Stabilis Solutions(SLNG) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue during the first quarter decreased by 12% compared to the first quarter of 2024, but was modestly higher than the fourth quarter of 2024 [12] - GAAP net loss was $1,600,000 or $0.09 per diluted share, compared to net income of $1,500,000 or $0.08 per diluted share in the first quarter of 2024 [13] - Adjusted EBITDA was $2,100,000, down from $3,100,000 in the first quarter of last year, with an adjusted EBITDA margin of 11.9%, down from 15.7% [13] Business Line Data and Key Metrics Changes - Revenue in marine and aerospace markets grew by more than 13% year over year, primarily driven by increased activity with a major aerospace customer [6] - Approximately 51% of revenues were derived from marine and aerospace customers compared to 39% in the first quarter of last year [12] - Power generation revenues remained consistent with Q1 of 2024 [12] Market Data and Key Metrics Changes - The company is focused on expanding its position as a leading small-scale LNG supplier within high-growth sectors, including marine bunkering, aerospace, and power generation [5][6] - The company is actively evaluating the potential expansion of liquefaction capacity in South Texas and along the Gulf Coast [8] Company Strategy and Development Direction - The company aims for long-term growth across core end markets supported by significant multiyear demand [5] - The strategy includes making targeted operating expense investments to support future growth while generating consistent positive operating cash flow [7] - The company remains focused on maintaining a strong balance sheet and liquidity position to fund future growth [9] Management's Comments on Operating Environment and Future Outlook - Management noted that the decline in revenues was primarily due to planned downtime with a key marine customer and the completion of a major project [5] - The company expects steady utilization and demand under existing contracts with potential upside as new opportunities are converted into signed agreements [8] - Management expressed optimism about the growth in commercial aerospace activity and the increasing demand for LNG as a propellant in the space industry [34] Other Important Information - Cash generated from operations during the first quarter was $1,000,000, representing a conversion rate of 50% of adjusted EBITDA [14] - Capital expenditures were $5,000,000, with about 70% allocated to growth initiatives [14] - As of March 31, 2025, the company had total cash and equivalents of $9,000,000 and $3,500,000 available under credit facilities, with total debt outstanding of $9,100,000 [15] Q&A Session Summary Question: Update on contracting side and liquefaction train deployment - Management is actively working on commercial contracts and expects to provide clarity on the timing for final investment decisions in the second or third quarter of this year [21] Question: Customer inquiries in power generation - Management indicated that inquiries are coming from various sectors, including data centers, reshoring manufacturing, and emergency power needs, with a focus on distributed power opportunities [23][24] Question: Details on bunkering operation downtime - The downtime was due to planned maintenance on vessels, which occurs for one week out of the year, affecting bunkering events [30] Question: Indicators of demand for small-scale LNG services - Management noted increased bidding and inbound customer needs in aerospace, marine bunkering, and distributed power markets as indicators of rising demand [32] Question: Impact of SpaceX's plans on demand - Management highlighted the normalization of commercial aerospace activity and the increasing use of LNG as a propellant for rockets as positive indicators for growth in the space industry [34]