGE> 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At a special meeting of stockholders held on May 15, 1997, the Company
presented to its stockholders an amendment to the Company's Certificate of
Incorporation to increase the authorized number of shares of common stock to
100 million and the authorized number of shares of preferred stock to 3
million. At the meeting, the Company also presented to the stockholders the
election of directors and the approval of the 1997 Stock Option and Purchase
Plan. A total of 145,014.8481 shares were eligible to vote on each matter
presented at the meeting. All of the matters presented were approved by the
following votes of stockholders:
<TABLE>
<CAPTION>
Matter For Against Abstain
------ --- ------- -------
<S> <C> <C> <C>
1. (a) Re-elect Ted Collins, Jr. 107,705,1266 - 37,309.7215
(b) Re-elect Robert R. Furgason 107,705.1266 - 37,309.7215
(c) Re-elect William S. Goldberg 107,705.1266 - 37,309.7215
(d) Re-elect Melvyn N. Klein 107,705.1266 - 37,309.7215
(e) Re-elect Carl M. Koupal 107,705.1266 - 37,309.7215
(f) Re-elect Michael J. McGhan 107,705.1266 - 37,309.7215
(g) Re-elect Michael A. O'Conner 107,705.1266 - 37,309.7215
(h) Re-elect Alvin Shoemaker 107,705.1266 - 37,309.7215
(i) Re-elect William E. Simon, Jr. 107,705.1266 - 37,309.7215
2. Amendment to Certificate 107,705.1266 - 37,309.7215
3. Approval of Plan 107,705.1266 - 37,309.7215
</TABLE>
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11 Statement Regarding Computation of Per Share Earnings
27 Financial Data Schedule
(b) Reports Submitted on Form 8-K; none.
All other items specified by Part II of this report are inapplicable and have
been omitted.
<PAGE> 14
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 thereunto duly authorized.
HANOVER COMPRESSOR COMPANY
Date: August 14, 1997
By:
/s/ MICHAEL J. MCGHAN
- -------------------------------------
Michael J. McGhan
President and Chief Executive Officer
Date: August 14, 1997
By:
/s/ CURTIS A. BEDRICH
- -------------------------------------
Curtis A. Bedrich
Chief Financial Officer
<PAGE> 15
EXHIBIT INDEX
(a) Exhibits
11 Statement Regarding Computation of Per Share Earnings
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 11
HANOVER COMPRESSOR COMPANY
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
(unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three months Six months
Ended June 30, Ended June 30,
-------------------------- --------------------------
1996 1997 1996 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Primary Earnings Per Common Share:
Net income, as reported $ 2,195 $ 3,476 $ 4,387 $ 6,870
Dividends on preferred stock (514) - (1,027) -
-------- -------- -------- --------
Net income available for common stockholders $ 1,681 $ 3,476 $ 3,360 $ 6,870
-------- -------- -------- --------
Weighted average common shares outstanding 20,435 22,912 20,356 22,911
Common equivalent shares 1,440 1,626 1,426 1,604
Cheap stock 708 - 747 -
-------- -------- -------- --------
Total common and common equivalent shares 22,583 24,538 22,529 24,515
-------- -------- -------- --------
Earnings per common share $ .07 $ .14 $ .15 $ .28
======== ======== ======== ========
Supplemental Earnings per Common Share:
Net income available for
stockholders $ 3,476 $ 6,870
Add interest on debt to be repaid from proceeds 1,495 2,979
Less income tax effect (590) (1,177)
-------- --------
Net income used in supplemental EPS 4,381 8,672
-------- --------
Shares used in primary earnings per common
share computation 24,538 24,515
Plus shares assumed to be issued to retire debt 4,789 3,996
-------- --------
Shares used in supplemental earnings per
common share computation 29,327 28,511
-------- --------
Supplemental earnings per common share $ .15 $ .30
======== ========
</TABLE>
(1) Net effect of dilutive stock options and warrants, calculated using the
treasury stock method using average market price. Fully diluted earnings
per share is not presented since it is the same as primary earnings per
share. The effect of convertible redeemable preferred stock is
antidilutive for 1996.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE HANOVER COMPRESSOR COMPANY FINANCIAL STATEMENTS AS OF AND FOR THE THREE
MONTHS ENDED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
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