NATURAL GAS SERVICES GROUP INC
For the period ended Dec 31, 2024. Filed Mar 17, 2025.
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FY2024 · Filed Mar 17, 2025
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3. Trade Accounts Receivables
- Trade Accounts Receivable
The following table summarizes our trade accounts receivable from customers as of the dates presented:
| December 31, | ||
|---|---|---|
| 2024 | 2023 | |
| Trade accounts receivable | ||
| Rentals | $14,218 | $32,871 |
| Sales and aftermarket services | 2,657 | 7,138 |
| 16,875 | 40,009 | |
| Less: Allowance for credit losses | (1,249) | (823) |
| Total trade accounts receivable, net | $15,626 | $39,186 |
Our trade accounts receivable consist of customer obligations due under normal trade terms for (i) operating leases for the use of our natural gas compressors, (ii) the sale of compressors and flare systems and (iii) the performance of aftermarket services.
Major Customers and Concentration of Credit Risk
Rental revenue and sales from Occidental Permian, LTD. (“Oxy”) in 2024, 2023 and 2022 amounted to 54 percent,50 percent and 42 percent of revenue, respectively. No other single customer accounted for more than 10 percent of our revenues in 2024, 2023 and 2022. Oxy’s accounts receivable balances amounted to 52 percent and 64 percent of our accounts receivable as of December 31, 2024 and 2023, respectively. No other customers amounted to more than 10 percent of our accounts receivable as of December 31, 2024 and 2023.
Allowance for Credit Losses
The following table summarizes the changes in our allowance for credit losses for the periods presented:
| Year Ended December 31, | |||
|---|---|---|---|
| 2024 | 2023 | 2022 | |
| Beginning balance | $823 | $338 | $1,129 |
| Provision for credit losses | 433 | 492 | — |
| Write-offs | (7) | (7) | (791) |
| Ending balance | $1,249 | $823 | $338 |
Management believes that the allowance is adequate; however, actual write-offs may exceed the recorded allowance.
F - 11
- Inventory
The following table summarizes our inventory, net of allowances for obsolescence as of the dates presented:
| December 31, | ||
|---|---|---|
| 2024 | 2023 | |
| Raw materials, net of allowance of $4,379 and $2,836, respectively | $17,706 | $20,227 |
| Work-in-process | 345 | 1,412 |
| Inventory - current | 18,051 | 21,639 |
| Raw materials - long term, net of allowance of $1,488 and $1,168, respectively | — | 701 |
| Total inventory | $18,051 | $22,340 |
Our long-term inventory, which is fully reserved as of December 31, 2024, consists of excess raw materials that remain viable but with limited market opportunities.
The following table summarizes the changes in our allowance for obsolescence for the periods presented:
| Year Ended December 31, | |||
|---|---|---|---|
| 2024 | 2023 | 2022 | |
| Beginning balance | $4,004 | $120 | $64 |
| Allowance for obsolescence | 1,863 | 3,965 | 83 |
| Write-offs | — | (81) | (27) |
| Ending balance | $5,867 | $4,004 | $120 |
The allowance for 2023 was primarily related to our decision to cease future compressor assembly at our Midland, Texas facility, which reduced the expected future demand of certain inventory items held at this facility. In 2024, we continued actions in support of our strategy to further outsource assembly activities to third parties resulting in an additional allowance charge.
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