Natural Gas Services Group, Inc. (NGS) has reported 90.08 percent plunge in profit for the quarter ended Mar. 31, 2017. The company has earned $0.25 million, or $0.02 a share in the quarter, compared with $2.54 million, or $0.20 a share for the same period last year.

Revenue during the quarter dropped 12.39 percent to $18.90 million from $21.58 million in the previous year period. Gross margin for the quarter contracted 1047 basis points over the previous year period to 71.31 percent. Total expenses were 98.19 percent of quarterly revenues, up from 82.54 percent for the same period last year. That has resulted in a contraction of 1564 basis points in operating margin to 1.81 percent.

Operating income for the quarter was $0.34 million, compared with $3.77 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $5.67 million compared with $9.29 million in the prior year period. At the same time, adjusted EBITDA margin contracted 1303 basis points in the quarter to 30.02 percent from 43.05 percent in the last year period.

Stephen C. Taylor, President and chief executive officer, said: "NGS had a good first quarter. Our rental utilization held relatively steady and our sales activity remained strong. While we did have a significant increase in SG&A expense due to non-cash costs related to the expensing of certain unvested stock grants, our operating performance was better than expected. As noted in the past, we anticipate utilization and pricing pressure through the first half of this year but anticipate some relief in the back half. Cash generation is strong, debt is minimal and we continue to be positioned very well."

Operating cash flow improves
Natural Gas Services Group, Inc. has generated cash of $10.78 million from operating activities during the quarter, up 7.50 percent or $0.75 million, when compared with the last year period.

The company has spent $0.53 million cash to meet investing activities during the quarter as against cash outgo of $1.96 million in the last year period. It has incurred net capital expenditure of $0.44 million on net basis during the quarter, down 77.20 percent or $1.48 million from year ago period.

Cash flow from financing activities was $0.02 million for the quarter as against cash outgo of $0.54 million in the last year period.

Cash and cash equivalents stood at $74.37 million as on Mar. 31, 2017, up 72.73 percent or $31.32 million from $43.06 million on Mar. 31, 2016.

Working capital increases sharply
Natural Gas Services Group, Inc. has recorded an increase in the working capital over the last year. It stood at $98.65 million as at Mar. 31, 2017, up 31.29 percent or $23.51 million from $75.14 million on Mar. 31, 2016. Current ratio was at 21.44 as on Mar. 31, 2017, up from 17.51 on Mar. 31, 2016.

Cash conversion cycle (CCC) has decreased to 217 days for the quarter from 632 days for the last year period. Days sales outstanding went down to 33 days for the quarter compared with 42 days for the same period last year.

Days inventory outstanding has decreased to 198 days for the quarter compared with 611 days for the previous year period. At the same time, days payable outstanding went down to 14 days for the quarter from 21 for the same period last year.