MIDLAND, Texas August 18, 2020 - Natural Gas Services Group, Inc.
(“NGS” or the “Company”) (NYSE:NGS), a leading provider of natural
gas compression equipment and services to the energy industry,
today announced financial results for the three and six months
ended June 30, 2020.
Second Quarter 2020
Highlights
- Company demonstrated its resilience during the second quarter
despite a very challenging environment.
- Net income of $165,000 ($0.01 per diluted share).
- Adjusted EBITDA of $6.5 million, an increase of 13.0% over the
first quarter of 2020 and an increase of 5.3% when compared to the
second quarter of 2019. Please see Non-GAAP Financial
Measures – Adjusted EBITDA, below.
- Rental revenue of $15.1 million, an increase of 11.5% over the
second quarter of 2019.
- Modest increase in unit and horsepower utilization in June that
remained stable in July, reflecting greater stability in oil prices
and partial restoration of shut-in production.
- Company has ample liquidity and is maintaining capital spending
discipline
- $15.5 million of cash, low debt ($0.4 million), and a $15
million income tax receivable at the end of the second
quarter.
- Forecasted capital expenditures of $8-$10 million for the
second half of 2020 backed by recent rental order that will require
$6+ million in capital.
Additional Discussion of the
Quarter
Revenue: Total revenue for the
three months ended June 30, 2020 decreased to $17.4 million from
$19.9 million for the three months ended June 30, 2019. This
decrease was primarily due to a drop in sales revenue (65.5%
decrease) resulting from reduced compressor sales offset by
increased rental revenue. Rental revenue increased 11.5% to $15.1
million in the second quarter of 2020 from $13.6 million in the
second quarter of 2019 due to a greater number of large horsepower
units being rented. Total revenue decreased 2.7% to $17.4
million in the second quarter of 2020 compared to $17.9 million in
the first quarter of 2020 primarily due to a 6.0% decrease in
rental revenue that was partially offset by a 38.5% increase in
sales revenue. This sequential decrease in rental revenue was
due to shut-ins, rate reductions and unit returns in April and May
after oil prices collapsed due to the COVID-19 pandemic and
resulting crude oil demand destruction. As oil prices
stabilized starting around June 1, we received restart notices on
several wells that were recently shut-in, as utilization improved
and unit pricing
stabilized.
Gross Margins: Total
gross margins decreased 12.6% to $2.7 million for the three months
ended June 30, 2020 compared to $3.1 million for the same period in
2019. Total adjusted gross margin, exclusive of depreciation,
for the three months ended June 30, 2020, increased $0.1 million to
$8.8 million from $8.7 million for the same period ended June 30,
2019. This improvement was attributable to increased rental revenue
and higher rental margins mostly offset by lower sales revenue and
lower sales margins. Sequentially, total gross margin
increased 30.6% to $2.7 million for the three months ended June 30,
2020 compared to $2.0 million for the three months ended March 31,
2020. Excluding depreciation, total adjusted gross margin
increased 8.5% to $8.8 million during the second quarter of 2020
compared to $8.1 million during the first quarter of 2020. This
sequential increase was due to increases in sales revenue, sales
margins and rental margins that were partially offset by a decrease
in rental revenue. Sales margins increased due to higher
margin compressor sales as well as improved labor efficiency in our
fabrication facilities, while rental margins increased mostly due
to a significant decrease in maintenance and repair expense during
the second quarter. Please see discussions of Non-GAAP
Financial Measures - Adjusted Gross Margin, below.
Operating (Loss) Income:
Operating loss for the three months ended June 30, 2020 was
$148,000 compared to operating income of $302,000 for the three
months ended June 30, 2019. This increase in operating loss was
mainly due to lower sales revenue, lower sales margins and higher
depreciation expense partially offset by higher rental revenues and
improved rental margins. Operating loss in the second quarter of
2020 decreased to $148,000 compared to an operating loss of
$273,000 during the first quarter of 2020. This sequential
improvement was due to increases in sales revenue, sales margins
and rental margins that were partially offset by a decrease in
rental revenue and higher selling, general and administrative
("SG&A") expenses during the second quarter. SG&A
increased by $501,000 sequentially due to the impact of an
unrealized gain on deferred compensation that impacted first
quarter SG&A while an unrealized loss on deferred compensation
impacted the second quarter.
Net Income: Net Income:
Net Income for the three months ended June 30, 2020 was $165,000
compared to $327,000 in net income for the three months ended June
30, 2019. This decrease in net income was mainly due to lower sales
revenue, lower sales margins and higher depreciation expense
partially offset by higher rental revenues, improved rental
margins, and higher other income. Second quarter 2020 other income
was impacted by an unrealized gain on company-owned life insurance
(related to deferred compensation) of approximately $170,000 as
well a $206,000 gain on sale or disposal of assets. Sequentially,
net income during the second quarter of 2020 was $165,000 compared
to $4.1 million during the first quarter of 2020. The first quarter
of 2020 was impacted by a $4.9 million current income tax benefit
due to net operating loss carrybacks that are now allowed under the
CARES Act. After excluding this income tax benefit, the Company
generated an adjusted net loss of $808,000 in the first quarter of
2020 compared to $165,000 of net income during the second quarter.
This sequential improvement was due to increases in sales revenue,
sales margins, rental margins and other income that were partially
offset by a decrease in rental revenue and higher SG&A expenses
during the second quarter. Second quarter 2020 other income was
positively impacted by the factors mentioned above, while other
income during the first quarter of 2020 was negatively impacted by
an unrealized loss on company-owned life insurance of approximately
$262,000. Please see discussions of Non-GAAP Financial Measures -
Adjusted Net Loss, below.
Earnings per share: For the
second quarter of 2020, the Company reported earnings per diluted
share of $0.01 compared to earnings per diluted share of $0.02 in
the second quarter of 2019. Sequentially, the Company reported
earnings per diluted share of $0.01 compared to earnings per
diluted share of $0.30 in the first quarter of 2020. After
adjusting for the $4.9 million income tax benefit during the first
quarter of 2020, the Company generated an adjusted net loss per
diluted share of $0.06. Please see discussions of Non-GAAP
Financial Measures - Adjusted Net Loss, below.
Adjusted EBITDA: Adjusted
EBITDA increased 5.3% to $6.5 million for the three months ended
June 30, 2020 compared to $6.2 million for the same period in
2019. This increase was attributable to higher rental revenue
and rental margins partially offset by lower sales revenue and
lower sales margins. Sequentially, adjusted EBITDA increased
13.0% to $6.5 million for the three months ended June 30, 2020
compared to $5.8 million in the previous quarter. This
increase was attributable to higher sales revenue, higher sales
margins, higher rental margins, and increased other income
partially offset by lower rental revenues and higher SG&A
expenses. Please see discussion of Non-GAAP Financial
Measures - Adjusted EBITDA, below.
Cash flow: At June 30, 2020,
cash and cash equivalents were approximately $15.5 million, while
working capital was $54.2 million and total debt was $417,000. For
the first six months of 2020, cash flow from operating activities
was $14.8 million, while cash flow used in investing activities was
$10.8 million. Our cash flow used in investing activities included
$11.0 million in capital expenditures, of which $9.5 million was
rental capital expenditures.
Commenting on Second Quarter 2020 results, Stephen
C. Taylor, President and CEO, said:
“In spite of continued weakness in energy demand
and volatile energy commodity prices – largely a result of the
effects of the COVID-19 pandemic - NGS posted solid financial
results in the second quarter. Our ability to react rapidly to
reduce our cost structure and respond to our customers’ needs
resulted in less impact than many in our industry on both our
income statement and financial condition.
We have been able to address our customers’
requests for pricing and shut-in assistance while maintaining a
strong financial position. While our revenues declined in the
quarter, we were able to post sequential gains in both gross margin
and EBITDA.
As importantly, we continued to strengthen our
balance sheet and liquidity position, even in this very challenging
market environment. NGS delivered free cash flow during the quarter
and grew our cash balance to $15.5 million, from $13.1 million at
the end of the first quarter. Our liquidity position has continued
to strengthen into the third quarter as our cash balance at the end
of July was approximately $17 million.
While commodity prices have improved from the
trough, they remain well below levels that will spur significant
oilfield activity. While business has improved, the pace has been
slow and inconsistent, a trend we expect to gradually improve
through the balance of the year. That said, we are seeing new
opportunities for which we are uniquely qualified, and believe our
fabrication capabilities, superior service and strong financial
position will allow us to capitalize on those opportunities.”
Selected data: The tables below
show, for the three and six months ended June 30, 2020 and 2019,
revenues and percentage of total revenues, along with our gross
margin and adjusted gross margin (exclusive of depreciation and
amortization), as well as, related percentages of revenue for each
of our product lines. Adjusted gross margin is the difference
between revenue and cost of sales, exclusive of depreciation.
|
Revenue |
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
(in thousands) |
Rental |
$ |
15,131 |
|
|
87 |
% |
|
$ |
13,572 |
|
|
68 |
% |
|
$ |
31,231 |
|
|
88 |
% |
|
$ |
26,959 |
|
|
71 |
% |
Sales |
2,008 |
|
|
11 |
% |
|
5,814 |
|
|
29 |
% |
|
3,458 |
|
|
10 |
% |
|
9,939 |
|
|
26 |
% |
Service &
Maintenance |
266 |
|
|
2 |
% |
|
509 |
|
|
3 |
% |
|
606 |
|
|
2 |
% |
|
988 |
|
|
3 |
% |
Total |
$ |
17,405 |
|
|
|
|
$ |
19,895 |
|
|
|
|
$ |
35,295 |
|
|
|
|
$ |
37,886 |
|
|
|
|
Gross Margin |
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
(in thousands) |
Rental |
$ |
2,432 |
|
|
16 |
% |
|
1,381 |
|
|
10 |
% |
|
$ |
4,629 |
|
|
15 |
% |
|
$ |
3,090 |
|
|
11 |
% |
Sales |
$ |
78 |
|
|
4 |
% |
|
1,327 |
|
|
23 |
% |
|
$ |
(283) |
|
|
(8) |
% |
|
$ |
1,687 |
|
|
17 |
% |
Service &
Maintenance |
$ |
159 |
|
|
60 |
% |
|
345 |
|
|
68 |
% |
|
$ |
365 |
|
|
60 |
% |
|
$ |
664 |
|
|
67 |
% |
Total |
$ |
2,669 |
|
|
15 |
% |
|
3,053 |
|
|
15 |
% |
|
$ |
4,711 |
|
|
13 |
% |
|
$ |
5,441 |
|
|
14 |
% |
|
Adjusted Gross Margin (1) |
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
(in thousands) |
Rental |
$ |
8,502 |
|
|
56 |
% |
|
$ |
6,959 |
|
|
51 |
% |
|
16,705 |
|
|
53 |
% |
|
$ |
14,126 |
|
|
52 |
% |
Sales |
148 |
|
|
7 |
% |
|
1,395 |
|
|
24 |
% |
|
(141) |
|
|
(4) |
% |
|
1,821 |
|
|
18 |
% |
Service &
Maintenance |
166 |
|
|
62 |
% |
|
350 |
|
|
69 |
% |
|
381 |
|
|
63 |
% |
|
682 |
|
|
69 |
% |
Total |
$ |
8,816 |
|
|
51 |
% |
|
$ |
8,704 |
|
|
44 |
% |
|
$ |
16,945 |
|
|
48 |
% |
|
$ |
16,629 |
|
|
44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For a reconciliation of adjusted gross
margin to its most directly comparable financial measure calculated
and presented in accordance with GAAP, please read “Non-GAAP
Financial Measures - Adjusted Gross Margin” below.
Non-GAAP Financial Measure - Adjusted
Gross Margin: “Adjusted Gross Margin” is defined as total
revenue less cost of sales (excluding depreciation expense).
Adjusted gross margin is included as a supplemental disclosure
because it is a primary measure used by management as it represents
the results of revenue and cost of sales (excluding depreciation
expense), which are key operating components. Adjusted gross margin
differs from gross margin in that gross margin includes
depreciation expense. We believe adjusted gross margin is
important because it focuses on the current operating performance
of our operations and excludes the impact of the prior historical
costs of the assets acquired or constructed that are utilized in
those operations. Depreciation expense reflects the systematic
allocation of historical property and equipment values over the
estimated useful lives.
Adjusted gross margin has certain material
limitations associated with its use as compared to gross
margin. Depreciation expense is a necessary element of our
costs and our ability to generate revenue. Management uses
this non-GAAP measure as a supplemental measure to other GAAP
results to provide a more complete understanding of the company's
performance. As an indicator of operating performance, adjusted
gross margin should not be considered an alternative to, or more
meaningful than, gross margin as determined in accordance with
GAAP. Adjusted Gross margin may not be comparable to a similarly
titled measure of another company because other entities may not
calculate adjusted gross margin in the same manner.
The following table calculates gross margin, the
most directly comparable GAAP financial measure, and reconciles it
to adjusted gross margin:
|
Three months ended June 30, |
|
Six months ended June 30, |
|
(in thousands) |
|
(in thousands) |
2020 |
|
2019 |
|
2020 |
|
2019 |
Total revenue |
$ |
17,405 |
|
|
$ |
19,895 |
|
|
$ |
35,295 |
|
|
37,886 |
|
Costs of revenue, exclusive of depreciation |
(8,589) |
|
|
(11,191) |
|
|
(18,350) |
|
|
(21,257) |
|
Depreciation allocable to costs of revenue |
(6,147) |
|
|
(5,651) |
|
|
(12,234) |
|
|
(11,188) |
|
Gross margin |
2,669 |
|
|
3,053 |
|
|
4,711 |
|
|
5,441 |
|
Depreciation allocable to costs of revenue |
6,147 |
|
|
5,651 |
|
|
12,234 |
|
|
11,188 |
|
Adjusted Gross Margin |
$ |
8,816 |
|
|
$ |
8,704 |
|
|
$ |
16,945 |
|
|
$ |
16,629 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures - Adjusted
EBITDA: “Adjusted EBITDA” reflects net income or loss
before interest, taxes, depreciation and amortization, impairment
of goodwill, increases in inventory allowance and retirement of
rental equipment. Adjusted EBITDA is a measure used by management,
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, Adjusted EBITDA
gives the investor information as to the cash generated from the
operations of a business. However, Adjusted EBITDA is not a measure
of financial performance under accounting principles GAAP, and
should not be considered a substitute for other financial measures
of performance. Adjusted EBITDA as calculated by NGS may not be
comparable to Adjusted EBITDA as calculated and reported by other
companies. The most comparable GAAP measure to Adjusted EBITDA is
net income (loss).
The following table reconciles our net income,
the most directly comparable GAAP financial measure, to Adjusted
EBITDA:
|
Three months ended June 30, |
|
Six months ended June 30, |
|
(in thousands) |
|
(in thousands) |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net income |
$ |
165 |
|
|
$ |
327 |
|
|
$ |
4,247 |
|
|
$ |
425 |
|
Interest
expense |
8 |
|
|
4 |
|
|
11 |
|
|
8 |
|
Income tax
expense (benefit) |
57 |
|
|
152 |
|
|
(4,486) |
|
|
210 |
|
Depreciation and
amortization |
6,301 |
|
|
5,720 |
|
|
12,541 |
|
|
11,297 |
|
Adjusted
EBITDA |
$ |
6,531 |
|
|
$ |
6,203 |
|
|
$ |
12,313 |
|
|
$ |
11,940 |
|
Non GAAP Financial Measures - Adjusted
Net Loss: From time to time, management may publicly
disclose certain “non-GAAP financial measures”, such as adjusted
net loss, below, in our earnings releases, financial presentations
or earnings conference calls. These non-GAAP measures are not in
accordance with, or a substitute for, measures prepared in
accordance with GAAP, and may be different from non-GAAP measures
used by other companies. In addition, these non-GAAP measures are
not based on any comprehensive set of accounting rules or
principles. Non-GAAP measures have limitations in that they do not
reflect all of the amounts associated with the Company’s results of
operations that would be reflected in measures determined in
accordance with GAAP. Adjusted operating loss in the first quarter
of 2020 excludes an income tax benefit related to a recent tax law
change.
The reconciliation of net loss to adjusted net
loss for the three months ended March 31, 2020 is as follows:
|
Three months ended March 31, 2020 |
|
(in thousands) |
|
per diluted share(1) |
Reported net
income |
$ |
4,082 |
|
|
$ |
0.30 |
|
Income tax
benefit related to recent tax law change |
(4,890) |
|
|
(0.36) |
|
Adjusted net
loss |
$ |
(808) |
|
|
$ |
(0.06) |
|
Note:(1) For the three months ended March 31,
2020, options to purchase 182,839 weighted average shares of common
stock with exercise prices ranging from $14.89 to $33.36 were not
included in the computation of reported earnings per diluted share
due to their antidilutive effect. In addition, restricted
stock and stock options were not included in the computation of
adjusted loss per diluted share due to their antidilutive
effect.
Conference Call Details:
Teleconference: Tuesday, August
18, 2020 at 10:00 a.m. Central (11:00 a.m.
Eastern). Live via phone by dialing 877-358-7306, pass
code “Natural Gas Services”. All attendees and
participants to the conference call should arrange to call in at
least 5 minutes prior to the start time.
Live Webcast: The webcast will
be available in listen only mode via our website www.ngsgi.com,
investor relations 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.
Stephen C. Taylor, President and CEO of Natural
Gas Services Group, Inc. will be leading the call and discussing
the financial results for the three and six months ended June 30,
2020.
About Natural Gas Services Group, Inc.
(NGS): NGS is a leading provider of gas compression
equipment and services to the energy industry. The Company
manufactures, fabricates, rents, sells and maintains natural gas
compressors and flare systems for oil and natural gas production
and plant facilities. NGS is headquartered in Midland, Texas, with
fabrication facilities located in Tulsa, Oklahoma and Midland,
Texas, and service facilities located in major oil and natural gas
producing basins in the U.S. Additional information can be found at
www.ngsgi.com.
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
potential impacts of the COVID-19 pandemic on the Company’s
business; a prolonged, substantial reduction in oil and natural gas
prices which could cause a decline in the demand for NGS's products
and services; the loss of market share through competition or
otherwise; the introduction of competing technologies by other
companies; 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 most
recent Annual Report on Form 10-K, as well as the Company’s Form
10-Q for the quarterly period ended March 31, 2020, as filed with
the Securities and Exchange Commission.
For More
Information, Contact: |
Alicia Dada,
Investor Relations |
|
(432)
262-2700Alicia.Dada@ngsgi.com |
|
www.ngsgi.com |
NATURAL GAS SERVICES GROUP,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands, except per share
amounts)(unaudited) |
|
|
|
|
|
June 30, 2020 |
|
December 31, 2019 |
ASSETS |
|
|
|
Current
Assets: |
|
|
|
Cash and cash equivalents |
$ |
15,451 |
|
|
$ |
11,592 |
|
Trade accounts receivable, net of allowance for doubtful accounts
of $972 and $918, respectively |
11,674 |
|
|
9,106 |
|
Inventory |
15,761 |
|
|
21,080 |
|
Federal income tax receivable |
14,992 |
|
|
— |
|
Prepaid income taxes |
95 |
|
|
40 |
|
Prepaid expenses and other |
637 |
|
|
597 |
|
Total current assets |
58,610 |
|
|
42,415 |
|
Long-term
inventory, net of allowance for obsolescence of $37 and $24,
respectively |
1,123 |
|
|
1,068 |
|
Rental equipment,
net of accumulated depreciation of $173,462 and $162,348,
respectively |
215,853 |
|
|
217,742 |
|
Property and
equipment, net of accumulated depreciation of $12,771 and $12,847,
respectively |
22,160 |
|
|
21,869 |
|
Right of use
assets - operating leases, net of accumulated amortization of $258
and $158, respectively |
510 |
|
|
604 |
|
Intangibles, net
of accumulated amortization of $1,946 and $1,883, respectively |
1,213 |
|
|
1,276 |
|
Other assets |
1,690 |
|
|
1,603 |
|
Total assets |
$ |
301,159 |
|
|
$ |
286,577 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current
Liabilities: |
|
|
|
Accounts payable |
$ |
1,188 |
|
|
$ |
1,975 |
|
Accrued liabilities |
2,538 |
|
|
2,287 |
|
Line of credit |
417 |
|
|
417 |
|
Current operating leases |
183 |
|
|
189 |
|
Deferred income |
125 |
|
|
640 |
|
Total current liabilities |
4,451 |
|
|
5,508 |
|
Deferred income tax
liability |
41,744 |
|
|
31,243 |
|
Long-term
operating leases |
327 |
|
|
415 |
|
Other long-term
liabilities |
1,780 |
|
|
1,718 |
|
Total liabilities |
48,302 |
|
|
38,884 |
|
Commitments and
contingencies |
|
|
|
Stockholders’ Equity: |
|
|
|
Preferred stock,
5,000 shares authorized, no shares issued or outstanding |
— |
|
|
— |
|
Common stock,
30,000 shares authorized, par value $0.01; 13,286 and 13,178 shares
issued, respectively |
133 |
|
|
132 |
|
Additional paid-in
capital |
111,489 |
|
|
110,573 |
|
Retained
earnings |
141,725 |
|
|
137,478 |
|
Treasury Shares,
at cost, 38 shares |
(490) |
|
|
(490) |
|
Total stockholders' equity |
252,857 |
|
|
247,693 |
|
Total liabilities and stockholders' equity |
$ |
301,159 |
|
|
$ |
286,577 |
|
NATURAL GAS SERVICES GROUP, INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except
earnings per share)(unaudited) |
|
|
|
|
|
Three months ended |
|
Six months ended |
|
June 30, |
|
June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenue: |
|
|
|
|
|
|
|
Rental
income |
$ |
15,131 |
|
|
$ |
13,572 |
|
|
$ |
31,231 |
|
|
$ |
26,959 |
|
Sales |
2,008 |
|
|
5,814 |
|
|
3,458 |
|
|
9,939 |
|
Service and
maintenance income |
266 |
|
|
509 |
|
|
606 |
|
|
988 |
|
Total revenue |
17,405 |
|
|
19,895 |
|
|
35,295 |
|
|
37,886 |
|
Operating
costs and expenses: |
|
|
|
|
|
|
|
Cost of rentals,
exclusive of depreciation stated separately below |
6,629 |
|
|
6,613 |
|
|
14,526 |
|
|
12,833 |
|
Cost of sales,
exclusive of depreciation stated separately below |
1,860 |
|
|
4,419 |
|
|
3,599 |
|
|
8,118 |
|
Cost of service
and maintenance, exclusive of depreciation stated separately
below |
100 |
|
|
159 |
|
|
225 |
|
|
306 |
|
Selling, general
and administrative expenses |
2,663 |
|
|
2,682 |
|
|
4,825 |
|
|
5,175 |
|
Depreciation and
amortization |
6,301 |
|
|
5,720 |
|
|
12,541 |
|
|
11,297 |
|
Total operating costs and expenses |
17,553 |
|
|
19,593 |
|
|
35,716 |
|
|
37,729 |
|
Operating
(loss) income |
(148) |
|
|
302 |
|
|
(421) |
|
|
157 |
|
Other
income (expense): |
|
|
|
|
|
|
|
Interest
expense |
(8) |
|
|
(4) |
|
|
(11) |
|
|
(8) |
|
Other income,
net |
378 |
|
|
181 |
|
|
193 |
|
|
486 |
|
Total other income, net |
370 |
|
|
177 |
|
|
182 |
|
|
478 |
|
Income
(loss) before provision for income taxes |
222 |
|
|
479 |
|
|
(239) |
|
|
635 |
|
Income tax
(expense) benefit |
(57) |
|
|
(152) |
|
|
4,486 |
|
|
(210) |
|
Net
income |
$ |
165 |
|
|
$ |
327 |
|
|
$ |
4,247 |
|
|
$ |
425 |
|
Earnings
per share: |
|
|
|
|
|
|
|
Basic |
$ |
0.01 |
|
|
$ |
0.02 |
|
|
$ |
0.32 |
|
|
$ |
0.03 |
|
Diluted |
$ |
0.01 |
|
|
$ |
0.02 |
|
|
$ |
0.32 |
|
|
$ |
0.03 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
Basic |
13,237 |
|
|
13,134 |
|
|
13,197 |
|
|
13,100 |
|
Diluted |
13,480 |
|
|
13,462 |
|
|
13,448 |
|
|
13,368 |
|
NATURAL GAS SERVICES GROUP, INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(in
thousands)(unaudited) |
|
Six months ended |
|
June 30, |
|
2020 |
|
2019 |
CASH FLOWS
FROM OPERATING ACTIVITIES: |
|
|
|
Net
income |
$ |
4,247 |
|
|
$ |
425 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
12,541 |
|
|
11,297 |
|
Deferred income taxes |
399 |
|
|
219 |
|
Stock-based compensation |
1,066 |
|
|
1,137 |
|
Bad debt allowance |
63 |
|
|
55 |
|
Gain on sale of assets |
(273) |
|
|
(37) |
|
Loss (gain) on company owned life insurance |
92 |
|
|
(131) |
|
Changes in operating assets and liabilities: |
|
|
|
Trade accounts receivables |
(2,631) |
|
|
(4,219) |
|
Inventory |
5,262 |
|
|
2,311 |
|
Federal income tax receivable |
(14,992) |
|
|
— |
|
Prepaid expenses and prepaid income taxes |
(95) |
|
|
(225) |
|
Accounts payable and accrued liabilities |
(536) |
|
|
(4,287) |
|
Deferred income |
(515) |
|
|
32 |
|
Deferred tax liability increase due to tax law change |
10,103 |
|
|
— |
|
Other |
71 |
|
|
192 |
|
NET CASH
PROVIDED BY OPERATING ACTIVITIES |
14,802 |
|
|
6,769 |
|
CASH FLOWS
FROM INVESTING ACTIVITIES: |
|
|
|
Purchase of rental equipment, property and other equipment |
(10,989) |
|
|
(29,724) |
|
Purchase of company owned life insurance |
(196) |
|
|
(111) |
|
Proceeds from sale of property and equipment |
383 |
|
|
26 |
|
Proceeds from sale of deferred compensation mutual fund |
10 |
|
|
— |
|
Proceeds from insurance claims of property and equipment |
— |
|
|
11 |
|
NET CASH
USED IN INVESTING ACTIVITIES |
(10,792) |
|
|
(29,798) |
|
CASH FLOWS
FROM FINANCING ACTIVITIES: |
|
|
|
Proceeds from loan |
4,601 |
|
|
— |
|
Repayment of loan |
(4,601) |
|
|
— |
|
Payments from other long-term liabilities, net |
(2) |
|
|
(10) |
|
Proceeds from exercise of stock options |
— |
|
|
505 |
|
Taxes paid related to net share settlement of equity awards |
(149) |
|
|
(183) |
|
NET CASH
(USED IN) PROVIDED BY FINANCING ACTIVITIES |
(151) |
|
|
312 |
|
NET CHANGE
IN CASH AND CASH EQUIVALENTS |
3,859 |
|
|
(22,717) |
|
CASH AND
CASH EQUIVALENTS AT BEGINNING OF PERIOD |
11,592 |
|
|
52,628 |
|
CASH AND
CASH EQUIVALENTS AT END OF PERIOD |
$ |
15,451 |
|
|
$ |
29,911 |
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION: |
|
|
|
Interest paid |
$ |
11 |
|
|
$ |
8 |
|
Income taxes paid |
$ |
63 |
|
|
$ |
45 |
|
NON-CASH
TRANSACTIONS |
|
|
|
Transfer of rental equipment components to inventory |
$ |
— |
|
|
$ |
347 |
|
Transfer of prepaids to rental equipment and inventory |
$ |
— |
|
|
$ |
574 |
|
Right of use asset acquired through an operating lease |
$ |
5 |
|
|
$ |
126 |
|
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