Natural Gas Services Group Announces a 27% Increase in Diluted Earnings Per Share to $1.28 for the Year Ended December 31, 2008
41% Increase in Rental Revenue and 18% Increase in Total Revenue for the
Year Ended
28% Increase in EBITDA for the Three Months Ended December 31, 2008
30% Increase Operating Income for the Three Months Ended December 31, 2008
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 was
EBITDA: We increased EBITDA (see discussion of EBITDA at the end of this
release) 28% to
Rental fleet: As of
Cash flow: At
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 years ended December 31, 2008 and 2007. Gross
margin is the difference between revenue and cost of sales, exclusive of
depreciation.
Revenue Gross Margin, Exclusive of
Depreciation(1)
Year Ended December 31, Year Ended December 31,
2007 2008 2007 2008
(dollars in thousands)
(unaudited)
Sales $41,088 56.7% $41,380 48.5% $12,964 31.6% $13,328 32.2%
Rental 30,437 42.0% 42,864 50.2% 18,055 59.3% 26,671 62.2%
Service and
maintenance 964 1.3% 1,092 1.3% 364 37.8% 343 31.4%
Total $72,489 $85,336 $31,383 43.3% $40,342 47.3%
(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 Twelve months
ended ended
(in thousands of dollars) December 31, December 31,
2007 2008 2007 2008
Net income $3,614 $3,932 $12,278 $15,593
Interest expense 276 224 1,155 742
Provision for income taxes 1,367 2,365 6,455 8,627
Depreciation and amortization 2,022 2,828 7,470 9,925
EBITDA $7,279 $9,349 $27,358 $34,887
Other operating expenses 1,551 1,468 5,324 5,842
Other expense (income) (237) 8 (1,299) (387)
Gross margin $8,593 $10,825 $31,383 $40,342
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.
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 filed with the
Conference Call Details:
Teleconference:
Live Webcast: The webcast will be available in listen only mode via our website www.ngsgi.com, investor relation section.
Webcast Reply: For those unable to attend or participate, a replay of the conference call will be available within 24 hours on the NGS website at www.ngsgi.com.
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. The Company manufactures, fabricates, rents and maintains natural gas
compressors that enhance the production of natural gas wells. The Company 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,
For More Information, Contact: Kimberly Huckaba, Investor Relations
(432) 262-2700
Kim.Huckaba@ngsgi.com
www.ngsgi.com
NATURAL GAS SERVICES GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
December 31,
2007 2008
ASSETS
Current Assets:
Cash and cash equivalents $245 $1,149
Short-term investments 18,661 2,300
Trade accounts receivable, net of doubtful
accounts of $110 and $177, respectively 11,322 11,321
Inventory, net of allowance for obsolescence
of $273 and $500, respectively 20,769 31,931
Prepaid income taxes 3,584 244
Prepaid expenses and other 641 87
Total current assets 55,222 47,032
Rental equipment, net of accumulated
depreciation of $16,810 and $24,624 ,
respectively 76,025 111,967
Property and equipment, net of accumulated
depreciation of $4,792 and $6,065 ,
respectively 8,580 8,973
Goodwill, net of accumulated amortization of
$325, both periods 10,039 10,039
Intangibles, net of accumulated amortization
of $1,145 and $1,198, respectively 3,324 3,020
Other assets 43 19
Total assets $153,233 $181,050
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt and
subordinated notes $4,378 $3,378
Current portion of line of credit 600 -
Accounts payable 4,072 8,410
Accrued liabilities 3,990 3,987
Current income tax liability 3,525 110
Deferred income 81 38
Total current liabilities 16,646 15,923
Long term debt, less current portion 9,572 6,194
Line of credit, less current portion - 7,000
Deferred income tax payable 12,635 21,042
Other long term liabilities - 441
Total liabilities 38,853 50,600
Stockholders' equity:
Preferred stock, 5,000 shares authorized, no
shares issued or outstanding - -
Common stock, 30,000 shares authorized, par
value $0.01 ; 12,085 and 12,094 shares issued
and outstanding, respectively 121 121
Additional paid-in capital 83,460 83,937
Retained earnings 30,799 46,392
Total stockholders' equity 114,380 130,450
Total liabilities and stockholders' equity $153,233 $181,050
NATURAL GAS SERVICES GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except earnings per share)
(unaudited)
For the Year
Ended
December 31,
2007 2008
Revenue:
Sales, net $41,088 $41,380
Rental income 30,437 42,864
Service and maintenance income 964 1,092
Total revenue 72,489 85,336
Operating costs and expenses:
Cost of sales, exclusive of depreciation
stated separately below 28,124 28,052
Cost of rentals, exclusive of depreciation
stated separately below 12,382 16,193
Cost of service and maintenance, exclusive
of depreciation stated
separately below 600 749
Selling, general and administrative expense 5,324 5,842
Depreciation and amortization 7,470 9,925
Total operating costs and expenses 53,900 60,761
Operating income 18,589 24,575
Other income (expense):
Interest expense (1,155) (742)
Other income 1,299 387
Total other income (expense) 144 (355)
Income before provision for income taxes 18,733 24,220
Provision for income taxes:
Current 3,525 220
Deferred 2,930 8,407
Total income tax expense 6,455 8,627
Net income 12,278 15,593
Earnings per common share:
Basic $1.02 $1.29
Diluted $1.01 $1.28
Weighted average common shares outstanding:
Basic 12,071 12,090
Diluted 12,114 12,143
SOURCENatural Gas Services Group, Inc. -0-03/04/2009 /CONTACT: Kimberly Huckaba, Investor Relations, ofNatural Gas Services Group, Inc. , +1-432-262-2700, Kim.Huckaba@ngsgi.com/ /Web Site: http://www.ngsgi.com/ / (NGS) CO:Natural Gas Services Group, Inc. ST:Texas IN: OIL GAS SU: ERN CCA PR -- CL78631 -- 453103/04/2009 09:23 EST http://www.prnewswire.com
