<PAGE>
 
BUSINESS OF ENERGY INDUSTRIES

  General.  In November 1993, the Company purchased the natural gas compression
business of Energy Industries.  Total consideration paid for the purchase of
Energy Industries' natural gas compression business and for two related
noncompetition agreements was $90.2 million.  The purchase price consisting of
$74.5 million in cash and approximately 2.7 million shares of Common Stock
valued at $15.7 million, or $5.80 per share, which approximated the average
trading price of the Common Stock prior to closing of the acquisition.

  Operations.  Energy Industries generally does business under the name "Energy
Industries, Inc."  Energy Industries is engaged in the business of renting,
fabricating, selling, installing and servicing natural gas compressor packages.
A natural gas compressor package consists of a compressor, a natural gas engine
or electric motor, a heat exchanger, a control panel and assorted piping and
tubing.  Natural gas compression is used in the production, processing and
delivery of natural gas.  Energy Industries primarily supplies natural gas
compressor packages in natural gas production and processing applications.  In
natural gas production applications, natural gas compression is used to increase
the flow rate of gas wells with low reservoir pressures.  In natural gas
processing applications, natural gas compression is used in the process of
separating the various hydrocarbon components of the wellhead natural gas
stream.  In interstate natural gas pipeline applications, natural gas
compression is used to increase the pressure of natural gas from reservoir
levels to interstate pipeline standards.

  Energy Industries fabricates natural gas compressor packages at its Corpus
Christi, Texas fabrication facility from components which are acquired from
various suppliers at market prices.  Energy Industries maintains an inventory of
compressor and engine components at its Corpus Christi facility to support the
fabrication and repair of natural gas compressor packages.

  Including its Corpus Christi, Texas location, Energy Industries maintains
eleven branch offices in Texas, Louisiana, Oklahoma, Arkansas and New Mexico.
Branch office personnel negotiate natural gas compressor package rentals and
sales, perform maintenance services for Energy Industries' fleet of rental
compressors and other natural gas compressor packages on a contract basis and
recondition Energy Industries' rental fleet packages when rental contracts
expire.  Energy Industries also has facilities for fabricating natural gas
compressor packages at its branches in Midland and Houston, Texas and Lafayette,
Louisiana, if market conditions require.

  The following table identifies major categories of Energy Industries' natural
gas compression revenue for the twelve months ended September 30, 1993 and 1994
and the nine months ended June 30, 1995.  Because the Company acquired Energy
Industries in November 1993, the Company's consolidated financial results for
its fiscal year ended September 30, 1994 include only eleven months of Energy
Industries' operations. For comparative purposes, however, the fiscal 1994
revenues presented in the following table are for the twelve months ended
September 30, 1994 and include Energy Industries' revenue information for an
additional month when Energy Industries was not owned by the Company. The
Company did not own Energy Industries in fiscal 1993 and that period is
presented for comparison purposes only.

<TABLE>
<CAPTION>
 
                                         TWELVE MONTHS ENDED
                          NINE MONTHS       SEPTEMBER 30,
                             ENDED       -------------------
                         JUNE 30, 1995     1994       1993
                         --------------  --------    -------
<S>                      <C>             <C>         <C>
                                   (in thousands)
Compressor rentals          $12,978       $17,575    $15,256
Fabrication and sales        21,879        29,842     22,020
Parts and service            14,919        21,138     16,662
Other                         3,310         9,981      9,334
                            -------       -------    -------
  Total                     $53,086       $78,536    $63,272
                            =======       =======    =======
</TABLE>

  Natural Gas Compressor Package Rentals.  Energy Industries maintains a fleet
of approximately 770 natural gas compressor packages of various capacities for
rental to natural gas producers and processors.  Energy Industries rents natural
gas compressor packages to its customers under contracts which require monthly
payments based on a fixed fee or on the volume of gas compressed.  The initial
fixed term of a natural gas compressor package rental is generally between one
and 36 months and thereafter continues on a month-to-month basis.  Customers
typically

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