Natural Gas Services Group, Inc. Reports Fourth Quarter and Year-End 2024 Financial and Operating Results; Provides 2025 Guidance

Midland, Texas, March 17, 2025 (GLOBE NEWSWIRE) — Natural Gas Services Group, Inc. (“NGS” or the “Firm”) (NYSE:NGS), a number one supplier of pure gasoline compression tools, know-how, and providers to the vitality {industry}, at present introduced monetary outcomes for the three months and year-ended December 31, 2024. The Firm additionally offered steerage for its full yr 2025, anticipating important top- and bottom-line development with sturdy momentum transferring into 2026.

Fourth Quarter and Full 12 months 2024 Highlights

• Rental income of $38.2 million for the fourth quarter and $144.2 million for the complete yr 2024, representing will increase of 21% and 36%, respectively, in comparison with the prior yr comparable durations.

• Internet earnings of $2.9 million or $0.23 per diluted share for the fourth quarter and $17.2 million or $1.37 per diluted share for the complete yr 2024, representing will increase of 68% and 263%, respectively, in comparison with the prior fourth quarter and full yr 2023 durations.

• Money circulation generated from working actions of $9.4 million for the fourth quarter and $66.5 million for the complete yr 2024. This compares to internet money utilized in working actions of $7.7 million for the fourth quarter and money generated of $18.0 million for the complete yr 2023.

• Adjusted EBITDA of $18.0 million for the fourth quarter and $69.5 million for the complete yr 2024; 2024 Adjusted EBITDA was 52% greater than 2023 and represented the best stage within the Firm’s historical past. Please see Non-GAAP Financial Measures – Adjusted EBITDA, beneath.

Administration Commentary and Outlook

“2024 was a transformational yr for Natural Gas Services Group as we executed in opposition to our strategic targets and considerably improved our market presence and monetary efficiency,” said Justin Jacobs, Chief Government Officer. “In the course of the yr, we enhanced our staff and infrastructure, additional diversified and expanded our buyer base, organically expanded into massive horsepower electrical models, maintained our industry-leading service ranges, and materially elevated the scale of our general fleet. I’m fairly pleased with the NGS staff as their unwavering dedication to our clients and their ardour to excel are the driving forces of our outcomes.”

 “2024 was additionally a document yr for NGS as our utilized rental fleet approached 500,000 horsepower and our Adjusted EBITDA elevated by over 50% in comparison with 2023. Equally essential, our enterprise grew to become considerably extra capital environment friendly: our whole debt elevated by solely $6 million over the course of 2024 and our leverage declined from 2.53x on the finish of 2023 to 2.36x at 2024 year-end. The discount of working capital was a fabric driver within the enchancment in capital effectivity, and we consider there may be extra alternative to monetize non-cash belongings within the close to time period.”

“Wanting ahead, we see continued power out there. We consider our natural development fee leads the {industry} and we’re taking market share. This was made doable by the arduous work of our service technicians and area service staff, our main compressor know-how, and sturdy partnerships with our clients. We anticipate 2025 will probably be one other yr of great development in new massive horsepower models and we’ve already signed materials new unit contracts for 2026. We’re excited for the longer term and consider we’re nicely positioned to proceed to extend shareholder worth.”

Company Guidance – 2025 Outlook

 In November 2024, the Firm famous it anticipated 2024 Adjusted EBITDA to be within the vary of $67 – $69 million, whole development capital expenditures for the yr to be within the vary of $65 – $75 million, and whole upkeep expenditures for the yr to be within the vary of $8 – $11 million. For the complete yr 2024, the Firm reported Adjusted EBITDA of $69.5 million, development capital expenditures of $60.5 million and upkeep capital expenditures of $11.4 million. Moreover, as of December 31, 2024, rented horsepower stood at 491,756, representing year-over-year development of 17%.

The Firm at present gives the next commentary concerning its monetary expectations for the 2025 Fiscal 12 months. For the yr ending December 31, 2025, the Firm expects development capital expenditures, that are largely comprised of latest models (primarily all of that are below contract), to be within the vary of $95 – $120 million. As soon as all these models are deployed with clients, which is anticipated by early 2026, the Firm expects its rented horsepower to extend by roughly 90,000 horsepower, which represents a rise of roughly 18% versus year-end 2024. The timing of unit deployments may be very closely weighted to the second half of 2025 and early 2026. Accordingly, nearly all of the affect of 2024 and 2025 development capital expenditures will begin to be mirrored in Adjusted EBITDA within the second half of 2025 and the primary quarter of 2026.

Based mostly on the timing of contractual orders and deployments in 2025, the Firm expects 2025 Adjusted EBITDA to be within the vary of $74 – $78 million, which on the mid-point of the vary, represents a 9% enhance over 2024. This vary is reflective of the timing of anticipated unit deployments.

The Firm additional notes that when all of the 2025 development capital expenditures are spent and the models are deployed, its “run fee” Adjusted EBITDA ought to enhance at a fee (when in comparison with the fourth quarter of 2024) nicely in extra of the Firm’s anticipated horsepower development of 18% as famous above. The Firm expects 2025 upkeep capital expenditures of $10 – $13 million and its focused return on invested capital of at the very least 20% stays unchanged.

2024 Fourth Quarter Financial Outcomes

Income: Complete income for the three months ended December 31, 2024 elevated 12% to $40.7 million from $36.2 million for the three months ended December 31, 2023. This enhance was due primarily to a rise in rental revenues. Rental income elevated 21% to $38.2 million within the fourth quarter of 2024 from $31.6 million within the fourth quarter of 2024 as a result of addition of upper horsepower packages and pricing enhancements. As of December 31, 2024, we had 491,756 horsepower (1,208 rented models) in comparison with 420,432 horsepower (1,247 rented models) as of December 31, 2023, reflecting a 17% enhance in whole utilized horsepower. Sequentially, whole income was primarily flat for the comparable durations, primarily associated to decrease gross sales income offset by a rise in rental income.

Gross Margins: Complete gross margins, together with depreciation expense elevated to $14.6 million for the three months ended December 31, 2024, in comparison with $13.3 million for a similar interval in 2023 and decreased from $14.9 million for the three months ended September 30, 2024. Complete adjusted gross margin, unique of depreciation expense, for the three months ended December 31, 2024, elevated to $23.0 million in comparison with $20.3 million for the three months ended December 31, 2023, and $22.9 million for the three months ended September 30, 2024.  For a reconciliation of Gross Margin, see Non-GAAP Financial Measures – Adjusted Gross Margin, beneath.

Operating Revenue: Operating earnings for the three months ended December 31, 2024 was $6.0 million in comparison with working earnings of $4.4 million for the three months ended December 31, 2023 and working earnings of $9.5 million, throughout the third quarter of 2024.

Internet Revenue: Internet earnings for the three months ended December 31, 2024, was $2.9 million, or $0.23 per diluted share in comparison with internet earnings of $1.7 million or $0.14 per diluted share for the fourth quarter of 2023, and $5.0 million or $0.40 per diluted share for the third quarter of 2024. The rise in internet earnings year-over-year was primarily associated to greater rental income and rental gross margin, whereas the sequential decline was primarily associated to the stock allowance and lower in gross sales gross revenue associated to the closure of our Midland fabrication operations, the intangible asset impairment, a rise in stock-based compensation, and a rise in depreciation.

Money Flows: At December 31, 2024, money and money equivalents have been roughly $2.1 million, whereas working capital was $30.8 million. For the twelve months of 2024, money flows offered by working actions have been $66.5 million, whereas money flows utilized in investing actions was $71.4 million. This compares to money flows offered by working actions of $18.0 million and money flows utilized in investing actions of $153.9 million for the comparable twelve-month interval in 2023. Money circulation utilized in investing actions throughout 2024 included $71.9 million in capital expenditures.

Adjusted EBITDA: Adjusted EBITDA elevated 11% to $18.0 million for the three months ended December 31, 2024, from $16.3 million for a similar interval in 2023. This enhance was primarily attributable to greater rental income and rental adjusted gross margin. Sequentially, adjusted EBITDA declined by 1% when in comparison with $18.2 million for the three months ended September 30, 2024.

Debt: Excellent debt on our revolving credit score facility as of December 31, 2024 was $170 million. Our leverage ratio at December 31, 2024 was 2.36x and our fastened cost protection ratio was 2.44x. The Firm is in compliance with all phrases, situations and covenants of the credit score settlement.

Chosen knowledge: The tables beneath present income by product line, gross margin and adjusted gross margin for the trailing 5 quarters. Adjusted gross margin is the distinction between income and price of gross sales, unique of depreciation.

(1) For a reconciliation of adjusted gross margin to its most straight comparable monetary measure calculated and introduced in accordance GAAP, please learn “Non-GAAP Financial Measures – Adjusted Gross Margin” beneath.

Non-GAAP Financial Measure – Adjusted Gross Margin: “Adjusted Gross Margin” is outlined as whole income much less prices of revenues (excluding depreciation and amortization expense). Adjusted gross margin is included as a supplemental disclosure as a result of it’s a main measure utilized by our administration because it represents the outcomes of income and prices (excluding depreciation and amortization expense), that are key parts of our operations. Adjusted gross margin differs from gross margin, in that gross margin contains depreciation and amortization expense. We consider Adjusted gross margin is essential as a result of it focuses on the present working efficiency of our operations and excludes the affect of the prior historic prices of the belongings acquired or constructed which might be utilized in these operations. Depreciation and amortization expense doesn’t precisely mirror the prices required to keep up and replenish the operational utilization of our belongings and due to this fact could not painting the prices from present working exercise. Reasonably, depreciation and amortization expense mirror the systematic allocation of historic property and tools prices over their estimated helpful lives.

Adjusted gross margin has sure materials limitations related to its use as in comparison with gross margin. These limitations are primarily as a result of exclusion of depreciation and amortization expense, which is materials to our outcomes of operations. As a result of we use capital belongings, depreciation and amortization expense is a vital component of our prices and our potential to generate income. As a way to compensate for these limitations, administration makes use of this non-GAAP measure as a supplemental measure to different GAAP outcomes to supply a extra full understanding of our efficiency. As an indicator of our working efficiency, Adjusted gross margin shouldn’t be thought-about an alternative choice to, or extra significant than, gross margin as decided in accordance with GAAP. Our Adjusted gross margin might not be corresponding to a equally titled measure of one other firm as a result of different entities could not calculate Adjusted gross margin in the identical method.

The next desk calculates our gross margin, essentially the most straight comparable GAAP monetary measure, and reconciles it to Adjusted gross margin for the durations introduced:

Non-GAAP Financial Measures – Adjusted EBITDA: “Adjusted EBITDA” displays internet earnings or loss earlier than curiosity, taxes, depreciation and amortization, non-cash equity-classified stock-based compensation expense, non-recurring restructuring costs together with severance bills, impairments, will increase in stock allowance and retirement of rental tools. Adjusted EBITDA is a measure utilized by administration, analysts and buyers as an indicator of working money circulation because it excludes the affect of actions in working capital gadgets, non-cash costs and financing prices. Due to this fact, Adjusted EBITDA offers the investor info as to the money generated from the operations of a enterprise. Nonetheless, Adjusted EBITDA is just not a measure of economic efficiency below accounting rules GAAP, and shouldn’t be thought-about an alternative choice to different monetary measures of efficiency. Adjusted EBITDA as calculated by NGS might not be corresponding to Adjusted EBITDA as calculated and reported by different firms. Essentially the most comparable GAAP measure to Adjusted EBITDA is internet earnings (loss).

The next tables reconciles our internet earnings, essentially the most straight comparable GAAP monetary measure, to Adjusted EBITDA for the durations introduced:

Convention Name Particulars: The Firm will host a convention name to evaluate its fourth-quarter and year-end monetary outcomes on Tuesday, March 18 at 8:30 a.m. (EST), 7:30 a.m. (CST). To affix the convention name, kindly entry the Investor Relations part of our web site at www.ngsgi.com or dial in at (800) 550-9745 and enter convention ID 167298 at the very least 5 minutes previous to the scheduled begin time. Please notice that utilizing the offered dial-in quantity is important for participation within the Q&A bit of the decision. A recording of the convention will probably be made out there on our Firm’s web site following its conclusion. Thanks on your curiosity in our Firm’s updates.

About Natural Gas Services Group, Inc.
Natural Gas Services Group is a number one supplier of pure gasoline compression tools, know-how and providers to the vitality {industry}. The Firm designs, rents, sells and maintains pure gasoline compressors for oil and pure gasoline manufacturing and plant services, primarily utilizing tools from third-party fabricators and OEM suppliers together with restricted in-house meeting. The Firm is headquartered in Midland, Texas, with a fabrication facility positioned in Tulsa, Oklahoma, and service services positioned in main oil and pure gasoline producing basins within the U.S. Extra info will be discovered at www.ngsgi.com.

Ahead-Wanting Statements

Sure statements herein (and oral statements made concerning the themes of this launch) represent “forward-looking statements” inside the that means of the federal securities legal guidelines. Phrases similar to “could,” “would possibly,” “ought to,” “consider,” “anticipate,” “anticipate,” “estimate,” “proceed,” “predict,” “forecast,” “challenge,” “plan,” “intend” or related expressions, or statements concerning intent, perception, or present expectations, are forward-looking statements. These forward-looking statements are based mostly upon present estimates and assumptions.

These ahead–wanting statements depend on quite a few assumptions regarding future occasions and are topic to quite a few uncertainties and components that might trigger precise outcomes to vary materially from such statements, a lot of that are outdoors the management of the Firm. Ahead–wanting info contains, however is just not restricted to statements concerning: steerage or estimates associated to EBITDA development, projected capital expenditures; returns on invested capital, fundamentals of the compression {industry} and associated oil and gasoline {industry}, valuations, compressor demand assumptions and general {industry} outlook, and the power of the Firm to capitalize on any potential alternatives.

Whereas the Firm believes that the assumptions regarding future occasions are affordable, buyers are cautioned that there are inherent difficulties in predicting sure essential components that might affect the longer term efficiency or outcomes of its enterprise. A few of these components that might trigger outcomes to vary materially from these indicated by such forward-looking statements embody, however should not restricted to:

• situations within the oil and gasoline {industry}, together with the availability and demand for oil and gasoline and volatility within the costs of oil and gasoline;

• our reliance on main clients;

• failure of projected natural development resulting from opposed modifications within the oil and gasoline {industry}, together with depressed oil and gasoline costs, oppressive environmental rules and competitors;

• our incapacity to realize elevated utilization of belongings, together with rental fleet utilization and monetizing different non-cash steadiness sheet belongings;

• failure of our clients to proceed to hire tools after expiration of the first rental time period;

• our potential to economically develop and deploy new applied sciences and providers, together with know-how to adjust to well being and environmental legal guidelines and rules;

• failure to realize accretive monetary ends in reference to any acquisitions we could make;

• fluctuations in rates of interest;

• regulation or prohibition of latest nicely completion methods;

• competitors among the many numerous suppliers of compression providers and merchandise;

• modifications in security, well being and environmental rules;

• modifications in financial or political situations within the markets during which we function;

• the inherent dangers related to our operations, similar to tools defects, malfunctions, pure disasters and opposed modifications in buyer, worker and provider relationships;

• our incapacity to adjust to covenants in our debt agreements and the decreased monetary flexibility related to our debt;

• incapacity to finance our future capital necessities and availability of financing;

• capability availability, prices and efficiency of our outsourced compressor fabrication suppliers and general inflationary pressures;

• impacts of world occasions, similar to acts of terrorism and important financial disruptions and opposed penalties ensuing from doable long-term results of potential pandemics and different public well being crises; and

• normal financial situations.

As well as, these forward-looking statements are topic to different numerous dangers and uncertainties, together with with out limitation these set forth within the Firm’s filings with the Securities and Trade Fee, together with the Firm’s Annual Report on Kind 10-Okay for the yr ended December 31, 2024. Thus, precise outcomes might be materially totally different. The Firm expressly disclaims any obligation to replace or alter statements whether or not on account of new info, future occasions or in any other case, besides as required by legislation.

For Extra Info, Contact:
Anna Delgado, Investor Relations
(432) 262-2700
IR@ngsgi.com
www.ngsgi.com