Natural Gas Services Group, Inc. (NYSE:NGS) Q4 2022 Earnings Call Transcript

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Justin Jacobs: But you did — I mean I think you mentioned another place you have brought in accounting consultants to — is that partially to address at least partially to address these issues?

Steve Taylor: Yes, to help us. Well, the issues were addressed by our auditors and our own personnel. We did employ an accounting consultant to help us write up some — clearly write up some findings we thought it was better for a third party to write the findings for the SEC and the K to put a little more detail succinctly in there. So that was the extent of the accounting consulting we used on that primarily to help us clearly define exactly what it was. But we, along with our auditors, have found it.

Justin Jacobs: I also note also your earnings were delayed. Your call was rescheduled to this morning. This is the second time this has happened in the last year. Can you talk to me about why the earnings were delayed?

Steve Taylor: It’s primarily just the transitions going on. We’ve got an interim CFO. And then with the earnings and everything, we had to essentially have Moss Adams come back in and attest to the findings. Also anytime you switch auditors, which we did last year, the prior auditors had some review responsibility on that. So, that took a — the whole process took a little longer than we had anticipated. And so, we held off the call. I think we announced it 10 days ago or so, we held off to make sure everything was done. And obviously, Friday was the deadline for the K, so we went ahead and put that out in the earnings and then have to call it a day. So it was a lot of transition and then just working through some of the issues that showed up in material weakness and plus two sets of auditors helping us.

Justin Jacobs: Yes. Okay. So basically, the resignation of Moss Adams was a factor in this delay.

Steve Taylor: Well, only from the point that they had to come back in and review and attest to what they had done because they were part of last year.

Justin Jacobs: Yes. Well I’m saying the fact that they weren’t the auditor. You got a transition here, there was in. So going through all that transition plus not having a full-time CFO, that’s an impact.

Steve Taylor: Yes, sir, definitely.

Operator: Our next question comes from Hale Hoak from Hoak & Co. Please go ahead. Your line is open.

Hale Hoak: I know this whole transition of your retirement kind of drive down longer than you wanted and been a little messier than you wanted. But appreciate you stepping back in and seeing it through. I’m curious, it seems like there’s so much going on at the Company as the prior caller mentioned, you’ve spent almost your entire market cap in CapEx. And as it relates to that, if you’re spending $150 million of CapEx between 2022 and 2023, and I’m using round numbers, and I know you’re hesitant to give guidance, which I totally appreciate. But is there any kind of directional numbers that you want us to think about on paybacks? I know when John Chisholm was involved, I think he was talking about kind of five-year paybacks or 20% returns. I mean can we think of this $150 million of CapEx over two years, adding $30 million of incremental EBITDA once it’s all up and running? Or is there any range you’re willing to give us?

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