FOR IMMEDIATE RELEASE
|August 6, 2019|
Natural Gas Services Group, Inc.
Reports Second Quarter 2019 Financial and Operating Results
MIDLAND, Texas August 6, 2019 - Natural Gas Services Group, Inc. (“NGS” or the “Company”) (NYSE:NGS), a leading provider of gas compression equipment and services to the energy industry, today announced financial results for the three and six months ended June 30, 2019.
For the quarter ended June 30, 2019, NGS reported rental revenue of $13.6 million compared to $11.4 million for the quarter ended June 30, 2018. Sequentially, rental revenue increased from $13.4 million.
The Company reported net income for the second quarter of $573,000 compared to $247,000 in the same quarter in 2018 and $357,000 in the prior quarter. Earnings per diluted share for the quarter ended June 30, 2019 was 4 cents.
Highlights of the quarter include:
Revenue: Total revenue for the three months ended June 30, 2019 was $19.9 million, an increase from $18.2 million compared to the three months ended June 30, 2018. This increase was primarily driven by a greater number of units on rent, with increased average rental rates. Sequentially, total revenue increased by $1.9 million to $19.9 million from $18.0 million, mainly due to higher compressor sales.
Operating Income: Operating income for the three months ended June 30, 2019 increased to $593,000 from $226,000 compared to the same period in 2018, mainly driven by an increase in rental revenue. Sequentially, operating income increased to $593,000 from $209,000 mainly due to an increase in compressor sales for the three months ended June 30, 2019.
Adjusted Gross Margins: Total adjusted gross margin for the three months ended June 30, 2019 increased $974,000 to $9.0 million from $8.0 million for the same period ended June 30, 2018. As a percentage of revenue, total adjusted gross margin slightly increased to 45% for the three months ended June 30, 2019 compared to 44% for the same period ended June 30, 2018. This increase is a result of a $2.0 million increase in rental revenues. Sequentially, adjusted gross margin of $9.0 million for the three months ending June 30, 2019 increased from $8.3 million for the three months ended in March 31, 2019. Adjusted gross margin as a percentage of revenue decreased slightly to 45% from 46% from the previous quarter, partially driven by the shift in revenues towards lower margin sales from higher margin rentals. Please see discussion of Non-GAAP Financial Measures - Adjusted Gross Margin at the conclusion of this release.
Net Income: Net income for the three months ended June 30, 2019 increased to $573,000 compared to net income of $247,000 for the same period in 2018. Sequentially, net income also increased to $573,000 from $357,000.
Earnings Per Share: Comparing the second quarter of 2019 versus 2018, earnings per diluted share was 4 cents, up 2 cents from the same period of 2018. Sequentially, diluted earnings per share increased to 4 cents from 3 cents.
Adjusted EBITDA: Adjusted EBITDA increased to $6.5 million compared to the same period ended June 30, 2018 of $5.8 million and remained flat as a percentage of revenue at 32% for both the three months ended June 30, 2019 and June 30, 2018. Adjusted EBITDA increased approximately $385,000 in the sequential quarters but decreased slightly as a percentage of revenue to 32% from 34%. Please see discussion of Non-GAAP Financial Measures - Adjusted EBITDA at the conclusion of this release.
Cash Flow: At June 30, 2019, cash and cash equivalents were $30.0 million with a bank debt level of $417,000, all classified as non-current. We had positive net cash flow from operating activities of $6.4 million during the six months ended of 2019.
The following information was filed by Natural Gas Services Group Inc (NGS) on Wednesday, August 7, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.