Natural Gas Services Group Inc. Files 2023 Annual Report (10-K)

TL;DR

<b>Natural Gas Services Group Inc. has filed its 2023 10-K annual report detailing financial performance and business operations.</b>

AI Summary

NATURAL GAS SERVICES GROUP INC (NGS) filed a Annual Report (10-K) with the SEC on April 1, 2024. The company filed its 10-K report for the fiscal year ending December 31, 2023. The filing covers the period from January 1, 2023, to December 31, 2023. Key financial data and business operations for 2023 are detailed in the report. The report includes information on product sales and aftermarket services. It also provides details on compressor and flare-related segments.

Why It Matters

For investors and stakeholders tracking NATURAL GAS SERVICES GROUP INC, this filing contains several important signals. This 10-K filing provides a comprehensive overview of the company's financial health and operational activities for the fiscal year 2023, crucial for investors to assess performance and future outlook. The detailed segment information, including product sales and services, allows stakeholders to understand revenue drivers and the company's market position within the oil and gas services sector.

Risk Assessment

Risk Level: — NATURAL GAS SERVICES GROUP INC shows moderate risk based on this filing. The company's reliance on specific customer segments, such as Oxy, for sales revenue presents a concentration risk that could impact financial stability if that customer's business needs change.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-K to understand the company's operational performance and potential challenges in the oil and gas services sector.

Revenue Breakdown

Key Numbers

• 2023-12-31 — Fiscal Year End (Report period)
• 2024-04-01 — Filing Date (Date the 10-K was filed)
• 2023-01-01 — Report Start Date (Beginning of the reporting period)

Key Players & Entities

• NATURAL GAS SERVICES GROUP INC (company) — Filer name
• Oxy (company) — Customer mentioned in relation to sales revenue

FAQ

Risk Factors

• Customer Concentration Risk [medium — financial]: The company's sales revenue is significantly dependent on a few customers, including Oxy, which poses a risk if these customers reduce their business with the company.

Industry Context

Natural Gas Services Group Inc. operates in the oil and gas field services sector, providing essential equipment and services to energy producers.

Regulatory Implications

The company is subject to SEC regulations for financial reporting, including the requirement to file annual 10-K reports detailing its business and financial condition.

What Investors Should Do

1. Analyze the revenue breakdown by segment to understand growth areas and potential vulnerabilities.
2. Assess the customer concentration risk, particularly the reliance on major clients like Oxy.
3. Review the company's operational efficiency and capital expenditures outlined in the filing.

Key Dates

• 2023-12-31: Fiscal Year End — Marks the end of the reporting period for the 10-K.
• 2024-04-01: Filing Date — Date the 10-K was officially submitted to the SEC.

Glossary

10-K

An annual report required by the U.S. Securities and Exchange Commission (SEC), which gives a comprehensive summary of a company's financial performance. (Provides a detailed overview of the company's financial health and operations for the fiscal year.)

Year-Over-Year Comparison

This filing represents the annual 10-K for the fiscal year ending December 31, 2023, providing a comprehensive update compared to previous filings.

Key Financial Figures

• $121.2 million — higan. Our revenue increased 42.8% to $121.2 million for the year ended December 31, 2023, f
• $84.8 million — the year ended December 31, 2023, from $84.8 million for the year ended December 31, 2022. O
• $106.2 million — Our rental revenues increased 42.6% to $106.2 million in 2023 from $74.5 million in 2022 as w
• $74.5 million — ed 42.6% to $106.2 million in 2023 from $74.5 million in 2022 as well as sales revenue increa
• $8.9 million — ell as sales revenue increasing 4.1% to $8.9 million in 2023 from $8.6 million in 2022. The
• $8.6 million — asing 4.1% to $8.9 million in 2023 from $8.6 million in 2022. The increase in rental revenue
• $4.7 million — 023, the Company reported net income of $4.7 million as compared to a net loss of $0.6 milli
• $0.6 million — .7 million as compared to a net loss of $0.6 million for the year ended December 31, 2022. I
• $45.8 million — rtization ("EBITDA") increased 57.0% to $45.8 million in 2023 from $29.2 million in 2022. See
• $29.2 million — sed 57.0% to $45.8 million in 2023 from $29.2 million in 2022. See "Item 7, Management's Disc
• $76.3 m — ember 31, 2023, our current assets were $76.3 million, which included $2.7 million of c
• $2.7 million — sets were $76.3 million, which included $2.7 million of cash and cash equivalents. Current l
• $32.7 million — h equivalents. Current liabilities were $32.7 million at year end 2023. Our stockholders' equ
• $235.9 million — rs' equity as of December 31, 2023, was $235.9 million. Recent Events We are transitioning

Filing Documents

• ngs-20231231.htm (10-K) — 1307KB
• ngsformofrsuagmtforemploye.htm (EX-10.12) — 52KB
• ngsformofpsuagreementwithd.htm (EX-10.13) — 92KB
• a123123-ngsxex211subsidiar.htm (EX-21.1) — 3KB
• a123123-ex231hlbconsent.htm (EX-23.1) — 3KB
• a123123-ngsxex311jacobs.htm (EX-31.1) — 13KB
• a123123-ngsxex312bittner.htm (EX-31.2) — 12KB
• a123123-ngsxex321jacobs.htm (EX-32.1) — 9KB
• a123123-ngsxex322bittner.htm (EX-32.2) — 9KB
• ngsclawbackpolicy.htm (EX-97.1) — 43KB
• image_0.jpg (GRAPHIC) — 28KB
• 0001084991-24-000017.txt (&nbsp;) — 7803KB
• ngs-20231231.xsd (EX-101.SCH) — 59KB
• ngs-20231231_cal.xml (EX-101.CAL) — 87KB
• ngs-20231231_def.xml (EX-101.DEF) — 235KB
• ngs-20231231_lab.xml (EX-101.LAB) — 689KB
• ngs-20231231_pre.xml (EX-101.PRE) — 485KB
• ngs-20231231_htm.xml (XML) — 1005KB

Risk Factors

Item 1A. Risk Factors 11

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 20

Cybersecurity

Item 1C. Cybersecurity 21

Properties

Item 2. Properties 22

Legal Proceedings

Item 3. Legal Proceedings 22

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 22 PART II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 22

Reserved

Item 6. Reserved 24

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 24

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 34

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 34

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 34

Controls and Procedures

Item 9A. Controls and Procedures 34

Other Information

Item 9B. Other Information 36

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 33 PART III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 37

Executive Compensation

Item 11. Executive Compensation 37

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 37

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 37

Principal Accountant Fees and Services

Item 14. Principal Accountant Fees and Services 37 PART IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules 38

Form 10-K Summary 39

Item 16. Form 10-K Summary 39

Signatures

Signatures 37 Index to Financial Statements 38 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains certain forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, and information pertaining to us, our industry and the oil and natural gas industry that is based on the beliefs of our management, as well as assumptions made by and information currently available to our management. All statements, other than statements of historical facts contained in this Annual Report on Form 10-K, including statements regarding our future financial position, growth strategy, budgets, projected costs, plans and objectives of management for future operations, are forward-looking statements. We use the words "may," "will," "expect," "anticipate," "estimate," "believe," "continue," "intend," "plan," "budget" and other similar words to identify forward-looking statements. You should read statements that contain these words carefully and should not place undue reliance on these statements because they discuss future expectations, contain projections of results of operations or of our financial condition and/or state other "forward-looking" information. We do not undertake any obligation to update or revise publicly any forward-looking statements. Although we believe our expectations reflected in these forward-looking statements are based on reasonable assumptions, no assurance can be given that these expectations or assumptions will prove to have been correct. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include, but are not limited to, the following factors and the other factors described in this Annual Report on Form 10-K under the caption "Risk Factors": conditions in the oil and natural gas industry, including the supply and demand for oil and n

BUSINESS

ITEM 1. BUSINESS Unless the context otherwise requires, references in this Annual Report on Form 10-K to "Natural Gas Services Group," the "Company", "NGS", "we," "us," "our" or "ours" refer to Natural Gas Services Group, Inc. Certain specialized terms used in describing our natural gas compressor business are defined in "Glossary of Industry Terms" on page i. Smaller Reporting Company We are a "smaller reporting company" as defined by the SEC. As such, we are eligible to follow the scaled disclosure requirements in several Regulation S-K and Regulation S-X items. Our disclosures in this Annual Report reflect many of these scaled requirements. The Company We are a provider of natural gas compression equipment and services to the energy industry. We rent, operate and maintain natural gas compressors for oil and natural gas production and plant facilities. We also design, fabricate and manufacture compressor units both for sale and rental to our customers. We are headquartered in Midland, Texas, with a fabrication facility located in Tulsa, Oklahoma, a rebuild shop located in Midland, Texas, and service facilities located in major oil and natural gas producing basins in the U.S. Our primary business and source of gross profit is the rental of natural gas compressor units for applications associated with oil and natural gas production with a focus on large and medium horsepower applications. Our customers, specifically for large and medium horsepower applications, are exploration and production companies that utilize our compressor units for artificial lift applications, i.e., production enhancement enabled with high-pressure gas compression equipment, on unconventional oil wells on single and multi-well pads. In addition, our customer base includes oil and natural gas exploration and production companies that focus primarily on natural gas production (with typically smaller horsepower applications). The Company's largest rental area is the Permian Basin (a

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View this 10-K filing on SEC EDGAR