Natural Gas Services Group, Inc.

Good morning, ladies and gentlemen, and welcome to the Natural Gas Services Group Incorporated Quarter One Earnings Call. At this time, all participants are in listen-only mode. Operator assistance is available at any time during this conference by pressing zero pound. I would now like to turn the call over to Ms. Hannah Delgado. Please begin.

Thank you, Luke, and good morning, everyone. Before we begin, I would like to remind you that during the course of this conference call, the company will be making forward-looking statements within the meaning of federal security laws. Investors are cautioned that forward-looking statements are not guarantees of future performance, and those actual results or developments may differ materially from those projected in the forward-looking statements. Finally, the company can give no assurance that such forward-looking statements will prove to be correct. Natural Gas Services Group disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Accordingly, you should not place in due reliance on forward-looking statements. These and other risks are described in yesterday's earning press release and in our filings with the SEC, including our form 10Q for the period ended March 31st, 2024, form 8Ks, and in our form 10K for the year ended December 31st, 2023. These documents can be found in the investor sections of our website located at www.ngsgi.com. Should one or more of these risks materialize or should underlying assumptions prove incorrect, actual results may vary materially. 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 the most directly comparable measures under GAAP, please see yesterday's earnings release. I will now turn the call over to Justin Jacobs, our Chief Executive Officer. Justin?

Thank you, Anna, and good morning, everyone. Welcome to our first quarter 2024 earnings conference call. Thank you for joining us this morning. We appreciate your interest in Natural Gas Services Group. I'll start by introducing the team. Joining me on the call this morning is Brian Tucker, our President and Chief Operating Officer, Jim Hazlett, our Chief Technical Officer, and John Bittner, our Interim Chief Financial Officer. In terms of the agenda for the call, I will start off with some high-level comments on the quarter. After that, John will review the quarter in detail, and then I will finish our prepared remarks with our general industry outlook, our updated guidance, and a recap of our growth strategy going forward. We will conclude with a Q&A session. I'm pleased to report that NGS had another strong quarter, and similar to the last call, we were happy with most areas of our performance. We had sequential growth in rental revenue, rental adjusted gross margin, and rental adjusted gross margin percentage. The growth in each of these metrics further validates our strategy of focusing new unit growth in high horsepower. Our first quarter adjusted EBITDA of $16.9 million exceeded our strong fourth quarter figure of $16.3 million. Similarly, our first quarter rental adjusted gross margin percentage of 61.1% eclipsed fourth quarter figure of 60.7%. The strength in these two metrics combined with an overall favorable outlook on industry conditions led us to increase our outlook for 2024 adjusted EBITDA. I also want to provide context for our strong growth. Our 2022 adjusted EBITDA was 29.2 million and our 2023 adjusted EBITDA was 45.6 million. This is a growth rate of 56%. Looking forward to 2024, our outlook range implies a growth rate of 34 to 47%. These are very attractive growth rates, particularly considering the recurring nature of our revenue. the stability of the revenue as it is largely tied to crude oil production, and our long-term contracts. These organic growth rates are also far in excess of our publicly traded rental compression competitors. In spite of these higher growth rates, we maintain a lower level of leverage at only 2.57 times than each of these competitors. Putting my public equity investor hat on for a second, these are intriguing figures that I believe our existing shareholders appreciate and our potential shareholders find quite appealing. Considering our opportunities for further growth, I'm quite excited about what NGS can achieve in the coming years. With that, I'll turn it over to John Bittner to review the quarter in detail.