<PAGE>
The following table compares Energy Industries' natural gas compressor package
sales and cost of sales 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 sales
and cost of sales presented in the following table are for the twelve months
ended September 30, 1994 and include Energy Industries' sales and cost of sales
information for an additional month when Energy Industries was not owned by the
Company. The Company did not own Energy Industries prior to November 1993.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
NINE MONTHS SEPTEMBER 30,
ENDED ------------------------
JUNE 30, 1995 1994 1993
-------------- ---------- ----------
(IN THOUSANDS, EXCEPT % AMOUNTS)
<S> <C> <C> <C>
Compressor package sales $21,879 $29,842 $22,020
Cost of sales 18,149 24,596 16,867
------- ------- -------
Gross margin $ 3,730 $ 5,246 $ 5,153
======= ======= =======
Gross margin/percentage 17.0% 17.6% 23.4%
======= ======= =======
</TABLE>
Parts and Service. Energy Industries provides on-site maintenance services to
its rental and sales customers and to users of other natural gas compressor
packages. Maintenance services provided by Energy Industries includes regular
monitoring of compressor package operations and performance of a standardized,
routine maintenance program for equipment in the field. Energy Industries sells
compressor parts and engines in connection with maintenance service operations.
Each branch location and each field technician maintains a small inventory of
commonly used natural gas compressor package parts to support routine repairs to
natural gas compressor packages covered under maintenance contracts.
Natural Gas Compression Markets. Energy Industries conducts the majority of
its operations in established natural gas producing regions of the United
States, located in Texas, Louisiana, Arkansas, Oklahoma, New Mexico and offshore
in the Gulf of Mexico. Its customers include natural gas companies and
pipelines which are involved in the production, processing and transmission of
natural gas.
A substantial majority of the demand for natural gas compression (on a
horsepower basis) is met through the use of natural gas compressor packages
owned by the companies that use them. Energy Industries competes with other
fabricators of natural gas compressors for sales in this market. The demand for
newly constructed natural gas compressor packages is a function of growth in the
consumption of natural gas and the age of producing wells. Natural gas
compression is required to maintain production rates and to maximize recoverable
reserves as natural gas reservoirs age and field pressure declines.
The remaining demand for natural gas compression is met through rental of
natural gas compressor packages. In addition to well age and natural gas
consumption, a structural shift in U.S. oil and gas operations has affected
demand for natural gas compression package rentals. Many of the major oil
companies have directed their focus toward international operations and away
from domestic natural gas reserves. Accordingly, these companies recently have
been selling their domestic natural gas reserves and minimizing staff in
domestic operations. As a result, demand for rental packages of natural gas
compressors is expected to increase as buyers of natural gass reserves or
producers with reduced staffs are less likely to own and operate natural gas
compressor packages and more likely to rent natural gas compressor packages to
meet their natural gas compression needs.
International Operations. While most of Energy Industries' operations are
domestic, Energy Industries sells natural gas compressor packages and parts in
Canada through ENSERV, Inc. ("Enserv") and outside the U.S. and Canada through
Atlas Copco Airpower, N.V. ("Atlas Copco"). The following table compares
domestic and international sales for the twelve months ended December 31, 1993
and 1994 and the nine months ended June 30, 1995. Because the Company acquired
Energy Industies 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 sales presented in the following table are for the twelve months ended
September 30, 1994 and include Energy Industries' sales information for an
additional month when Energy Industries was not owned by the Company. The
Company did not own Energy Industries prior to November 1993.
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