Stabilis Solutions(SLNG) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue during the second quarter decreased by 7% compared to 2024, primarily due to the completion of a large contract with an industrial customer last year [10][11] - Adjusted EBITDA was $1,500,000, down from $2,100,000 in the same quarter last year, with an adjusted EBITDA margin of 8.6%, down from 11.3% [11] - Cash generated from operations was $4,500,000, resulting in a record liquidity position of $16,100,000 at quarter end, consisting of $12,200,000 in cash and approximately $4,000,000 available under credit facilities [12] Business Line Data and Key Metrics Changes - Revenue in the marine, aerospace, and power generation sectors increased by a combined 15% year over year, driven by an 83% increase in aerospace revenues [6][11] - Aerospace revenues more than doubled in the first half of the year compared to the same period in 2024 [7] - Power generation market revenues increased by 10% during the quarter [11] Market Data and Key Metrics Changes - The company is seeing increased interest in LNG as a bridge and backup fueling solution to meet rising electric demand from data centers and other energy-intensive infrastructure [7] - The projected long-term growth in electricity demand is creating a broad range of use cases for LNG solutions [8] Company Strategy and Development Direction - The strategic vision is to build Stabilis into the leading provider of last mile LNG solutions, focusing on becoming the partner of choice for key end markets [8] - The company is actively working on securing long-term customer commitments to support capacity expansion [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth opportunities in marine, aerospace, and power generation sectors, with ongoing commercial discussions progressing well [6][8] - The company is focused on finalizing new contract awards and expects to update investors in the coming months [10] Other Important Information - The company ended the quarter with a net cash position and no net debt, providing strong balance sheet flexibility for strategic capital deployment [12] - Capital expenditures during the quarter were $600,000, with expectations for acceleration in capital commitments as new customer agreements are finalized [12] Q&A Session Summary Question: Inquiry about contractual agreements and potential project financing - Management confirmed that they are working on multiple contracts across marine, aerospace, and power generation sectors, with varying durations from six months to multiple years [14][15] - The contracts are expected to support capital expenditures and project financing for new liquefaction capacity [15] Question: Timing of additional liquefaction capacity - Management indicated that the quickest new capacity could be deployed at the George West facility, with ongoing work on the Gulf Coast liquefier [19][20] Question: Key variables for finalizing marine sector contracts - Management clarified that long-term contracts are essential to underpin project financing for new facilities, which will produce LNG needed for those contracts [22][23] Question: Types of customers in marine contracts - Management stated that discussions are ongoing with multiple end markets in the marine space, primarily focusing on the cruise sector [24] Question: Company’s market positioning and outreach - Management expressed eagerness to communicate the company's growth story and emphasized the importance of securing contracts to generate excitement in the marketplace [32][33]