Stabilis Solutions(US:SLNG)2024-08-11 11:34Financial Data and Key Metrics Changes - Revenue for Q2 2024 increased to $18.6 million, up 44.1% from $12.9 million in Q2 2023, driven by strong demand and improved utilization [15][6] - Net income was slightly above breakeven compared to a net loss of $2.2 million in the same quarter last year [15] - Adjusted EBITDA for the quarter was $2.1 million, an improvement of $2.2 million from the prior year, with an adjusted EBITDA margin of 11.3% [15][16] - Generated $5 million in operating cash flow and ended the period with nearly $16 million in cash and availability under credit agreements [6][16] Business Line Data and Key Metrics Changes - The marine market showed strong performance, particularly with the LNG fueling contract with Carnival Corporation, contributing to improved plant utilization [7][8] - In the commercial and industrial markets, the company serves about eight different sectors and announced a 14-month contract extension for LNG supply for primary power generation [10][21] - Aerospace revenues are expected to increase approximately 75% over 2023 levels, representing about 10% of annual sales for 2024 [11][12] Market Data and Key Metrics Changes - The company is focusing on expanding its operations in emergency power delivery and primary power generation for the data center sector, anticipating a 10% increase in electricity load demand in certain markets [11][21] - The demand for high-purity LNG as rocket propellant is growing due to increased commercial rocket launch activity [11] Company Strategy and Development Direction - The company aims to leverage its business model to develop growth opportunities across marine, commercial, and industrial platforms [7] - Plans to build the first dedicated waterfront LNG bunkering facility along the U.S. Gulf Coast are underway, with advanced discussions for partnerships [8][19] - A phased expansion will more than double storage capacity at the George West facility from 270,000 gallons to 630,000 gallons [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to meet growing demand across multiple end markets and plans to invest in operational capabilities and infrastructure [11][12] - The company is evaluating opportunities to deploy capital to enhance its ability to meet increasing demand for LNG across all platforms [12] Other Important Information - The company has a net cash positive balance sheet with total debt outstanding of $8.6 million as of June 30, 2024 [17] - The second quarter of 2024 marked the company's first-ever second quarter profit and highest adjusted EBITDA, indicating significant progress [16] Q&A Session Summary Question: Details about the dedicated waterfront bunkering facility and financing - Management confirmed the need for commercial activity before reaching a final investment decision (FID) and is in advanced discussions with potential partners [18][19] Question: Role in backup power generation for data centers - Management highlighted the opportunity in primary and backup power for data centers, with ongoing discussions for contracts [20][21] Question: Why LNG versus natural gas for data centers - LNG is often used where data centers lack access to pipeline gas, allowing for hub-and-spoke operations [24][25] Question: Schedule for new George West capacity - Half of the new storage capacity is already operational, with the remainder expected to come online later this year or early next year [25][26] Question: Opportunities in aerospace and potential contracts - Management sees significant growth potential in aerospace and is aware of increasing rocket launch activities [28][29] Question: Competitive environment in marine bunkering - The competitive landscape varies by geography, with the company positioned as a leading turnkey supplier for inland LNG distribution [30][32]