Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 08, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-31398 | |
Entity Registrant Name | NATURAL GAS SERVICES GROUP, INC. | |
Entity Incorporation, State or Country Code | CO | |
Entity Tax Identification Number | 75-2811855 | |
Entity Address, Address Line One | 404 Veterans Airpark Ln., Ste 300 | |
Entity Address, City or Town | Midland | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 79705 | |
City Area Code | 432 | |
Local Phone Number | 262-2700 | |
Title of 12(b) Security | Common Stock, Par Value $0.01 | |
Trading Symbol | NGS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,501,597 | |
Entity Central Index Key | 0001084991 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 7,412 | $ 3,372 |
Trade accounts receivable, net | 14,971 | 14,668 |
Inventory | 25,077 | 23,414 |
Federal income tax receivable (Note 4) | 11,538 | 11,538 |
Prepaid income taxes | 10 | 10 |
Prepaid expenses and other | 648 | 1,145 |
Total current assets | 59,656 | 54,147 |
Long-term inventory, net of allowance for obsolescence of $40 and $120, respectively | 1,588 | 1,557 |
Rental equipment, net of accumulated depreciation of $182,560 and $177,729, respectively | 287,181 | 246,450 |
Property and equipment, net of accumulated depreciation of $17,554 and $16,981, respectively | 22,420 | 22,176 |
Right of use assets - operating leases, net of accumulated amortization $760 and $721, respectively | 309 | 349 |
Intangibles, net of accumulated amortization of $2,290 and $2,259, respectively | 869 | 900 |
Other assets | 4,784 | 2,667 |
Total assets | 376,807 | 328,246 |
Current Liabilities: | ||
Accounts payable | 24,835 | 6,481 |
Accrued liabilities | 16,946 | 23,726 |
Current operating leases | 123 | 155 |
Deferred income | 114 | 37 |
Total current liabilities | 42,018 | 30,399 |
Long-term debt | 61,011 | 25,000 |
Deferred income tax liability | 39,946 | 39,798 |
Long-term operating leases | 186 | 194 |
Other long-term liabilities | 2,897 | 2,779 |
Total liabilities | 146,058 | 98,170 |
Commitments and contingencies (Note 9) | ||
Stockholders’ Equity: | ||
Preferred stock, 5,000 shares authorized, no shares issued or outstanding | 0 | 0 |
Common stock, 30,000 shares authorized, par value $0.01; 13,548 and 13,519 shares issued, respectively | 135 | 135 |
Additional paid-in capital | 115,714 | 115,411 |
Retained earnings | 129,904 | 129,534 |
Treasury shares, at cost, 1,310 shares, respectively | (15,004) | (15,004) |
Total stockholders' equity | 230,749 | 230,076 |
Total liabilities and stockholders' equity | $ 376,807 | $ 328,246 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Noncurrent Assets: | ||
Allowance for obsolescence | $ 40 | $ 120 |
Accumulated depreciation, rental equipment | 182,560 | 177,729 |
Accumulated depreciation, property and equipment | 17,554 | 16,981 |
Accumulated amortization, operating lease right of use assets | 760 | 721 |
Accumulated amortization, intangibles | $ 2,290 | $ 2,259 |
Stockholders’ Equity: | ||
Preferred stock, shares authorized (in shares) | 5,000 | 5,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, shares authorized (in shares) | 30,000 | 30,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 13,548 | 13,519 |
Treasury shares (in shares) | 1,310 | 1,310 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue: | ||
Rental income | $ 22,723 | $ 17,129 |
Revenue from contracts with customers | 3,897 | 3,207 |
Total revenue | 26,620 | 20,336 |
Operating costs and expenses: | ||
Cost of rentals, exclusive of depreciation stated separately below | 11,645 | 9,230 |
Cost of sales, exclusive of depreciation stated separately below | 3,237 | 1,988 |
Cost of service and maintenance, exclusive of depreciation stated separately below | 609 | 173 |
Selling, general and administrative expenses | 4,562 | 2,502 |
Depreciation and amortization | 6,165 | 6,061 |
Total operating costs and expenses | 26,218 | 19,954 |
Operating income | 402 | 382 |
Other income (expense): | ||
Interest expense | 0 | (24) |
Other income (expense), net | 118 | (32) |
Total other income, net | 118 | (56) |
Income before provision for income taxes | 520 | 326 |
Income tax (expense) benefit | (150) | 11 |
Net income | $ 370 | $ 337 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.03 | $ 0.03 |
Diluted (in dollars per share) | $ 0.03 | $ 0.03 |
Weighted average shares outstanding: | ||
Basic (in shares) | 12,213 | 12,537 |
Diluted (in shares) | 12,354 | 12,698 |
Sales | ||
Revenue: | ||
Revenue from contracts with customers | $ 2,992 | $ 2,893 |
Service and maintenance income | ||
Revenue: | ||
Revenue from contracts with customers | $ 905 | $ 314 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock |
Beginning balance (in shares) at Dec. 31, 2021 | 0 | |||||
Beginning balance at Dec. 31, 2021 | $ 235,910 | $ 0 | $ 134 | $ 114,017 | $ 130,103 | $ (8,344) |
Beginning balance (in shares) at Dec. 31, 2021 | 13,394 | |||||
Beginning balance (in shares) at Dec. 31, 2021 | 775 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Compensation expense on common stock options | 21 | 21 | ||||
Issuance of restricted stock (in shares) | 79 | |||||
Compensation expense on restricted common stock | 402 | $ 1 | 401 | |||
Taxes paid related to net shares settlement of equity awards | (359) | (359) | ||||
Purchase of treasury shares (in shares) | 247 | |||||
Purchase of treasury shares | (2,928) | $ (2,928) | ||||
Net income | 337 | 337 | ||||
Ending balance (in shares) at Mar. 31, 2022 | 0 | |||||
Ending balance at Mar. 31, 2022 | $ 233,383 | $ 0 | $ 135 | 114,080 | 130,440 | $ (11,272) |
Ending balance (in shares) at Mar. 31, 2022 | 13,473 | |||||
Ending balance (in shares) at Mar. 31, 2022 | 1,022 | |||||
Beginning balance (in shares) at Dec. 31, 2022 | 0 | |||||
Beginning balance at Dec. 31, 2022 | $ 230,076 | $ 135 | 115,411 | 129,534 | $ (15,004) | |
Beginning balance (in shares) at Dec. 31, 2022 | 13,519 | |||||
Beginning balance (in shares) at Dec. 31, 2022 | 1,310 | 1,310 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Compensation expense on common stock options | $ 22 | 22 | ||||
Issuance of restricted stock (in shares) | 29 | |||||
Compensation expense on restricted common stock | 465 | 465 | ||||
Taxes paid related to net shares settlement of equity awards | (184) | (184) | ||||
Net income | $ 370 | 370 | ||||
Ending balance (in shares) at Mar. 31, 2023 | 0 | 0 | ||||
Ending balance at Mar. 31, 2023 | $ 230,749 | $ 0 | $ 135 | $ 115,714 | $ 129,904 | $ (15,004) |
Ending balance (in shares) at Mar. 31, 2023 | 13,548 | |||||
Ending balance (in shares) at Mar. 31, 2023 | 1,310 | 1,310 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 370 | $ 337 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 6,165 | 6,061 |
Amortization of debt issuance costs | 52 | 12 |
Deferred income tax (benefit) expense | 148 | (11) |
Stock-based compensation | 487 | 423 |
Bad debt allowance | 48 | 0 |
Gain on sale of assets | (25) | (36) |
Loss (gain) on company owned life insurance | (18) | 130 |
Changes in operating assets and liabilities: | ||
Trade accounts receivables | (351) | (2,494) |
Inventory | (986) | 2,085 |
Prepaid expenses and prepaid income taxes | 497 | 238 |
Accounts payable and accrued liabilities | 11,574 | (349) |
Deferred income | 77 | (1,312) |
Other | 184 | (89) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 18,222 | 4,995 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of rental equipment, property and other equipment | (47,792) | (8,212) |
Purchase of company owned life insurance | (50) | (47) |
Proceeds from sale of property and equipment | 0 | 37 |
NET CASH USED IN INVESTING ACTIVITIES | (47,842) | (8,222) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from loan | 36,011 | 0 |
Payments of other long-term liabilities, net | (36) | (2) |
Payments of debt issuance costs | (2,131) | 0 |
Purchase of treasury shares | 0 | (2,928) |
Taxes paid related to net share settlement of equity awards | (184) | (359) |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 33,660 | (3,289) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 4,040 | (6,516) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 3,372 | 22,942 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 7,412 | 16,426 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest paid | 855 | 12 |
NON-CASH TRANSACTIONS | ||
Right of use asset acquired through an operating lease | 0 | 91 |
Transfer of rental equipment to inventory | $ 708 | $ 0 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of BusinessNatural Gas Services Group, Inc. (the "Company", “NGS”, "Natural Gas Services Group", "we" or "our") (a Colorado corporation), is a provider of natural gas compression equipment and services to the energy industry. The Company manufactures, fabricates, rents, sells and maintains natural gas compressors systems for oil and natural gas production and plant facilities. NGS is headquartered in Midland, Texas, with fabrication facilities located in Tulsa, Oklahoma and Midland, Texas, and service facilities located in major oil and natural gas producing basins in the U.S. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, its subsidiary, NGSG Properties, LLC and the rabbi trust associated with the Company's deferred compensation plan. All significant intercompany accounts and transactions for the periods presented have been eliminated in consolidation. These financial statements include all adjustments, consisting of only normal recurring adjustments, which are necessary to make our financial position at March 31, 2023 and the results of our operations for the three months ended March 31, 2023 and 2022 not misleading. As permitted by the rules and regulations of the Securities and Exchange Commission (the "SEC"), the accompanying condensed consolidated financial statements do not include all disclosures normally required by generally accepted accounting principles in the United States of America (GAAP). These financial statements should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 on file with the SEC. In our opinion, the condensed consolidated financial statements are a fair presentation of the financial position, results of operations, changes in stockholders' equity and cash flows for the periods presented. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2023. Revenue Recognition Policy The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers ("ASC 606"), except for rental revenue as discussed below. Under ASC 606, revenue is measured based on a consideration specified in a customer’s contract, excluding any sale incentives and taxes collected on behalf of third parties (i.e. sales and property taxes). Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration that we expect to receive for those goods or services. To recognize revenue, we (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, we satisfy the performance obligation(s). Shipping and handling costs incurred are accounted for as fulfillment costs and are included in cost of revenues in our condensed consolidated statements of operations. Nature of Goods and Services The following is a description of principal activities from which the Company generates its revenue: Rental Revenue. The Company generates revenue from renting compressors systems to our customers. These contracts, which all qualify as operating leases under ASC Topic 842, Leases (ASC 842), may also include a fee for servicing the compressor during the rental contract period. Our rental contracts typically range from six Sales Revenue. The Company generates revenue by the sale of custom/fabricated compressors, and parts, as well as, exchange/rebuilding customer owned compressors and sale of used rental equipment. Custom/fabricated compressors - The Company designs and fabricates compressors based on the customer’s specifications outlined in their contract. Though the equipment being built is customized by the customer, control under these contracts does not pass to the customer until the compressor package is complete and shipped, or in accordance with a bill and hold arrangement, the customer accepts title and assumes the risk and rewards of ownership. We request some of our customers to make progressive payments as the product is being built; these payments are recorded as a contract liability on the Deferred Income line on the condensed consolidated balance sheet until control has been transferred. These contracts also may include an assurance warranty clause to guarantee the product is free from defects in material and workmanship for a set duration of time; this is a standard industry practice and is not considered a performance obligation. From time to time we recognize revenue when manufacturing is complete and the equipment is ready for shipment. At the customer’s request, we will bill the customer upon completing all performance obligations, but before shipment. The customer will formally request that we ship the equipment per their direction from our manufacturing facility at a later specified date and that we segregate this equipment from our finished goods, such that this equipment is not available to fill other orders. Per the customer’s agreement change of control is passed to the customer once the equipment is complete and ready for shipment. We have operated using bill and hold agreements with certain customers for many years, with consistent and satisfactory results for both the customer and us. The credit terms on these agreements are consistent with the credit terms on all other sales. All control is maintained by the customer and there are no exceptions to the customer’s commitment to accept and pay for the manufactured equipment. There was no revenue recognized for bill and hold arrangements for the three months ended March 31, 2023 or 2022. Parts - Revenue is recognized after the customer obtains control of the parts. Control is passed either by the customer taking physical possession or the parts being shipped. The amount of revenue recognized is not adjusted for expected returns, as our historical part returns have been de minimis. Exchange or rebuilding customer owned compressors - Based on the contract, the Company will either exchange a new/rebuilt compressor for the customer’s malfunctioning compressor or rebuild the customer’s compressor. Revenue is recognized after control of the replacement compressor has transferred to the customer based on the terms of the contract, i.e., by physical delivery, delivery and installment, or shipment of the compressor. Used compressors - From time to time, a customer may request to purchase a used compressor out of our rental fleet. Revenue from the sale of rental equipment is recognized when the control has passed to the customer based on the terms of the contract, i.e., when the customer has taken physical possession or the equipment has been shipped. Service and Maintenance Revenue . The Company provides routine or call-out services on customer owned equipment. Revenue is recognized after services in the contract are rendered. Payment terms for sales revenue and service and maintenance revenue discussed above are generally 30 to 60 days, although terms for specific customers can vary. Also, transaction prices are not subject to variable consideration constraints. Disaggregation of Revenue The following table shows the Company's revenue disaggregated by product or service type for the three months ended March 31, 2023 and 2022: Three months ended March 31, 2023 2022 (in thousands) Compressors - sales $ 969 $ 1,968 Other (parts/rebuilds) - sales 2,023 925 Service and maintenance 905 314 Total revenue from contracts with customers 3,897 3,207 Add: ASC 842 rental revenue 22,723 17,129 Total revenue $ 26,620 $ 20,336 Contract Balances As of March 31, 2023 and December 31, 2022, we had the following receivables and deferred income from contracts with customers: March 31, 2023 December 31, 2022 (in thousands) Accounts Receivable Accounts receivable - contracts with customers $ 4,245 $ 4,353 Accounts receivable - ASC 842 11,107 10,653 Total Accounts Receivable 15,352 15,006 Less: Allowance for doubtful accounts (381) (338) Total Accounts Receivable, net $ 14,971 $ 14,668 Deferred income $ 114 $ 37 The Company recognized sales revenues of $37,000 for the three months ended March 31, 2023 that was included in deferred income at the beginning of 2023. The increase in accounts receivable and decrease in deferred income were primarily due to normal timing differences between our performance and the customers’ payments. Remaining Performance Obligations As of March 31, 2023, the Company had deferred revenue of $114 thousand related to unsatisfied performance obligations. Contract Costs The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in selling, general and administrative expenses on our condensed consolidated statements of operations. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, and operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established to reduce deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. To the extent we establish a valuation allowance or increase this allowance in a period, we include an expense in the tax provision in our condensed consolidated statements of operations. We account for uncertain tax positions in accordance with guidance in ASC 740, which prescribes the minimum recognition threshold a tax position taken or expected to be taken in a tax return is required to meet before being recognized in the condensed consolidated financial statements. Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely to be realized upon settlement. A liability for unrecognized tax benefits is recorded for any tax benefits claimed in our tax returns that do not meet these recognition and measurement standards. We have no liabilities for uncertain tax positions as of March 31, 2023. Our policy regarding income tax interest and penalties is to expense those items as interest expense and other expense, respectively. Capitalized Interest Beginning January 1, 2023, the Company began capitalizing interest from external borrowings on significant expenditures for the fabrication of its natural gas compressor equipment until such projects are ready for their intended use. Capitalized interest is added to the cost of the underlying asset and is amortized over the useful lives of the assets in the same manner as the underlying assets. For the three months ended March 31, 2023, the Company capitalized interest aggregating approximately $855,000. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments to ASC Topic 326 require immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, including trade receivables. For companies that qualify as smaller reporting companies, the amendments in this update are effective for interim and annual periods beginning after January 1, 2023. We have adopted ASU 2016-13 on January 1, 2023. The adoption did not result in any material change to our financial statements. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Our inventory, net of allowance for obsolescence of $40,000 at March 31, 2023 and $120,000 at December 31, 2022, consisted of the following amounts: March 31, 2023 December 31, 2022 (in thousands) Raw materials - current $ 24,281 $ 21,354 Work-in-process 796 2,060 Inventory - current 25,077 23,414 Raw materials - long term (net of allowances of $40 and $120, respectively) 1,588 1,557 Inventory - total $ 26,665 $ 24,971 Our long-term inventory consists of raw materials that remain viable but that the Company does not expect to sell or use within the year. Inventory Allowance We routinely review our inventory allowance balance to account for slow moving or obsolete inventory costs that may not be recoverable in the future. A summary of our inventory allowance is as follows: March 31, 2023 December 31, 2022 (in thousands) Beginning balance $ 120 $ 64 Accruals — 83 Write-offs (80) (27) Ending balance $ 40 $ 120 |
Federal Income Tax Receivable
Federal Income Tax Receivable | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Federal Income Tax Receivable | Federal Income Tax ReceivableOn March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted in response to the economic impact caused by the COVID-19 pandemic. The CARES Act allowed NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid federal income taxes. The Company generated significant NOLs during 2018 and 2019, and has filed amended returns to carryback these losses for five years. Accordingly, during 2020, the Company recorded a federal income tax receivable of $15.0 million and an increase to its deferred income tax liability of $10.1 million on its condensed consolidated balance sheet. During the third quarter of 2020, the Company received refunds totaling $3.9 million related to its 2018 NOLs, which reduced its federal income tax receivable to $11.5 million on its condensed consolidated balance sheet as of March 31, 2023 and December 31, 2022. |
Rental Equipment
Rental Equipment | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Rental Equipment | Rental Equipment Our rental equipment and associated accumulated depreciation as of March 31, 2023 and December 31, 2022, respectively, consisted of the following: March 31, 2023 December 31, 2022 (in thousands) Compressor units $ 404,175 $ 387,145 Work-in-process 65,566 37,034 Rental equipment 469,741 424,179 Accumulated depreciation (182,560) (177,729) Rental equipment, net of accumulated depreciation $ 287,181 $ 246,450 |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Our long-term debt consists of the following: March 31, 2023 December 31, 2022 (in thousands) Total long-term debt $ 61,011 $ 25,000 Credit Agreement On May 11, 2021, we entered into a five year senior secured revolving credit agreement ("Credit Agreement") with Texas Capital Bank, National Association (the "Lender") with an initial commitment of $20 million and an accordion feature that would increase the maximum commitment to $30 million, subject to collateral availability. We also have a right to request from the Lender, on an uncommitted basis, an increase of up to $30 million on the aggregate commitment; provided, however, the aggregate commitment amount is not permitted to exceed $50 million. The maturity date of the Credit Agreement is May 11, 2026. The obligations under the Credit Agreement are secured by a first priority lien on a variety of our assets, including inventory and accounts receivable as well as a variable number of our leased compressor equipment. As of December 31, 2022, we were in compliance with all financial covenants in our Credit Agreement. At December 31, 2022, we had $25 million outstanding under the Credit Agreement with a weighted average interest rate of 7.32% . Amended and Restated Credit Agreement On February 28, 2023, we entered into a five-year senior secured revolving credit agreement (“Amended and Restated Credit Agreement”) with Texas Capital Bank, as administrative agent (the “Lender”), TCBI Securities, Inc., as joint lead arranger and sole book runner and Bank of America, N.A., as joint lead arranger, with an initial commitment of $175 million as of the closing date. Subject to collateral availability, we also have a right to request from the Lender, on an uncommitted basis, an increase of up to $125 million on the aggregate commitment; provided, however, the aggregate commitment amount is not permitted to exceed $300 million. The maturity date of the Amended and Restated Credit Agreement is February 28, 2028. The obligations under the Amended and Restated Credit Agreement are secured by a first priority lien on a variety of our assets, including inventory and accounts receivable as well as a variable number of our leased compressor equipment. Borrowing Base . At any time before the maturity of the Amended and Restated Credit Agreement, we may draw, repay and re-borrow amounts available under the borrowing base up to the maximum aggregate availability discussed above. Generally, the borrowing base equals the sum of (a) 85% of eligible accounts receivable owed to the Company, plus (b) 50% of the eligible inventory, valued at the lower of cost or market value at such time, subject to a cap of the component not to exceed $2.5 million, plus (c) the lesser of (i) 95% of the net book value of the compressors that the Lender has determined are eligible for the extension of credit, valued at the lower of cost or market value with depreciation not to exceed 25 years, at such time and (ii) 80% of the net liquidation value percentage of the net book value of the eligible compressors that the Lender has determined are eligible for the extension of credit, valued at the lower of cost or market value with depreciation not to exceed 25 years, at such time, plus (d) 80% of the net book value, valued at the lower cost (excluding any costs for capitalized interest or other non-cash capitalized costs) or market of the eligible new compressor fleet, minus (e) any required availability reserves determined by the Lender in its sole discretion. The Lender may adjust the borrowing base components if the material deviations in the collateral are discovered in the future audits of the collateral. At March 31, 2023, our borrowing base was approximately $138 million. Interest and Fees . Under the terms of the Amended and Restated Credit Agreement, we have the option of selecting the applicable variable rate for each revolving loan, or portion thereof, of either (a) the Base Rate (as defined below) plus the Applicable Margin, or (b) in the case of a Term SOFR ("Secured Overnight Financing Rate") Loan, the Adjusted Term SOFR rate plus the Applicable Margin. "Base Rate" means, for any day, a rate of interest per annum equal to the highest of (a) the prime rate for such a day; (b) the sum of the federal funds rate for such day plus 0.50%; and (c) the Adjusted Term SOFR for such day plus 1.00%. The Applicable Margin is determined based upon the leverage ratio as set forth in the most recent compliance certificate received by the Lender for each fiscal quarter from time to time pursuant to the Amended and Restated Credit Agreement. Depending on the leverage ratio, the Applicable Margin can be 2.00% to 2.75% for Base Rate Loans (as defined in Amended and Restated Credit Agreement) and 3.00% to 3.75% for Term SOFR Loans and for requested letters of credit. In addition, we are required to pay a monthly commitment fee on the daily average unused amount of the commitment while the Amended and Restated Credit Agreement is in effect at an annual rate equal to 0.50% of the unused commitment amount. Accrued interest is payable monthly on outstanding principal amounts and unused commitment fee, provided that accrued interest on Term SOFR Loans is payable at the end of each interest period, but in no event less frequently than quarterly. Covenants . The Amended and Restated Credit Agreement contains customary representations and warranties, as well as covenants which, among other things, condition or limit our ability to incur additional indebtedness and liens; enter into transactions with affiliates; make acquisitions in excess of certain amounts; pay dividends; redeem or repurchase capital stock or senior notes; make investments or loans; make negative pledges; consolidate, merge or effect asset sales; or change the nature of our business. In addition, we are subject to certain financial covenants during certain trigger periods in the Amended and Restated Credit Agreement that require us to maintain (i) a leverage ratio, as defined, lesser than or equal to 3.50 to 1.00 as of the last day of each fiscal quarter thereafter and (ii) a fixed charge coverage ratio greater than or equal to 1.25 to 1.00 as of the last day of each fiscal quarter. Events of Default and Acceleration . The Amended and Restated Credit Agreement contains customary events of default for credit facilities of this size and type, and includes, without limitation, payment defaults; defaults in performance of covenants or other agreements contained in the Amended and Restated Credit Agreement and the other transaction documents; inaccuracies in representations and warranties; certain defaults, termination events or similar events; certain defaults with respect to any other Company indebtedness in excess of $1.0 million; certain bankruptcy or insolvency events; the rendering of certain judgments in excess of $1.0 million; certain ERISA events; certain change in control events and the defectiveness of any liens under the secured revolving credit agreement. Obligations outstanding under the Amended and Restated Credit Agreement may be accelerated upon the occurrence of an event of default. |
Stock-Based and Other Long-Term
Stock-Based and Other Long-Term Incentive Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based and Other Long-Term Incentive Compensation | Stock-Based and Other Long-Term Incentive Compensation Stock Options A summary of all option activity as of December 31, 2022, and changes during the three months ended March 31, 2023 is presented below: Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2022 201,584 $ 19.32 3.90 $ — Cancelled / Forfeited (2,667) $ 10.58 — $ 3 Expired (13,000) $ 18.75 — $ — Outstanding, March 31, 2023 185,917 $ 19.49 3.84 $ — Exercisable, March 31, 2023 147,084 $ 21.72 2.51 $ — The following table summarizes information about our stock options outstanding at March 31, 2023: Range of Exercise Prices Options Outstanding Options Exercisable Shares Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Shares Weighted Average Exercise Price $0.01-18.00 103,333 5.24 $ 13.37 64,500 $ 14.78 $22.01-26.00 29,667 2.04 $ 22.90 29,667 $ 22.90 $26.01-30.00 20,750 3.89 $ 28.15 20,750 $ 28.15 $30.01-34.00 32,167 0.97 $ 30.41 32,167 $ 30.41 185,917 3.84 $ 19.49 147,084 $ 21.72 The summary of the status of our unvested stock options as of December 31, 2022 and changes during the three months ended March 31, 2023 is presented below: Unvested Stock Options: Shares Weighted Average Grant Date Fair Value Per Share Unvested at December 31, 2022 41,500 $ 5.48 Cancelled/Forfeited (2,667) $ 5.15 Unvested at March 31, 2023 38,833 $ 5.50 As of March 31, 2023, there was $157 thousand of unrecognized compensation cost related to unvested options. For the three months ended March 31, 2023, there was $22 thousand of compensation expense for stock options. For the three months ended March 31, 2022, there was $21 thousand of compensation expense for stock options. Restricted Shares/Units On April 26, 2022, 4,212 shares of restricted common stock were awarded to each of our three independent Board members. The restricted stock issued to these directors vest in one year from the date of grant. On August 15, 2022, the Compensation Committee awarded 32,040 shares of restricted common stock to two executive officers that vest ratably over three years, beginning on April 25, 2023. In addition, on August 15, 2022, the Compensation Committee awarded 60,839 shares of restricted stock to Mr. Stephen Taylor, our Interim Chief Executive Officer, that will vest in full on June 30, 2023. On April 25, 2023, the Compensation Committee awarded 27,840 shares of restricted stock to our Chief Technical Officer that vest ratably over three years, beginning on April 25, 2024. Pursuant to the Retirement Agreement dated May 17, 2022, between the Company and Stephen C. Taylor, our Interim Chief Executive Officer, on April 25, 2023, the Compensation Committee awarded 58,790 fully vested shares of common stock to Mr. Stephen Taylor, our Interim Chief Executive Officer that vest immediately. Total compensation expense related to these and previously granted restricted stock awards was $0.5 million and $0.4 million for the three months ended March 31, 2023, and 2022, respectively. A summary of all restricted stock/units outstanding as of December 31, 2022 and activity during the three months ended March 31, 2023 is presented below: Number Weighted Average Weighted Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2022 250,847 $ 9.14 1.42 $ 2,681 Granted 8,944 $ 10.81 $ 100 Vested (48,583) $ 10.04 $ 467 Canceled/Forfeited (14,357) $ — $ 158 Outstanding, March 31, 2023 196,851 $ 8.40 1.20 $ 1,587 Other Long-Term Incentive Compensation On April 26, 2022, subject to vesting we granted a $50,000 cash award to each of our three independent Board members. These awards vested on April 26, 2023 and have been paid. There were no long-term incentive awards issued to executives during the three months ended March 31, 2023. The Company accounts for these other long-term incentive awards as liabilities under accrued liabilities on our condensed consolidated balance sheet. In general the vesting of long term awards is subject to acceleration upon certain events, such as (i) death or disability of the recipient, (ii) certain circumstances in connection with a change of control of the Company, (iii) for executive officers, termination without cause (as defined in the agreement), and (iv) for executive officers, resignation for good reason (as defined). Total compensation expense related to these and other long-term incentive awards was approximately $300,000 and $700,000 for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, there was a total of $200,000 of unrecognized compensation expense related to these other long-term incentive awards which is expected to be recognized over the next 3 months. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The following table reconciles the numerators and denominators of the basic and diluted earnings per share computation: Three months ended March 31, 2023 2022 (in thousands, except per share data) Numerator: Net income $ 370 $ 337 Denominator for earnings per basic common share: Weighted average common shares outstanding 12,213 12,537 Denominator for earnings per diluted common share: Weighted average common shares outstanding 12,213 12,537 Dilutive effect of stock options and restricted stock/units 141 161 Diluted weighted average shares 12,354 12,698 Earnings per common share: Basic $ 0.03 $ 0.03 Diluted $ 0.03 $ 0.03 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesFrom time to time, we are a party to various legal proceedings in the ordinary course of our business. While management is unable to predict the ultimate outcome of these actions, it believes that any ultimate liability arising from these actions will not have a material adverse effect on our financial position, results of operations or cash flow. We are not currently a party to any material legal proceedings, and we are not aware of any threatened material litigation. The Company believes it maintains adequate insurance coverage against any potential litigation loss. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsIn accordance with ASC 855 - Subsequent Events - the Company has evaluated all events subsequent to the balance sheet date as of March 31, 2023 through the date of this report and believes nothing is required thereunder. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, its subsidiary, NGSG Properties, LLC and the rabbi trust associated with the Company's deferred compensation plan. All significant intercompany accounts and transactions for the periods presented have been eliminated in consolidation. These financial statements include all adjustments, consisting of only normal recurring adjustments, which are necessary to make our financial position at March 31, 2023 and the results of our operations for the three months ended March 31, 2023 and 2022 not misleading. As permitted by the rules and regulations of the Securities and Exchange Commission (the "SEC"), the accompanying condensed consolidated financial statements do not include all disclosures normally required by generally accepted accounting principles in the United States of America (GAAP). These financial statements should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 on file with the SEC. In our opinion, the condensed consolidated financial statements are a fair presentation of the financial position, results of operations, changes in stockholders' equity and cash flows for the periods presented. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2023. |
Revenue Recognition Policy and Contract Costs | Revenue Recognition Policy The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers ("ASC 606"), except for rental revenue as discussed below. Under ASC 606, revenue is measured based on a consideration specified in a customer’s contract, excluding any sale incentives and taxes collected on behalf of third parties (i.e. sales and property taxes). Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration that we expect to receive for those goods or services. To recognize revenue, we (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, we satisfy the performance obligation(s). Shipping and handling costs incurred are accounted for as fulfillment costs and are included in cost of revenues in our condensed consolidated statements of operations. Nature of Goods and Services The following is a description of principal activities from which the Company generates its revenue: Rental Revenue. The Company generates revenue from renting compressors systems to our customers. These contracts, which all qualify as operating leases under ASC Topic 842, Leases (ASC 842), may also include a fee for servicing the compressor during the rental contract period. Our rental contracts typically range from six Sales Revenue. The Company generates revenue by the sale of custom/fabricated compressors, and parts, as well as, exchange/rebuilding customer owned compressors and sale of used rental equipment. Custom/fabricated compressors - The Company designs and fabricates compressors based on the customer’s specifications outlined in their contract. Though the equipment being built is customized by the customer, control under these contracts does not pass to the customer until the compressor package is complete and shipped, or in accordance with a bill and hold arrangement, the customer accepts title and assumes the risk and rewards of ownership. We request some of our customers to make progressive payments as the product is being built; these payments are recorded as a contract liability on the Deferred Income line on the condensed consolidated balance sheet until control has been transferred. These contracts also may include an assurance warranty clause to guarantee the product is free from defects in material and workmanship for a set duration of time; this is a standard industry practice and is not considered a performance obligation. From time to time we recognize revenue when manufacturing is complete and the equipment is ready for shipment. At the customer’s request, we will bill the customer upon completing all performance obligations, but before shipment. The customer will formally request that we ship the equipment per their direction from our manufacturing facility at a later specified date and that we segregate this equipment from our finished goods, such that this equipment is not available to fill other orders. Per the customer’s agreement change of control is passed to the customer once the equipment is complete and ready for shipment. We have operated using bill and hold agreements with certain customers for many years, with consistent and satisfactory results for both the customer and us. The credit terms on these agreements are consistent with the credit terms on all other sales. All control is maintained by the customer and there are no exceptions to the customer’s commitment to accept and pay for the manufactured equipment. There was no revenue recognized for bill and hold arrangements for the three months ended March 31, 2023 or 2022. Parts - Revenue is recognized after the customer obtains control of the parts. Control is passed either by the customer taking physical possession or the parts being shipped. The amount of revenue recognized is not adjusted for expected returns, as our historical part returns have been de minimis. Exchange or rebuilding customer owned compressors - Based on the contract, the Company will either exchange a new/rebuilt compressor for the customer’s malfunctioning compressor or rebuild the customer’s compressor. Revenue is recognized after control of the replacement compressor has transferred to the customer based on the terms of the contract, i.e., by physical delivery, delivery and installment, or shipment of the compressor. Used compressors - From time to time, a customer may request to purchase a used compressor out of our rental fleet. Revenue from the sale of rental equipment is recognized when the control has passed to the customer based on the terms of the contract, i.e., when the customer has taken physical possession or the equipment has been shipped. Service and Maintenance Revenue . The Company provides routine or call-out services on customer owned equipment. Revenue is recognized after services in the contract are rendered. Payment terms for sales revenue and service and maintenance revenue discussed above are generally 30 to 60 days, although terms for specific customers can vary. Also, transaction prices are not subject to variable consideration constraints. Contract Costs The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in selling, general and administrative expenses on our condensed consolidated statements of operations. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, and operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established to reduce deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. To the extent we establish a valuation allowance or increase this allowance in a period, we include an expense in the tax provision in our condensed consolidated statements of operations. We account for uncertain tax positions in accordance with guidance in ASC 740, which prescribes the minimum recognition threshold a tax position taken or expected to be taken in a tax return is required to meet before being recognized in the condensed consolidated financial statements. Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely to be realized upon settlement. A liability for unrecognized tax benefits is recorded for any tax benefits claimed in our tax returns that do not meet these recognition and measurement standards. We have no liabilities for uncertain tax positions as of March 31, 2023. Our policy regarding income tax interest and penalties is to expense those items as interest expense and other expense, respectively. |
Capitalized Interest | Capitalized Interest |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments to ASC Topic 326 require immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, including trade receivables. For companies that qualify as smaller reporting companies, the amendments in this update are effective for interim and annual periods beginning after January 1, 2023. We have adopted ASU 2016-13 on January 1, 2023. The adoption did not result in any material change to our financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Disaggregation of Revenue | The following table shows the Company's revenue disaggregated by product or service type for the three months ended March 31, 2023 and 2022: Three months ended March 31, 2023 2022 (in thousands) Compressors - sales $ 969 $ 1,968 Other (parts/rebuilds) - sales 2,023 925 Service and maintenance 905 314 Total revenue from contracts with customers 3,897 3,207 Add: ASC 842 rental revenue 22,723 17,129 Total revenue $ 26,620 $ 20,336 |
Schedule of Contract with Customer, Asset and Liability | As of March 31, 2023 and December 31, 2022, we had the following receivables and deferred income from contracts with customers: March 31, 2023 December 31, 2022 (in thousands) Accounts Receivable Accounts receivable - contracts with customers $ 4,245 $ 4,353 Accounts receivable - ASC 842 11,107 10,653 Total Accounts Receivable 15,352 15,006 Less: Allowance for doubtful accounts (381) (338) Total Accounts Receivable, net $ 14,971 $ 14,668 Deferred income $ 114 $ 37 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Our inventory, net of allowance for obsolescence of $40,000 at March 31, 2023 and $120,000 at December 31, 2022, consisted of the following amounts: March 31, 2023 December 31, 2022 (in thousands) Raw materials - current $ 24,281 $ 21,354 Work-in-process 796 2,060 Inventory - current 25,077 23,414 Raw materials - long term (net of allowances of $40 and $120, respectively) 1,588 1,557 Inventory - total $ 26,665 $ 24,971 A summary of our inventory allowance is as follows: March 31, 2023 December 31, 2022 (in thousands) Beginning balance $ 120 $ 64 Accruals — 83 Write-offs (80) (27) Ending balance $ 40 $ 120 |
Rental Equipment (Tables)
Rental Equipment (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Rental Equipment | Our rental equipment and associated accumulated depreciation as of March 31, 2023 and December 31, 2022, respectively, consisted of the following: March 31, 2023 December 31, 2022 (in thousands) Compressor units $ 404,175 $ 387,145 Work-in-process 65,566 37,034 Rental equipment 469,741 424,179 Accumulated depreciation (182,560) (177,729) Rental equipment, net of accumulated depreciation $ 287,181 $ 246,450 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Instruments | Our long-term debt consists of the following: March 31, 2023 December 31, 2022 (in thousands) Total long-term debt $ 61,011 $ 25,000 |
Stock-Based and Other Long-Te_2
Stock-Based and Other Long-Term Incentive Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Option Activity | A summary of all option activity as of December 31, 2022, and changes during the three months ended March 31, 2023 is presented below: Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2022 201,584 $ 19.32 3.90 $ — Cancelled / Forfeited (2,667) $ 10.58 — $ 3 Expired (13,000) $ 18.75 — $ — Outstanding, March 31, 2023 185,917 $ 19.49 3.84 $ — Exercisable, March 31, 2023 147,084 $ 21.72 2.51 $ — |
Schedule of Stock Options Outstanding | The following table summarizes information about our stock options outstanding at March 31, 2023: Range of Exercise Prices Options Outstanding Options Exercisable Shares Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Shares Weighted Average Exercise Price $0.01-18.00 103,333 5.24 $ 13.37 64,500 $ 14.78 $22.01-26.00 29,667 2.04 $ 22.90 29,667 $ 22.90 $26.01-30.00 20,750 3.89 $ 28.15 20,750 $ 28.15 $30.01-34.00 32,167 0.97 $ 30.41 32,167 $ 30.41 185,917 3.84 $ 19.49 147,084 $ 21.72 |
Schedule of Status of Unvested Stock Options | The summary of the status of our unvested stock options as of December 31, 2022 and changes during the three months ended March 31, 2023 is presented below: Unvested Stock Options: Shares Weighted Average Grant Date Fair Value Per Share Unvested at December 31, 2022 41,500 $ 5.48 Cancelled/Forfeited (2,667) $ 5.15 Unvested at March 31, 2023 38,833 $ 5.50 |
Schedule of Restricted Stock Activity | A summary of all restricted stock/units outstanding as of December 31, 2022 and activity during the three months ended March 31, 2023 is presented below: Number Weighted Average Weighted Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2022 250,847 $ 9.14 1.42 $ 2,681 Granted 8,944 $ 10.81 $ 100 Vested (48,583) $ 10.04 $ 467 Canceled/Forfeited (14,357) $ — $ 158 Outstanding, March 31, 2023 196,851 $ 8.40 1.20 $ 1,587 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table reconciles the numerators and denominators of the basic and diluted earnings per share computation: Three months ended March 31, 2023 2022 (in thousands, except per share data) Numerator: Net income $ 370 $ 337 Denominator for earnings per basic common share: Weighted average common shares outstanding 12,213 12,537 Denominator for earnings per diluted common share: Weighted average common shares outstanding 12,213 12,537 Dilutive effect of stock options and restricted stock/units 141 161 Diluted weighted average shares 12,354 12,698 Earnings per common share: Basic $ 0.03 $ 0.03 Diluted $ 0.03 $ 0.03 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue from External Customer [Line Items] | ||
Revenue | $ 26,620 | $ 20,336 |
Uncertain tax position | 0 | |
Capitalized interest | 855 | |
Sales | ||
Revenue from External Customer [Line Items] | ||
Revenue recognized | 37 | |
Bill and Hold Arrangement | ||
Revenue from External Customer [Line Items] | ||
Revenue | $ 0 | $ 0 |
Minimum | ||
Revenue from External Customer [Line Items] | ||
Amortization period of capitalized contract costs | 1 year | |
Rental Contracts, Excluding Large Horsepower Compressors | Minimum | ||
Revenue from External Customer [Line Items] | ||
Rental contract term | 6 months | |
Rental Contracts, Excluding Large Horsepower Compressors | Maximum | ||
Revenue from External Customer [Line Items] | ||
Rental contract term | 24 months | |
Rental Contracts, Large Horsepower Compressors | Maximum | ||
Revenue from External Customer [Line Items] | ||
Rental contract term | 60 months |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 3,897 | $ 3,207 |
Add: ASC 842 rental revenue | 22,723 | 17,129 |
Total revenue | 26,620 | 20,336 |
Compressors - sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 969 | 1,968 |
Other (parts/rebuilds) - sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 2,023 | 925 |
Service and maintenance | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 905 | $ 314 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Contract Balances (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Accounts Receivable | ||
Accounts receivable - contracts with customers | $ 4,245 | $ 4,353 |
Accounts receivable - ASC 842 | 11,107 | 10,653 |
Total Accounts Receivable | 15,352 | 15,006 |
Less: Allowance for doubtful accounts | (381) | (338) |
Total Accounts Receivable, net | 14,971 | 14,668 |
Deferred income | $ 114 | $ 37 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | |||
Allowance for obsolescence | $ 40 | $ 120 | $ 64 |
Raw materials - current | 24,281 | 21,354 | |
Work-in-process | 796 | 2,060 | |
Inventory - current | 25,077 | 23,414 | |
Raw materials - long term (net of allowances of $40 and $120, respectively) | 1,588 | 1,557 | |
Inventory - total | $ 26,665 | $ 24,971 |
Inventory - Schedule of Inven_2
Inventory - Schedule of Inventory Allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Inventory Valuation Reserves [Roll Forward] | ||
Beginning balance | $ 120 | $ 64 |
Accruals | 0 | 83 |
Write-offs | (80) | (27) |
Ending balance | $ 40 | $ 120 |
Federal Income Tax Receivable (
Federal Income Tax Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2020 | Mar. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Federal income tax receivable | $ 15,000 | $ 11,538 | $ 11,538 | |
Deferred tax liability increase due to tax law change | $ 10,100 | |||
Income tax received refunds | $ 3,900 |
Rental Equipment (Details)
Rental Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Rental equipment, gross | $ 469,741 | $ 424,179 |
Accumulated depreciation | (182,560) | (177,729) |
Rental equipment, net of accumulated depreciation | 287,181 | 246,450 |
Impairment of rental equipment | 0 | |
Compressor units | ||
Property, Plant and Equipment [Line Items] | ||
Rental equipment, gross | 404,175 | 387,145 |
Work-in-process | ||
Property, Plant and Equipment [Line Items] | ||
Rental equipment, gross | $ 65,566 | $ 37,034 |
Long-term Debt - Schedule of Lo
Long-term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Total long-term debt | $ 61,011 | $ 25,000 |
Long-term Debt - Narrative (Det
Long-term Debt - Narrative (Details) - Revolving credit facility - Line of Credit - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Feb. 28, 2023 | May 11, 2021 | Mar. 31, 2023 | Dec. 31, 2022 | |
New Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, term | 5 years | |||
Borrowing base amount available | $ 20 | |||
Aggregate credit agreement commitment | 30 | |||
Potential increase in borrowing capacity | 30 | |||
Potential maximum borrowing capacity | $ 50 | |||
Outstanding balance | $ 25 | |||
Weighted average interest rate | 7.32% | |||
Amended And Restated Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, term | 5 years | |||
Borrowing base amount available | $ 175 | $ 138 | ||
Potential increase in borrowing capacity | 125 | |||
Potential maximum borrowing capacity | $ 300 | |||
Outstanding balance | $ 61 | |||
Weighted average interest rate | 8.55% | |||
Borrowing base, component, percentage of eligible accounts receivable | 85% | |||
Percentage of eligible inventory | 50% | |||
Line of credit facility, non exceeding cap of components | $ 2.5 | |||
Percentage of eligible compressors for extension of credit | 95% | |||
Term for depreciation | 25 years | |||
Percentage of net liquidation value of eligible compressors for extension of credit | 80% | |||
Percentage of eligible value at cost | 80% | |||
Unused commitment fee, rate | 0.50% | |||
Maximum leverage ratio allowed | 3.50 | |||
Fixed charge coverage ratio | 1.25 | |||
Outstanding credit facility | $ 77 | |||
Maximum | Amended And Restated Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Default trigger, certain defaults of other company indebtedness, amount | $ 1 | |||
Default trigger, rendering of certain judgments, amount | $ 1 | |||
Federal Fund Rate | Amended And Restated Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate, applicable margin | 0.50% | |||
Base Rate | Minimum | Amended And Restated Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate, applicable margin | 2% | |||
Base Rate | Maximum | Amended And Restated Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate, applicable margin | 2.75% | |||
SOFR Rate | Amended And Restated Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate, applicable margin | 1% | |||
SOFR Rate | Minimum | Amended And Restated Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate, applicable margin | 3% | |||
SOFR Rate | Maximum | Amended And Restated Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate, applicable margin | 3.75% |
Stock-Based and Other Long-Te_3
Stock-Based and Other Long-Term Incentive Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Number of Stock Options | ||
Outstanding, beginning of period (in shares) | 201,584 | |
Canceled/Forfeited (in shares) | (2,667) | |
Expired (in shares) | (13,000) | |
Outstanding, end of period (in shares) | 185,917 | 201,584 |
Exercisable (in shares) | 147,084 | |
Weighted AverageExercise Price | ||
Outstanding, beginning of period (in dollars per share) | $ 19.32 | |
Canceled/Forfeited (in dollars per share) | 10.58 | |
Expired (in dollars per share) | 18.75 | |
Outstanding, end of period (in dollars per share) | 19.49 | $ 19.32 |
Exercisable (in dollars per share) | $ 21.72 | |
WeightedAverageRemainingContractual Life (years) | ||
Outstanding, weighted average remaining contractual life | 3 years 10 months 2 days | 3 years 10 months 24 days |
Exercisable, weighted average remaining contractual life | 2 years 6 months 3 days | |
AggregateIntrinsicValue(in thousands) | ||
Outstanding, aggregate intrinsic value | $ 0 | $ 0 |
Cancelled / Forfeited, intrinsic value | 3 | |
Exercisable, aggregate intrinsic value | $ 0 |
Stock-Based and Other Long-Te_4
Stock-Based and Other Long-Term Incentive Compensation - Stock Options Outstanding (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options outstanding, shares (in shares) | shares | 185,917 |
Options outstanding, weighted average remaining contractual life (years) | 3 years 10 months 2 days |
Options outstanding, weighted average exercise price (in dollars per share) | $ 19.49 |
Options exercisable, shares (in shares) | shares | 147,084 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 21.72 |
$0.01-18.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of exercise prices, lower limit (in dollars per share) | 0.01 |
Range of exercise prices, upper limit (in dollars per share) | $ 18 |
Options outstanding, shares (in shares) | shares | 103,333 |
Options outstanding, weighted average remaining contractual life (years) | 5 years 2 months 26 days |
Options outstanding, weighted average exercise price (in dollars per share) | $ 13.37 |
Options exercisable, shares (in shares) | shares | 64,500 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 14.78 |
$22.01-26.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of exercise prices, lower limit (in dollars per share) | 22.01 |
Range of exercise prices, upper limit (in dollars per share) | $ 26 |
Options outstanding, shares (in shares) | shares | 29,667 |
Options outstanding, weighted average remaining contractual life (years) | 2 years 14 days |
Options outstanding, weighted average exercise price (in dollars per share) | $ 22.90 |
Options exercisable, shares (in shares) | shares | 29,667 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 22.90 |
$26.01-30.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of exercise prices, lower limit (in dollars per share) | 26.01 |
Range of exercise prices, upper limit (in dollars per share) | $ 30 |
Options outstanding, shares (in shares) | shares | 20,750 |
Options outstanding, weighted average remaining contractual life (years) | 3 years 10 months 20 days |
Options outstanding, weighted average exercise price (in dollars per share) | $ 28.15 |
Options exercisable, shares (in shares) | shares | 20,750 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 28.15 |
$30.01-34.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of exercise prices, lower limit (in dollars per share) | 30.01 |
Range of exercise prices, upper limit (in dollars per share) | $ 34 |
Options outstanding, shares (in shares) | shares | 32,167 |
Options outstanding, weighted average remaining contractual life (years) | 11 months 19 days |
Options outstanding, weighted average exercise price (in dollars per share) | $ 30.41 |
Options exercisable, shares (in shares) | shares | 32,167 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 30.41 |
Stock-Based and Other Long-Te_5
Stock-Based and Other Long-Term Incentive Compensation - Summary of Unvested Stock Options (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Shares | |
Unvested, beginning of period (in shares) | shares | 41,500 |
Canceled/Forfeited (in shares) | shares | (2,667) |
Unvested, end of period (in shares) | shares | 38,833 |
Weighted Average Grant Date Fair Value Per Share | |
Unvested, weighted average grant date fair value, beginning of period (in USD per share) | $ / shares | $ 5.48 |
Canceled/Forfeited (in dollars per share) | $ / shares | 5.15 |
Unvested, weighted average grant date fair value, end of period (in USD per share) | $ / shares | $ 5.50 |
Stock-Based and Other Long-Te_6
Stock-Based and Other Long-Term Incentive Compensation - Stock Option, Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total unrecognized compensation expense | $ 157 | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 22 | $ 21 |
Stock-Based and Other Long-Te_7
Stock-Based and Other Long-Term Incentive Compensation - Restricted Stock, Narrative (Details) - Restricted Stock $ in Millions | 3 Months Ended | ||||
Apr. 25, 2023 shares | Aug. 15, 2022 executive_officer shares | Apr. 26, 2022 independent_director shares | Mar. 31, 2023 USD ($) shares | Mar. 31, 2022 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 8,944 | ||||
Share-based compensation expense | $ | $ 0.5 | $ 0.4 | |||
Directors | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 4,212 | ||||
Number of independent directors | independent_director | 3 | ||||
Award vesting period | 1 year | ||||
Executive Officers | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 32,040 | ||||
Award vesting period | 3 years | ||||
Number of executive officers | executive_officer | 2 | ||||
Chief Executive Officer | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 60,839 | ||||
Chief Executive Officer | Subsequent Event | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 58,790 | ||||
Chief Technical Officer | Subsequent Event | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 27,840 | ||||
Award vesting period | 3 years |
Stock-Based and Other Long-Te_8
Stock-Based and Other Long-Term Incentive Compensation - Restricted Stock (Details) - Restricted Stock - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Number of Shares | ||
Outstanding, beginning of period (in shares) | 250,847 | |
Granted (in shares) | 8,944 | |
Vested (in shares) | (48,583) | |
Canceled/Forfeited (in shares) | (14,357) | |
Outstanding, beginning of period (in shares) | 196,851 | 250,847 |
Weighted Average Grant Date Fair Value | ||
Outstanding beginning of period (in dollars per share) | $ 9.14 | |
Granted (in dollars per share) | 10.81 | |
Vested (in dollars per share) | 10.04 | |
Canceled/Forfeited (in dollars per share) | 0 | |
Outstanding ending of the period (in dollars per share) | $ 8.40 | $ 9.14 |
Weighted Average Remaining Contractual Life (years) | ||
Weighted average remaining contractual life (years) | 1 year 2 months 12 days | 1 year 5 months 1 day |
Aggregate Intrinsic Value | ||
Outstanding, begging balance | $ 2,681 | |
Granted | 100 | |
Vested | 467 | |
Canceled/Forfeited | 158 | |
Outstanding, ending balance | $ 1,587 | $ 2,681 |
Stock-Based and Other Long-Te_9
Stock-Based and Other Long-Term Incentive Compensation - Other Long-Term Incentive Compensation, Narrative (Details) $ in Thousands | 3 Months Ended | ||
Apr. 26, 2022 USD ($) independent_director | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total unrecognized compensation expense | $ 157 | ||
Other Long-Term Incentive Compensation | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted | 0 | ||
Share-based compensation expense | 300 | $ 700 | |
Total unrecognized compensation expense | $ 200 | ||
Recognition period | 3 months | ||
Other Long-Term Incentive Compensation | Directors | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted | $ 50 | ||
Number of independent directors | independent_director | 3 |
Earnings per Share- Schedule of
Earnings per Share- Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator: | ||
Net income | $ 370 | $ 337 |
Denominator for earnings per basic common share: | ||
Weighted average common shares outstanding (in shares) | 12,213 | 12,537 |
Denominator for earnings per diluted common share: | ||
Weighted average common shares outstanding (in shares) | 12,213 | 12,537 |
Dilutive effect of stock options and restricted stock/units (in shares) | 141 | 161 |
Diluted weighted average shares (in shares) | 12,354 | 12,698 |
Earnings per common share: | ||
Basic (in dollars per share) | $ 0.03 | $ 0.03 |
Diluted (in dollars per share) | $ 0.03 | $ 0.03 |