Natural Gas Services Group Announces Third Quarter and Nine Months Financial Results
MIDLAND, Texas, Nov 04, 2003 /PRNewswire-FirstCall via Comtex/ -- 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 third quarter and nine months ended September 30, 2003.
Revenue for the third quarter ended September 30, 2003, increased 20% to $3,699,556 as compared to $3,081,384 for the same period in 2002. Revenue for the nine months ended September 30, 2003, increased 13% to $9,264,116 as compared to $8,200,940 for the same period in 2002. The increase in revenue during the third quarter and nine months reflects an increase in revenue from the rental of natural gas compressor units and a slight increase in service and maintenance revenue.
Net income for the three months ended September 30, 2003, increased 4% to $384,407 or $.06 per share (diluted), as compared to net income of $368,932 or $.08 per share (diluted) for the same period in 2002. Net income for the nine months ended September 30, 2003, increased 15% to $817,442 or $.14 per share (diluted), as compared to net income of $708,041 or $.15 per share (diluted) for same period in 2002. Earnings Per Share were affected by the increase of 1.5 million shares for the initial public offering in the fourth quarter of 2002.
EBITDA (see discussion of EBITDA at the end of this release) increased 13% to $1,300,933 for the three months ended September 30, 2003, versus $1,150,993 for the same period in 2002. EBITDA increased 12% to $3,164,915 for nine months ended September 30, 2003, versus $2,830,105 for the same period in 2002.
NGS's rental fleet grew by 35% during the nine months ended September 30, 2003. The Company ended the quarter with 371 compressor packages in its rental fleet, up from 274 units at September 30, 2002.
Wayne Vinson, President and CEO of Natural Gas Services Group, Inc. said, "We are pleased with our quarter-over-quarter growth. Our Year-To-Date financials are strong and getting stronger.
"Here are some key indicators comparing September 2002 to September 2003:
Services and Maintenance income up 13% to $1.3 million.
Leasing income up 55% to $5 million.
Operating income up 18% to $1.9 million.
Net income up 15% to $817,442.
EBITDA up 12% at $3.2 million.
Diluted Earnings Per Share at $.14.
"As the third quarter and nine months 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. As we continue to focus on the execution of our marketing and sales strategies, we are pleased with the increasing acceptance of our products and the acceleration of new account penetration. We have a strong balance sheet, a healthy backlog and are on track for a successful fourth quarter and fiscal year 2004. We remain extremely optimistic about our prospects for continued growth."
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 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 Nine months ended
Sept. 30, Sept. 30,
2003 2002 2003 2002
EBITDA $1,300,933 $1,150,993 $3,164,915 $2,830,105
Adjustments to
reconcile EBITDA
to net income:
Amortization and
depreciation (455,563) (301,493) (1,235,118) (839,093)
Interest expense (170,971) (273,568) (500,760) (796,408)
Provision for
income tax (289,992) (207,000) (611,595) (486,563)
Net income $384,407 $368,932 $817,442 $708,041
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 Balance Sheet
(unaudited)
September 30, 2003
ASSETS
Current Assets:
Cash and cash equivalents $258,276
Accounts receivable - trade 1,584,767
Lease receivable - net of unearned interest ---
Inventory 2,546,683
Prepaid expenses 130,344
Total current assets 4,520,070
Lease equipment, net 17,537,997
Other property, plant and equipment, net 2,779,335
Goodwill, net of accumulated amortization 2,589,655
Patents, net of accumulated amortization 120,812
Investment in Joint Venture ---
Lease receivable net of unearned interest ---
Other assets 79,200
Total assets $27,627,069
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long term debt and
capital lease $2,342,151
Accounts payable and accrued liabilities 1,411,129
Unearned Income 492,271
Total current liabilities 4,245,551
Long term debt and capital lease, less
current portion 6,273,100
Subordinated notes, net 1,393,104
Deferred income tax payable 1,773,202
Total liabilities 13,684,957
SHAREHOLDERS' EQUITY
Preferred stock 3,437
Common stock 50,221
Paid in capital 11,183,715
Retained earnings 2,704,739
Total shareholders' equity 13,942,112
Total liabilities and shareholders' equity $27,627,069
Natural Gas Services Group, Inc.
Consolidated Income Statements
(unaudited)
Three months ended Nine months ended
Sept. 30, Sept. 30,
2003 2002 2003 2002
Revenue:
Sales $1,372,248 $1,438,069 $2,877,358 $3,749,300
Service and
maintenance 452,714 439,522 1,346,597 1,191,580
Leasing income 1,874,594 1,203,793 5,040,161 3,260,060
3,699,556 3,081,384 9,264,116 8,200,940
Cost of revenue:
Cost of sales 1,008,771 963,035 2,155,568 2,543,287
Cost of service
and maintenance 290,008 373,594 961,237 1,012,843
Cost of leasing 545,309 329,850 1,313,093 916,149
1,844,088 1,666,479 4,429,898 4,472,279
Gross Margin 1,855,468 1,414,905 4,834,218 3,728,661
Operating Cost:
Selling expense 159,870 134,786 484,421 378,456
General and
administrative
expense 395,918 276,523 1,186,922 877,010
Amortization and
depreciation 455,563 301,493 1,235,118 839,093
1,011,351 712,802 2,906,461 2,094,559
Operating income 844,117 702,103 1,927,757 1,634,102
Interest expense (170,971) (273,568) (500,760) (796,408)
Equity in earnings
of joint venture --- 132,081 --- 339,684
Other income 1,253 15,316 2,040 17,226
Income before income
taxes 674,399 575,932 1,429,037 1,194,604
Income tax expense 289,992 207,000 611,595 486,563
Net income 384,407 368,932 817,442 708,041
Preferred dividends 30,530 31,009 92,550 106,624
Net income available
to common
shareholders $353,877 $337,923 $724,892 $601,417
Earnings per share:
Basic $0.07 $0.10 $0.15 $0.18
Diluted $0.06 $0.08 $0.14 $0.15
Weighted average
shares:
Basic 4,995,713 3,357,632 4,910,062 3,357,632
Diluted 5,733,327 4,091,862 5,208,096 4,136,709
EBITDA $1,300,933 $1,150,993 $3,164,915 $2,830,105
Natural Gas Services Group, Inc.
Consolidated Statements of Cash Flows
(unaudited)
Nine Months Nine Months
Ended Ended
September 30, September 30,
2003 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $817,442 $708,041
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and amortization 1,235,120 839,093
Deferred taxes 602,202 486,563
Amortization of debt issuance costs 48,717 48,717
Warrants Issued for debt guarantee --- 42,025
Equity in earnings of joint venture --- (339,684)
Gain on disposal of assets 10,547 (15,066)
Changes in operating assets:
Trade and other receivables (938,817) 246,047
Inventory and work in progress (1,000,735) (191,713)
Prepaid expenses and other 42,958 (85,097)
Changes in current liabilities:
Accounts payable and accrued liabilities 708,971 157,906
Deferred income 174,710 74,129
Other (60,436) (26,209)
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,640,679 1,944,752
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (5,900,453) (3,025,780)
Acquisition of remaining interest in joint
venture, net of cash acquired 242,753 ---
Proceeds from sale of property and equipment 112,500 40,000
Decrease in lease receivable 210,512 62,543
Distribution from equity method investee 49,090 260,868
NET CASH USED IN INVESTING ACTIVITIES (5,285,598) (2,662,369)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from bank loans and line
of credit 2,649,811 1,853,386
Repayments of long term debt (1,583,951) (647,004)
Deferred offering costs --- (250,937)
Proceeds from stock offering, net of
offering cost --- 12,724
Dividends paid on preferred stock (92,550) (75,613)
Proceeds from exercise of warrants 216,247 43
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,189,557 892,599
NET CHANGE IN CASH AND CASH EQUIVALENTS (2,455,362) 174,982
CASH AT BEGINNING OF PERIOD 2,713,638 512,669
CASH AT END OF PERIOD $258,276 $687,651
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Interest paid $500,760 $796,408
Income taxes paid $--- $---
SOURCE Natural Gas Services Group, Inc.
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, for Natural Gas Services Group, Inc.
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