Stabilis Solutions(SLNG) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q2 2023, Stabilis reported a net loss of $2.2 million on total revenue of $12.9 million, compared to a net loss of $2.2 million on revenue of $23.2 million in Q2 2022 and a net income of $1.1 million on revenue of $26.8 million in Q1 2023 [19][20] - Adjusted EBITDA was a loss of $0.1 million in Q2 2023, down from a profit of $1.4 million in Q2 2022 and $3.5 million in Q1 2023 [20][21] - The weighted average cost of gas was $2.60 per MMBtu during Q2 2023, significantly lower than $7.05 during the same quarter last year [20] Business Line Data and Key Metrics Changes - Marine revenue increased to more than $16 million, representing 21% of total revenue, up from 5% in the prior year period [14] - The decline in revenue was attributed to lower pass-through natural gas prices and changes in feed gas composition at the George West plant, which reduced revenue by $1.4 million [21][23] Market Data and Key Metrics Changes - The U.S. is positioned to become a leader in LNG vessel fueling due to an abundance of inexpensive shale gas, with expectations for the addressable market to scale to over 380 ships by 2024, up from less than 70 in 2021 [6] Company Strategy and Development Direction - The company aims to protect and optimize its core industrial business while accelerating growth in marine vessel bunkering and export demand cycles [13] - Stabilis is focused on leveraging its business model to expand and optimize its portfolio of owned and third-party assets for long-term growth [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in resolving issues at the George West facility, which had a $1.2 million EBITDA drag in Q2 2023, and expects production to return to historic levels [32] - The company is optimistic about potential contracts that could improve performance in the second half of the year, although specific guidance was not provided [32] Other Important Information - Stabilis generated $3.8 million of operating cash flow in Q2 2023 and ended the quarter with total cash and equivalents of $8.1 million [17][28] - The company arranged a new $10 million secured revolving credit facility, enhancing liquidity and operational flexibility [26][27] Q&A Session Summary Question: Expectations for profitability in the second half of the year - Management indicated confidence in resolving issues at the George West facility and expects production to return to historic levels, which could improve EBITDA significantly [32] Question: Potential milestones for growth platforms - Key milestones include capital expenditures and contract awards, with management optimistic about upcoming contracts that could support capital investments [34][35] Question: Update on the space market and export license plans - The space market is seen as exciting but currently lumpy, while management is bullish on export opportunities, particularly in Europe, despite current inventory levels [58][60]