Stabilis Solutions(SLNG) - 2023 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a sequential revenue growth of 19% driven by higher sales volumes and strong demand from equipment and labor segments [80] - Adjusted EBITDA was adversely impacted by changes in feed gas composition, with a decrease of $1.2 million and $1.3 million in the second and third quarters respectively [28] Business Line Data and Key Metrics Changes - The LNG marine bunkering business is expected to significantly increase due to a new multiyear contract with Carnival Corporation, which will utilize 50% to 60% of the George West liquefaction facility's capacity [81][59] - The company completed the purchase of key components for an additional 100,000 gallon per day LNG train, indicating a commitment to expanding its marine business [60] Market Data and Key Metrics Changes - The company is experiencing a growing demand for LNG-fueled vessels, with a large inventory expected to be commissioned in the latter part of next year [12] - The industrial business is migrating towards LNG as a fuel source, indicating a positive trend for future growth [72] Company Strategy and Development Direction - Stabilis Solutions aims to solidify its position as a leading provider of small-scale LNG fueling solutions in North America, focusing on expanding its marine bunkering capabilities [29] - The company is actively evaluating strategic partnerships and expansion opportunities to support its growth in clean fuels and new services [61] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a tidal wave of demand for LNG and the need to unlock infrastructure to meet this demand [89] - The company has ample liquidity to fund operations and is maintaining a conservative capital structure while pursuing growth opportunities [33][62] Other Important Information - The company incurred $3.8 million in capital expenditures during the quarter, bringing the year-to-date total to $9 million, reflecting a strong commitment to the marine bunkering business [86] - The company generated $1.5 million in cash from operations in the third quarter, contributing to a total of $5.4 million for the first nine months of 2023 [85] Q&A Session Summary Question: What is the opportunity for marine bunkering going forward? - Management highlighted the significant opportunity presented by the Carnival contract and the increasing demand for LNG-powered vessels [63] Question: Can you provide an update on the space business? - The space business currently represents between 2% and 10% of total revenue, with expectations for growth as contracts become more predictable [96][97] Question: What was the feed gas issue at George West and how was it resolved? - Management indicated that the issue was related to feed gas composition changes, which have been addressed, and they are optimistic that it will not reoccur [74][75]