Natural Gas Services Group Inc (NGS) 2023 Q1 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Natural Gas Services Group, Incorporated Quarter 1 2023 Earnings Call. (Operator Instructions)

早上好，女士們、先生們，歡迎參加天然氣服務集團公司 2023 年第一季度財報電話會議。 （操作員說明）

And I would now like to turn the call over to Ms. Anna Delgado. Please begin.

我現在想把電話轉給安娜·德爾加多女士。請開始。

Thank you, Luke. Hello, everyone, and thank you for joining us to discuss our first quarter 2023 financial results. Today's call is being webcast on our Investor Relations website, ngsgi.com. Also available on the site is our earnings press release, which was issued Monday, May 15.

謝謝你，盧克。大家好，感謝您加入我們討論我們 2023 年第一季度的財務業績。今天的電話會議將在我們的投資者關係網站 ngsgi.com 上進行網絡直播。該網站還提供我們於 5 月 15 日星期一發布的收益新聞稿。

Before I hand the call over, I'd like to remind everyone that, during today's call, including Q&A, we may make forward-looking statements regarding expectations of the company. These forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied on this call. These risks are detailed in our most recent Annual Report on Form 10-K, and as such, may be amended or supplemented by subsequent quarterly reports filed with the Securities and Exchange Commission. The statements made during this call are based upon information known to Natural Gas Services Group as of the date and time of this call, and NGS assumes no obligation to update the information presented in today's call.

在我轉交電話之前，我想提醒大家，在今天的電話會議中，包括問答環節，我們可能會就公司的期望做出前瞻性陳述。這些前瞻性陳述涉及已知和未知的風險和不確定性，可能導致實際結果與本次電話會議中明示或暗示的結果存在重大差異。這些風險在我們最新的 10-K 表格年度報告中進行了詳細說明，因此可能會通過隨後向美國證券交易委員會提交的季度報告進行修改或補充。本次電話會議期間發表的聲明基於天然氣服務集團截至本次電話會議日期和時間已知的信息，NGS 不承擔更新今天電話會議中提供的信息的義務。

With that, I'd like to turn the call over to Steve Taylor, our Chairman of the Board, Interim CEO and President. Steve?

接下來，我想將電話轉給我們的董事會主席、臨時首席執行官兼總裁史蒂夫·泰勒 (Steve Taylor)。史蒂夫？

Thank you, Anna and Luke, and good morning, everyone. Welcome to our first quarter 2023 earnings conference call. Thank you for joining us this morning. Before taking your questions, I will highlight our financial and operational results for the first quarter that were detailed in our earnings press release yesterday, discuss the current business environment and provide comments on other aspects of our business.

謝謝安娜和盧克，大家早上好。歡迎參加我們的 2023 年第一季度收益電話會議。感謝您今天早上加入我們。在回答大家的問題之前，我將重點介紹我們昨天的收益新聞稿中詳細介紹的第一季度的財務和運營業績，討論當前的商業環境並對我們業務的其他方面提供評論。

The quarter marked the ninth quarter in a row of rental revenue growth. For the current sequential quarters, rental revenue alone grew almost 11%, while higher rental and sales revenues grew total revenues by 18%. Adjusted rental gross margin slipped 2% due to higher field expenses and a onetime noncash adjustment, but our total adjusted gross margin increased 4% sequentially. SG&A declined 4% and our bottom line net income had a positive swing of over $1 million from last quarter as we posted positive GAAP earnings.

該季度標誌著租金收入連續第九個季度增長。在當前連續幾個季度中，僅租金收入就增長了近 11%，而租金和銷售收入的增加使總收入增長了 18%。由於現場費用增加和一次性非現金調整，調整後的租金毛利率下滑了 2%，但調整後的總毛利率環比增長了 4%。 SG&A 下降 4%，由於我們公佈了積極的 GAAP 收益，我們的底線淨收入比上季度增加了超過 100 萬美元。

As mentioned in our last earnings call, NGS closed on a substantial line of credit from our bank at the end of February. This was to fund the additional high horsepower equipment we have already contracted as we continue to execute on our growth plan. NGS had a solid and growing quarter. We have added more committed contracts over the past couple of months, our utilization continues to increase and pre-contracted activity remains at a high level for the rest of the year.

正如我們在上次財報電話會議中提到的，NGS 在 2 月底從我們銀行獲得了大量信貸額度。這是為了資助我們在繼續執行增長計劃時已經簽訂的額外高馬力設備。 NGS 的季度表現穩健且不斷增長。在過去的幾個月裡，我們增加了更多的承諾合同，我們的利用率持續增加，預簽約活動在今年剩餘時間內保持在高水平。

With that said, let's look at the results from the first quarter of 2023. Total revenue for the 3 months ended March 31, 2023, increased to $26.6 million from $22.5 million for the 3 months ended December 31, 2023, and or an 18% increase in sequential quarters. The total revenues increased year-over-year from $20.3 million for the 3 months ended March 31, 2022, for a 31% increase.

話雖如此，讓我們看看 2023 年第一季度的業績。截至 2023 年 3 月 31 日止 3 個月的總收入從截至 2023 年 12 月 31 日止 3 個月的 2,250 萬美元增加到 2,660 萬美元，增長了 18%環比增長。截至 2022 年 3 月 31 日的三個月，總收入同比增長 31%，為 2030 萬美元。

Rental revenue increased 11% from $20.6 million in the 3 months ending December 31, 2022, compared to $22.7 million in the 3 months ending March 31, 2023. Rental revenue increased to $22.7 million for the first quarter of 2023 from $17.1 million in the first quarter of 2022 for a 33% gain over the past year. Both comparative period increases were primarily the result of the increased deployment of higher horsepower rental units, higher overall utilization across the fleet and rental price increases throughout the year. Rental revenues have strengthened and are now running approximately 85% to 90% of our total revenues in all comparative periods.

截至 2022 年 12 月 31 日止三個月的租金收入為 2,060 萬美元，增長了 11%，而截至 2023 年 3 月 31 日止的三個月為 2,270 萬美元。2023 年第一季度的租金收入從第一季度的 1,710 萬美元增至 2,270 萬美元。 2022 年第四季度較去年增長 33%。兩次比較期間的增長主要是由於增加了更高馬力的租賃單位的部署、整個車隊的整體利用率提高以及全年租賃價格上漲的結果。租金收入有所增強，目前在所有比較期間約占我們總收入的 85% 至 90%。

As of March 31, 2023, we had 1,245 utilized rented units, representing over 335,000 horsepower compared to 1,276 rented units, representing almost 307,000 horsepower as of March 31, 2022. We ended the first quarter with 66.4% utilization on a per unit basis and 77.4% utilization on a horsepower basis. These are both improvements from the prior quarter. Notably, approximately 96% of our higher horsepower fleet equipment is utilized and drawing rent, while 100% is contracted. The 4% difference represents units waiting to be installed.

截至 2023 年 3 月 31 日，我們擁有 1,245 個已使用的租賃單位，代表超過 335,000 馬力，而截至 2022 年 3 月 31 日，我們有 1,276 個租賃單位，代表近 307,000 馬力。第一季度末，我們的單位利用率為 66.4%，以馬力計算，利用率為 77.4%。這些都是較上一季度的改進。值得注意的是，我們約 96% 的大馬力車隊設備已得到利用並收取租金，而 100% 已簽訂合同。 4% 的差異代表等待安裝的單元。

Utilized horsepower increased 9% in the first quarter when compared to the year ago period, while revenue per horsepower increased 21% when comparing the same periods, demonstrating the impact of the growth in higher horsepower units and the price increases we have been able to implement over the past year. Our total fleet as of March 31, 2023, consist of 1,875 units with over 433,000 horsepower. Our large horsepower assets comprise approximately 15% of our current utilized fleet by unit count, but these units provide approximately half of our current rental revenue stream.

與去年同期相比，第一季度的使用馬力增加了 9%，而與去年同期相比，每馬力的收入增加了 21%，這證明了更高馬力單位增長和我們能夠實施的價格上漲的影響在過去的一年。截至 2023 年 3 月 31 日，我們的車隊總數包括 1,875 輛，功率超過 433,000 馬力。按單位數量計算，我們的大馬力資產約占我們當前使用的機隊的 15%，但這些單位提供了我們當前租賃收入流的大約一半。

Sales revenues for the sequential quarters increased from $1.3 million in the fourth quarter of 2023 to $3 million in Q1 2023 -- up from Q4 2022, I'm sorry, to the current quarter. This large increase in sequential revenues was primarily from idle equipment sales from the rental fleet and a doubling of parts revenue from the sale of proprietary pressure control systems. On a year-over-year quarterly basis, sales revenue increased slightly from $2.9 million to $3 million.

抱歉，連續幾個季度的銷售收入從 2023 年第四季度的 130 萬美元增加到 2023 年第一季度的 300 萬美元，從 2022 年第四季度增加到本季度。連續收入的大幅增長主要來自租賃車隊的閒置設備銷售以及專有壓力控制系統銷售的零部件收入翻倍。按季度計算，銷售收入從 290 萬美元小幅增長至 300 萬美元。

As noted in our release this morning, adjusted gross rental margin slightly decreased sequentially from $11.3 million or 55% of revenue in the fourth quarter '22 to $11.1 million or 49% of revenue in the first quarter of 2023. Half of this quarterly decline is due to a noncash reclassification of inventory items from the balance sheet to the income statement, while the balance of that expenses from higher R&M and parts costs.

正如我們今天上午發布的新聞稿中所指出的，調整後的毛租金利潤率環比略有下降，從 2022 年第四季度的 1130 萬美元（佔收入的 55%）降至 2023 年第一季度的 1110 萬美元（佔收入的 49%）。本季度下降的一半是由於庫存項目從資產負債表到損益表的非現金重新分類，而該費用的餘額則來自更高的 R&M 和零件成本。

On a year-over-year basis, our adjusted rental gross margin of $11.1 million in the first quarter of 2023 increased approximately 40% when compared to $7.9 million in the same period in 2022. Our SG&A expenses declined $200,000 in sequential quarters and totaled 17% of revenue this quarter. Sequentially, we reported an operating loss of $314,000 in the fourth quarter of 2022 compared to positive operating income of $402,000 in the first quarter this year. This improvement was primarily due to higher total gross margin, lower SG&A expense and $280,000 less in equipment retirement expense. This compares to operating income of $382,000 for the 3 months ended March 31, 2022.

與去年同期相比，我們 2023 年第一季度調整後的租金毛利率為 1,110 萬美元，與 2022 年同期的 790 萬美元相比增長了約 40%。我們的 SG&A 費用連續幾個季度下降了 20 萬美元，總計 17佔本季度收入的百分比。因此，我們報告 2022 年第四季度的運營虧損為 314,000 美元，而今年第一季度的運營收入為 402,000 美元。這一改善主要是由於總毛利率提高、SG&A 費用降低以及設備報廢費用減少 280,000 美元。相比之下，截至 2022 年 3 月 31 日的三個月營業收入為 382,​​000 美元。

Our net income in the first quarter of this year was $370,000 or $0.03 per basic and diluted share. This compares to a net loss of $756,000 in the fourth quarter of 2022 or a $0.06 loss per diluted share. In the year ago quarter, our net income was $337,000. Adjusted EBITDA was flat at $7.7 million for the sequential quarters, but increased 15% from $6.8 million from the same period in 2022. Our cash balance as of March 31, 2023, was approximately $7.4 million, with $61 million outstanding under our revolving credit facility.

今年第一季度我們的淨利潤為 370,000 美元，即每股基本股和稀釋股 0.03 美元。相比之下，2022 年第四季度的淨虧損為 756,000 美元，即稀釋後每股虧損 0.06 美元。去年同期，我們的淨利潤為 337,000 美元。調整後的 EBITDA 連續幾個季度持平於 770 萬美元，但較 2022 年同期的 680 萬美元增長了 15%。截至 2023 年 3 月 31 日，我們的現金餘額約為 740 萬美元，循環信貸額度下的未償餘額為 6100 萬美元。

In the first quarter this year, we realized cash flow from operations of $18.2 million compared to $5 million in the same quarter last year. We used $47.8 million for capital expenditures, $47 million of which was expended on our rental fleet in this current quarter.

今年第一季度，我們實現的運營現金流為 1820 萬美元，而去年同期為 500 萬美元。我們使用了 4780 萬美元的資本支出，其中 4700 萬美元用於本季度我們的租賃車隊。

The compression market remains very strong, and we continue to see demand for new compression units, especially in the high horsepower range. Last quarter, I mentioned that if opportunities present themselves, we are likely to expand our fleet further to meet demand as long as such expansion meets our return expectations, contract requirements and our cash availability. That said, we, in fact, secured additional contracts this quarter worth approximately $20 million to $25 million.

壓縮市場仍然非常強勁，我們繼續看到對新壓縮裝置的需求，特別是在高馬力範圍內。上個季度，我提到，如果機會出現，我們可能會進一步擴大我們的機隊以滿足需求，只要這種擴張滿足我們的回報預期、合同要求和我們的現金可用性。也就是說，事實上，我們本季度獲得了價值約 2000 萬至 2500 萬美元的額外合同。

We also accelerated our build schedule, which brought another similar amount into this current year. This resulted in a large increase in our 2023 committed capital budget from the $95 million originally announced to $150 million currently. This is a large increase, but this projection is supported by present build schedules so that we will add approximately $50 million for each of the next 2 quarters in equipment assets. I'll caution everyone that this may fluctuate to the downside due to supply chain constraints, but this is our best present estimate. Even with this, we are still seeing added demand that we cannot fulfill this year.

我們還加快了構建進度，今年又增加了類似的數量。這導致我們的 2023 年承諾資本預算從最初宣布的 9500 萬美元大幅增加到目前的 1.5 億美元。這是一個很大的增長，但這一預測得到了當前建設計劃的支持，因此我們將在接下來的兩個季度中每個季度增加約 5000 萬美元的設備資產。我要提醒大家，由於供應鏈的限制，這可能會向下波動，但這是我們目前最好的估計。儘管如此，我們仍然看到今年無法滿足的額外需求。

I also want to take time to introduce 2 new members that we have recently appointed to our Board, Justin Jacobs and Don Tringali. Justin is the Management Committee Director of Mill Road Capital Management, one of our largest shareholders, and Don is the Chief Executive Officer of Augusta Advisory Group. Both have extensive experience in private and public boards from a financial and governance perspective. A full description of their background is in our recently published proxy. We welcome them and look forward to their contributions to our Board.

我還想花時間介紹一下我們最近任命為董事會的兩位新成員：賈斯汀·雅各布斯 (Justin Jacobs) 和唐·特林加利 (Don Tringali)。賈斯汀 (Justin) 是我們最大股東之一米爾路資本管理公司 (Mill Road Capital Management) 的管理委員會主任，唐 (Don) 是奧古斯塔諮詢集團 (Augusta Advisory Group) 的首席執行官。從財務和治理的角度來看，兩人都在私人和公共董事會中擁有豐富的經驗。他們的背景的完整描述在我們最近發布的代理書中。我們歡迎他們並期待他們為我們的董事會做出貢獻。

As I've just discussed, the demand for our equipment and services continues unabated. Based on our current build orders and already executed contracts, we are essentially sold out this year, and we anticipate this continuing into 2024. It's too early to tell if next year continues at a faster pace as this one, but barring an extraordinary macro event, we anticipate that will be another robust growth year.

正如我剛才所討論的，對我們的設備和服務的需求有增無減。根據我們當前的建造訂單和已執行的合同，我們今年基本上已售罄，我們預計這種情況會持續到 2024 年。現在判斷明年是否會像今年一樣以更快的速度發展還為時過早，但除非發生特殊的宏觀事件，我們預計這將是又一個強勁增長的一年。

Obviously, there can be headwinds, but consensus projected prices for WTI crude from Bloomberg anticipate crude oil in the mid-$80 per barrel range through 2025, another 2-plus years. This is supported by OPEC's recent decision to cut production, the potential of refill its strategic petroleum reserve and the continuing natural decline in production. Presently, approximately 75% of our utilized horsepower is employed in the production of crude oil. So our overall activity is now driven by crude oil pricing and production dynamics.

顯然，可能會遇到阻力，但彭博社對 WTI 原油的一致預測價格預計到 2025 年（又是兩年多），原油價格將在每桶 80 美元中間。歐佩克最近的減產決定、補充其戰略石油儲備的潛力以及產量持續自然下降都支持了這一點。目前，我們所用馬力的大約 75% 用於原油生產。因此，我們的整體活動現在是由原油定價和生產動態驅動的。

As far as natural gas, the picture is murkier and not as rosy. Natural gas prices have been extremely volatile over the past few months. Spot prices exceeded $9 per MMBtu in August of 2022, and they are currently at $2.24 at the end of April 2023. That's a 75% decline in price in 8 months. Rigs drilling for natural gas hit their lowest point in 7 years last week. The spike in prices last year was caused by some short-term worry about natural gas supply, but that quickly abated. We are now, unfortunately, stuck in the same natural gas price scenario that we have seen play out over the last decade.

就天然氣而言，情況更加黯淡，並不那麼樂觀。過去幾個月，天然氣價格波動極大。 2022 年 8 月，現貨價格超過每 MMBtu 9 美元，截至 2023 年 4 月，目前價格為 2.24 美元。8 個月內價格下跌了 75%。上週天然氣鑽機數量創下七年來的最低點。去年價格飆升是由於對天然氣供應的一些短期擔憂造成的，但這種擔憂很快就減弱了。不幸的是，我們現在陷入了與過去十年相同的天然氣價格情景。

I don't expect a whole lot of support to our business from natural gas prices and activity, but fortunately, only 25% of our utilized horsepower is employed in natural gas projects. However, if we do get any pricing uplift, it will add to the activity we already see. There are a lot of moving parts in the business right now, but I think we're connecting all the dots, and we look forward to continued growth. Thanks for your time, and I look forward to your questions.

我預計天然氣價格和活動不會為我們的業務提供大量支持，但幸運的是，我們所用馬力中只有 25% 用於天然氣項目。然而，如果我們確實獲得任何價格上漲，它將增加我們已經看到的活動。目前，該業務中有很多變化的部分，但我認為我們正在將所有點連接起來，我們期待著持續增長。感謝您抽出寶貴時間，期待您的提問。

Luke?

盧克？

Hello? Ladies and gentlemen, at this time, we will conduct a question-and-answer session. (Operator Instructions) Our first question comes from Rob Brown with Lake Street Capital. Rob, go ahead, please.

你好？女士們、先生們，這個時候我們將進行問答環節。 （操作員說明）我們的第一個問題來自 Lake Street Capital 的 Rob Brown。羅布，請繼續。

Congrats on a good quarter.

祝賀季度表現良好。

Hi, Rob. Yes, thanks.

嗨，羅布。對了謝謝。

Just wanted to get a sense of kind of demand environment for the high horsepower. It's been strong. How are you kind of seeing it with the current commodity prices? Are you seeing more interest in activity there?

只是想了解一下高馬力的需求環境。一直很強勁。您對目前的商品價格有何看法？您是否發現人們對那裡的活動更感興趣？

Well, the -- yes, the current commodity price, oil commodity price has weakened just a little bit. But we're not -- if we didn't know that, we wouldn't have even known that there's a $70, low-$80 gas or oil price out there. Demand has continued, as I mentioned, essentially unabated. Just mentioned the additional contracts we've gotten. We've tried to speed up some bills to get the stuff out quicker. And we're still seeing demand and it's actually demand that we can't fill this year due to schedules and cash commitments. So it's -- presently, it's just continuing nonstop.

嗯，是的，目前的商品價格，石油商品價格已經減弱了一點。但我們不是——如果我們不知道這一點，我們甚至不會知道有 70 美元、低至 80 美元的汽油或石油價格。正如我所提到的，需求仍在繼續，基本上沒有減弱。剛才提到了我們獲得的額外合同。我們試圖加快一些賬單的速度，以便更快地把東西拿出來。我們仍然看到需求，但實際上由於日程安排和現金承諾，我們今年無法滿足這些需求。所以目前，它正在不間斷地繼續。

Now, I think -- and we anticipate that continuing on. And if you're starting to look into '24, what you're trying to do now, it's a little tougher because operators aren't really publicizing too much of their 2024 schedules, but just based on continued demand, we're seeing requests for equipment and things like that, '24 looks like it's going to be a -- have a good start. But if everything else continue with the oil price hanging in, and I don't think it has to go up a whole lot more, I mean, the demand is there even at the current price, which is the price that the operators can make money at. We anticipate demand continuing.

現在，我認為——我們預計這種情況會繼續下去。如果你開始研究 '24，你現在想做的事情，那就有點困難了，因為運營商並沒有真正公佈太多他們的 2024 年時間表，但只是基於持續的需求，我們看到對設備和類似物品的要求，'24 看起來這將是一個良好的開端。但如果其他一切都繼續下去，油價保持不變，而且我認為油價不必上漲很多，我的意思是，即使按照目前的價格（運營商可以製定的價格），需求仍然存在錢在.我們預計需求將會持續。

Our challenge is now execution. As I mentioned, you're sold out and getting it built, getting it out on time, supply chain continues to be somewhat of an issue, not a killer, but as long as all that stuff stays together, we see that rest of the year and into '24 being good. So demand is there. It's just now, I think, among -- with us and in the industry, generally, is just how to fulfill all of it, and I don't think all the 2023 demand will get fulfilled. It will slide over into '24.

我們現在的挑戰是執行。正如我所提到的，你已經售完並建造它，按時交付，供應鏈仍然是一個問題，而不是殺手，但只要所有這些東西保持在一起，我們就會看到其餘的今年和進入'24都很好。所以需求是存在的。我認為，現在我們和整個行業的共同問題就是如何滿足所有這些需求，我認為 2023 年的所有需求都不會得到滿足。它將滑入'24。

Yes. Okay. That's good. And then maybe just review the capital commitment again on kind of what you've sold? And is that capital commitment sort of to fulfill contracts that you have and that's committed at this point? And just provide us -- remind us what it is.

是的。好的。那挺好的。然後也許只是再次審查您所出售的產品的資本承諾？該資本承諾是否是為了履行您目前已承諾的合同？只需向我們提供——提醒我們它是什麼。

Yes. It's essentially the same stuff. The contracts we talked about last quarter were largely precontract, and I say largely, I think there's 90%, 95% precontracted. And the ones we've added this quarter are contracts. So they're not speculative builds or anticipated work, they're signed contracts, and that's why we would hadn't added them and increased the capital budget. It's equipment we've got to build now. So the commitment level still stays at that 90% range. We've got -- the 10% difference is some equipment we've got in there towards the end of the year and into 2014 that have not been committed at this point that are being built, but we fully anticipate that equipment over the next 6 months being rented. So the bottom line is, we're still running a 90% commitment rate on the stuff we're building.

是的。本質上是一樣的東西。我們上個季度談到的合同大部分是預先簽訂的合同，我認為大部分是預先簽訂的合同，我認為有 90%、95%。我們本季度添加的內容是合同。因此，它們不是投機性的構建或預期的工作，它們是簽署的合同，這就是為什麼我們不會添加它們並增加資本預算。這是我們現在必須建造的設備。因此承諾水平仍保持在 90% 的範圍內。我們已經得到了——10%的差異是我們在今年年底和2014年之前得到的一些設備，這些設備目前尚未投入使用，但我們完全預計這些設備會在接下來的時間裡投入使用。租期6個月。所以底線是，我們仍然對我們正在構建的東西運行 90% 的承諾率。

Okay. Okay. And I may have missed it when you spoke with the capital -- the CapEx expectations this year, and I guess, the way you're talking, would that be similar next year? What's the CapEx expectations at this point?

好的。好的。當你與資本交談時，我可能錯過了今年的資本支出預期，我想，按照你說話的方式，明年會類似嗎？目前的資本支出預期是多少？

I don't want to even project 2014 -- '24 yet. I think last call, I was asked that question, I said, well, just based on the difference in what we anticipate the capital budget being and the bank line commitment we had, there's about a $55 million difference. I said, well, if everything stays static, it'd probably be $55 million we spend next year just to finish out the bank commitment. But now the budget this year has grown to where there's very little left in the bank commitment if we execute on everything we've gotten and the committed stuff.

我什至還不想預測 2014 年——'24。我想上次電話會議時，有人問我這個問題，我說，好吧，僅根據我們預期的資本預算和我們的銀行額度承諾的差異，大約有 5500 萬美元的差異。我說，好吧，如果一切保持不變，明年我們可能會花費 5500 萬美元來完成銀行的承諾。但現在，如果我們執行我們已經得到的一切和承諾的東西，今年的預算已經增長到銀行承諾所剩無幾的水平。

So it's very hard to say what 2024 is going to be right now. Like I mention the operators haven't really put out anything publicly. I mean, anything we hear is pretty much speculation and advance projections from operators. And those are hard to, I guess, commit to right now from a capital budget standpoint. So we're trying to get a better handle on it. But 2024, like I say, I think it's going to be a robust growing year whether we spend $150 million, I -- that's a lot of money for 2 years in a row, and I would be hesitant to say that. But give me another quarter or 2, and we'll have a lot better handle. But it's going to be a decent year. I just don't know if it's going to be -- as I mentioned in the remarks, I don't know if it's going to be as fast paced as this year because this is pretty extraordinary.

所以現在很難說 2024 年會怎樣。就像我提到的，運營商還沒有真正公開發布任何內容。我的意思是，我們聽到的任何消息幾乎都是運營商的猜測和預先預測。我想，從資本預算的角度來看，現在很難承諾這些。所以我們正在努力更好地處理它。但是，正如我所說，2024 年，我認為無論我們花費 1.5 億美元，這都將是強勁增長的一年，這對於連續兩年來說都是一大筆錢，而且我會猶豫是否要這麼說。但再給我一兩個季度，我們就會有更好的處理。但這將是不錯的一年。我只是不知道它是否會——正如我在評論中提到的那樣，我不知道它是否會像今年一樣快，因為這非常不尋常。

Our next question comes from Tate Sullivan with Maxim.

我們的下一個問題來自 Tate Sullivan 和 Maxim。

It's Alejandro Nuno on for Tate Sullivan. Congratulations on the quarter.

亞歷杭德羅·努諾 (Alejandro Nuno) 替補泰特·沙利文 (Tate Sullivan)。祝賀本季度。

Who is this?

這是誰？

It's Alejandro Nuno on for Tate Sullivan.

亞歷杭德羅·努諾 (Alejandro Nuno) 替補泰特·沙利文 (Tate Sullivan)。

Okay. Alejandro, how are you?

好的。亞歷杭德羅，你好嗎？

Good. Congrats on the quarter. Just kind of following up on the CapEx comments. How much of the increased CapEx guidance is for the 2,500 horsepower market? I think last quarter, you talked about it being about 1/3 or half of the $95 million commitment. So I wanted to see if we're increasing it now that we've increased the CapEx guidance as well.

好的。恭喜本季度。只是跟進資本支出評論。增加的資本支出指導中有多少是針對 2,500 馬力市場的？我想上個季度，您談到這大約是 9500 萬美元承諾的 1/3 或一半。所以我想看看我們是否會增加它，因為我們也增加了資本支出指導。

No. Actually, the majority of it is 1,500 horsepower units. So we didn't change the 2,500 horsepower number. It's just primarily we've had a lot of interest in the 1,500 horsepower equipment.

不是，實際上大部分是1500馬力單位。所以我們沒有改變2500馬力的數字。主要是我們對 1,500 馬力的設備很感興趣。

Great. And then again, just kind of following up on the price increases. Should we see continuous price increases throughout 2023? Or do you think the -- can you kind of just give us a little more of a rundown on what we should be looking at as you see price increases throughout the rest of the year?

偉大的。話又說回來，只是跟進價格上漲。 2023 年我們是否會看到價格持續上漲？或者您認為，當您看到今年剩餘時間的價格上漲時，您能否給我們更多一點關於我們應該關注的內容？

Well, from a new equipment standpoint, we may primarily because engines are continuing to get more expensive, compressors are more expensive, building is more expensive. So from a new build cost of goods sort of thing, we're still seeing increases. And if they continue like they are, we're going to have to increase the rental rate on new equipment going forward. We'll probably look at it, we constantly look at it, but we'll make an assessment in the next quarter or so and just see what we see from an inflationary standpoint there.

好吧，從新設備的角度來看，我們可能主要是因為發動機繼續變得更加昂貴，壓縮機更加昂貴，建築更加昂貴。因此，從新建商品成本來看，我們仍然看到增長。如果他們繼續這樣下去，我們將不得不提高新設備的租金。我們可能會關注它，我們會不斷地關注它，但我們將在下個季度左右進行評估，並從通貨膨脹的角度來看我們所看到的情況。

From the existing fleet, it's more of an operating expense question. And the inflationary increases from the operating standpoint, being labor, lubricants and stuff like that, have -- they're still going up a little bit, they mitigated somewhat recently, but we're keeping an eye on it, and we'll just have to see what, again, make an assessment on the next quarter as to what that pricing is looking like. But we're seeing a little slowdown in some stuff, but it just -- it continues on. It's not as extreme as it was last year, but -- in the earlier part of this year, but we're still going to watch it a bit.

從現有機隊來看，這更多的是運營費用問題。從運營的角度來看，通貨膨脹的增加，包括勞動力、潤滑油和類似的東西，仍然在上漲一點，最近有所緩解，但我們正在密切關注，我們會只需再次看看對下個季度的定價進行評估即可。但我們看到一些事情略有放緩，但它只是——它仍在繼續。它不像去年那麼極端，但是——在今年早些時候，但我們仍然會稍微觀察一下。

I think there's still price increases going on in the industry, as we speak. And I think that's more so a catch-up to what we had already done versus maybe doing enough last year. So there's still some price increasing going on and still some costs going up. But as far as we go, we're just going to look at that very carefully probably in the next quarter or so and determine if we need to do it. There's getting to be some pricing fatigue from customers, which is -- we know what they're talking about because we're getting a little over, too, from our suppliers, but we just got to make an overall assessment and see what and where it puts us.

我認為，正如我們所說，行業內的價格仍在上漲。我認為這更多的是對我們已經做的事情的追趕，而不是去年做得足夠多的事情。因此，價格仍在上漲，成本仍在上漲。但就我們而言，我們可能會在下個季度左右非常仔細地考慮這一點，並確定是否需要這樣做。客戶會出現一些定價疲勞，我們知道他們在說什麼，因為我們的供應商也有點過分了，但我們只需要進行總體評估，看看有什麼和它把我們放在哪裡。

Thank you very much. (Operator Instructions) We have Hale Hoak with Hoak & Co.

非常感謝。 （操作員說明）我們有 Hale Hoak 和 Hoak & Co。

Steve, it's Hale. Congrats on a good quarter. Just to follow up a little bit on the CapEx questions and asking a little differently. If no new equipment orders came in and you just fulfilled what you're currently obligated to fulfill, when would all of those units be in service? Is it 6 months from now or 12 months from now or how far out until all of them are in place?

史蒂夫，我是黑爾。祝賀季度表現良好。只是為了跟進一些資本支出問題並提出一些不同的問題。如果沒有新設備訂單進來，而您剛剛完成了當前有義務完成的任務，那麼所有這些設備何時投入使用？是從現在起 6 個月還是從現在起 12 個月，還是距離所有這些都到位還需要多長時間？

Well, the -- yes, look at the build schedule, of course, it's the buildup about the third quarter then decline, and this is from the standpoint of the build schedule being, okay, this is completed equipment and equipment we can start to place on contract and rental. So you get the typical sign wave. So all of the equipment would be -- and from a time delay standpoint, let's just say, equipment that gets built and we receive it in Q2 will be installed and start generating revenue sometime in Q3. So you got about a lag like that. So all the equipment that we're building this year, I will anticipate being installed and all deploying 100% rent by the end of Q1 '24.

嗯，是的，看看建設時間表，當然，這是第三季度的建設然後下降，這是從建設時間表的角度來看，好吧，這是我們可以開始的已完成的設備和設備簽訂合同和租賃。這樣你就得到了典型的符號波。因此，從時間延遲的角度來看，所有設備都將是，我們在第二季度收到的設備將被安裝並在第三季度的某個時候開始產生收入。所以你就有了這樣的滯後。因此，我們今年建造的所有設備，我預計將在 24 年第一季度末安裝並全部部署 100% 租金。

Okay. Great. I just was thinking about you're going to have a -- you had a nice quarter now, but you're going to have a quarter with a real step function change in earnings power and, I guess, later this year or early next year and was just trying to get my hands around the timing of that. But congrats and also congrats on added some guys to your Board. I think it looks like you'll get good perspective, and we'll talk to you soon.

好的。偉大的。我只是在想你將會有一個——你現在有一個不錯的季度，但是你將有一個季度的盈利能力發生真正的階躍函數變化，我想，今年晚些時候或明年初年，我只是想了解一下具體的時間。但恭喜你，也恭喜你的董事會增加了一些人。我認為您將會獲得良好的視角，我們很快就會與您交談。

Okay. Yes, appreciate the call.

好的。是的，感謝您的來電。

Our next question -- our last question comes from Kyle Krueger with Apollo Capital.

我們的下一個問題——最後一個問題來自阿波羅資本的凱爾克魯格。

Steve, a couple of questions for you. Fantastic increase in revenues during the quarter, year-over-year operating income was basically flat, would have expected significantly more operating leverage than that with that dramatic of a revenue increase, and I see some couple of the onetime factors. But is that revenue increase going to lead to significant profit prosperity going forward? And if so, what's the timing associated with that? When will we start to see the earnings leverage come through?

史蒂夫，有幾個問題要問你。本季度收入大幅增長，同比營業收入基本持平，預計營業槓桿將顯著高於收入大幅增長的情況，而且我看到了一些一次性因素。但收入的增加會帶來未來利潤的顯著繁榮嗎？如果是這樣，相關的時間是什麼？我們什麼時候才能開始看到盈利槓桿發揮作用？

Well, I think just like talking to Hale there a second ago, we'll see the majority of it. Q1 was the beginning of the kind of the CapEx build. So as I mentioned, we're going to start getting the majority of the equipment in Q2 and Q3. So the second half is going to look a lot different than the first half of the year when we're just starting out. So we're going to be getting the equipment, getting installed, getting the rent starts and things like that. So I think you'll start to see some real improvements all the way up and down the income statement and start in the second half. And it will just build. We'll have -- I think you'll see a Q3, Q4 and Q1 increase pretty consistently going that way.

好吧，我想就像剛才和黑爾談話一樣，我們會看到其中的大部分內容。第一季度是資本支出構建的開始。正如我所提到的，我們將在第二季度和第三季度開始獲得大部分設備。因此，下半年看起來將與我們剛開始時的上半年有很大不同。因此，我們將獲得設備、安裝、開始租金等等。因此，我認為從下半年開始，您將開始在損益表中看到一些真正的改善。它只會建造。我想你會看到第三季度、第四季度和第一季度的增長相當一致。

Yes. Yes. Any idea that you could give us as to what the expected incremental operating margin associated with a dollar revenue increase could be? I mean, I would imagine it would be quite substantial. I mean 20%, 30% that will start to see flow through off of that dramatic ramp in revenue?

是的。是的。您能告訴我們與美元收入增加相關的預期增量營業利潤是多少嗎？我的意思是，我想這將是相當可觀的。我的意思是，20%、30% 的人將開始看到收入大幅增長帶來的流量？

Yes, the revenues is -- the increase that we're going to see, say, the next year, next 4 quarters or so, it'll be (inaudible). I would guess for every (inaudible) dollar revenue we see go up, we're going to see a commensurate 20% to 30% increase in -- additional in operating income. So I don't think you're too far off of that because we're going to start seeing pretty substantial increases in a lot of stuff, revenue. This is new equipment going out and this new equipment is carrying higher prices in some of the existing equipment out there. And so there's a lot of levers in the income statement that will start to be pulled as we go through, our SG&A is going to get better or predicted that. So we're going to have a lot of tailwinds going forward. So yes, I don't think you're too far off on your operating leverage, you think?

是的，收入是——我們將看到的增長，比如說，明年，接下來的 4 個季度左右，它將是（聽不清）。我猜想，我們看到的每（聽不清）美元收入的增長，我們都會看到營業收入相應增加 20% 到 30%。所以我認為你離這個目標不會太遠，因為我們將開始看到很多東西、收入的大幅增長。這是即將推出的新設備，並且該新設備的價格比現有的一些設備更高。因此，當我們經歷時，損益表中的很多槓桿將開始被拉動，我們的銷售、管理費用將變得更好或預測到這一點。因此，我們未來將會有很多順風車。所以，是的，我認為你們的經營槓桿並沒有離得太遠，你認為嗎？

Yes. Okay. Now, typically, you guys have played in lower horsepower space, 250-ish, I think, was the average horsepower of your installed fleet going back 2, 3 years ago, now you're moving up into the 1,500 and beyond range. Is the manufacturing and fabrication process similar enough that you can guarantee customers contractual run time performance? Or is this really a new piece of equipment for you that is needing to have run time performance in order to perform according to what ordinary field level statistics might be?

是的。好的。現在，通常情況下，你們都在較低馬力的空間中進行比賽，我認為 250 左右是你們安裝的車隊 2、3 年前的平均馬力，現在你們正在進入 1,500 甚至更高的範圍。製造和製造流程是否足夠相似，足以保證客戶的合同運行時性能？或者這對您來說確實是一台新設備，需要具有運行時性能才能根據普通現場級統計數據執行操作？

Well, it's a magnitude difference in the equipment. So you're right, say, 5-plus years ago, our typical build was a 200, 250 horsepower unit. Now, we're routinely building 1,500 and stepping into the 2,500 horsepower. So you get a magnitude change in just the horsepower and the size of the equipment. You get a big change in how it's operated and maintained in the field. But from a design standpoint and how you can maintain run time, some of it's -- some of the basic stay the same. They're all our designs. We've built a fair amount of the bigger stuff. But currently, in probably the last couple of quarters, we've outsourced the majority of the big horsepower our designs. So it's -- we've found a couple of good fabricators that have good quality and will build at a good price for us. And so we're using the outsourced model more so now than we ever have in the past from -- certainly from an additional horsepower standpoint.

嗯，裝備上有很大的區別。所以你是對的，比如說，五年多前，我們的典型構建是 200、250 馬力的裝置。現在，我們通常會生產 1,500 馬力，並逐步邁向 2,500 馬力。因此，您會發現設備的馬力和尺寸發生了巨大的變化。它在現場的操作和維護方式將發生巨大變化。但從設計的角度以及如何維護運行時間的角度來看，其中一些基本內容保持不變。它們都是我們的設計。我們已經建造了相當多的更大的東西。但目前，可能在過去幾個季度，我們已經外包了大部分設計。所以，我們找到了一些質量好的製造商，並且能夠以優惠的價格為我們製造。因此，我們現在比過去更多地使用外包模型——當然是從額外馬力的角度來看。

But from a run time, we've always guaranteed high run times on equipment. Now, on this bigger equipment, the customers typically demand even higher run time on them because now you're starting to get into critical infrastructure when you're getting into centralized compression, maybe touching some midstream stuff or any downtime, especially on a gas lift or production perspective is very profitable or very expensive for the operator. So the more downtime you can give them, the more money they make. Number one, that drives rental rates up because your manpower gets more, your monitoring costs get more, et cetera. But we are able to deliver very high run time on this stuff.

但從運行時間來看，我們始終保證設備的高運行時間。現在，在這種更大的設備上，客戶通常要求更長的運行時間，因為現在當您進入集中壓縮時，您開始進入關鍵基礎設施，可能會接觸到一些中游東西或任何停機時間，尤其是在天然氣上對於運營商來說，提升或生產的角度是非常有利可圖的，或者是非常昂貴的。因此，您給他們的停機時間越多，他們賺的錢就越多。第一，這會推高租金，因為你的人力增加，你的監控成本增加等等。但我們能夠在這些東西上提供非常長的運行時間。

But you do have to spend a little more money to do it, and that drives some of our rates, too. But your customers are typically okay paying those higher rates if you can give them that kind of run time because 1% or 2% additional run time on the higher end, I mean, into the higher 90% run time range, is very profitable when you're lifting thousands of barrels of oil a day from centralized stations. So it's more critical now than actually has been in the past with the medium horsepower.

但你確實需要多花一點錢才能做到這一點，這也提高了我們的一些費率。但是，如果您能給客戶提供這樣的運行時間，那麼您的客戶通常願意支付更高的費用，因為在高端，我的意思是，在較高的 90% 運行時間範圍內，1% 或 2% 的額外運行時間是非常有利可圖的您每天從集中加油站提運數千桶石油。因此，現在比過去更重要的是中等馬力。

And these are -- these being kind of brand-new units for you guys and you're outsourcing the production and fabrication of them. Isn't it a new piece of equipment? And are you sure that they're performing according to contractual specifications? And are you confident -- how are you confident enough with really very few units out in the field now with accumulated performance, how are you confident to spend up to $150 million and take what has been a pristine balance sheet to one that, on a current run rate basis, has 3x debt-to-EBITDA going presumably significantly higher.

這些對你們來說是一種全新的單位，你們正在外包它們的生產和製造。不是新裝備嗎？您確定他們按照合同規範執行嗎？您是否有信心——您如何有足夠的信心，目前在該領域擁有累積業績的單位非常少，您如何有信心花費高達 1.5 億美元，將原始的資產負債表變成一個這樣的資產負債表：以目前的運行利率為基礎，債務與 EBITDA 之比可能會顯著提高 3 倍。

Yes. Well, I mean, we're -- we've dealt with this equipment. The engines and compressors were having built for us in this equipment is #1 from the industry standpoint, long-standing, excellent quality goods. So there's no issue with the quality of the engines and the compressors. And that's from the industry standpoint. From the NGS standpoint, we've been dealing in the same engines and compressors for 4 to 5 years. So we've also got some history with it, and we're building more and more each day. And with this equipment and the value of it and the run time expectations or service expectations, every one of these big units are extensively monitored. There's probably, and there maybe more, 30 to 40 monitoring points constantly on this equipment to track what's going on, what's good, what's bad, et cetera.

是的。嗯，我的意思是，我們已經處理過這些設備了。從行業的角度來看，為我們製造的該設備的發動機和壓縮機是排名第一的、歷史悠久、品質優良的產品。所以發動機和壓縮機的質量不存在問題。這是從行業的角度來看的。從 NGS 的角度來看，我們使用相同的發動機和壓縮機已經有 4 到 5 年了。所以我們也有一些歷史，而且我們每天都在建造越來越多的東西。憑藉該設備及其價值以及運行時間預期或服務預期，這些大型設備中的每一個都受到廣泛監控。該設備上可能有，也可能更多，30 到 40 個持續監控點，用於跟踪正在發生的情況、好的情況、壞的情況等。

So we've got an extremely high level of confidence in the equipment we're putting out. We're getting a lot of support from the factory and the suppliers and everything else on this stuff. So that's really not that doesn't keep us awake at night. The -- we lose sleep over making sure we can make the run time and things like that, more of a service aspect than an equipment aspect.

因此，我們對我們推出的設備充滿信心。我們從工廠和供應商以及其他方面得到了很多支持。所以這並不是讓我們徹夜難眠的原因。 - 我們為確保我們能夠使運行時間和類似的事情更多地成為服務方面而不是設備方面而失眠。

Yes. Yes. Okay. And could you update us, Steve, on the CEO -- the full-time CEO replacement search? What kind of candidates you're coming up with? And --

是的。是的。好的。史蒂夫，您能否向我們介紹一下關於首席執行官——全職首席執行官替代人選的最新情況？您會提出什麼樣的候選人？和 -

Well, we've been -- we've had a search going on, as I mentioned in the past. Now, with the 2 new directors on the Board, which we announced a couple of weeks ago, 3 weeks ago, I think we're going to -- we want to involve them in that. And so we're taking a look at where we are, where we've been, what we're going to do, et cetera, et cetera. So no -- I mean, the candidates are what you'd expect. We were trying to find different levels of experience, whether it's equipment experience, financial experience, et cetera. So that criteria, to this point, hasn't changed, but we are taking a little bit of a pause and reassessing with our new Directors, the candidates we've identified so far, the profiles we want and things like that. But we'll -- it'll -- it's going along, but it will resume to a fuller extent in the future.

嗯，正如我過去提到的，我們一直在進行搜索。現在，我們在幾週前、三週前宣布了董事會的兩名新董事，我認為我們將 - 我們希望讓他們參與其中。因此，我們正在考慮我們現在在哪裡、我們去過哪裡、我們要做什麼等等。所以不——我的意思是，候選人就是你所期望的那樣。我們試圖尋找不同層次的經驗，無論是設備經驗、財務經驗等等。因此，到目前為止，這一標準還沒有改變，但我們正在暫停一下，重新評估我們的新董事、我們迄今為止確定的候選人、我們想要的個人資料等等。但我們會——它會——它會繼續下去，但它會在未來更全面地恢復。

Yes. And have you expanded that exercise to include sort of a full scope strategic review with these new Directors coming on, which presumably with a CEO transition so important. Are you including outright sale up to and including the outright sale of the company with respect to how the new Directors and the CEO search is moving forward?

是的。您是否擴大了這項工作，以包括對這些新董事的上任進行全面的戰略審查，這對於首席執行官的換屆來說可能非常重要。關於新董事和首席執行官搜尋的進展情況，您是否包括直接出售直至並包括公司的直接出售？

Well, the new Directors didn't come on from the point of doing anything in particular with the company, except increasing shareholder value, right? And we've made no bones about the fact that we're going to look at the company from the perspective of we've got this organic growth plan going on. And we've got the big bank line and making sure that's assessed correctly. We're going forward the way we want and things like that. But I think whether it's 2 new directors or the existing Board before, we're always constantly looking at what's the horizon, what's the future hold, what direction do we want to go, what are the strategies and things like that. So that's really not going to change. Now, certainly, we got 2 new perspective, 2 new eyes looking at things, which is great. That's from a business standpoint, that's always what we ought to do. We're going to continue to assess our strategies. But our strategy right now is what I've just talked about, executing on our growth plan, putting in a lot of new equipment, satisfying demand and stuff like that. So really, that's the point we're at right now, just making sure we're as tight as we can be on our present plan.

嗯，除了增加股東價值之外，新董事的加入並不是為了對公司做任何特別的事情，對吧？我們毫不掩飾這樣一個事實：我們將從我們正在進行的有機增長計劃的角度來看待公司。我們擁有大量銀行額度，並確保對其進行正確評估。我們正在按照我們想要的方式前進，諸如此類。但我認為無論是兩位新董事還是之前的現有董事會，我們總是不斷地關注前景是什麼，未來是什麼，我們想要走什麼方向，戰略是什麼等等。所以這真的不會改變。當然，現在我們有了兩個新的視角、兩個看待事物的新眼睛，這很棒。從商業角度來看，這始終是我們應該做的。我們將繼續評估我們的策略。但我們現在的戰略就是我剛才談到的，執行我們的增長計劃，投入大量新設備，滿足需求等等。所以，實際上，這就是我們現在的重點，只是確保我們盡可能嚴格地執行當前的計劃。

Okay. Best of luck going forward, looking forward to seeing the leverage come through based on dramatic increase in revenue.

好的。祝你未來好運，期待看到槓桿在收入大幅增長的基礎上實現。

And that was our last question. Mr. Taylor, go ahead.

這是我們的最後一個問題。泰勒先生，請繼續。

Okay. Thanks, Luke, and thanks, everyone, for your time and joining our call, and I look forward to updating you on the next earnings call next quarter. Thank you.

好的。謝謝盧克，謝謝大家抽出時間參加我們的電話會議，我期待著在下個季度的下一次財報電話會議上向您通報最新情況。謝謝。

Thank you, everyone. This concludes today's conference call. Again, thank you for attending.

謝謝大家。今天的電話會議到此結束。再次感謝您的出席。