Natural Gas Services Group Announces Second Quarter and Six Months Financial Results
33% Increase in Revenue for the Three Months to $3.2 Million
9% Increase in Revenue for the Six Months to $5.6 Million
MIDLAND, Texas, Aug. 6 /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 second quarter and six months ended June 30, 2003.
Revenue for the second quarter ended June 30, 2003, increased 33% to $3,220,815 as compared to $2,429,160 for the same period in 2002. Revenues for the six months ended June 30, 2003, increased 9% to $5,564,560, as compared to $5,119,556 for the same period in 2002. The increase in revenue during the second quarter and six months reflects an increase in revenue from the rental of natural gas compressor units and also additional revenue recognized from the sale of our irrigation pump engines.
Net income for the three months ended June 30, 2003, increased 30% to $315,152 or $.06 per share (diluted), as compared to net income of $242,933 or $.05 per share (diluted) for the same period in 2002. Net income for the six months ended June 30, 2003, increased 28% to $433,035 or $.07 per share (diluted), as compared to net income of $339,109 or $.06 per share (diluted) for same period in 2002.
EBITDA (see discussion of EBITDA at the end of this release) increased 16% to $1,146,194 for the three months ended June 30, 2003, versus $982,609 for the same period in 2002. EBITDA increased 11% to $1,863,982 for six months ended June 30, 2003, versus $1,679,112 for the same period in 2002.
NGS's rental fleet grew by 15% during the six months ended June 30, 2003. The Company ended the quarter with 353 compressor packages in its rental fleet, up from 254 units at June 30, 2002, and 308 units at December 31, 2002.
Wayne Vinson, President and CEO of Natural Gas Services Group, Inc. said, "We are extremely pleased with our quarter-to-quarter growth. With a 67% increase in revenue for the three months and 53% increase in revenue for the six months in our core leasing business, the second quarter and six months were significant accomplishments for Natural Gas Services Group. As the second quarter financial results show, our core leasing business remains quite profitable. We have been able to do this by delivering a high-value product to the small to mid-sized compressor market that meets their critical needs. Historically, our equipment utilization rate remains around 90% and our operating margins are well above the industry norms. As we move into our third quarter we will continue with our strategic initiatives. While the economy continues to firm up, our goal is to continue to meet the market demand for our products."
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
972-355-6070
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 EBITDA to net income is as follows:
Three months ended Six months ended
June 30, June 30,
2003 2002 2003 2002
EBITDA $1,146,194 $ 982,609 $1,863,982 $1,679,112
Adjustments to
reconcile EBITDA
to net income:
Amortization
and depreciation (417,589) (283,196) (779,555) (537,600)
Interest expense (175,706) (265,480) (329,789) (522,840)
Provision for
income tax (237,747) (191,000) (321,603) (279,563)
Net income $ 315,152 $ 242,933 $ 433,035 $ 339,109
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.
Natural Gas Services Group, Inc.
Consolidated Income Statements
(unaudited)
Three months ended Six months ended
June 30, June 30,
2003 2002 2003 2002
Revenue:
Sales $ 939,838 $ 962,252 $1,505,110 $2,311,269
Service and maintenance 516,573 410,158 893,883 752,020
Leasing income 1,764,404 1,056,750 3,165,567 2,056,267
3,220,815 2,429,160 5,564,560 5,119,556
Cost of revenue:
Cost of sales 713,624 472,567 1,146,797 1,561,452
Cost of service
and maintenance 335,928 348,634 671,229 658,049
Cost of leasing 406,867 303,764 767,784 586,299
1,456,419 1,124,965 2,585,810 2,805,800
Gross Margin 1,764,396 1,304,195 2,978,750 2,313,756
Operating Cost:
Selling expense 185,604 119,003 324,551 243,670
General and
administrative expense 410,838 326,946 791,004 600,487
Amortization &
depreciation 417,589 283,196 779,555 537,600
1,014,031 729,145 1,895,110 1,381,757
Operating income 750,365 575,050 1,083,640 931,999
Interest expense (175,706) (265,480) (329,789) (522,840)
Equity in earnings
of joint venture --- 124,151 --- 207,603
Other income (21,760) 212 787 1,910
Income before income taxes 552,899 433,933 754,638 618,672
Income tax expense 237,747 191,000 321,603 279,563
Net income 315,152 242,933 433,035 339,109
Preferred dividends 31,010 31,430 62,020 75,614
Net income available
to common shareholders $ 284,142 $ 211,503 $ 371,015 $ 263,495
Earnings per share:
Basic $0.06 $0.06 $0.08 $0.08
Diluted $0.06 $0.05 $0.07 $0.06
Weighted average Shares:
Basic 4,875,324 3,357,632 4,866,527 3,357,632
Diluted 5,024,774 4,193,490 5,116,332 4,163,710
Natural Gas Services Group, Inc.
Consolidated Balance Sheet
(unaudited)
June 30, 2003
ASSETS
Current Assets:
Cash and cash equivalents $ 976,004
Accounts receivable - trade 1,482,762
Inventory 2,292,196
Prepaid expenses 81,156
Total current assets 4,832,118
Lease equipment, net 16,709,633
Other property, plant and equipment, net 2,616,661
Goodwill, net 2,589,655
Patents, net 127,684
Other assets 114,605
Total assets $ 26,990,356
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long term debt and capital lease $ 2,278,951
Accounts payable and accrued liabilities 973,025
Unearned Income 588,007
Total current liabilities 3,839,983
Long term debt and capital lease, less current portion 6,708,947
Subordinated notes, net 1,376,865
Deferred income tax payable 1,492,573
Total liabilities 13,418,368
SHAREHOLDERS' EQUITY
Preferred stock $ 3,577
Common stock 49,816
Paid in capital 11,167,733
Retained earnings 2,350,862
Total shareholders' equity 13,571,988
Total liabilities and shareholders' equity $ 26,990,356
SOURCE Natural Gas Services Group, Inc.
CONTACT: Wayne Vinson, CEO, or Wallace Sparkman, both of Natural Gas Services Group, Inc., +1-800-580-1828; or investor relations, Jim Drewitz, +1-972-355-6070/
/Web site: http://www.ngsgi.com /
