Natural Gas Services Group Announces a 62% Increase in Net Income and a 53% Increase in EPS (Diluted) for the Twelve Months Ended December 31, 2007
56% Increase In Net Income For The Three Months Ended December 31, 2007 to
$3.6 Million
58% Increase In EPS (Diluted) For The Three Months Ended December 31, 2007 to
$0.30 per share
MIDLAND, Texas, Feb. 21 /PRNewswire-FirstCall/ -- Natural Gas Services Group, Inc. (Amex: NGS), a leading provider of equipment and services to the natural gas industry, announces its financial results for the fourth quarter and twelve months ended December 31, 2007.
(in thousands of
dollars, except Three Months Twelve Months
per share amounts) Ended Ended
December 31, Change December 31, Change
2006 2007 2006 2007
(unaudited) (unaudited)
Revenue $16,563 $19,502 18 % $62,729 $72,489 16 %
Operating income $3,476 $5,020 44 % $12,131 $18,589 53 %
Net income $2,320 $3,614 56 % $7,588 $12,278 62 %
EPS (Basic) $0.19 $0.30 58 % $0.67 $1.02 52 %
EPS (Diluted) $0.19 $0.30 58 % $0.66 $1.01 53 %
EBITDA $5,737 $7,279 27 % $19,541 $27,358 40 %
Weighted avg.
shares outstanding:
Basic 12,016 12,082 11,405 12,071
Diluted 12,078 12,133 11,472 12,114
Revenue: Total revenue increased from $16.6 million to $19.5 million, or 18%, for the three months ended December 31, 2007, compared to the same period ended December 31, 2006. This increase was the result of a 27% growth in rental revenue and a 12% increase in sales revenue. Total revenues for the comparable twelve month periods increased 16%, or $9.8 million. This increase was the result of 29% higher rental revenue and 8% greater sales revenue.
Operating income: Operating income increased from $3.5 million to $5.0 million, or 44%, for the three months ended December 31, 2007, compared to the same period ended December 31, 2006. Operating income increased from $12.1 million to $18.6 million, or 53%, for the twelve months ended December 31, 2007 compared to the same period ended December 31, 2006. Growth in operating income benefited primarily from the appreciably higher compressor sales gross margins achieved in the comparable quarterly and year-to-date periods.
Net income: Net income for the three months ended December 31, 2007, increased 56% to $3.6 million, as compared to net income of $2.3 million for the same period in 2006. Net income for the twelve months ended December 31, 2007 increased 62% to $12.3 million, as compared to net income of $7.6 million for the same period in 2006. The increase for the twelve months of 2007 was mainly the result of increased operating income, a lower income tax rate, and a lower interest expense from our reduced debt balances.
EBITDA: EBITDA (see discussion of EBITDA at the end of this release) increased 27% to $7.3 million for the fourth quarter ended December 31, 2007, versus $5.7 million for the same period in 2006. EBITDA grew 40% to $27.4 million for the twelve months ended December 31, 2007, compared to $19.5 million for the same period in 2006.
Earnings per Share: Earnings per diluted share were $0.30 during the three months ending December 31, 2007 as compared to $0.19 during the same 2006 period, a 58% increase. Comparing the twelve months of 2006 versus 2007, our earnings per diluted share grew from $0.66 to $1.01, or 53%.
Steve Taylor, President and CEO of Natural Gas Services Group, Inc. said, "Our excellent financial results not only verify our ability to execute on our plan, but continue to confirm that we are a leader in our market. We continue to be encouraged by the opportunities we see and our ability to capitalize on them and anticipate adding a record 300-350 rental compressors to the fleet in 2008."
The Company has scheduled a conference call Thursday, February 21, 2008 at 10:00 a.m., Central Standard Time, to discuss 2007 Fourth Quarter and Twelve Months Financial Results.
What: Natural Gas Services Group, Inc. 2007 Fourth Quarter and Twelve Months Financial Results Conference Call
When: Thursday, February 21, 2008 at 10:00 a.m., CST
How: Live via phone by dialing 800-624-7038. Code: Natural Gas Services. Participants to the Conference call should call in at least 5 minutes prior to the start time.
Steve Taylor, President and CEO of Natural Gas Services Group, Inc. will be leading the call and discussing fourth quarter and twelve months financial results.
About Natural Gas Services Group, Inc. (NGS)
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, Texas with manufacturing facilities located in Tulsa, Oklahoma, Lewiston, Michigan and Midland, Texas and service facilities located in major gas producing basins in the U.S.
For More Information, Contact:
Jim Drewitz, Investor Relations
830-669-2466
jim@jdcreativeoptions.com
Or visit the Company's website at www.ngsgi.com
"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 United States of America ("GAAP"), and should not be considered a substitute for other financial measures of performance. EBITDA as calculated by NGS may not be comparable to EBITDA as calculated and reported by other companies. The most comparable GAAP measure to EBITDA is net income. The reconciliation of net income to EBITDA and gross margin is as follows:
Three months ended Twelve months ended
(in thousands of dollars) December 31, December 31,
2006 2007 2006 2007
Net income $2,320 $3,614 $7,588 $12,278
Interest expense 339 276 1,646 1,155
Provision for income taxes 1,193 1,367 4,287 6,455
Depreciation and
amortization 1,885 2,022 6,020 7,470
EBITDA $5,737 $7,279 $19,541 $27,358
Other operating expenses 1,445 1,551 5,270 5,324
Other expense (income) (375) (237) (1,390) (1,299)
Gross margin $6,807 $8,593 $23,421 $31,383
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. Because we use capital assets, 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.
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 Securities and Exchange Commission.
NATURAL GAS SERVICES GROUP, INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except per share data)
December 31,
2006 2007
ASSETS
Current Assets:
Cash and cash equivalents $4,391 $245
Short-term investments 25,052 18,661
Trade accounts receivable, net of doubtful
accounts of $110, both periods 8,463 11,322
Inventory, net of allowance for
obsolescence of $347 and $273, respectively 16,943 20,769
Prepaid income taxes - 3,584
Prepaid expenses and other 321 641
Total current assets 55,170 55,222
Rental equipment, net of accumulated
depreciation of $11,320 and $16,810,
respectively 59,866 76,025
Property and equipment, net of accumulated
depreciation of $3,679 and $4,792,
respectively 6,714 8,580
Goodwill, net of accumulated amortization of
$325, both periods 10,039 10,039
Intangibles, net of accumulated amortization
of $819 and $1,145, respectively 3,650 3,324
Other assets 113 43
Total assets $135,552 $153,233
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt and
subordinated notes $4,442 $4,378
Line of credit - 600
Accounts payable 2,837 4,072
Accrued liabilities 2,077 3,990
Current income tax liability 1,056 3,525
Deferred income 225 81
Total current liabilities 10,637 16,646
Long term debt, less current portion 12,950 9,572
Subordinated notes-related parties, less
current portion 1,000 -
Deferred income tax payable 9,764 12,635
Total liabilities 34,351 38,853
Stockholders' equity:
Preferred stock, 5,000 shares authorized,
no shares outstanding - -
Common stock, 30,000 shares authorized, par
value $0.01;12,046 and 12,085 shares issued
and outstanding, respectively 120 121
Additional paid-in capital 82,560 83,460
Retained earnings 18,521 30,799
Total stockholders' equity 101,201 114,380
Total liabilities and stockholders' equity $135,552 $153,233
NATURAL GAS SERVICES GROUP, INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share data)
For the Years Ended December 31,
2005 2006 2007
Revenue:
Sales, net $30,278 $38,214 $41,088
Service and maintenance income 2,424 979 964
Rental income 16,609 23,536 30,437
Total revenue 49,311 62,729 72,489
Operating costs and expenses:
Cost of sales, exclusive of
depreciation stated separately below 23,331 29,629 28,124
Cost of service, exclusive of
depreciation stated separately below 1,479 735 600
Cost of rental, exclusive of
depreciation stated separately below 6,528 8,944 12,382
Selling, general and administrative
expense 4,890 5,270 5,324
Depreciation and amortization 4,224 6,020 7,470
Total operating costs and expenses 40,452 50,598 53,900
Operating income 8,859 12,131 18,589
Other income (expense):
Interest expense (1,997) (1,646) (1,155)
Other income 199 1,390 1,299
Total other income (expense) (1,798) (256) 144
Income before provision for income taxes 7,061 11,875 18,733
Provision for income taxes:
Current 207 1,743 3,525
Deferred 2,408 2,544 2,930
Total income tax expense 2,615 4,287 6,455
Net income 4,446 7,588 12,278
Earnings per common share:
Basic $0.59 $0.67 $1.02
Diluted $0.52 $0.66 $1.01
Weighted average common shares outstanding:
Basic 7,564 11,405 12,071
Diluted 8,481 11,472 12,114
NATURAL GAS SERVICES GROUP, INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
For the Years Ended December 31,
2005 2006 2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $4,446 $7,588 $12,278
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 4,224 6,020 7,470
Deferred taxes 2,408 2,544 2,930
Employee stock option expense 135 376 541
Loss (gain) on disposal of assets (28) 13 (1)
Changes in current assets:
Trade accounts and other receivables (1,352) (2,271) (2,859)
Inventory (5,699) 749 (3,826)
Prepaid expenses and other (362) 135 (3,904)
Changes in current liabilities:
Accounts payable and accrued liabilities 337 (3) 3,228
Current income tax liability 187 849 2,581
Deferred income (855) 122 (144)
Other assets 348 (46) (25)
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,789 16,076 18,269
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (17,708) (27,684) (25,307)
Purchase of short-term investments - (38,252) (2,609)
Redemption of short-term investments - 13,200 9,000
Assets acquired, net of cash (7,584) - -
Proceeds from sale of property
and equipment 264 73 95
Changes in restricted cash 2,000 - -
NET CASH USED IN INVESTING ACTIVITIES (23,028) (52,663) (18,821)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from line of credit 300 1,375 600
Proceeds from long-term debt 21,517 68 -
Repayments of long-term debt (13,077) (9,581) (4,442)
Repayment of line of credit - (1,675) -
Proceeds from exercise of stock
options and warrants 13,085 357 248
Proceeds from sale of stock, net
of transaction costs - 47,163 -
NET CASH PROVIDED BY FINANCING ACTIVITIES 21,825 37,707 (3,594)
NET CHANGE IN CASH 2,586 1,120 (4,146)
CASH AT BEGINNING OF PERIOD 685 3,271 4,391
CASH AT END OF PERIOD $3,271 $4,391 $245
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Interest paid $1,877 $1,692 $1,191
Income taxes paid $24 $894 $4,620
SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Assets acquired for issuance of
subordinated debt 3,000 - -
Assets acquired for issuance of
common stock 5,120 - -
SOURCE Natural Gas Services Group, Inc.
-0- 02/21/2008
/CONTACT: Jim Drewitz, Investor Relations, for Natural Gas Services
Group, Inc., +1-830-669-2466, jim@jdcreativeoptions.com/
/Web Site: http://www.ngsgi.com /
(NGS)
CO: Natural Gas Services Group, Inc.
ST: Texas
IN: OIL FIN
SU: ERN CCA
EE-DL
-- CLTH054 --
8953 02/21/2008 09:25 EST http://www.prnewswire.com
