What changed in this filing

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Item 1. Financial Statements

2025-11-10 compared with 2025-08-11 · 86 added, 75 removed, 438 unchanged (27% of the section changed)

3 unchanged sentences

(in thousands, except par value)

June 30, December 31,

September 30, December 31,

Current Assets:

35 unchanged sentences

(in thousands, except earnings per share)

Three months ended Six months ended

June 30, June 30,

Three months ended Nine months ended

September 30, September 30,

2025 2024 2025 2024

10 unchanged sentences

Depreciation and amortization 9,249 8,086 26,854 22,878

Impairments — 136 — 136

Inventory allowance — — 61 —

31 unchanged sentences

June 30, 2024 — $ — 13,727 $ 137 $ 116,898 $ 143,629 1,310 $ ( 15,004 ) $ 245,660

Stock-based compensation — — — — 522 — — — 522

Vesting of restricted stock/units — — 7 — — — — — —

Exercise of common stock options — — 7 — 70 — — — 70

Taxes paid related to net shares settlement of equity awards — — — — ( 80 ) — — — ( 80 )

Net income — — — — — 5,014 — — 5,014

September 30, 2024 — $ — 13,741 $ 137 $ 117,410 $ 148,643 1,310 $ ( 15,004 ) $ 251,186

Preferred Stock Common Stock Additional Paid-In Capital Retained Earnings Treasury Stock Total Stockholders’ Equity

11 unchanged sentences

June 30, 2025 — $ — 13,811 $ 138 $ 119,530 $ 161,550 1,310 $ ( 15,004 ) $ 266,214

Stock-based compensation — — — — 612 — — — 612

Vesting of restricted stock/units — — 44 — — — — — —

Exercise of common stock options — — 9 — 80 — — — 80

Dividends declared ($ 0.10 per share)

— — — — — ( 1,269 ) — — ( 1,269 )

Net income — — — — — 5,784 — — 5,784

September 30, 2025 — $ — 13,864 $ 138 $ 120,222 $ 166,065 1,310 $ ( 15,004 ) $ 271,421

See accompanying notes to these unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Six months ended

Nine months ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

2 unchanged sentences

Depreciation and amortization 26,854 22,878

Impairments — 136

Inventory allowance 61 —

26 unchanged sentences

Proceeds from exercise of stock options 155 70

Payment of dividends ( 1,254 ) —

Taxes paid related to net share settlement of equity awards ( 6 ) ( 178 )

9 unchanged sentences

Right of use assets acquired through an finance lease $ — $ 2,174

Right of use assets acquired through an operating lease $ 1,053 $ 520

See accompanying notes to these unaudited condensed consolidated financial statements.

6 unchanged sentences

We rent, design, sell, install, service and maintain compressors and related equipment for our customers’ oil and gas production and processing facilities, generally using equipment from OEM suppliers along with limited in-house assembly.

We are headquartered in Midland, Texas, with an assembly facility located in Tulsa, Oklahoma and service facilities located in major oil and gas producing basins in the United States (“U.S.”).

We are headquartered in Midland, Texas, with executive offices in Southlake, Texas, an assembly facility located in Tulsa, Oklahoma and service facilities located in major oil and gas producing basins in the United States (“U.S.”).

Summary of Significant Accounting Policies

2 unchanged sentences

All significant intercompany accounts and transactions for the periods presented have been eliminated in consolidation.

These financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary for the fair presentation of our financial position as of June 30, 2025, and the results of our operations for the three and six months ended June 30, 2025, and 2024, respectively.

These financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary for the fair presentation of our financial position as of September 30, 2025, and the results of our operations for the three and nine months ended September 30, 2025, and 2024, respectively.

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 GAAP.

7 unchanged sentences

In our Condensed Consolidated Statements of Operations, (gains) and losses on the sale of assets have been reclassified from selling, general and administrative expenses to a stand-alone caption included within total operating income.

The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2025.

The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2025.

Recently Issued Accounting Pronouncements

5 unchanged sentences

The following table summarizes our trade accounts receivable from customers as of the dates presented:

June 30, December 31,

September 30, December 31,

Trade accounts receivable

7 unchanged sentences

Major Customers and Concentration of Credit Risk

Rental revenue and sales from Occidental Permian, LTD.

(“Oxy”) in the six months ended June 30, 2025 and 2024 amounted to 47 percent and 51 percent of revenue, respectively.

Rental revenue from Occidental Permian, LTD.

(“Oxy”) and Devon Energy Corporation (“Devon”) in the nine months ended September 30, 2025 and 2024 amounted to 59 percent and 58 percent of revenue on a combined basis, respectively.

No other single customer accounted for more than 10 percent of our revenues during these periods.

Likewise, Oxy’s accounts receivable balances amounted to 50 percent and 52 percent of our accounts receivable as of June 30, 2025, and December 31, 2024, respectively.

Likewise, Oxy’s and Devon’s accounts receivable balances amounted to 64 percent and 60 percent of our accounts receivable as of September 30, 2025, and December 31, 2024, respectively.

No other customers amounted to more than 10 percent of our accounts receivable as of these dates.

1 unchanged sentence

The following table summarizes the changes in our provision for credit losses for the periods presented:

Six months ended Year ended

June 30, December 31,

Nine months ended Year ended

September 30, December 31,

Beginning balance $ 1,249 $ 823

4 unchanged sentences

however, actual write-offs may exceed the recorded provision.

The substantial write-off of the provision for credit losses during the six months ended June 30, 2025 reflects certain aged receivables that are no longer deemed collectible.

The substantial write-off of the provision for credit losses during the nine months ended September 30, 2025 reflects certain aged receivables that are no longer deemed collectible.

The following table summarizes the components of our inventory, net of allowance for obsolescence, as of the dates presented:

June 30, December 31,

September 30, December 31,

Raw materials, net of allowance of $ 1,499 and $ 4,379 , respectively

6 unchanged sentences

The following table summarizes the changes in our allowance for obsolescence for the periods presented:

June 30, December 31,

September 30, December 31,

Beginning balance $ 5,867 $ 4,004

2 unchanged sentences

Ending balance $ 2,519 $ 5,867

The substantial write-off of the allowance for obsolescence during the six months ended June 30, 2025 reflects the disposal of inventory items, including engines, frames and coolers, among other items that were previously held and reserved at our former Midland, Texas fabrication facility.

The substantial write-off of the allowance for obsolescence during the nine months ended September 30, 2025 reflects the disposal of inventory items, including engines, frames and coolers, among other items that were previously held and reserved at our former Midland, Texas fabrication facility.

Assets Held for Sale

3 unchanged sentences

The closure of the Midland Facility was part of our strategy to streamline and outsource our assembly operations and monetize company-owned real estate as disclosed previously.

We anticipated that we will complete a sale transaction for the Midland Facility within the next twelve months.

We anticipate that we will complete a sale transaction for the Midland Facility within the next twelve months.

Beginning in the first quarter of 2025, all equipment with continuing productive value was transferred from the Midland Facility to certain of our other regional service centers.

1 unchanged sentence

In addition, we disposed of all inventory items, including engines, frames and coolers, among other items that were fully reserved (see Note 4 ).

In connection with complete closure of the Midland Facility, we terminated eight employees and incurred $ 0.1 million of severance and termination benefits all of which were paid and settled during April 2025.

In connection with the complete closure of the Midland Facility, we terminated eight employees and incurred $ 0.1 million of severance and termination benefits all of which were paid and settled during April 2025.

Rental Equipment

The following table summarizes our rental equipment and accumulated depreciation as of the dates presented:

June 30, December 31,

September 30, December 31,

Compressor units $ 658,412 $ 579,373

3 unchanged sentences

Rental equipment, net of accumulated depreciation $ 479,375 $ 415,021

We evaluated our rental equipment for potential impairments as of June 30, 2025, and December 31, 2024 and determined that none were present.

Depreciation expense for rental equipment was $ 8.0 million and $ 6.9 million for the three months ended June 30, 2025, and 2024, respectively and $ 15.7 million and $ 13.4 million for the six months ended June 30, 2025, and 2024, respectively.

We capitalized interest totaling approximately $ 0.5 million and $ 1.3 million for the three months ended June 30, 2025, and 2024, respectively, and $ 1.1 million a nd $ 2.4 million , for the six months ended June 30, 2025, and 2024, respe ctively.

We evaluated our rental equipment for potential impairments as of September 30, 2025, and December 31, 2024 and determined that none were present.

Depreciation expense for rental equipment was $ 8.3 million and $ 7.2 million for the three months ended September 30, 2025, and 2024, respectively and $ 24.0 million and $ 20.6 million for the nine months ended September 30, 2025, and 2024, respectively.

We capitalized interest totaling approximately $ 0.7 million and $ 1.2 million for the three months ended September 30, 2025, and 2024, respectively, and $ 1.8 million a nd $ 3.6 million , for the nine months ended September 30, 2025, and 2024, respe ctively.

Property and Equipment

The following table summarizes our property and equipment as of the dates presented:

June 30, December 31,

The following table summarizes our property and non-rental equipment as of the dates presented:

September 30, December 31,

Land $ 1,562 $ 1,680

9 unchanged sentences

Total $ 22,514 $ 22,989

Depreciation expense for property and equipment was $ 0.9 million and $ 0.8 million for the three months ended June 30, 2025, and 2024, respectively, and $ 1.9 million and $ 1.3 million for the six months ended June 30, 2025, and 2024, respectively.

During the quarter ended June 30, 2025, we reclassified certain items of property and equipment attributable to our former Midland Facility with a carrying value of $ 2.2 million to assets held for sale (see Note 5 ).

Depreciation expense for property and equipment was $ 0.9 million and $ 0.9 million for the three months ended September 30, 2025, and 2024, respectively, and $ 2.8 million and $ 2.2 million for the nine months ended September 30, 2025, and 2024, respectively.

During the quarter ended September 30, 2025, we reclassified certain items of property and equipment attributable to our former Midland Facility with a carrying value of $ 2.2 million to assets held for sale (see Note 5 ).

Supplemental Balance Sheet Disclosures

The following table summarizes the components of accrued liabilities as of the dates presented:

June 30, December 31,

September 30, December 31,

Accrued purchases $ 8,223 $ 2,085

7 unchanged sentences

Our outstanding long-term debt consists of the following, as of the dates presented:

June 30, December 31,

September 30, December 31,

Credit facility $ 208,000 $ 170,000

We have a senior secured revolving credit agreement, as amended (the “Credit Facility”) with Texas Capital Bank, National Association (the “Lender”) as administrative agent, and TCBI Securities, Inc., Bank of America, N.A., and the Huntington National Bank as joint lead arrangers and joint book runners.

On April 18, 2025, we entered into the Fourth Amendment to the Amended and Restated Credit Agreement (the “Fourth Amendment”) with the Lender and certain other lenders to (i) increase the total commitment to $ 400.0 million from $ 300.0 million, (ii) expand the accordion feature to $ 100.0 million from $ 50.0 million, (iii) reduce the interest rates by 50 to 75 basis points at comparable leverage levels and (iv) provide for a more flexible leverage covenant beginning on June 30, 2026.

In connection with the Fourth Amendment, we incurred fees of $ 1.3 million.

2 unchanged sentences

provided, however, the aggregate commitment amount is not permitted to exceed $ 500.0 million.

The accordion feature is subject to certain conditions, including the absence of a default, the consent of new or existing lenders willing to provide additional commitments, and our pro forma compliance with the Credit Facility ’ s financial covenants.The obligations under the Credit Facility are secured by a first priority lien on most of our assets, including inventory and certain accounts receivable as well as a variable number of our leased compressor units.

The obligations under the Credit Facility are secured by a first priority lien on most of our assets, including inventory and certain accounts receivable as well as a variable number of our leased compressor units.

The maturity date of the Credit Facility is February 28, 2028.

As of June 30, 2025, we had $ 182.0 million outstanding under our Credit Facility with a weighted average interest rate of 7.23 %.

As of June 30, 2025 we had approximately $ 172.3 million available for borrowing under the Credit Facility, subject to a borrowing base determination.

As of June 30, 2025, we were in compliance with all financial covenants in our Credit Facility.

As of September 30, 2025, we had $ 208.0 million outstanding under our Credit Facility with a weighted average interest rate of 7.04 %.

As of September 30, 2025 we had approximately $ 163.0 million available for borrowing under the Credit Facility, subject to a borrowing base determination.

As of September 30, 2025, we were in compliance with all financial covenants in our Credit Facility.

Borrowing Base .

20 unchanged sentences

or change the nature of our business.

In addition, we are subject to certain financial covenants in the Credit Facility that require us to maintain (i) a leverage ratio, as defined, less than or equal to (a) 3.75 to 1.00 for fiscal quarter ending on June 30, 2025, (b) and 3.50 to 1.00 for 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.

In addition, we are subject to certain financial covenants in the Credit Facility that require us to maintain (i) a leverage ratio, as defined, less than or equal to 3.50 to 1.00 for each fiscal quarter 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 .

17 unchanged sentences

Congress (“JCT”).

Our request for refund was formally submitted to the JCT for their review during the second quarter of 2025 and we are currently awaiting their response.

As a result of the submission of the refund claim to the JCT, the IRS has effectively completed their review of the income tax returns for 2015, 2016 and 2017.

however, the tax return for 2019 remains technically subject to review until a response is received from the JCT.

Our request for refund was formally submitted to the JCT for their review during the second quarter of 2025 which was concluded favorably with the JCT concurring with the IRS’s conclusions.

As of November 8, 2025, we are awaiting receipt of our refund claim;

however, due to the shut down of the federal government which began on October 1, 2025, we are not able to validate the amount or timing of the receipt of the refund claim.

Commitments and Contingencies

6 unchanged sentences

The following table summarizes our revenue disaggregated by product or service type for the periods presented:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

5 unchanged sentences

Total revenue $ 43,401 $ 40,686 $ 126,166 $ 116,084

No amounts were recognized in revenue attributable to deferred revenue during the six months ended June 30, 2025.

We recognized $ 0.4 million in revenue for the six months ended June 30, 2024, that was included in accrued liabilities as deferred revenue at the beginning of 2024.

No amounts were recognized in revenue attributable to deferred revenue during the nine months ended September 30, 2025.

We recognized $ 0.4 million in revenue for the nine months ended September 30, 2024, that was included in accrued liabilities as deferred revenue at the beginning of 2024.

Transaction Price Allocated to the Remaining Performance Obligations

As of June 30, 2025, and December 31, 2024, we had no deferred revenue related to unsatisfied performance obligations.

As of September 30, 2025, and December 31, 2024, we had no deferred revenue related to unsatisfied performance obligations.

Contract Costs

5 unchanged sentences

The following table summarizes the total stock-based compensation expense recognized during the periods presented:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

6 unchanged sentences

The Stock Option Plan provides for the granting of incentive and non-qualified stock options to our employees for up to 1,000,000 shares of common stock.

After consideration of the activity described in the table below, a total of 395,669 shares remained available for grant under the Stock Option Plan as of June 30, 2025.

After consideration of the activity described in the table below, a total of 392,169 shares remained available for grant under the Stock Option Plan as of September 30, 2025.

The last date that grants can be made under the Stock Option Plan is February 28, 2026.

A summary of all option activity during the six months ended June 30, 2025 is presented below:

A summary of all option activity during the nine months ended September 30, 2025 is presented below:

Number of Shares Underlying

7 unchanged sentences

Expired ( 23,167 ) $ 22.90 $ —

Outstanding, June 30, 2025 120,234 $ 20.86 7.73 $ 634

Exercisable, June 30, 2025 49,819 $ 19.79 5.52 $ 339

The following table summarizes information about our stock options outstanding as of June 30, 2025:

Outstanding, September 30, 2025 116,501 $ 21.31 7.60 $ 781

Exercisable, September 30, 2025 47,751 $ 20.05 5.37 $ 382

The following table summarizes information about our stock options outstanding as of September 30, 2025:

Range of Exercise Prices:

8 unchanged sentences

116,501 7.60 $ 21.31 47,751 $ 20.05

The following table summarizes changes in our unvested stock options during the six months ended June 30, 2025:

The following table summarizes changes in our unvested stock options during the nine months ended September 30, 2025:

Shares Weighted Average Grant Date Fair Value Per Share

4 unchanged sentences

Canceled/Forfeited ( 4,000 ) $ 12.46

Unvested, June 30, 2025

Unvested, September 30, 2025

68,750 $ 11.97

As of June 30, 2025, there was a total of approximately $ 0.6 million of unrecognized compensation cost related to unvested options which is expected to be recognized over the next 2.33 years.

As of September 30, 2025, there was a total of approximately $ 0.5 million of unrecognized compensation cost related to unvested options which is expected to be recognized over the next 2.09 years.

2019 Equity Incentive Plan

2 unchanged sentences

In addition, the Amendment extended the term of the Equity Incentive Plan by five years to June 20, 2034.

After consideration of the activity described in detail below, a total of 643,514 shares remained available for grant under the Equity Incentive Plan as of June 30, 2025.

Time-Vested RSUs

The following table summarizes all restricted stock and RSU activity during the six months ended June 30, 2025 is presented below:

After consideration of the activity described in detail below, a total of 635,421 shares remained available for grant under the Equity Incentive Plan as of September 30, 2025.

Time-Vested Restricted Stock and Restricted Stock Units

The following table summarizes all restricted stock and RSU activity during the nine months ended September 30, 2025 is presented below:

Shares Weighted Average

5 unchanged sentences

Canceled/Forfeited ( 910 ) $ 22.19 $ 17

Outstanding, June 30, 2025 146,851 $ 19.71 4.27 $ 3,790

As of June 30, 2025, there was a total of approximately $ 2.1 million of unrecognized compensation cost related to unvested restricted stock and RSUs which is expected to be recognized over the next 2.12 years.

Cash Settled RSUs

Outstanding, September 30, 2025 132,430 $ 20.66 4.15 $ 3,707

As of September 30, 2025, there was a total of approximately $ 1.9 million of unrecognized compensation cost related to unvested restricted stock and RSUs which is expected to be recognized over the next 1.98 years.

Cash Settled Restricted Stock Units

The 2025 and 2024 grants of RSUs to the independent Board members that can be settled in cash represent liability-classified awards.

4 unchanged sentences

Contractual Life (years) Aggregate

Outstanding, December 31, 2024 15,069 $ 19.51 0.50 $ 294

Outstanding, Outstanding, December 31, 2024 15,069 $ 19.51 0.50 $ 294

Granted 13,812 $ 24.60 $ 340

1 unchanged sentence

Canceled/Forfeited ( 2,810 ) $ 19.57 $ 55

Outstanding, June 30, 2025 17,197 $ 23.50 0.78 $ 445

Outstanding, September 30, 2025 15,544 $ 23.99 0.61 $ 414

Performance Share Units

3 unchanged sentences

Due to the presence of the TSR measurement for the common equity of the peer companies, including NGS common stock, which is deemed a “market condition,” the grant-date fair values of the PSUs have been determined using a binomial pricing model, or a Monte Carlo simulation model.

The following table summarizes the weighted average grant date fair values of PSUs granted and the assumptions used in the Monte Carlo simulation model for the determination of the grant date fair values of our PSUs granted during the six months ended June 30, 2025:

Weighted-average grant date fair value of PSUs granted $ 28.22

2 unchanged sentences

Expected dividend yield — %

The following table summarizes all PSU activity during the six months ended June 30, 2025:

The following table summarizes all PSU activity during the nine months ended September 30, 2025:

Shares Weighted Average

4 unchanged sentences

Canceled/Forfeited — $ —

Outstanding, June 30, 2025 96,198 $ 24.76 2.38 $ —

As of June 30, 2025 , there was a total of approximately $ 1.8 million of unrecognized compensation cost related to the unvested portion of the PSUs which is expected to be recognized over the next 2.13 years.

Outstanding, September 30, 2025 98,488 $ 24.91 1.89 $ —

As of September 30, 2025 , there was a total of approximately $ 1.6 million of unrecognized compensation cost related to the unvested portion of the PSUs which is expected to be recognized over the next 1.89 years.

Earnings per Share

The following table reconciles the numerators and denominators of the basic and diluted earnings per share computation for the periods presented:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

11 unchanged sentences

The following table summarizes the actual number of stock-based compensation awards that were excluded from the determination of diluted earnings per share due to their anti-dilutive effect for the periods presented:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

4 unchanged sentences

Subsequent Events

On July 30, 2025, our Board of Directors declared a cash dividend of $ 0.10 per share to stockholders of record as of August 8, 2025 expected to be paid on August 22, 2025.

On August 5, 2025, Brian Tucker, NGS management, and the Board, collectively reached the difficult decision that Mr.

Tucker will transition out of his role as President and COO.

This was driven solely by an unfortunate and unexpected family loss which changed Mr.

Tucker's personal circumstances.

His transition will take place over the next several months with a target end date of October 31, 2025.

Tucker remains fully committed to NGS during this time and beyond, if necessary.

On August 8, 2025, our Board of Directors approved a share repurchase program (the “Repurchase Plan”).

The Repurchase Plan provides for the repurchase of shares of our common stock from time to time in the open market as conditions, cash reserves, cash flows and the evaluation of uses of cash for operations, growth and share repurchase may allow.

The Repurchase Plan is limited to $ 6 million and expires on August 6, 2027.

We have evaluated all events subsequent to the balance sheet date as of June 30, 2025, and through the date this report was issued and determined that there have been no other events that would require adjustments or additional disclosures to our Condensed Consolidated Financial Statements.

On November 10, 2025, we announced that our Board of Directors declared a cash dividend of $ 0.11 per share to stockholders of record as of November 20, 2025 expected to be paid on December 3, 2025.

We have evaluated all events subsequent to the balance sheet date as of September 30, 2025, and through the date this report was issued and determined that there have been no other events that would require adjustments or additional disclosures to our Condensed Consolidated Financial Statements.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

30 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements