Natural Gas Services (US:NGS)2021-08-13 21:56Revenue Performance - Total revenue increased by 2.0% to $17.7 million for the three months ended June 30, 2021, compared to $17.4 million for the same period in 2020, primarily driven by a 3.2% increase in rental revenue [80]. - Rental revenue reached $15.6 million for the three months ended June 30, 2021, up from $15.1 million in the same period of 2020, attributed to higher horsepower compression rentals [82]. - Sales revenue decreased by 21.7% to $1.6 million for the three months ended June 30, 2021, compared to $2.0 million for the same period in 2020, mainly due to lower compressor sales [84]. - Total revenue for the six months ended June 30, 2021, increased by 2.4% to $36.1 million compared to $35.3 million for the same period in 2020, primarily due to a 23.9% increase in sales revenue [91]. - Rental revenue for the six months ended June 30, 2021, decreased to $31.0 million from $31.2 million in the same period of 2020, impacted by well shut-ins and unit returns due to a drop in oil prices [92]. - Sales revenue increased to $4.3 million for the six months ended June 30, 2021, up from $3.5 million for the same period in 2020, primarily due to an increase in parts sales [94]. Cost and Expenses - Cost of rentals increased by 37.0% to $9.1 million during the three months ended June 30, 2021, compared to $6.6 million in the same period of 2020, driven by increased repair and maintenance work [85]. - Cost of rentals rose by 11.8% to $16.2 million during the six months ended June 30, 2021, compared to $14.5 million in the same period of 2020, driven by increased repair and maintenance work [95]. - Selling, general, and administrative expenses decreased by 2.1% to $2.6 million for the three months ended June 30, 2021, compared to $2.7 million in the same period of 2020 [87]. - Selling, general, and administrative expenses increased by 8.9% to $5.3 million for the six months ended June 30, 2021, influenced by an unrealized loss on deferred compensation [97]. - Adjusted EBITDA decreased by $2.4 million (17.7%) for the six months ended June 30, 2021, primarily due to a $1.7 million increase in rental costs and higher SG&A expenses [103]. - Cash flows from operating activities were $12.8 million for the six months ended June 30, 2021, down from $14.8 million for the same period in 2020, attributed to higher rental costs and SG&A expenses [106]. Assets and Investments - Current assets totaled $72.1 million as of June 30, 2021, compared to $72.7 million at December 31, 2020, with cash and cash equivalents decreasing to $26.2 million [104]. - The company invested $12.6 million in rental and property equipment during the six months ended June 30, 2021, including $12.0 million in new equipment for the rental fleet [105]. Fleet and Operations - As of June 30, 2021, the company had 1,245 natural gas compressors rented to 79 customers, with a total of 287,365 horsepower, compared to 1,273 compressors rented to 84 customers with 284,373 horsepower as of June 30, 2020 [69]. - The company's total unit horsepower remained flat at 446,803 horsepower as of June 30, 2021, compared to 446,805 horsepower as of June 30, 2020 [83]. - As of June 30, 2021, the company had 2,257 compressor packages in its fleet, a decrease from 2,335 units as of June 30, 2020, with total unit horsepower remaining relatively stable at 446,803 horsepower [93]. Financial Position and Strategy - The company recorded an income tax benefit of approximately $339,000 for the three months ended June 30, 2021, compared to an income tax expense of $(57,000) for the same period in 2020 [89]. - The company has a senior secured revolving credit agreement with an initial commitment of $20 million, with the potential to increase to $30 million based on collateral availability [108]. - For the remainder of 2021, the company plans to manage operating expenses and capital expenditures, ensuring that capital expenditures do not exceed internally generated cash flows [107].