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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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): May 3, 2000
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 77086
Houston, Texas 77086 (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (281) 447-8787
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Item 5. Other Events.
See the following press release.
HANOVER COMPRESSOR REPORTS RECORD FIRST QUARTER
FULLY DILUTED CASH FLOW PER SHARE $1.26 VS. $0.98
FULLY DILUTED EPS $0.36 VS. $0.29
HOUSTON--(BUSINESS WIRE)--May 3, 2000--Hanover Compressor Company (NYSE:HC -
news), the market leader in outsourcing of natural gas compression services,
today reported significantly higher revenue, cash flow and net income for the
first quarter ended March 31, 2000.
First quarter 2000 total revenues increased to $89.7 million, compared with
$64.4 million for the quarter ended March 31, 1999. Cash flow (income before
income taxes, interest expense, leasing expense, distributions on mandatorily
redeemable convertible preferred securities and depreciation and amortization)
increased 33 percent in the first quarter of 2000 to $39.2 million or $1.26 per
fully diluted share. A year earlier cash flow was $29.5 million or $0.98 per
fully diluted share. Net income grew 29 percent to $11.2 million or $0.36 per
fully diluted share, compared with $8.6 million or $0.29 per fully diluted share
for the first quarter of 1999.
"Hanover experienced very strong growth across the board during the first
quarter compared with a year ago," said Michael J. McGhan, president and chief
executive officer. "All business units contributed to the strong performance
reflecting the continuing industry trend toward greater outsourcing of
compression and gas handling, the success of our geographic and product line
expansion strategies and the quarter's stronger energy pricing environment."
Leading the Company's growth were Hanover's core compression rental and
maintenance unit generating 32 percent year-over-year revenue growth during the
first quarter and the Company's related parts and service unit which registered
119 percent revenue growth in the quarter compared with the 1999 first quarter.
Additionally, reported compressor fabrication revenues increased 96 percent year
to year, reflecting both increased output and higher third-party sales.
"The outlook for our business is quite favorable and we look forward to
continued strong growth," McGhan said. "We continue to focus time and
resources on those high-return activities that provide greatest reward to our
customers and shareholders. Of greatest benefit has been Hanover's success in
leveraging the core compressor rental and maintenance business to drive
significant growth outside the U.S. and in related market segments such as
contract gas treating, power generation and measurement. Bringing together rock
solid field operations, new technologies such as remote monitoring and strong
financial and other resources, we seek to help our customers reduce downtime,
streamline operations and optimize production through a widening array of
outsourced services. Along these lines, Hanover's agreement today to acquire
Applied Process Solutions, Inc. (APSI) represents a move that will significantly
expand Hanover's geographic market reach and existing outsourced turnkey gas
treating and gas handling business, adding to the operating expertise, strong
management group and solid customer relationships that will help take Hanover to
the next level."
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McGhan also announced that Executive Vice President William Goldberg has been
appointed to take over the additional responsibilities as chief financial
officer and treasurer to replace Curtis Bedrich, who retired effective May 1 but
who will continue with the Company as a consultant. "Curtis made invaluable
contributions to the successful growth of Hanover Compressor since its founding
a decade ago and all employees and shareholders owe him a debt of gratitude,"
McGhan said.
Hanover Compressor Company is the 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, its customers include premier independent and
major producers and distributors throughout the Western Hemisphere.
This news release contains forward-looking statements intended to qualify for
the safe harbors from liability established by the Private Securities Litigation
Reform Act of 1995, including statements regarding the expected expansion of
Hanover's compression rental fleet, anticipated compression and gas-handling
demand growth for 2000. These projections and statements are based on
management's estimates and assumptions with respect to future events and
financial performance and are believed to be reasonable, though are inherently
uncertain and difficult to predict. Actual results could differ materially from
those projected as a result of certain factors. A discussion of these factors is
included in the Company's periodic reports filed with the Securities and
Exchange Commission including its Form 10-K for the fiscal year ended
December 31, 1999.
Hanover Compressor Company
Consolidated Statement of Income
(unaudited; in thousands, except per share amounts)
Three months
ended March 31,
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2000 1999
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Revenues:
Rentals $56,104 $42,434
Parts and service 10,134 4,631
Compressor fabrication 14,185 7,241
Production equipment fabrication 5,925 5,886
Gain on sale of property, plant and
equipment 1,286 3,467
Other 2,077 785
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89,711 64,444
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Expenses:
Rentals 18,151 13,974
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Parts and service 7,360 3,424
Compressor fabrication 11,391 5,657
Production equipment fabrication 4,483 4,442
Selling, general and administrative 9,115 7,397
Depreciation and amortization 10,359 9,213
Leasing expense 8,076 3,510
Interest expense 1,630 3,114
Distributions on mandatorily redeemable
convertible preferred securities 1,591 -
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72,156 50,731
Income before income taxes ------ ------
17,555 13,713
Provision for income taxes 6,390 5,074
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Net income $11,165 $ 8,639
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Weighted average common and common
equivalent shares outstanding:
Basic 28,707 28,436
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Diluted 31,095 30,197
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Earnings per common share
Basic $0.39 $0.30
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Diluted $0.36 $0.29
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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: May 5, 2000 By: /s/ Michael J. McGhan
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Name: Michael J. McGhan
Title: President and Chief Executive Officer
