Natural Gas Services Group Inc (NGS) filed Quarterly Report for the period ended 2009-06-30.
Natural Gas Services Group Inc. manufactures fabricates sells rents and services natural gas compressors that enhance the production of natural gas wells. The Company also manufactures and sells flare systems and flare ignition systems for plant and production facilities. Natural Gas Services Group Inc has a market cap of $166.9 million; its shares were traded at around $13.8 with a P/E ratio of 10.8 and P/S ratio of 4.
Highlight of Business Operations:
At June 30, 2009, we had cash and cash equivalents of $11.7 million compared to $1.1 million at December 31, 2008. We had working capital of $39.1 million at June 30, 2009 compared to $31.1 million at December 31, 2008. At June 30, 2009, our total debt was $14.9 million of which $3.4 million was classified as current compared to $16.6 million and $3.4 million, respectively at December 31, 2008. We had positive net cash flow from operating activities of $16.9 million during the first six months of 2009 compared to $13.4 million for the first six months of 2008. The cash flow from operations of $16.9 million was primarily the result of the net income of $6.7 million and the non cash items of depreciation and taxes of $9.5 million.
Accounts receivable decreased $5.5 million to $5.8 million at June 30, 2009 as compared to $11.3 million at December 31, 2008. This decrease largely reflects the timing of collections and a slowdown in compressor unit sales during the first six months of 2009.
Inventory decreased $4.5 million to $27.4 million as of June 30, 2009 as compared to $31.9 million as of the year ended December 31, 2008. This decrease is mainly the result of our decreased manufacturing activity.
Long-term debt decreased $1.7 million to $14.9 million at June 30, 2009, compared to $17.0 million at December 2008. This decrease is mainly the result of the normal debt amortization. The current portion of long-term debt remained flat at $3.4 million at June 30, 2009 compared to December 31, 2008.
For the quarter ended June 30, 2009, our overall plan during the downturn in the economy is to reduce expenses in line with the lower anticipated activity, fabricate rental fleet equipment only in direct response to market requirements, emphasize marketing of our idle gas compressor units and reduce bank borrowing. Capital expenditures for the remainder of the year are not to exceed our internal cash generating capacity. We believe that cash flows from operations will be sufficient to satisfy our capital and liquidity requirements through 2009. We may require additional capital to fund any unanticipated expenditures, including any acquisitions of other businesses. We currently have a $40 million dollar bank line of credit with an available balance of $33 million.
As of June 30, 2009, we had a long-term liability of $275,000 to Midland Development Corporation. This amount is to be recognized as income contingent upon certain staffing requirements in the future. In addition, we entered into a purchase agreement with a vendor on July 30, 2008 pursuant to which we agreed to purchase up to $4.8 million of our paint and coating requirements exclusively from the vendor. In connection with the execution of the agreement, the vendor paid us a $300,000 fee which is considered to be a discount toward future purchases from the vendor. Based on our historical paint and coating requirements, we estimate meeting the $4.8 million purchase obligation within five years. The $300,000 payment we received is recorded as a long-term liability and will decrease as the purchase commitment is fulfilled. The long-term liability remaining as of June 30, 2009 was $287,000.
NGS is in the portfolios of John Keeley of Keeley Fund Management.
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