Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Stabilis Solutions Inc (NASDAQ:SLNG) reported a record adjusted EBITDA of $4 million for the fourth quarter, with a margin of 23.2%, up from 16% in the previous year.
• The company saw significant growth in its marine bunkering revenues, which increased by over 500% year-over-year.
• Aerospace and power generation revenues also saw substantial increases, with 35% and 23% growth respectively.
• Stabilis Solutions Inc (NASDAQ:SLNG) has a strong cash and liquidity position, with $9 million in cash and equivalents and $4.3 million available under credit facilities.
• The company is focusing on growth in high-potential markets such as marine, aerospace, and distributed power solutions, with significant investments in infrastructure along the US Gulf Coast.

Negative Points

• Fourth quarter revenue decreased by 4% compared to the same period in 2023, primarily due to lower oil and gas customer revenues and lower natural gas prices.
• The company experienced a decrease in oil and gas contracts and slower uptake in aerospace, affecting overall performance.
• Stabilis Solutions Inc (NASDAQ:SLNG) anticipates significant capital expenditures for future growth investments, which could impact short-term financial flexibility.
• The company is facing challenges in finalizing commercial contracts and financing for its new liquefaction train, which could delay its deployment.
• There were one-time costs associated with executive changes, which impacted the general and administrative expenses for the quarter.

Q & A Highlights

• Warning! GuruFocus has detected 3 Warning Signs with SLNG.

Q: Can you discuss the timetable and milestones for expanding liquefaction capacity to support marine bunkering with the relocation of equipment to the Gulf Coast region? A: We relocated a liquefaction train to our George West facility and expanded storage capacity to better serve marine markets. We're exploring multiple paths for deployment in marine, aerospace, and distributed power sectors, working on financing and customer contracts. We're also considering expanding capacity in Galveston and the Houston Ship Channel for marine bunkering. - Casey Crenshaw, Executive Chairman and Interim CEO

Q: The G&A expenses were lower this quarter. Can you explain the reasons and what to expect going forward? A: The decrease was due to adjustments in bonus accruals and costs related to a mutual separation. There will be some one-time costs in the first quarter related to this separation. Overall, the G&A run rate should stabilize going forward. - Andy Pouhala, CFO

Q: There was a slight decrease in gallons delivered in Q4. Is this related to the timing of the Carnival contract or other factors? A: The decrease was due to operational efficiency, contract shifts, and timing in aerospace growth. There was also a decrease in oil and gas contracts and slower uptake in aerospace. The marine sector's scaling timing also contributed. - Casey Crenshaw, Executive Chairman and Interim CEO

Q: Can you provide details on the potential CapEx for growth investments related to FID decisions? A: In Q4, CapEx was primarily for relocating the liquefaction train and installing additional storage at George West. Future significant expenditures will depend on FID decisions for growth in marine and aerospace markets. - Casey Crenshaw, Executive Chairman and Interim CEO

Q: Can you elaborate on the marine bunkering business and its growth prospects? A: The marine bunkering business is exciting, with growth in cruise, container, and tanker markets. We're focusing on the Gulf Coast and East Coast, leveraging our first-mover advantage. Customers seek consistent supply and cost advantages of U.S. natural gas. - Casey Crenshaw, Executive Chairman and Interim CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.