Natural Gas Services (US:NGS)2025-05-12 20:06Revenue and Growth - Rental revenue for the three months ended March 31, 2025, increased to $38,910,000, a 15.3% increase from $33,734,000 in 2024[79] - Total revenues for the three months ended March 31, 2025, were $41,383,000, compared to $36,907,000 in 2024, reflecting a growth of 12.5%[73] - Adjusted gross margin for the same period rose to $24,256,000, up 14.9% from $21,113,000 in 2024[73] - Adjusted EBITDA for the three months ended March 31, 2025, was $19,290,000, compared to $16,878,000 in 2024, marking a 24.5% increase[77] - The percentage of rental revenues as part of total revenues increased to 94.0% in 2025 from 91.4% in 2024[79] Equipment and Utilization - Rented horsepower at the end of the period was 492,679, an increase of 10.9% from 444,220 in 2024[65] - Horsepower utilization at the end of the period was 81.7%, slightly down from 81.9% in 2024[65] Customer and Market Dynamics - The number of customers under contract decreased to 67 from 80 in 2024, a decline of 16.3%[79] - The company operates in several oil and gas producing basins, with 77% of rental revenue generated from the Permian Basin[64] Expenses and Costs - The cost of rentals (excluding depreciation and amortization) increased to $14,840,000, a 13.2% rise from $13,114,000 in 2024[79] - Total selling, general and administrative (SG&A) expenses increased to $5,378 million, reflecting a rise of $676 million or 14.4% compared to $4,702 million in 2024[84] - Depreciation and amortization expenses rose to $8,636 million, an increase of $1,549 million or 21.9% from $7,087 million in 2024, primarily due to the expansion of the high horsepower fleet[85] Financial Position and Cash Flow - As of March 31, 2025, the company had $2.1 million in cash on hand and net cash provided by operating activities increased by $15.7 million compared to the same period in 2024, totaling $21.3 million[99][103] - The company had net repayments of $2.0 million under the Credit Facility during the three months ended March 31, 2025, while the previous year included net borrowings of $8.0 million[105] - As of March 31, 2025, the company had $168.0 million outstanding under its Credit Facility with a weighted average interest rate of 7.93%[108] - Total stockholders' equity increased to $260.3 million as of March 31, 2025, from $255.1 million as of December 31, 2024[106] - The company's total capitalization as of March 31, 2025, was $428.3 million, with debt representing 39.2% of total capitalization[106] Tax and Interest - Interest expense totaled $3,170 million, an increase of $235 million or 8.0% from $2,935 million in 2024, influenced by lower capitalized interest[91] - The effective income tax rate for the three months ended March 31, 2025, was 23.3%, up from 22.5% in 2024[93] Future Outlook and Strategy - Forecasted capital expenditures for 2025 will depend on customer compression requirements and capital availability, while maintaining prudent debt levels[96] - The company anticipates continued focus on improving working capital performance statistics throughout 2025[103] - The company maintains a shelf registration statement with the SEC for up to $200 million for various securities to provide financing optionality[102] - The company has flexibility regarding its capital expenditures and financing alternatives based on market conditions[97] - The company evaluates potential sales of underutilized assets, which may include compressor units and non-strategic real estate[101]