Natural Gas Services Group Inc (NGS) 2022 Q3 法說會逐字稿

Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the Natural Gas Services Group Inc. Third Quarter 2022 Conference Call (Operator Instructions) I would now like to turn the conference over to Micah Foster, Chief Financial Officer. Please go ahead.

早上好。我叫丹尼斯，今天我將擔任你們的會議接線員。此時，我想歡迎大家參加 Natural Gas Services Group Inc. 2022 年第三季度電話會議（操作員說明）我現在想將會議轉交給首席財務官 Micah Foster。請繼續。

Thank you, Dennis, and good morning, everyone. Before we begin, I need to remind you that during this call, we will make forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, based on our current beliefs and expectations, as well as assumptions made by and information currently available to Natural Gas Services Group's leadership team.

謝謝丹尼斯，大家早上好。在開始之前，我需要提醒您，在本次電話會議期間，我們將根據我們目前的信念和預期以及以及天然氣服務集團領導團隊目前可用的信息。

Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Please refer to our latest filings with the United States Securities and Exchange Commission for the factors that may cause actual results to differ materially from those in the forward-looking statements made during this call.

儘管我們認為此類前瞻性陳述中反映的預期是合理的，但我們無法保證此類預期將被證明是正確的。請參閱我們向美國證券交易委員會提交的最新文件，了解可能導致實際結果與本次電話會議期間所做的前瞻性陳述中的結果存在重大差異的因素。

In addition, our discussion today will reference certain non-GAAP financial measures, including EBITDA, adjusted EBITDA and adjusted gross margin, among others. For reconciliations of these non-GAAP financial measures to our GAAP financial results, please see this morning -- yesterday afternoon's press release and our Forms 8-K, 10-K and 10-Q furnished to the SEC.

此外，我們今天的討論將參考某些非 GAAP 財務指標，包括 EBITDA、調整後的 EBITDA 和調整後的毛利率等。有關這些非 GAAP 財務指標與我們的 GAAP 財務結果的對賬，請參閱今天上午 - 昨天下午的新聞稿以及我們向美國證券交易委員會提供的 8-K、10-K 和 10-Q 表格。

I will now turn the call over to John Chisholm.

我現在將把電話轉給 John Chisholm。

Thank you, Micah. As most of you likely read in our press release last night, I've resigned as interim CEO for NGS, but will remain as a director until March 1, 2023. My focus over the past 15 years as a Director with NGS has always been on what creates the most shareholder value for NGS.

謝謝你，邁卡。正如你們中的大多數人可能在昨晚的新聞稿中讀到的那樣，我辭去了 NGS 的臨時首席執行官一職，但將繼續擔任董事至 2023 年 3 月 1 日。在過去的 15 年裡，我作為 NGS 董事的工作重點一直是是什麼為 NGS 創造了最大的股東價值。

But I concluded it was my other growing obligations, some of which are international, the time required that I could provide would not be sufficient. I want to thank employees of NGS and my fellow directors for this last 6 months leading the company. I trust that I have extended the foundation of NGS and contributed to our value creation. Now my long-time friend and colleague, Steve Taylor. Steve?

但我得出結論，這是我其他不斷增加的義務，其中一些是國際性的，我所能提供的所需時間是不夠的。我要感謝 NGS 的員工和我的董事同事們在過去 6 個月裡領導公司。我相信我已經擴展了 NGS 的基礎並為我們的價值創造做出了貢獻。現在是我的老朋友兼同事史蒂夫·泰勒 (Steve Taylor)。史蒂夫？

Good morning, everyone. Thank you, John, and thanks for your contributions to NGS. We all value your knowledge and insight and look forward to your continued guidance. And thank you for the assistance you have given me during this transition. Before I get to my prepared remarks, I do want to reiterate and reinforce that the company will continue our search, which is ongoing for a permanent CEO. We will provide updates as required.

大家，早安。謝謝你，約翰，感謝你對 NGS 的貢獻。我們都重視您的知識和洞察力，並期待您繼續提供指導。感謝您在此過渡期間給予我的幫助。在我準備好發言之前，我確實想重申並強調公司將繼續我們的搜索，目前正在尋找一位永久 CEO。我們將根據需要提供更新。

I would also like to note that in addition to Micah Foster, our Chief Financial Officer, with us today is Jim Hazlett, our Vice President of Technical Services. Micah, Jim and I will be happy to answer your questions after our discussion of the third quarter results and on our current operating environment.

我還想指出，除了我們的首席財務官 Micah Foster 之外，今天和我們在一起的還有我們的技術服務副總裁 Jim Hazlett。 Micah、Jim 和我將很樂意在討論完第三季度業績和當前運營環境後回答您的問題。

Turning our attention to the business. As we noted in our second quarter earnings call, the current macro environment for energy industry is unique in my career. Upstream operating customers have typically continued with their capital restraint, which supports higher commodity prices. There's clearly a weak supply, strong demand dynamic in play that has been influenced by traditional natural gas demand, defining pressures and volumes in existing basins and increase in LNG consumption and a continued strength in crude oil commodity prices with a large amount of crude oil produced through gas compression assisted techniques.

將注意力轉移到業務上。正如我們在第二季度財報電話會議中指出的那樣，當前能源行業的宏觀環境在我的職業生涯中是獨一無二的。上游運營客戶通常會繼續限制資本，這支持了更高的商品價格。顯然供應疲軟，需求強勁受到傳統天然氣需求的影響，確定了現有盆地的壓力和數量，液化天然氣消費量增加，原油商品價格持續走強，原油產量增加通過氣體壓縮輔助技術。

It's a unique dynamic that demonstrates that gas compression demand is presently (inaudible) from appreciably higher capital spending. After a large-scale geopolitical event, we believe that we are at the beginning of at least a couple of years of higher commodity prices. NGS, with our past financial discipline is well-positioned to take advantage of these opportunities beginning this year and into 2023 and beyond.

這是一種獨特的動態，表明氣體壓縮需求目前（聽不清）來自明顯更高的資本支出。在發生大規模地緣政治事件之後，我們認為我們正處於至少幾年商品價格上漲的開端。 NGS 憑藉我們過去的財務紀律，可以很好地利用從今年開始到 2023 年及以後的這些機會。

While we have been and will continue to be focused on operational efficiencies, our visibility of organic growth opportunities in the large horsepower market has never been stronger. We have worked diligently with our customers to understand their needs in 2023 and beyond and have started discussions with our financing partners to provide us with immediate liquidity and to build out significant new large horsepower additions at highly accretive rates.

雖然我們一直並將繼續關注運營效率，但我們對大馬力市場有機增長機會的了解從未如此強烈。我們努力與客戶合作，了解他們在 2023 年及以後的需求，並開始與我們的融資合作夥伴進行討論，為我們提供即時流動性，並以高增值率增加大量新的大馬力設備。

We have always been protective of our balance sheet, so we have the financial ability to execute on opportunities, and we are now in the land of opportunity. While the ultimate amount of capital required for our 2023 program has not yet been finalized, we are working with our Board and banks to complete the process. Along with this, we have already begun work on meaningful amounts of new large horsepower compression that is already committed under long-term contracts.

我們一直在保護我們的資產負債表，所以我們有財務能力來抓住機會，我們現在正處於機會之地。雖然我們 2023 年計劃所需的最終資金數額尚未最終確定，但我們正在與董事會和銀行合作以完成這一過程。與此同時，我們已經開始著手大量新的大馬力壓縮，這些壓縮已經根據長期合同承諾。

In addition, our previously announced electrification conversion project on a number of our 250-horsepower units is well underway, and we anticipate that we will complete the conversion of 60 of these units by midyear 2023. Additive to this, our plans to deploy our first 2,500 horsepower electric units in next year. While most of our capital is committed to traditional gas fired engine editions, we are seeing more demand for high horsepower electric units from our customers, and we do think there will be more opportunities in this realm.

此外，我們之前宣布的一些 250 馬力機組的電氣化改造項目正在順利進行，我們預計到 2023 年年中將完成其中 60 台機組的改造。除此之外，我們計劃部署我們的第一個明年 2,500 馬力電動裝置。雖然我們的大部分資金都用於傳統的燃氣發動機版本，但我們看到客戶對大馬力電動裝置的需求越來越大，我們確實認為這個領域會有更多機會。

Turning to our quarterly results. We are pleased to report our seventh consecutive quarter of increased rental revenues. Rental revenue increased 15% to $18.6 million from $16.2 million in the third quarter of last year and 3% over the second quarter's rental revenue of $18.1 million. Q3 saw a slight decline in operating margins on our rental business after consecutive quarters of improved margins. Inflationary pressures, primarily in labor, lube oil and parts drove this decline.

轉向我們的季度業績。我們很高興地報告我們連續第七個季度租金收入增加。租金收入從去年第三季度的 1620 萬美元增長 15% 至 1860 萬美元，比第二季度的租金收入 1810 萬美元增長 3%。在連續幾個季度提高利潤率後，第三季度我們租賃業務的營業利潤率略有下降。主要來自勞動力、潤滑油和零件的通脹壓力推動了這一下降。

During the quarter, we worked with our customers to increase our rental pricing given these inflationary pressures. The price increases we rolled out will impact approximately half of the active rental fleet in the fourth quarter with the balance of the fleet seen increases beginning in January of 2023. These price increases will need to not only recapture operating costs due to inflation, but to roll back previously negotiated price concessions we've seen over the last 2 to 3 years and during the pandemic.

在本季度，鑑於這些通脹壓力，我們與客戶合作提高了租金價格。我們推出的價格上漲將影響第四季度大約一半的活躍租賃機隊，而機隊的餘額將從 2023 年 1 月開始增加。這些價格上漲不僅需要收回因通貨膨脹而產生的運營成本，還需要取消我們在過去 2 到 3 年和大流行期間看到的先前談判的價格優惠。

These will have a positive and sustained impact on revenues and EBITDA. We believe these price increases are appropriate given the current cost environment and will restore our margins to the levels needed to continue to invest in the business and bring on new compression to support our customers' activities. As you are all aware, we began our strategic shift towards the higher horsepower market nearly 5 years ago, and has been and continues to be an excellent source of cash, margins and returns.

這些將對收入和 EBITDA 產生積極和持續的影響。我們認為，鑑於當前的成本環境，這些價格上漲是適當的，並且將使我們的利潤率恢復到繼續投資業務所需的水平，並帶來新的壓縮以支持我們客戶的活動。眾所周知，我們在近 5 年前就開始了向更高馬力市場的戰略轉變，並且一直並將繼續成為現金、利潤和回報的極好來源。

Our asset mix, however, by unit count is still heavily weighted towards small to medium-sized compression. Our large horsepower assets comprised approximately 14% of our current utilized fleet by unit count, but these units provide approximately 45% of our current rental revenue stream. As the small- to medium-sized compression market is the most competitive, and thus the most price sensitive, we anticipate that our unit utilization will experience some volatility over the coming months, but it will not have a meaningful impact to our revenue stream.

然而，我們的資產組合，按單位計數仍然偏重於中小型壓縮。按單位數量計算，我們的大馬力資產約占我們目前使用的車隊的 14%，但這些單位提供了我們目前租金收入流的約 45%。由於中小型壓縮市場競爭最激烈，因此對價格最敏感，我們預計我們的單位利用率將在未來幾個月內出現波動，但這不會對我們的收入流產生重大影響。

However, we anticipate that our horsepower utilization will continue to grow, reflecting our large horsepower growth. With that, I'll turn the call over to Micah to discuss our quarterly results in more detail.

但是，我們預計我們的馬力利用率將繼續增長，反映出我們的馬力增長很大。有了這個，我會把電話轉給 Micah 來更詳細地討論我們的季度業績。

Thank you, Steve. As previously mentioned, total revenue for the 3 months ended September 30, 2022, increased to $20.7 million from $18.2 million for the 3 months ended September 30, 2021. Rental revenue increased 15% to $18.6 million in the third quarter of this year from $16.2 million in the third quarter of last year due to the increased deployment of rental units, primarily higher horsepower packages. As of September 30, 2022, we had 1,196 rented units, representing 305,953 horsepower compared to 1,221 rented units, representing 288,706 horsepower as of September 30, 2021.

謝謝你，史蒂夫。如前所述，截至 2022 年 9 月 30 日的三個月的總收入從截至 2021 年 9 月 30 日的三個月的 1820 萬美元增至 2070 萬美元。今年第三季度的租金收入從 16.2 美元增長 15% 至 1860 萬美元萬在去年第三季度由於租賃單位的部署增加，主要是更高的馬力包。截至 2022 年 9 月 30 日，我們擁有 1,196 個租賃單位，代表 305,953 馬力，而截至 2021 年 9 月 30 日，我們擁有 1,221 個租賃單位，代表 288,706 馬力。

We ended the third quarter with 60.5% utilization on a per unit basis and 72.2% utilization on a horsepower basis. Utilized horsepower increased by 6% in the third quarter when compared to the year ago period, while revenue per horsepower increased 6.8% when comparing the same periods. Sequentially, total revenue increased 4.1% to $20.7 million in the third quarter of 2022 compared to $19.9 million in the second quarter of 2022, primarily due to a $0.5 million increase in sales revenues and $0.5 million increase in rental revenues partially offset by a $200,000 decrease in service and maintenance revenues.

第三季度末，單位利用率為 60.5%，馬力利用率為 72.2%。與去年同期相比，第三季度的使用馬力增長了 6%，而每馬力收入同比增長了 6.8%。與 2022 年第二季度的 1990 萬美元相比，2022 年第三季度的總收入環比增長 4.1%，達到 2070 萬美元，這主要是由於銷售收入增加了 50 萬美元，租金收入增加了 50 萬美元，部分被 200,000 美元的減少所抵消在服務和維護收入方面。

As noted in our release this morning, adjusted rental gross margin of $8.6 million increased 17% when compared to $7.4 million in the same period in 2021 with a marginal decline of 300 basis points when compared to the $8.9 million recognized in the second quarter of this year. Adjusted rental gross margin as a percent of rental revenues was 46% for both the third quarter of 2022 and '21 and 49% for the second quarter of 2022. Operating loss for the 3 months ended September 30, 2022, was $1.5 million compared to an operating loss of $1.6 million for the 3 months ended September 30, 2021.

正如我們今天上午發布的消息所述，調整後的租金毛利率為 860 萬美元，與 2021 年同期的 740 萬美元相比增長了 17%，與第二季度確認的 890 萬美元相比小幅下降了 300 個基點年。調整後的租金毛利率佔租金收入的百分比在 2022 年第三季度和 21 年均為 46%，在 2022 年第二季度為 49%。截至 2022 年 9 月 30 日止三個月的營業虧損為 150 萬美元，而截至 2021 年 9 月 30 日止三個月的營業虧損為 160 萬美元。

Operating loss improved primarily due to higher rental margins, partially offset by increased G&A, primarily driven by severance costs related to the retirement of our former Chief Executive Officer, Steve Taylor. Sequentially, we reported operating income of $700,000 in the second quarter of 2022. The decline in operating income during the current period was a product of severance charges, and to a lesser extent, increased rental expenses.

經營虧損的改善主要是由於租金利潤率提高，部分被 G&A 增加所抵消，這主要是由於與我們的前首席執行官史蒂夫泰勒退休相關的遣散費。隨後，我們報告了 2022 年第二季度的營業收入為 700,000 美元。當期營業收入的下降是遣散費的產物，其次是租金支出的增加。

Our net loss for the 3 months ended September 30, 2022 was $80,000 or $0.01 per basic and diluted share compared to a net loss of $3.6 million or $0.27 per basic and diluted share for the 3 months ended September 30, 2021. Improved rental margins, combined with a $1.3 million gain on the sale of certain assets from our rental fleet were the primary contributors to the decreased net loss. We reported a net loss of $70,000 in the second quarter of the year or $0.01 per basic and diluted share.

截至 2022 年 9 月 30 日止三個月的淨虧損為 80,000 美元或每股基本股和稀釋後每股 0.01 美元，而截至 2021 年 9 月 30 日止三個月的淨虧損為 360 萬美元或每股基本股和稀釋後股 0.27 美元。租金利潤率提高，加上從我們的租賃車隊出售某些資產獲得的 130 萬美元收益是淨虧損減少的主要原因。我們報告今年第二季度淨虧損 70,000 美元，即基本股和稀釋後每股虧損 0.01 美元。

Adjusted EBITDA increased to $7.7 million or 44% for the 3 months ended September 30, 2022, from $5.4 million for the same period in 2021. This increase was primarily the result of higher rental margins and gains recorded on asset dispositions. Sequentially, adjusted EBITDA increased 13% from $6.7 million, primarily as a result of asset dispositions. SG&A in the quarter was approximately $4.1 million, a $1.4 million increase from the year ago period and an increase of approximately $1.8 million in the second quarter of this year.

截至 2022 年 9 月 30 日止的三個月，經調整的 EBITDA 從 2021 年同期的 540 萬美元增加至 770 萬美元或 44%。這一增長主要是由於租金利潤率和資產處置收益增加所致。調整後的 EBITDA 從 670 萬美元環比增長 13%，這主要是資產處置的結果。本季度的 SG&A 約為 410 萬美元，比去年同期增加 140 萬美元，比今年第二季度增加約 180 萬美元。

These increases were primarily attributable to severance expenses related to the retirement agreement between the company and our former CEO, as well as other costs related to our executive transition process. While we anticipate fluctuations in SG&A with our heightened activity, we anticipate severance and executive transition costs to be temporary in nature, and do not expect them to impact our business beyond the midpoint of 2023.

這些增長主要歸因於與公司和我們前任首席執行官之間的退休協議相關的遣散費，以及與我們的高管過渡過程相關的其他費用。雖然我們預計 SG&A 會隨著我們活動的增加而波動，但我們預計遣散費和高管過渡成本本質上是暫時的，並且預計它們不會影響我們的業務超過 2023 年中點。

Our cash balance as of September 30, 2022 was approximately $2.6 million with $2 million outstanding under our revolving credit facility. In the first 9 months of the year, we realized cash flow from operations of $18.8 million and used $35.4 million for capital expenditures, $34.6 million of which was expended on our rental fleet. As noted in our second quarter earnings call, the compression market remains strong, and we are fielding calls daily from our customers inquiring about the availability of new compression, primarily higher horsepower.

截至 2022 年 9 月 30 日，我們的現金餘額約為 260 萬美元，在我們的循環信貸額度下有 200 萬美元未償還。今年前 9 個月，我們實現了 1880 萬美元的運營現金流，並使用了 3540 萬美元用於資本支出，其中 3460 萬美元用於租賃車隊。正如我們在第二季度財報電話會議中指出的那樣，壓縮市場依然強勁，我們每天都會接到客戶的電話，詢問新壓縮的可用性，主要是更高的馬力。

During the second quarter, we accelerated our new equipment development program and anticipate we will end the year at the high end of our previously forecasted $40 million to $50 million of CapEx spend.

在第二季度，我們加快了我們的新設備開發計劃，並預計我們將在我們之前預測的 4000 萬至 5000 萬美元資本支出支出的高端結束今年。

With that, I will turn the call back over to Steve.

有了這個，我會把電話轉回給史蒂夫。

Thanks, Micah. In my opening comments, I mentioned that we will be fabricating and installing some 2,500 horsepower electrical drive units, our first. That's significant, but I also want everyone to understand that this is only part of the new phase in our large horsepower strategy. We started on this shift to remake our fleet about 5 years ago, and we have been quite successful, as evidenced by the fact that today, 45% of our rental fleet revenue is associated with our large horsepower assets.

謝謝，邁卡。在我的開場白中，我提到我們將製造和安裝大約 2,500 馬力的電力驅動裝置，這是我們的第一個。這很重要，但我也希望每個人都明白，這只是我們大馬力戰略新階段的一部分。大約 5 年前，我們開始進行這種轉變以改造我們的機隊，我們取得了相當大的成功，事實證明，今天，我們 45% 的租賃機隊收入與我們的大馬力資產相關。

We're now embarking on another complementary phase, and that is moving into the 2,500 horsepower asset size. Besides providing an additional growth avenue, we will be able to leverage our existing large horsepower compressor infrastructure that has already been established. In the past, we have been fortunate in being awarded rental contracts of longer term and higher price than the general market. These positive aspects continue as we contract equipment in 2,500 horsepower units. With our entry into the very large compression horsepower market, we anticipate that our utilized fleet horsepower will see double-digit growth by this time next year.

我們現在正在進行另一個互補階段，即進入 2,500 馬力的資產規模。除了提供額外的增長途徑外，我們還將能夠利用已經建立的現有大馬力壓縮機基礎設施。過去，我們有幸獲得比一般市場更長、價格更高的租賃合同。隨著我們以 2,500 馬力為單位承包設備，這些積極方面仍在繼續。隨著我們進入非常大的壓縮馬力市場，我們預計到明年這個時候，我們使用的機隊馬力將實現兩位數的增長。

Supply chain disruptions and customer delays can certainly impact that. But in general, we anticipate this level of activity. Besides the problems we see in our traditional business, we think we also have the optimum type of gas compression packages to capitalize on the methane reduction initiatives that continue to be legislated, as recently evidenced in the Inflation Reduction Act.

供應鏈中斷和客戶延遲肯定會影響到這一點。但總的來說，我們預計會有這種活動水平。除了我們在傳統業務中看到的問題外，我們認為我們還擁有最佳類型的氣體壓縮包，以利用繼續立法的甲烷減排舉措，正如最近在《降低通貨膨脹法案》中所證明的那樣。

Combined with our technological prowess and experience, our eComp compression package will not only reduce the carbon footprint of our equipment, but will simultaneously reduce the taxes operators pay related to those emissions. If you followed NGS for any time at all, I'm pretty conservative when it comes to predicting the future, but it certainly looks like we are uniquely positioned to take advantage of this positive cycle. I did not expect to be coming back into NGS in a daily operating role, but through John's efforts and the contributions of the NGS team, we're in an excellent position to grow the company.

結合我們的技術實力和經驗，我們的 eComp 壓縮包不僅會減少我們設備的碳足跡，還會同時減少運營商支付的與這些排放相關的稅款。如果你一直關注 NGS，那麼在預測未來時我會非常保守，但看起來我們確實處於獨特的位置，可以利用這個積極的循環。我沒想到會回到 NGS 擔任日常運營職務，但通過 John 的努力和 NGS 團隊的貢獻，我們處於發展公司的絕佳位置。

Our focus will continue to be on capital execution, deployment of new compression equipment, and maintaining our service quality. I will, of course, provide further updates on our end of the year call. Now we're happy to take any questions. So Dennis, if you'll open up the lines.

我們的重點將繼續放在資本執行、新壓縮設備的部署以及保持我們的服務質量上。當然，我會在年終電話會議上提供進一步的更新。現在我們很樂意回答任何問題。所以丹尼斯，如果你願意打開線路。

(Operator Instructions) Your first question is from the line of Rob Brown with Lake Street Capital.

（操作員說明）您的第一個問題來自 Rob Brown 與 Lake Street Capital 的合作。

Stephen, good to be talking again. On the demand environment, you said it's quite strong, and you're seeing customer activity increasing. I guess, is that strength across the board? Or is it really focused on the high horsepower market or really what's driving demand and where are you seeing it?

斯蒂芬，很高興再次交談。在需求環境方面，您說它非常強勁，而且您看到客戶活動在增加。我想，這是全面的實力嗎？或者它真的專注於高馬力市場，或者真正推動需求的是什麼，你在哪裡看到它？

Well, there is some increase across the board, but I mean, natural gas prices are good, but it's primarily a big horsepower that we're seeing, and the majority, I think the number was 80% or 85% of our CapEx is spent on large horsepower, which has been pretty indicative of the last few years anyway. But overall, it's -- we're concentrating and seeing large horsepower demand. Jim, do you want to add anything to that?

好吧，全面上漲，但我的意思是，天然氣價格不錯，但這主要是我們看到的強大動力，而且我認為大多數，我認為這個數字占我們資本支出的 80% 或 85%花在了大馬力上，無論如何，這在過去幾年中已經很能說明問題了。但總的來說，它是——我們正在集中精力並看到巨大的馬力需求。吉姆，你想補充什麼嗎？

Well, Steve, you're absolutely correct. Most of our build out -- our planned build-out will be in the large horsepower, 1,500 horsepower, 2,500 horsepower size units. There -- as you know, there are some small ones, but not very much.

好吧，史蒂夫，你完全正確。我們的大部分擴建——我們計劃的擴建將採用大馬力、1,500 馬力、2,500 馬力大小的裝置。正如你所知，那裡有一些小的，但不是很多。

Rob, did you just ask the gas price has been, they are currently volatile, but I think still pretty decent compared to the last decade. There is uplift everywhere, I mean, even in traditional, just pure natural gas basins, Barnett, San Juan, South Texas places like that. But really, what's driving the large horsepower demand or oil commodity prices and gas lift techniques which require compression. So it's kind of an indirect activity, but the gas lift market is really the one that's driven our entry into big horsepower in the last 4, 5 years. So it's -- I don't want anybody to think that's a transient thing, is the high oil prices are driving the vast majority of the horsepower demand.

Rob，你剛才問過汽油價格嗎，它們目前波動很大，但我認為與過去十年相比仍然相當不錯。到處都有隆起，我的意思是，即使在傳統的純天然氣盆地，像巴尼特、聖胡安、南德克薩斯這樣的地方。但實際上，是什麼推動了大馬力需求或石油商品價格以及需要壓縮的氣舉技術。所以這是一種間接的活動，但在過去的 4、5 年裡，氣舉市場確實是推動我們進入大馬力的市場。所以它 - 我不想讓任何人認為這是一個短暫的事情，高油價正在推動絕大多數的馬力需求。

Yes. Okay. Great. And then on the methane reduction kind of market that's opening up in the government support, how -- how do you see that in terms of opportunity for you and kind of the growth drivers next year and beyond?

是的。好的。偉大的。然後，在政府支持下開放的甲烷減排市場，你如何看待明年及以後的增長動力？

Well, it's a double-edged sword, right? So it's an opportunity, but it's also driven by legislation. And when legislation has made The Inflation Reduction Act, quite the misnomer, you're always having some portions of it directed towards methane reduction. I think even Biden the other day, kind of double downed a little bit on some of that stuff. So we're seeing that from a legislative standpoint everywhere. But certainly, there's an opportunity from the point that the cleaner the machine got, the more popular you're going to be, you're going to be the girl that dance, gets all the boys because all this stuff come along.

好吧，這是一把雙刃劍，對吧？所以這是一個機會，但它也是由立法驅動的。當立法制定《減少通貨膨脹法案》時，用詞不當，您總是將其中的某些部分用於減少甲烷排放。我認為即使是拜登前幾天，在其中一些事情上也有點加倍努力。因此，我們從各地的立法角度都看到了這一點。但可以肯定的是，機器越乾淨，你就越受歡迎，你就會成為跳舞的女孩，因為所有這些東西都出現了，所以有機會得到所有男孩。

And one of the things I think was in the Inflation Reduction Act, and Jim, correct me if I'm wrong, but I think there is a tax regime in there based on carbon emissions, methane emissions, stuff like that. And so when you start looking at that and particularly the equipment, as I mentioned, that we're using whether it's the engines or going to electric drives or eComp phase of our top equipment, we can reduce operating taxes quite a bit just due to taxes imposed on methane emissions.

我認為其中一件事是在《降低通貨膨脹法案》中，吉姆，如果我錯了請糾正我，但我認為那裡有一個基於碳排放、甲烷排放等的稅收制度。因此，當你開始關注它，特別是設備時，正如我提到的，我們正在使用的是發動機、電力驅動或我們頂級設備的 eComp 階段，我們可以減少營業稅，因為對甲烷排放徵稅。

So there are -- there's all kinds of opportunities around it, whether it's (inaudible) environmental, whether it's financial, you have lot of bills, and we're going to get started on it. And it's just going to grow. So Jim, I don't know if you've got anything else about that Act or our equipment now, don't give away any secrets. But...

所以有 - 周圍有各種各樣的機會，無論是（聽不清）環境，還是金融，你有很多賬單，我們將開始著手處理。而且它只會增長。所以吉姆，我不知道你現在是否還有關於該法案或我們設備的其他信息，不要洩露任何秘密。但...

I won't, it involves capturing the escaping methane from a traditional package, and we do it by changing our end devices and things like that. And we can get it down quite a bit. On the electric drives, we can move it down pretty close to 0. So Steve, you're right. It's -- also, I would like to mention that I heard yesterday even that New Mexico is increasing their (inaudible) restrictions on methane. So it's coming down to who can do more and better. So you're right, it's the girl at the dance.

我不會，它涉及從傳統包裝中捕獲逸出的甲烷，我們通過改變我們的終端設備和類似的東西來做到這一點。我們可以把它降低很多。在電力驅動器上，我們可以將其降低到非常接近 0。所以史蒂夫，你是對的。另外，我想提一下，我昨天甚至聽說新墨西哥州正在增加對甲烷的（聽不清）限制。所以歸結為誰能做得更多更好。所以你是對的，是舞會上的那個女孩。

Yes. So and Jim mentioned New Mexico, it's a part of the Permian Basin. So supporting this driving a lot of this big horsepower, a lot of the concentrated (inaudible), et cetera. So we're going to be well positioned in that. And I think we start testing some phases of the equipment in about a month or so, but we're going to be able to offer to the operator a pretty clean machine.

是的。所以吉姆提到了新墨西哥州，它是二疊紀盆地的一部分。所以支持這種驅動很多這種大馬力，很多集中（聽不清）等等。所以我們將在這方面處於有利地位。我認為我們將在大約一個月左右的時間內開始測試設備的某些階段，但我們將能夠為操作員提供一台非常乾淨的機器。

Okay. Great. That's great color. And then I guess last question is on the pricing environment. You talked about increasing pricing and then maybe a second round for the rest of your fleet. How -- what sort of the degree of price increases you can get and how calling to take to flow into the average?

好的。偉大的。那是很棒的顏色。然後我想最後一個問題是關於定價環境的。你談到了提高價格，然後可能是你的其餘車隊的第二輪。如何 - 您可以獲得什麼樣的價格上漲程度以及如何呼籲流入平均水平？

Well, the -- as I mentioned, about half of the fleet receive price increases in fourth quarter then the other half first quarter of next year, it may go into how much the increases were. I mean they buried and depending on the current price of equipment over time in the rental business for the same size and (inaudible) different rental rates on with the same customers, it's certainly among customers because depending on when you put that stuff out, environment with the high activity or lower activity environment, things like that and your cost in certain areas are higher than the other areas. So you get different rental rates out there. And one of the things we got to do is obviously get everything up to a decent return profile.

好吧，正如我提到的，大約一半的機隊在第四季度收到價格上漲，然後是明年第一季度的另一半，這可能會影響漲幅。我的意思是他們埋沒並根據租賃業務中設備的當前價格隨著時間的推移對相同的客戶提供相同規模和（聽不清）不同的租金，這肯定是在客戶中，因為取決於你什麼時候把這些東西拿出來，環境在高活動或低活動環境下，諸如此類的事情以及您在某些區域的成本高於其他區域。所以你會得到不同的租金。我們要做的其中一件事顯然是讓一切都達到一個不錯的回報率。

So the increases were all different. Generally, they were instead of shotgun, broad approach, like, we did in March, which is just spread across the board, 7% to 8%, this is more surgical. And to that and sort of give John some credit for leading that effort, and that will come in. Micah, I don't know if you got anything you will say on the price increases.

所以漲幅各不相同。一般來說，他們不是散彈槍，而是廣泛的方法，就像我們在 3 月份所做的那樣，它只是全面傳播，7% 到 8%，這更像外科手術。對於這一點，有點讚揚 John 領導這項工作，這將會出現。Micah，我不知道你是否對價格上漲有任何看法。

Yes. No, I think you hit it, Steve. This was -- this is when we say 50%, we're really looking at that from a revenue basis, right? So half our revenues will see a price uplift in the fourth quarter with the balance rolling into the first quarter. A big piece of that, we've got one large customer whose equipment is primarily still under contract terms. And so negotiating price increases there, we can't just do that unilaterally. It's a real negotiation there where we've got to prove out. Here's the cost burden we're bearing and kind of prove that out to them.

是的。不，我想你成功了，史蒂夫。這是 - 這是當我們說 50% 時，我們真的是從收入的角度來看的，對吧？因此，我們一半的收入將在第四季度看到價格上漲，而餘額將進入第一季度。其中很大一部分，我們有一個大客戶，其設備主要仍處於合同條款之下。因此，在那裡談判價格上漲，我們不能單方面這樣做。這是一場真正的談判，我們必須證明這一點。這是我們承擔的成本負擔，並向他們證明了這一點。

So that's what we're expecting to come in, in the first quarter. But in the fourth quarter, this was across the rest of our customer base. And as we kind of intimated within the script, a lot of this was on small compression that is obviously the most competitive in the market, as far as price is concerned. And so we anticipate, Rob, a little volatility in our utilization going forward as some of these units come back to us.

這就是我們期望在第一季度出現的情況。但在第四季度，這是我們其他客戶群的情況。正如我們在劇本中暗示的那樣，其中很多都是小壓縮，就價格而言，這顯然是市場上最具競爭力的。因此，我們預計，Rob，隨著其中一些設備返回給我們，我們的利用率會有所波動。

We also have on several occasions when we talk with the customer and said, here's the price that we need to realize to keep operating this machine in the field for you. This is some older equipment that does -- isn't really part of our core strategy going forward and those customers at times have kind of raised their hand and said, "Hey, would you sell that to us and then maintain it for us." And so we've done that as well. So we're working through all the options available to us to help our customers continue to -- with their operations, but at the same time help us realize the margins we need to go forward to continue to invest in the business.

我們也有幾次在與客戶交談時說，這是我們需要實現的價格，以便繼續為您在現場操作這台機器。這是一些舊設備——並不是我們未來核心戰略的一部分，那些客戶有時會舉手說，“嘿，你能把它賣給我們，然後為我們維護嗎？ “所以我們也這樣做了。因此，我們正在研究我們可用的所有選項，以幫助我們的客戶繼續 - 與他們的運營，但同時幫助我們實現我們繼續投資業務所需的利潤。

Yes, Rob, as you -- a lot of inflationary pressures, a lot of supply chain issues still. I mean, supply chain is getting a little better in some aspect and other aspect it's not. Certainly price -- inflation-driven pricing has not abated in spite of what the government says. Obviously, excuse my digressing. Biden hadn't been to a grocery store or hadn't bought a compressor part in a while because they're all still advancing cost pretty significantly.

是的，Rob，就像你一樣——很多通脹壓力，很多供應鏈問題仍然存在。我的意思是，供應鏈在某些方面正在變得更好，而在其他方面則不然。當然價格——儘管政府怎麼說，但通貨膨脹驅動的定價並沒有減弱。顯然，請原諒我跑題了。拜登沒有去過雜貨店，也有一段時間沒有購買壓縮機零件，因為它們都在大幅提高成本。

So as I mentioned in the narrative, a lot of this is to recover some costs and certainly get our margins where we need them to continue to provide equipment. There's a lot of demand out there. And it is unique. It's pretty high. And we're fortunate that we're in the (inaudible) the market right now, the 1,500 to 2,500 horsepower realm is pretty active. We think we're going to be in good shape (inaudible). And the new contracts we're getting, as I mentioned, on the bigger equipment is excellent, too. So I think you'll see that flow through certainly into 2023.

因此，正如我在敘述中提到的那樣，其中很多是為了收回一些成本，當然也可以在我們需要他們繼續提供設備的地方獲得利潤。那裡有很多需求。它是獨一無二的。這是相當高的。我們很幸運，我們現在處於（聽不清）市場，1,500 到 2,500 馬力的領域非常活躍。我們認為我們會保持良好狀態（聽不清）。正如我所提到的，我們獲得的關於更大設備的新合同也非常好。所以我認為你肯定會看到這種趨勢一直持續到 2023 年。

And as long as we don't have some disruption in the market that pricing should hold for a bit.

只要我們沒有對市場造成一些干擾，定價就應該保持一段時間。

(Operator Instructions) Your next question is from the line of Tate Sullivan with the Maxim Group.

（操作員說明）您的下一個問題來自 Maxim Group 的 Tate Sullivan。

Steve, you commented earlier on kind of maybe seeking other financial partners to finance building larger compressors, I mean, in this type of market, I mean just as the customer demand enough to rationalize using more debt than you have historically? And how comfortable are you with using more debt to build a higher horsepower business.

史蒂夫，你之前評論過可能會尋求其他金融合作夥伴來資助建造更大的壓縮機，我的意思是，在這種類型的市場中，我的意思是就像客戶需求足以合理化使用比以往更多的債務？您對使用更多債務來建立更高馬力的業務有多滿意。

Well, it's not going to be too hard to use more than we have more debt than we have traditionally because traditionally, it's been 0. And yes, we're -- as I mentioned, we're talking to others about additional liquidity and things like that. But the issue you get in, and we saw it moving on to the 1,500 horsepower. You in, say, medium horsepower, you run into equipment to run, brand new, maybe $250,000, $300,000. You move into the 1,500 horse realm, and you've got stuff that's $1.5 million to $2 million, you start moving in to 2,500 horsepower and you get $2.5 million to $3 million. So the magnitude of the expenditures grow, even though the number of equipment don't; so yes, we're going to have to -- and that's what we're doing, and Micah is leading the charge on that.

好吧，使用比傳統上更多的債務並不會太難，因為傳統上它一直是 0。是的，我們 - 正如我提到的那樣，我們正在與其他人討論額外的流動性和像這樣的東西。但是你遇到的問題，我們看到它轉向了 1,500 馬力。比如說，你的馬力中等，你遇到了要運行的設備，全新的，可能價值 250,000 美元，300,000 美元。你進入 1,500 匹馬領域，你得到了 150 萬到 200 萬美元的東西，你開始進入 2,500 馬力，你得到 250 萬到 300 萬美元。因此，儘管設備數量沒有增加，但支出的幅度卻在增加；所以是的，我們將不得不——這就是我們正在做的，彌迦正在帶頭這樣做。

We just -- we're going to have -- to have some other sources outside of our operating cash. Certainly, that's still going to be a stronger driver, but we're going to have to supplement just because, number one, you get the higher cost of the equipment and just have such demand, but our cash flow just can't take advantage of it right now.

我們只是 - 我們將擁有 - 在我們的運營現金之外還有一些其他來源。當然，這仍將是一個更強大的驅動力，但我們將不得不補充，因為第一，你獲得了更高的設備成本並且有這樣的需求，但我們的現金流無法利用現在。

Micah, you are going a little more on that?

Micah，你會在這方面做得更多嗎？

No, I think you hit it right on, Steve. It's something, as we've said numerous times, we've been very protective of the balance sheet, waiting for the right opportunity in this -- the market that we're seeing today with the wide gap between supply and demand, the rates we can secure with this new large horsepower additions are very accretive and something that we don't, it doesn't bother us to take on leverage in this kind of operating environment. It's just, the rates that you can get and the returns you can achieve on those investments is too good to pass up. So it's something we're working on diligently talking with our banks and others to make sure that we have the financing lined up so we can go execute on the opportunities available to us.

不，我認為你說得對，史蒂夫。正如我們多次說過的那樣，我們一直非常保護資產負債表，等待合適的機會 - 我們今天看到的市場供需之間存在巨大差距，利率我們可以確保通過這種新的大馬力增加是非常增值的，而我們沒有的東西，在這種操作環境中發揮槓桿作用並不會打擾我們。只是，您可以獲得的利率和您可以從這些投資中獲得的回報太好了，不容錯過。因此，我們正在努力與我們的銀行和其他人進行對話，以確保我們已經準備好融資，這樣我們就可以抓住我們可用的機會。

Tate, I will mention that we're keeping an eagle eye on the balance sheet. We don't go out there and get 5 to 6x EBITDA leverage and stuff like that. So we're going to keep it in the reasonable realm while still being able to grow the fleet pretty vigorously.

泰特，我會提到我們正在密切關注資產負債表。我們不會去那裡獲得 5 到 6 倍的 EBITDA 槓桿和類似的東西。所以我們將把它保持在合理的範圍內，同時仍然能夠非常活躍地發展艦隊。

And then related to the large -- the 2,500 horsepower, is it not an element of the industry for customers to do installment payments or any upfront payments as they go to the larger horsepower? Or do you have to finance the whole construction until the rental -- receiving rental...

然後與大 - 2,500 馬力相關，客戶在獲得更大馬力時進行分期付款或任何預付款，這不是行業的一個要素嗎？或者你是否必須為整個建設提供資金，直到租金——收到租金……

Well, yes. On rental, it's all on us. Now if we're building this up for somebody, certainly, we get upfront payments, [partial payments] and things like that. But that's not a capital expense. That's just build and sell the margin. So we're not too worried about that stuff right there that will impact our capital profile too much. It's a real equipment that we've got to put the whole bill and then we turn around and run it for that return.

嗯，是。關於出租，一切由我們承擔。現在，如果我們正在為某人建立這個，當然，我們會得到預付款、[部分付款] 和類似的東西。但這不是資本支出。那隻是建立和出售保證金。因此，我們並不太擔心那些會對我們的資本狀況產生太大影響的東西。這是一個真正的設備，我們必須把整個賬單付清，然後我們轉身運行它以獲得回報。

At this time, there appear to be no further questions. I will now turn the call over to Steve for any closing remarks.

此時，似乎沒有進一步的問題。我現在將把電話轉給史蒂夫，聽取任何結束語。

Okay. I appreciate everybody calling in. Certainly want to again thank John for his contribution to the company and continued insights and appreciate Jim and Micah join the call and certainly all the NGS employees. We've got a lot of opportunity in front of us. So thanks, everybody, and we will see you next quarter. Thank you.

好的。我感謝大家的來電。當然要再次感謝約翰對公司的貢獻和持續的見解，感謝吉姆和邁卡加入電話會議，當然還有所有 NGS 員工。我們面前有很多機會。所以謝謝大家，我們下個季度見。謝謝。

This does conclude the Natural Gas Services Group, Inc. Third Quarter 2022 Conference Call. We thank you for your participation. You may now disconnect.

這確實結束了 Natural Gas Services Group, Inc. 2022 年第三季度電話會議。我們感謝您的參與。您現在可以斷開連接。