Natural Gas Services Group Announces Fourth Quarter and Year End Financial Results
66% Increase in Revenue for the Three Months to $3.5 Million
24% Increase in Revenue for the Twelve Months to $12.7 Million
MIDLAND, Texas, March 1 /PRNewswire-FirstCall/ -- Natural Gas Services Group, Inc. (Amex: NGS), a leading provider of equipment and services to the natural gas and oil industry, announces its financial results for the fourth quarter and twelve months ended December 31, 2003.
Natural Gas Service Group, Inc.
Fourth Fourth Twelve Twelve
Quarter Quarter Change Months Months Change
2003 2002 2003 2002
Revenues $3,485,406 $2,095,601 66.3% $12,749,522 $10,296,541 24%
Net Income $489,691 $78,044 527% $1,307,133 $786,085 66%
EPS (Basic) $0.09 $0.02 428% $0.24 $0.19 29%
EPS (Diluted) $0.09 $0.02 411% $0.23 $0.16 43%
Cash flow
from
operation $3,024,420 $2,205,953
EBITDA $1,231,856 $681,166 80.9% $4,396,771 $3,511,271 25.2%
Weighted avg.
shares
outstanding:
Basic 5,051,851 4,515,241 4,946,922 3,649,413
Diluted 5,386,928 4,661,728 5,252,531 4,305,053
Revenue for the fourth quarter ended December 31, 2003, increased 66% to $3,485,406 as compared to $2,095,601 for the same period in 2002. Revenue for the twelve months ended December 31, 2003, increased 24% to $12,749,522 as compared to $10,296,541 for the same period in 2002. The increase in revenue during the fourth quarter and twelve months reflects a significant increase in revenue from the rental of natural gas compressor units and a slight increase in service and maintenance revenue.
Net income for the fourth quarter ended December 31, 2003, increased 527% to $489,691 or $.09 per share (diluted), as compared to net income of $78,044 or $.02 per share (diluted) for the same period in 2002. Net income for the twelve months ended December 31, 2003, increased 66% to $1,307,133 or $.23 per share (diluted), as compared to net income of $786,085 or $.16 per share (diluted) for same period in 2002. Earnings Per Share was affected by the increase of 1.5 million shares for the initial public offering in the fourth quarter of 2002.
NGSG's rental fleet grew by 46% during the twelve months ended December 31, 2003. The Company ended the year with 399 compressor packages in its rental fleet, up from 274 units at December 31, 2002. The company anticipates adding rental units this year at a cost of approximately $10 million and expects total revenue to grow by approximately 28%.
Wayne Vinson, President and CEO of Natural Gas Services Group, Inc. said, "We delivered consistent sales and earning growth throughout 2003.
Here are some key indicators comparing year end 2003 to year end 2002:
Services and Maintenance income up 13.5% to $1.7 million.
Leasing income up 61.7% to $7 million.
Gross Margin up 42% to $6.7 million.
Operating income up 45% to $2.7 million.
EBITDA up 25% to $4.4 million.
Natural Gas Services 2003 financial performance scored on all major areas: revenue growth, profitability and positive cash flow, reflecting the strength of our strategic business model, the dedication of our team and the value of delivering a high-value product to the small to mid-sized compressor market that meets their critical needs. Our 2003 profitability reflected two actions which further demonstrate the Company's performance oriented strategy and tight fiscal management. We are moving confidently into 2004 with strong balance sheet, a healthy backlog and a platform for growth."
The Company has scheduled a conference call Monday, March 1 at 3:15 PM Central Standard Time to discuss 2003 financial results.
What: Natural Gas Services 2003 Fourth Quarter and Year End Financial Results Conference Call
When: Monday, March 1, 2004 - 3:15 PM Central Standard Time
How: Live via phone by dialing 800-936-4602. Code: Natural Gas Services. Participants to the conference call should call in at least 5 minutes prior to the start time.
About Natural Gas Services Group, Inc. (NGS)
NGS manufactures, fabricates, sells, leases and services natural gas compressors that enhance the production of oil and gas wells. The Company also manufactures and sells flare systems and flare ignition systems for plant and production facilities.
For More Information, Contact: Wayne Vinson, CEO or Wallace Sparkman
800-580-1828
Jim Drewitz, Investor Relations
jdrewitz@comcast.net
972-355-6070
"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 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 EBITDA to net income is as follows:
Three months ended Twelve months
December 31, December 31,
2003 2002 2003 2002
EBITDA $1,231,856 $681,166 $4,396,771 $3,511,271
Adjustments to reconcile
EBITDA to net income:
Amortization and
depreciation (490,599) (326,911) (1,725,717) (1,166,004)
Interest expense (166,362) (179,311) (667,122) (975,719)
Provision for income tax (85,204) (96,900) (696,799) (583,463)
Net income $489,691 $78,044 $ 1,307,133 $786,085
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-KSB filed with the Securities and Exchange Commission.
CONSOLIDATED BALANCE SHEET
December 31, 2003
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $176,202
Trade accounts receivable, net of doubtful
accounts of $5,000 816,596
Inventory 2,554,239
Prepaid expenses and other 107,030
Total current assets 3,654,067
LEASE EQUIPMENT, net of accumulated depreciation
of $2,978,848 18,986,190
PROPERTY AND EQUIPMENT, net of accumulated
depreciation of $906,736 2,818,438
GOODWILL, net of accumulated amortization of $325,192 2,589,655
PATENTS, net of accumulated amortization of $137,423 113,941
OTHER ASSETS 107,900
Total assets $28,270,191
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and capital lease $2,363,927
Line of credit 300,000
Accounts payable and accrued liabilities 1,070,652
Deferred income 207,215
Total current liabilities 3,941,794
LONG-TERM DEBT AND CAPITAL LEASE, less current portion 6,650,486
SUBORDINATED NOTES, net of discount of $129,918 1,409,343
DEFERRED TAX LIABILITY 1,843,406
COMMITMENT
STOCKHOLDERS' EQUITY:
Preferred stock, 5,000,000 shares authorized,
par value $0.01:
10 % Convertible Series A: 381,654 shares
authorized, 343,654 shares outstanding;
10% cumulative, liquidation preference of
$1,116,876 3,437
Common stock, 30,000,000 shares authorized,
par value $0.01; 5,031,181 shares issued
and outstanding 50,311
Additional paid-in capital 11,205,375
Retained earnings 3,166,039
Total stockholders' equity 14,425,162
Total liabilities and stockholders' equity $28,270,191
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended
December 31,
2003 2002
REVENUE:
Sales, net $3,865,045 $4,335,721
Service and maintenance income 1,773,256 1,562,650
Leasing income and interest 7,111,221 4,398,170
Total revenue 12,749,522 10,296,541
COSTS OF REVENUE:
Cost of sales 2,859,572 3,078,429
Cost of service 1,243,499 1,326,572
Cost of leasing 1,953,525 1,166,530
Total costs of revenue 6,056,596 5,571,531
GROSS PROFIT 6,692,926 4,725,010
OPERATING EXPENSES:
Selling expenses 678,777 499,721
General and administrative 1,613,076 1,218,513
Depreciation and amortization 1,725,717 1,166,004
Total operating expenses 4,017,570 2,884,238
INCOME FROM OPERATIONS 2,675,356 1,840,772
OTHER INCOME (EXPENSE):
Interest expense (667,122) (975,719)
Equity in earnings of joint venture --- 485,109
Other income (expense) (4,302) 19,386
Total other income (expense) (671,424) (471,224)
INCOME BEFORE PROVISION FOR INCOME TAXES 2,003,932 1,369,548
PROVISION FOR INCOME TAXES:
Current 25,000 25,900
Deferred 671,799 557,563
Total income tax expense 696,799 583,463
NET INCOME 1,307,133 786,085
PREFERRED DIVIDENDS 120,941 106,624
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $1,186,192 $679,461
NET INCOME PER COMMON SHARE:
Basic $0.24 $0.19
Diluted $0.23 $0.16
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 4,946,922 3,649,413
Diluted 5,252,531 4,305,053
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
2003 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,307,133 $786,085
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 1,725,717 1,166,004
Deferred taxes 671,799 557,563
Amortization of debt issuance costs 64,956 70,369
Gain on disposal of assets 18,615 (15,066)
Warrants issued for debt guarantee --- 42,025
Equity in earnings of joint venture --- (485,109)
Changes in current assets:
Trade and other receivables (391,498) 276,588
Inventory (1,078,445) 139,614
Prepaid expenses and other 66,272 (11,888)
Changes in current liabilities:
Accounts payable and accrued
liabilities 542,790 (348,549)
Deferred income 173,678 134,187
Other changes (76,597) (105,870)
Net cash provided by operating
activities 3,024,420 2,205,953
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (7,881,720) (4,414,952)
Proceeds from sale of property and equipment 119,500 40,000
Distribution from equity method investment 107,774 405,466
Decrease in lease receivable 210,512 84,908
Net cash used in investing activities (7,443,934) (3,884,578)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from lines of credit 300,000 ---
Proceeds from long-term debt 3,478,568 1,956,893
Repayments of long-term debt (2,013,546) (4,463,612)
Dividends on preferred stock (120,941) (106,624)
Proceeds from sale of stock and exercise
of stock options and warrants 237,997 6,529,170
Net proceeds from preferred stock sales --- 12,767
Purchase of warrants from underwriter --- (43,000)
Net cash provided by
financing activities 1,882,078 3,885,594
NET CHANGE IN CASH (2,537,436) 2,206,969
CASH, beginning of year 2,713,638 506,669
CASH, end of year $176,202 $2,713,638
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $667,122 $975,719
Income taxes paid $35,292 $4,110
SOURCE Natural Gas Services Group, Inc.
-0- 03/01/2004
/CONTACT: Wayne Vinson, CEO, or Wallace Sparkman, both of Natural Gas
Services Group, Inc., +1-800-580-1828; or Jim Drewitz, Investor Relations,
+1-972-355-6070, or jdrewitz@comcast.net , for Natural Gas Services Group,
Inc./
(NGS)
CO: Natural Gas Services Group, Inc.
ST: Texas
IN: OIL OTC
SU: ERN CCA MAV
GN-CD
-- DAM025 --
0975 03/01/2004 08:25 EST http://www.prnewswire.com
