Natural Gas Services Group Announces a 15% Increase in EBITDA and an 8% Increase in Net Income for the Three Months Ended March 31, 2009
Earnings at
MIDLAND,
Revenue: Our total revenue increased from
Operating income: We increased our operating income from
Net income: Our net income for the three months ended
Earnings per share: Our earnings per diluted share were
EBITDA: We increased EBITDA (see discussion of EBITDA at the end of this
release) 15% to
Cash flow: At
Rental fleet: As of
Selected data: The table below shows our revenues, percentage of total
revenues, gross margin, exclusive of depreciation, and gross margin percentage
of each of our segments for the three months ended March 31, 2009 and 2008.
Gross margin is the difference between revenue and cost of sales, exclusive of
depreciation.
Gross Margin,
Revenue Exclusive of Depreciation(1)
Three Months Ended March 31, Three Months Ended March 31,
2008 2009 2008 2009
(dollars in thousands)
(unaudited)
Sales 9,626 51% $6,929 35% $3,233 34% $2,400 35%
Rental 9,010 47% 12,788 64% 5,606 62% 8,099 63%
Service and
maintenance 297 2% 308 1% 89 30% 93 30%
Total $18,933 $20,025 $8,928 47% $10,592 53%
(1) For a reconciliation of gross margin to its most directly comparable
financial measure calculated and presented in accordance with GAAP, please
read Non-GAAP Financial Measures" in this report.
Non GAAP Measures: "EBITDA" reflects net income or loss before interest,
taxes, depreciation and amortization. EBITDA is a measure used by analysts
and investors as an indicator of operating cash flow since it excludes the
impact of movements in working capital items, non-cash charges and financing
costs. Therefore, EBITDA gives the investor information as to the cash
generated from the operations of a business. However, EBITDA is not a measure
of financial performance under accounting principles generally accepted in the
Three Months Ended
(in thousands of dollars) March 31,
2008 2009
Net income $3,517 $3,797
Interest expense 241 160
Provision for income taxes 1,928 2,053
Depreciation and amortization 2,125 2,958
EBITDA $7,811 $8,968
Other operating expenses 1,350 1,577
Other expense (income) (233) 47
Gross margin $8,928 $10,592
We define gross margin as total revenue less cost of sales (excluding depreciation and amortization expense). Gross margin is included as a supplemental disclosure because it is a primary measure used by our management as it represents the results of revenue and cost of sales (excluding depreciation and amortization expense), which are key components of our operations. Depreciation expense is a necessary element of our costs and our ability to generate revenue and selling, general and administrative expense is a necessary cost to support our operations and required corporate activities. Management uses this non-GAAP measure as a supplemental measure to other GAAP results to provide a more complete understanding of our performance. As an indicator of our operating performance, gross margin should not be considered an alternative to, or more meaningful than, net income as determined in accordance with GAAP. Our gross margin may not be comparable to a similarly titled measure of another company because other entities may not calculate gross margin in the same manner.
Conference Call Details:
Teleconference:
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Live Webcast: The webcast will be available in listen only mode via our website www.ngsgi.com, investor relation section.
Webcast Replay: For those unable to attend or participate a replay of the conference call will be available within 2 hours on the NGS website at www.ngsgi.com and will remain available for 30 days.
Cautionary Note Regarding Forward-Looking Statements:
Except for historical information contained herein, the statements in this
release are forward-looking and made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements involve known and unknown risks and uncertainties, which may cause
NGS's actual results in future periods to differ materially from forecasted
results. Those risks include, among other things, the loss of market share
through competition or otherwise; the introduction of competing technologies
by other companies; a prolonged, substantial reduction in oil and gas prices
which could cause a decline in the demand for NGS's products and services; and
new governmental safety, health and environmental regulations which could
require NGS to make significant capital expenditures. The forward-looking
statements included in this press release are only made as of the date of this
press release, and NGS undertakes no obligation to publicly update such
forward-looking statements to reflect subsequent events or circumstances. A
discussion of these factors is included in the Company's Annual Report on Form
10-K for the year ended
About
NGS is a leading provider of small to medium horsepower, wellhead
compression equipment to the natural gas industry with a primary focus on the
non-conventional gas industry, i.e., coalbed methane, gas shales and tight
gas. NGS manufactures, fabricates, rents and maintains natural gas compressors
that enhance the production of natural gas wells. NGS also designs and sells
custom fabricated natural gas compressors to particular customer
specifications and sells flare systems for gas plant and production
facilities. NGS is headquartered in Midland,
NATURAL GAS SERVICES GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
December 31, March 31,
2008 2009
ASSETS
Current Assets:
Cash and cash equivalents $1,149 $2,741
Short-term investments 2,300 -
Trade accounts receivable, net of doubtful
accounts of $177 and $221, respectively 11,321 10,321
Inventory, net of allowance for obsolescence
of $500 and $150, respectively 31,931 29,496
Prepaid income taxes 244 243
Prepaid expenses and other 87 195
Total current assets 47,032 42,996
Rental equipment, net of accumulated
depreciation of $24,624 and $26,923 ,
respectively 111,967 115,044
Property and equipment, net of accumulated
depreciation of $6,065 and $6,367 ,
respectively 8,973 8,709
Goodwill, net of accumulated amortization of
$325, both periods 10,039 10,039
Intangibles, net of accumulated amortization
of $1,198 and $1,524, respectively 3,020 2,946
Other assets 19 19
Total assets $181,050 $179,753
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $3,378 $3,378
Accounts payable 8,410 2,627
Accrued liabilities 3,987 3,119
Current income tax liability 110 171
Deferred income 38 142
Total current liabilities 15,923 9,437
Long term debt, less current portion 6,194 5,350
Line of credit 7,000 7,000
Deferred income tax payable 21,042 23,034
Other long term liabilities 441 564
Total liabilities 50,600 45,385
Stockholders' equity:
Preferred stock, 5,000 shares authorized, no
shares issued or outstanding - -
Common stock, 30,000 shares authorized, par
value $0.01 ; 12,094 and 12,094 shares issued
and outstanding, respectively 121 121
Additional paid-in capital 83,937 84,058
Retained earnings 46,392 50,189
Total stockholders' equity 130,450 134,368
Total liabilities and stockholders' equity $181,050 $179,753
NATURAL GAS SERVICES GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except earnings per share)
(unaudited)
Three Months Ended
March 31,
2008 2009
Revenue:
Sales, net $9,626 $6,929
Rental income 9,010 12,788
Service and maintenance income 297 308
Total revenue 18,933 20,025
Operating costs and expenses:
Cost of sales, exclusive of depreciation
stated separately below 6,393 4,529
Cost of rentals, exclusive of depreciation
stated separately below 3,404 4,689
Cost of service and maintenance, exclusive of
depreciation stated separately below 208 215
Selling, general and administrative expense 1,350 1,577
Depreciation and amortization 2,125 2,958
Total operating costs and expenses 13,480 13,968
Operating income 5,453 6,057
Other income (expense):
Interest expense (241) (160)
Other income 233 (47)
Total other income (expense) (8) (207)
Income before provision for income taxes 5,445 5,850
Provision for income taxes (1,928) (2,053)
Net income $3,517 $ 3,797
Earnings per common share:
Basic $0.29 $0.31
Diluted $0.29 $0.31
Weighted average common shares outstanding:
Basic 12,085 12,094
Diluted 12,144 12,094
NATURAL GAS SERVICES GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
March 31,
2008 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $3,517 $3,797
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 2,125 2,958
Deferred taxes 5,312 2,053
Employee stock options expense 95 121
Loss on disposal of assets - 4
Changes in current assets and liabilities:
Trade accounts receivables, net 1,196 1,000
Inventory, net (3,721) 2,540
Prepaid expenses and other 438 (108)
Accounts payable and accrued
liabilities 1,732 (6,650)
Current income tax liability (3,468) -
Deferred income 796 104
Other 18 -
NET CASH PROVIDED BY OPERATING ACTIVITIES 8,040 5,819
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (8,064) (5,824)
Purchase of short-term investments (187) -
Redemption of short-term investments 4,500 2,300
Proceeds from sale of property and
equipment - 19
NET CASH USED IN INVESTING ACTIVITIES (3,751) (3,505)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit 500 -
Proceeds from other long-term
liabilities - 123
Repayments of long-term debt (1,845) (845)
Repayments of line of credit (1,100) -
Proceeds from exercise of stock
options 22 -
NET CASH USED IN FINANCING ACTIVITIES (2,423) (722)
NET CHANGE IN CASH 1,866 1,592
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 245 1,149
CASH AND CASH EQUIVALENTS AT END OF PERIOD $2,111 $2,741
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Interest paid $290 $164
Income taxes paid $84 $-
For More Information, Contact:
Kimberly Huckaba, Investor Relations
(432) 262-2700
Kim.Huckaba@ngsgi.com
www.ngsgi.com
SOURCENatural Gas Services Group, Inc. -0-05/08/2009 /CONTACT: Kimberly Huckaba, Investor Relations, +1-432-262-2700, Kim.Huckaba@ngsgi.com/ (NGS) CO:Natural Gas Services Group, Inc. ST:Texas IN: GAS OIL SU: ERN CCA PR -- CL13639 -- 953905/08/2009 08:45 EDT http://www.prnewswire.com
