What changed in this filing

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Item 1. Financial Statements

2026-05-11 compared with 2025-11-10 · 124 added, 149 removed, 375 unchanged (42% of the section changed)

3 unchanged sentences

(in thousands, except par value)

September 30, December 31,

March 31, December 31,

Current Assets:

2 unchanged sentences

Inventory, net of allowance for obsolescence 21,780 20,647

Federal income tax receivable 11,427 11,282

Income taxes receivable and prepayments 1,690 14,056

Prepaid expenses and other 3,352 1,696

30 unchanged sentences

(in thousands, except earnings per share)

Three months ended Nine months ended

September 30, September 30,

2025 2024 2025 2024

Three months ended

Rental $ 47,115 $ 38,910

9 unchanged sentences

Depreciation and amortization 10,325 8,636

Impairments — 136 — 136

Inventory allowance — 61

24 unchanged sentences

Stock-based compensation — — — — 359 — — — 359

Taxes paid related to net shares settlement of equity awards — — 6 — — — — — —

Net income — — — — — 5,098 — — 5,098

March 31, 2024 — $ — 13,694 $ 137 $ 116,754 $ 139,379 1,310 $ ( 15,004 ) $ 241,266

Stock-based compensation — — — — 242 — — — 242

Taxes paid related to net shares settlement of equity awards — — 33 — ( 98 ) — — — ( 98 )

Net income — — — — — 4,250 — — 4,250

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 — — 22 — — — — — —

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

Taxes paid related to net shares settlement of equity awards — — — — ( 6 ) — — — ( 6 )

Net income — — — — — 4,854 — — 4,854

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

March 31, 2025 — $ — 13,784 $ 138 $ 118,768 $ 156,362 1,310 $ ( 15,004 ) $ 260,264

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

3 unchanged sentences

Vesting of restricted stock/units — — 23 — — — — — —

Exercise of common stock options — — 2 1 66 — — — 67

Taxes paid related to net shares settlement of equity awards — — ( 1 ) — ( 195 ) — — — ( 195 )

Dividends declared — — — — — ( 1,396 ) — — ( 1,396 )

Net income — — — — — 6,763 — — 6,763

March 31, 2026 — $ — 13,907 $ 139 $ 121,261 $ 174,138 1,310 $ ( 15,004 ) $ 280,534

Stock-based compensation — — — — 579 — — — 579

Vesting of restricted stock/units — — 22 — 108 — — — 108

Exercise of common stock options — — 5 — 75 — — — 75

Net income — — — — — 5,188 — — 5,188

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)

Nine months ended

September 30,

Three months ended

CASH FLOWS FROM OPERATING ACTIVITIES:

2 unchanged sentences

Depreciation and amortization 10,325 8,636

Impairments — 136

Inventory allowance — 61

5 unchanged sentences

Provision for credit losses 88 208

Gain on company owned life insurance ( 57 ) ( 152 )

Loss on company owned life insurance 125 17

Changes in operating assets and liabilities:

1 unchanged sentence

Inventory ( 1,133 ) 647

Prepaid expenses and prepaid income taxes ( 1,297 ) ( 1,025 )

Prepaid expenses, income taxes receivable and prepayments 10,710 64

Accounts payable and accrued liabilities ( 1,380 ) 4,617

3 unchanged sentences

Purchase of rental equipment, property and other equipment ( 15,247 ) ( 19,256 )

Purchase of company owned life insurance — ( 13 )

Proceeds received from insurance for damages to equipment 96 —

Proceeds from disposition of assets, net 37 —

Proceeds from surrender of company owned life insurance — 178

NET CASH USED IN INVESTING ACTIVITIES ( 15,210 ) ( 19,256 )

2 unchanged sentences

Repayments of credit facility borrowings ( 13,000 ) ( 8,000 )

Payments of other long-term liabilities — ( 622 )

Payments of debt issuance costs ( 1 ) —

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Taxes paid related to net share settlement of equity awards ( 195 ) ( 6 )

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 35,617 ( 2,692 )

NET CASH USED IN FINANCING ACTIVITIES ( 5,514 ) ( 2,006 )

NET CHANGE IN CASH AND CASH EQUIVALENTS 2,311 5

2 unchanged sentences

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Interest paid $ 10,722 $ 14,445

Income taxes paid $ 204 $ —

Interest paid, net of amounts capitalized $ 3,653 $ 2,936

Income taxes paid, net of refunds received $ ( 10,196 ) $ 16

NON-CASH TRANSACTIONS:

Transfer of property and equipment to assets held for sale $ 8,759 $ —

Accrued purchases of property and equipment $ 228 $ 524

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.

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(the “Company,” “NGS,” “Natural Gas Services Group,” “we,” “us” or “our”) (a Colorado corporation), is a leading provider of natural gas and electric compression equipment, technology and services to the energy industry.

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 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.”).

We rent, design, install, service and maintain compressors and related equipment and parts 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 Southlake, Texas, with administrative offices in Midland, Texas, an assembly facility located in Tulsa, Oklahoma and service facilities located in major oil and gas producing basins in the continental United States (“U.S.”).

Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements were prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include the accounts of the Company, its subsidiary, NGSG Properties, LLC, which owns the Company’s headquarters office building, and the rabbi trust associated with our deferred compensation plan.

The accompanying unaudited Condensed Consolidated Financial Statements were prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) and include the accounts of the Company, its subsidiary, NGSG Properties, LLC and the rabbi trust associated with our 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 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.

These financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary for the fair presentation of our financial position as of March 31, 2026, and the results of our operations for the three months ended March 31, 2026, and 2025, respectively.

As permitted by the rules and regulations of the SEC, the accompanying Condensed Consolidated Financial Statements do not include all disclosures normally required by 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, 2025, as filed with the SEC.

In our opinion, the Condensed Consolidated Financial Statements provide a fair representation of our financial position, results of operations, changes in stockholders’ equity and cash flows for the periods presented.

Although we review our service and product offerings to analyze the nature of our revenue, costs and expenses, the net income and non-GAAP financial measures including EBITDA and Adjusted gross margin are not captured or analyzed by these categories.

Our chief executive officer (“CEO”) serves as the chief operating decision maker and does not make resource allocation decisions or assess the performance of the business based on these categories, but rather on the entire entity in the aggregate.

Although we review our service and product offerings (rentals, sales and aftermarket services) to analyze the nature of our revenue, costs and expenses, the net income and non-GAAP financial measures including Adjusted EBITDA and Adjusted gross margin are not captured or analyzed by these categories.

Our chief executive officer (“CEO”) serves as the chief operating decision maker and does not make resource allocation decisions or assess the performance of the business based on these service and product offerings, but rather on the entire entity in the aggregate.

Accordingly, the measures of profit and loss and total assets are effectively those of the Company as a whole as reflected in these Condensed Consolidated Financial Statements.

Based on these facts and circumstances, we have concluded that we operate in one business segment.

Certain reclassifications have been made to prior periods to conform to the current presentation.

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 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.

The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2026.

Recently Issued Accounting Pronouncements

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

September 30, December 31,

March 31, December 31,

Trade accounts receivable

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Total trade accounts receivable, net $ 22,950 $ 18,497

Our trade accounts receivable consist of customer obligations due under normal trade terms for (i) operating leases for the use of our compressor equipment, (ii) the sale of compressors and related equipment and (iii) the performance of aftermarket services.

Our trade accounts receivable consist of customer obligations due under normal trade terms for (i) operating leases for the use of our compressor equipment, (ii) the sale of compressor parts, other equipment and rebuild services and (iii) the performance of aftermarket services.

Major Customers and Concentration of Credit Risk

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.

Rental revenue and sales from Occidental Permian, LTD.

(“Oxy”) and Devon Energy Corporation (“Devon”) in the three months ended March 31, 2026 and 2025 amounted to 64 percent and 55 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 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.

Likewise, Oxy’s and Devon’s accounts receivable balances amounted to 63 percent and 62 percent of our accounts receivable on a combined basis as of March 31, 2026, and December 31, 2025, 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:

Nine months ended Year ended

September 30, December 31,

Three months ended Year ended

March 31, December 31,

Beginning balance $ 317 $ 1,249

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

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 substantial write-off of the provision for credit losses during the year ended December 31, 2025 reflects certain aged receivables that were no longer deemed collectible.

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

September 30, December 31,

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

March 31, December 31,

Parts and supplies, net of allowance of $ 2,552 for each period, respectively

$ 21,185 $ 20,104

1 unchanged sentence

Inventory - current 21,780 20,647

Raw materials - long term, net of allowance of $ 1,020 and $ 1,488 , respectively

Parts and supplies - long term, net of allowance of $ 1,020 for each period, respectively

Total inventory $ 21,780 $ 20,647

Our long-term inventory, which is fully reserved for obsolescence, consists of raw materials that remain viable but with limited market opportunities.

Our long-term inventory, which is fully reserved for obsolescence, consists of excess materials and supplies that remain viable but with limited market opportunities.

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

September 30, December 31,

March 31, December 31,

Beginning balance $ 3,572 $ 5,867

2 unchanged sentences

Ending balance $ 3,572 $ 3,572

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

During the second quarter of 2025, we completed all activities necessary to terminate operations at our fabrication, repair and overhaul facility in Midland, Texas (the (“Midland Facility”) and prepared the site, which includes an industrial building and land, for sale.

Accordingly, depreciation of the facility was suspended and the combined net carrying value of the building and land, or $ 2.2 million, was reclassified from property and equipment to an asset held for sale included as a component of current assets on our Condensed Consolidated Balance Sheet as of June 30, 2025.

We have engaged a broker and are actively marketing the facility.

The substantial write-off of the allowance for obsolescence during the year ended December 31, 2025 reflects the disposal of inventory items, including engines, frames and coolers, among other items that were previously held and reserved at our former fabrication, repair and overhaul facility in Midland, Texas (the (“Midland Facility”).

Assets Held for Sale and Restructuring Activities

As part of our broader efforts to monetize certain noncash assets, we began a process during 2025 to explore and ultimately pursue transactions to sell certain non-core real estate assets.

These properties and the related restructuring actions are described below.

The carrying value of these properties are reflected as assets held for sale and are included as a component of current assets on our Condensed Consolidated Balance Sheet.

Former Headquarters Property

In connection with our efforts to plan for an eventual sale of our former corporate headquarters facility including a building and land in Midland, Texas (the “Former Headquarters Property”), we undertook certain actions in the fourth quarter of 2025 to begin building-out a new leased office facility in Midland, Texas.

We recorded an impairment during the fourth quarter of 2025 to reduce the carrying value of the Former Headquarters Property to its fair value, less costs to sell, or $ 8.8 million.

In February 2026, we entered into an exclusive listing agreement to sell the Former Headquarters Property.

Midland Facility

During the second quarter of 2025, we completed all activities necessary to terminate operations at the Midland Facility and to begin marketing the facility for sale.

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 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.

By the end of April 2025, the Midland Facility was completely vacant in anticipation of the eventual sale.

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

We are party to an exclusive listing agreement and are currently marketing the Midland Facility, which has a carrying value of $ 2.2 million.

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.

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

Rental Equipment

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

September 30, December 31,

March 31, December 31,

Compressor units $ 719,988 $ 712,693

3 unchanged sentences

Rental equipment, net of accumulated depreciation $ 503,027 $ 498,525

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.

We evaluated our rental equipment for potential impairments as of March 31, 2026, and December 31, 2025 and determined that none were present.

We retired 134 and 68 units representing 17,700 and 12,073 horsepower, with remaining carrying values of $ 0.4 million and $ 0.7 million during the three months ended March 31, 2026 and 2025, respectively.

Depreciation expense for rental equipment was $ 9.2 million and $ 7.7 million for the three months ended March 31, 2026, and 2025, respectively.

We capitalized interest totaling approximately $ 0.2 million a nd $ 0.6 million , for the three months ended March 31, 2026, and 2025, respe ctively.

Property and Equipment

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

September 30, December 31,

March 31, December 31,

Land $ 441 $ 1,562

9 unchanged sentences

Total $ 11,994 $ 20,519

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 ).

Depreciation expense for property and equipment was $ 1.1 million and $ 0.9 million for the three months ended March 31, 2026, and 2025, respectively.

During the quarter ended March 31, 2026, we reclassified certain items of property and equipment attributable to our Former Headquarters Property with a carrying value of $ 8.8 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:

September 30, December 31,

March 31, December 31,

Accrued purchases $ 6,355 $ 4,960

3 unchanged sentences

Sales taxes 433 421

Professional fees 439 426

Other 251 799

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

September 30, December 31,

March 31, December 31,

Credit facility $ 226,000 $ 230,000

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 September 30, 2025.

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

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

The Credit Facility provides for a total commitment of $ 400.0 million.

We also have a right to request from the Lender an increase to the potential aggregate commitment of up to $ 100.0 million;

We also have a right to request from the Lenders an increase to the potential aggregate commitment of up to $ 100.0 million;

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

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

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.

As of March 31, 2026, we had $ 226.0 million outstanding under our Credit Facility with a weighted average interest rate of 6.79 %.

As of March 31, 2026, we had approximately $ 174.0 million available for borrowing under the Credit Facility, subject to a borrowing base determination.

As of March 31, 2026, we were in compliance with all financial covenants in our Credit Facility.

Borrowing Base .

At any time before the maturity of the Credit Facility, 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 us, plus (b) 50 % of the eligible inventory, valued at the lower of cost or market value at such time, subject to a cap of this 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 of cost (excluding any costs for capitalized interest or other noncash 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 material deviations in the collateral are discovered in future audits of the collateral.

Generally, the borrowing base equals the sum of (a) 85 % of eligible accounts receivable owed to us, plus (b) 50 % of the eligible inventory, valued at the lower of cost or market value at such time, subject to a cap of this component not to exceed $ 2.5 million, plus (c) the lesser of (i) 95 % of the net book value of the compressors that the Administrative Agent 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 Administrative Agent 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 of cost (excluding any costs for capitalized interest or other noncash capitalized costs) or market of the eligible new compressor fleet, minus (e) any required availability reserves determined by the Administrative Agent in its sole discretion.

The Administrative Agent may adjust the borrowing base components if material deviations in the collateral are discovered in future audits of the collateral.

Interest and Fees .

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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 Credit Facility.

The Applicable Margin is determined based upon the leverage ratio as set forth in the most recent compliance certificate received by the Administrative Agent for each fiscal quarter from time to time pursuant to the Credit Facility.

Depending on the leverage ratio, the Applicable Margin can be 1.50 % to 2.25 % for Base Rate Loans (as defined in the Credit Facility) and 2.50 % to 3.25 % for Term SOFR Loans and for requested letters of credit.

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Obligations outstanding under the Credit Facility may be accelerated upon the occurrence of an event of default.

Income Taxes Receivable

On 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.

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We generated significant NOLs during 2018 and 2019 and filed carryback claims for these losses to the preceding five years.

During 2020, we received federal income tax refunds corresponding to the 2018 NOL carryback leaving approximately $ 11.4 million remaining to be refunded in connection with the 2019 NOL carryback.

In connection with the filing of these claims, we initially recorded a federal income tax receivable of approximately $ 15.0 million and certain related adjustments to our deferred tax liability.

We subsequently received federal income tax refunds corresponding to the 2018 NOL carryback during 2020 leaving approximately $ 11.5 million remaining to be refunded in connection with the 2019 NOL carryback.

In conjunction with the remaining income tax refund claim, we received a notice from the Internal Revenue Service (“IRS”) on March 8, 2023, stating that our income tax returns for 2015, 2016, 2017 and 2019 were selected for examination.

Furthermore and as is customary for income tax refunds of this magnitude, the IRS is required to review the refund claim and provide a report to the Joint Committee on Taxation of the U.S.

Furthermore, and as is customary for income tax refunds of this magnitude, the IRS was required to review the refund claim and provide a report to the Joint Committee on Taxation of the U.S.

Congress (“JCT”).

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.

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.

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

Our request for refund was reviewed and concluded favorably with the JCT concurring with the IRS’s conclusions.

Subsequent to a delay due to the federal government shutdown in October 2025, we received a total of $ 12.3 million in the first quarter of 2026.

This amount includes tax refunds of $ 10.2 million and related interest of $ 2.1 million for the years 2015, 2016 and 2017.

After receipt of these refunds, a total of $ 1.8 million attributable solely to 2019 remains open including an income tax refund of $ 1.5 million plus interest of $ 0.3 million.

Commitments and Contingencies

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Furthermore, we believe that we maintain adequate insurance coverage against any potential litigation loss relating to insurable risks.

Stockholders’ Equity

Dividends and Comprehensive Income

Cash dividends are considered restricted payments as defined in the Credit Facility (see N ote 9 ) and may be made provided that certain conditions are satisfied as reflected in the Credit Facility, including the absence of any defaults, among others.

With respect to the dividends presented in the table below, all of the necessary conditions have been satisfied.

The following table summarizes our dividends declared and paid in cash for the periods presented:

Quarterly Period Ended Dividends Declared per Share Dividends Paid

March 31, 2026 $ 0.11 $ 1,385

Our comprehensive income is comprised only of our net income as there are no components that would be considered as other comprehensive income.

Revenues from Customers

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

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

2025 2024 2025 2024

Three months ended March 31,

Rental $ 47,115 $ 38,910

Compressors 35 383 985 1,724

Other (Parts/Rebuilds) 436 1,460 2,163 4,892

471 1,843 3,148 6,616

Parts 392 1,019

Other (Compressors/Rebuilds) 99 908

Aftermarket services 861 546

Total revenue $ 48,467 $ 41,383

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.

No amounts were recognized in revenue attributable to deferred revenue during the three months ended March 31, 2026 and 2025.

Transaction Price Allocated to the Remaining Performance Obligations

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

As of March 31, 2026, and December 31, 2025, we had no deferred revenue related to unsatisfied performance obligations.

Contract Costs

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Stock-Based and Other Long-Term Incentive Compensation

We maintain two stockholder approved plans for the issuance of stock-based compensation awards to our employees and Board of Director members:

(i) the 2019 Equity Incentive Plan, as amended (the “Equity Incentive Plan”), and (ii) the 1998 Stock Option Plan, as amended (the “Stock Option Plan”).

We maintain the stockholder-approved 2019 Equity Incentive Plan, as amended (the “Equity Incentive Plan”) for the issuance of stock-based compensation awards to our employees, certain consultants and Board of Director members.

The Equity Incentive Plan provides for a total of 1,650,000 shares of common stock for issuance in the form of awards for:

(i) stock options, (ii) stock appreciation rights, (iii) restricted awards in the form of restricted stock and restricted stock units (“RSUs ”) , (iv) performance share awards, including performance share units (“PSUs ” ) and (v) other equity-based awards.

After consideration of the activity described in detail below, a total of 530,393 shares remained available for grant under the Equity Incentive Plan as of March 31, 2026.

The Equity Incentive Plan expires on June 20, 2034.

Until its expiration on February 28, 2026, we also maintained the 1998 Stock Option Plan, as amended (the “Stock Option Plan”) through which we issued stock options for all years prior to 2026.

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

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

2025 2024 2025 2024

Three months ended March 31,

Equity-classified $ 579 $ 359

Liability-classified (1)

139 46 276 62

$ 751 $ 568 $ 1,826 $ 1,100

(1) Represents compensation expense associated with awards that may be settled in cash at the option of the grantee.

1998 Stock Option Plan

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 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 nine months ended September 30, 2025 is presented below:

Stock Options

While the Stock Option Plan has expired, all stock options that were outstanding as of December 31, 2025 will remain subject to their vesting rights through their contractual lives.

All options granted after 2025, including those indicated below, were granted under the Equity Incentive Plan.

A summary of all option activity during the three months ended March 31, 2026 is presented below:

Number of Shares Underlying

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Expired — $ — $ —

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:

Outstanding, March 31, 2026 123,085 $ 23.98 7.24 $ 1,694

Exercisable, March 31, 2026 55,753 $ 20.82 5.61 $ 943

The following table summarizes information about our stock options outstanding as of March 31, 2026:

Range of Exercise Prices:

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123,085 6.60 $ 11.28 55,753 $ 16.33

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

The following table summarizes changes in our unvested stock options during the three months ended March 31, 2026:

Shares Weighted Average Grant Date Fair Value Per Share

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Canceled/Forfeited ( 7,583 ) $ 12.23

Unvested, September 30, 2025

Unvested, March 31, 2026

67,332 $ 13.69

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

On June 5, 2025, our stockholders approved an amendment to the Equity Incentive Plan (the “Amendment ” ) to increase the number of shares available by 500,000 shares up to a total of 1,650,000 shares of common stock for issuance in the form of awards for:

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 635,421 shares remained available for grant under the Equity Incentive Plan as of September 30, 2025.

As of March 31, 2026, 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.

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:

The following table summarizes all restricted stock and RSU activity during the three months ended March 31, 2026 is presented below:

Shares Weighted Average

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Canceled/Forfeited — $ — $ —

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.

Outstanding, March 31, 2026 123,128 $ 27.57 5.84 $ 5,225

As of March 31, 2026, there was a total of approximately $ 2.9 million of unrecognized compensation cost related to unvested restricted stock and RSUs which is expected to be recognized over the next 2.45 years.

Cash Settled Restricted Stock Units

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Contractual Life (years) Aggregate

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

Outstanding, December 31, 2025 13,812 $ 24.60 0.42 $ 340

Granted — $ — $ —

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Canceled/Forfeited — $ — $ —

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

Outstanding, March 31, 2026 13,812 $ 24.60 0.12 $ 340

Performance Share Units

The potential payout for the PSU awards is based upon performance for a three-year period ending December 31, 2026 for the 2024 grants and December 31, 2027 for the 2025 grants measured against relative total shareholder return (“TSR”) compared to a peer group of companies as established by the Compensation Committee.

The PSU award payout ranges from zero (if the Company ranks below the 31.25 percentile) and up to 200 % (if the Company ranks first) based upon our relative TSR performance ranking (subject to certain caps based on absolute TSR as defined in the PSU agreements).

The potential payout for the PSU awards is based upon performance for a three-year period ending December 31, 2026 for the 2024 grants, December 31, 2027 for the 2025 grants and December 31, 2028 for the 2026 grants measured against relative total shareholder return (“TSR”) compared to a peer group of companies as established by the Compensation Committee.

The PSU award payout ranges from zero (if the Company ranks below the 31.25th percentile for the 2024 and 2025 grants and below the 30th percentile for the 2026 grant) and up to 200 % (if the Company ranks first) based upon our relative TSR performance ranking (subject to certain caps based on absolute TSR as defined in the PSU agreements).

With respect to vesting, the PSUs have both a service condition and a market condition.

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 nine months ended September 30, 2025:

Weighted-average grant date fair value of PSUs granted $ 43.97

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Expected volatility 44.8 %

Expected dividend yield — %

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

The following table summarizes all PSU activity during the three months ended March 31, 2026:

Shares Weighted Average

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Canceled/Forfeited — $ —

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.

Outstanding, March 31, 2026 119,294 $ 31.47 1.93 $ —

As of March 31, 2026 , there was a total of approximately $ 2.8 million of unrecognized compensation cost related to the unvested portion of the PSUs which is expected to be recognized over the next 1.93 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 September 30, Nine months ended September 30,

2025 2024 2025 2024

Three months ended March 31,

Numerator for basic and diluted earnings per share:

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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 September 30, Nine months ended September 30,

2025 2024 2025 2024

Three months ended March 31,

Stock options 21,500 96,500

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Subsequent Events

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.

On May 11, 2026, we announced that our Board of Directors declared a cash dividend of $ 0.15 per share to stockholders of record as of May 20, 2026 expected to be paid on June 3, 2026.

We have evaluated all events subsequent to the balance sheet date as of March 31, 2026, 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

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All statements, other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future financial position, growth strategy, budgets, projected costs, plans and objectives of management for future operations, are forward-looking statements.

We use the words “may,” “will,” “expect,” “anticipate,” “estimate,” “believe,” “continue,” “intend,” “plan,” “budget” and other similar words to identify forward-looking statements.

We use the words “may,” “will,” “expect,” “anticipate,” “estimate,” “guidance,” “believe,” “continue,” “intend,” “plan,” “budget” and other similar words to identify forward-looking statements.

You should read statements that contain these words carefully and should not place undue reliance on these statements because they discuss future expectations, contain projections of results of operations or of our financial condition and/or state other “forward-looking” information.

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• fluctuations in interest rates;

• our ability to make dividends, distributions and share repurchases;

• changes in regulation or prohibition of new or current well completion techniques;

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• inability to finance our future capital requirements and availability of financing;

• cybersecurity threats, including increased use of artificial intelligence and other emerging technologies;

• capacity availability, costs and performance of our outsourced compressor fabrication providers and overall inflationary pressures;

• impacts of world events, such as acts of terrorism and significant economic disruptions and adverse consequences resulting from possible long-term effects of potential pandemics and other public health crises;

• impacts of world events, such as acts of terrorism, the conflicts in Iran, Ukraine, Venezuela and in the greater Middle East, and significant economic disruptions and adverse consequences resulting from possible long-term effects of potential pandemics and other public health crises;

• general economic conditions.

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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