Stabilis Solutions Announces Third Quarter 2020 Results

Revenues Jump 80% from Second Quarter 2020

HOUSTON, TX / ACCESSWIRE / November 11, 2020 / Stabilis Solutions, Inc., (“Stabilis” or the “Company”) (OTCQX:SLNG) today reported its financial results for its third quarter ended September 30, 2020.

Sequential Quarter Results

For the third quarter (“current quarter”) Stabilis reported revenues of $9.0 million, an 80% increase from the quarter ended June 30, 2020 (“preceding quarter”) primarily due to a large remote power contract in Mexico, hurricane related temporary power projects along the gulf coast, and the increase in overall i
ndustrial activity following the widespread economic shutdown during the second quarter. Revenues from Stabilis’ LNG segment increased by $3.6 million (90%) in the current quarter on an 80% increase in gallons delivered. The Company delivered 8.3 million LNG gallons to customers in the quarter. Utilization of the George West liquefier improved to 48% in the current quarter versus 33% in the preceding quarter. Power Delivery segment revenues increased by 39% to $1.4 million.

Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) was $0.4 million in the current quarter, an improvement of $1.2 million from the preceding quarter. The net loss for the current quarter narrowed to $2.1 million compared to a net loss of $3.5 million in the preceding quarter.

Calendar Quarter Results

Revenues in the current quarter decreased $1.5 million (14%) compared to the quarter ended September 30, 2019 (“prior year quarter”) primarily due to lower oil and gas related activity, partially offset by additional work in other sectors, primarily in Mexico. LNG segment revenues decreased by $1.5 million (16%). Utilization of the George West liquefier was 48% in the current quarter versus 82% in the prior year quarter.

Adjusted EBITDA in the current quarter was consistent with the prior year quarter and the net loss for the current quarter improved by $1.2 million compared to the prior year quarter.

“We are extremely pleased with the recovery which began in the third quarter and is ongoing.” said Jim Reddinger, President and Chief Executive Officer of Stabilis Solutions, Inc. “Our team responded to the challenging spring by aggressively pursuing new revenue opportunities, demonstrating flawless execution with our customers, and significantly reducing costs. We believe the worst is behind us and we are well positioned to grow in 2021.”

Conference Call

Management will conduct a conference call on Thursday, November 12, 2020 at 10:00 a.m. eastern time (9:00 a.m. central). Individuals in the United States and Canada who wish to participate in the conference call can access the live webcast at https://www.webcaster4.com/Webcast/Page/2256/38446 or dial +1 877-876-9173. International callers should dial +1 785-424-1667. A replay of the call will be available until November 19, 2020. Individuals in the United States and Canada who wish to listen to the replay should dial +1 877-481-4010; passcode 38446. International callers should dial +1 919-882-2331; passcode 38446.

About Stabilis

Stabilis Solutions, Inc. is a vertically integrated provider of small-scale liquefied natural gas (“LNG”) production, distribution and fueling services to multiple end markets in North America. Stabilis has safely delivered over 200 million gallons of LNG through more than 20,000 truck deliveries during its 15-year operating history in the LNG industry, which we believe makes us one of the largest and most experienced small-scale LNG providers in North America. Stabilis’ customers use LNG as a fuel source in a variety of applications in the industrial, energy, mining, utilities and pipelines, commercial, and high horsepower transportation markets. Stabilis’ customers use LNG as an alternative to traditional fuel sources, such as distillate fuel oil and propane, to lower fuel costs and reduce harmful environmental emissions. Stabilis’ customers also use LNG as a “virtual pipeline” solution when natural gas pipelines are not available or volumes are curtailed. To learn more, visit www.stabilis-solutions.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 and within the meaning of Section 27a of the Securities Act of 1933, as amended, and Section 21e of the Securities Exchange Act of 1934, as amended. Any actual results may differ from expectations, estimates and projections presented or implied and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “can,” “believes,” “anticipates,” “expects,” “could,” “will,” “plan,” “may,” “should,” “predicts,” “potential” and similar expressions are intended to identify such forward-looking statements.

Such forward-looking statements relate to future events or future performance, but reflect the parties’ current beliefs, based on information currently available. Most of these factors are outside the parties’ control and are difficult to predict. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. Factors that may cause such differences include, among other things: the future performance of Stabilis, future demand for and price of LNG, availability and price of natural gas, unexpected costs, and general economic conditions.

The foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in the Risk Factors in Item 1A of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 16, 2020 which is available on the SEC’s website at www.sec.gov or on the Investors section of our website at www.stabilis-solutions.com. All subsequent written and oral forward-looking statements concerning Stabilis, or other matters attributable to Stabilis, or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made.

Stabilis does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in their expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

Stabilis Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per share data)

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2020
 
2019
 
2020
 
2019
Revenue
 
 
 
 
 
 
 
LNG product
$
6,594
 
 
$
7,919
 
 
$
18,609
 
 
$
26,872
Rental, service and other
1,073
 
 
1,224
 
 
5,613
 
 
6,341
Power delivery
1,352
 
 
1,371
 
 
3,638
 
 
1,371
Total revenues
9,019
 
 
10,514
 
 
27,860
 
 
34,584
Operating expenses:
 
 
 
 
 
 
 
Cost of LNG product
5,044
 
 
5,441
 
 
13,692
 
 
19,051
Cost of rental, service and other
808
 
 
1,095
 
 
3,381
 
 
3,538
Costs of power delivery
996
 
 
1,144
 
 
3,131
 
 
1,144
Selling, general and administrative expenses
2,338
 
 
3,781
 
 
7,892
 
 
8,139
Depreciation expense
2,266
 
 
2,307
 
 
6,802
 
 
6,892
Total operating expenses
11,452
 
 
13,768
 
 
34,898
 
 
38,764
Loss from operations before equity income
(2,433)
 
 
(3,254)
 
 
(7,038)
 
 
(4,180)
Net equity income from foreign joint ventures’ operations:
 
 
 
 
 
 
 
Income from equity investments in foreign joint ventures
642
 
 
187
 
 
1,529
 
 
187
Foreign joint ventures’ operations related expenses
(69)
 
 
(52)
 
 
(182)
 
 
(52)
Net equity income from foreign joint ventures’ operations
573
 
 
135
 
 
1,347
 
 
135
Loss from operations
(1,860)
 
 
(3,119)
 
 
(5,691)
 
 
(4,045)
Other income (expense):
 
 
 
 
 
 
 
Interest expense, net
(2)
 
 
(33)
 
 
(28)
 
 
(37)
Interest expense, net – related parties
(199)
 
 
(306)
 
 
(681)
 
 
(910)
Other income (expense)
(31)
 
 
124
 
 
(6)
 
 
61
Gain from disposal of fixed assets
 
 
17
 
 
11
 
 
17
Total other income (expense)
(232)
 
 
(198)
 
 
(704)
 
 
(869)
Loss before income tax expense
(2,092)
 
 
(3,317)
 
 
(6,395)
 
 
(4,914)
Income tax expense
41
 
 
38
 
 
251
 
 
38
Net loss
(2,133)
 
 
(3,355)
 
 
(6,646)
 
 
(4,952)
Net income attributable to noncontrolling interests
 
 
 
 
 
 
207
Net loss attributable to Stabilis Solutions, Inc.
$
(2,133)
 
 
$
(3,355)
 
 
$
(6,646)
 
 
$
(5,159)
 
 
 
 
 
 
 
 
Common Stock Data:
 
 
 
 
 
 
 
Net loss per common share:
 
 
 
 
 
 
 
Basic and diluted
$
(0.13)
 
 
$
(0.22)
 
 
$
(0.39)
 
 
$
(0.37)
Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
Basic and diluted
16,896,626
 
 
15,070,733
 
 
16,867,939
 
 
13,816,341
 
 
 
 
 
 
 
 
EBITDA
$
375
 
 
$
(671)
 
 
$
1,116
 
 
$
2,925
Adjusted EBITDA
375
 
 
384
 
 
1,116
 
 
4,407

Revenues by Segment
(unaudited in thousands)

 
  Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
 
  2020     2019     2020     2019  
Revenue
                       
LNG
  $ 7,667     $ 9,143     $ 24,222     $ 33,213  
Power Delivery
    1,352       1,371       3,638       1,371  
Total Revenue
  $ 9,019     $ 10,514     $ 27,860     $ 34,584  

Gallons Delivered
(unaudited in thousands)

 
  Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
 
  2020     2019     2020     2019  
Gallons Delivered
                       
George West
    4,370       7,509       14,266       19,632  
3rd Party
    3,904       3,209       10,551       13,462  
Total Gallons Delivered
    8,274       10,718       24,817       33,094  

Stabilis Solutions, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands, except share and per share data)

 
September 30,
2020
 
December 31,
2019
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
3,410
 
 
$
3,979
 
Accounts receivable, net
1,993
 
 
5,945
 
Inventories, net
161
 
 
209
 
Prepaid expenses and other current assets
3,712
 
 
3,583
 
Total current assets
9,276
 
 
13,716
 
Property, plant and equipment, net
53,852
 
 
60,363
 
Right-of-use assets
881
 
 
965
 
Goodwill
4,453
 
 
4,453
 
Investments in foreign joint ventures
10,316
 
 
10,521
 
Other noncurrent assets
306
 
 
308
 
Total assets
$
79,084
 
 
$
90,326
 
Liabilities and Equity
 
 
 
Current liabilities:
 
 
 
Current portion of long-term notes payable
$
447
 
 
$
0
 
Current portion of long-term notes payable – related parties
2,737
 
 
1,000
 
Current portion of finance lease obligation – related parties
1,312
 
 
3,440
 
Current portion of operating lease obligations
383
 
 
364
 
Short-term notes payable
744
 
 
558
 
Accrued liabilities
4,116
 
 
5,018
 
Accounts payable
3,273
 
 
4,728
 
Total current liabilities
13,012
 
 
15,108
 
Long-term notes payable, net of current portion
633
 
 
 
Long-term notes payable, net of current portion – related parties
3,340
 
 
6,077
 
Finance lease obligations, net of current portion – related parties
 
 
648
 
Long-term portion of operating lease obligations
565
 
 
650
 
Deferred compensation
72
 
 
 
Deferred income taxes
32
 
 
 
Total liabilities
17,654
 
 
22,483
 
Commitments and contingencies
 
 
 
Equity:
 
 
 
Preferred Stock; $0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively
 
 
 
Stockholders’ equity:
 
 
 
Common stock; $0.001 par value, 37,500,000 shares authorized, 16,896,626 and 16,800,612 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively
17
 
 
17
 
Additional paid-in capital
91,092
 
 
90,748
 
Accumulated other comprehensive loss
(402)
 
 
(291)
 
Accumulated deficit
(29,277)
 
 
(22,631)
 
Total stockholders’ equity
61,430
 
 
67,843
 
Total liabilities and equity
$
79,084
 
 
$
90,326
 

Non-GAAP Measures

Our management uses EBITDA and Adjusted EBITDA to assess the performance and operating results of our business. EBITDA is defined as Earnings before Interest (includes interest income and interest expense), Taxes, Depreciation and Amortization. Adjusted EBITDA is defined as EBITDA further adjusted for certain special items that occur during the reporting period, as noted below. We include EBITDA and adjusted EBITDA to provide investors with a supplemental measure of our operating performance. Neither EBITDA nor Adjusted EBITDA is a recognized term under generally accepted accounting principles in the U.S. (“GAAP”). Accordingly, they should not be used as an indicator of, or an alternative to, net income as a measure of operating performance. In addition, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow available for management’s discretionary use, as they do not consider certain cash requirements, such as debt service requirements. Because the definition of EBITDA and Adjusted EBITDA may vary among companies and industries, it may not be comparable to other similarly titled measures used by other companies. The following table provides a reconciliation of net loss, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA (in thousands).

 
  Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
 
  2020     2019     2020     2019  
Net Loss
  $ (2,133 )   $ (3,355 )   $ (6,646 )   $ (4,952 )
Depreciation
    2,266       2,307       6,802       6,892  
Net Interest Expense
    201       339       709       947  
Income Tax Expense
    41       38       251       38  
EBITDA
    375       (671 )     1,116       2,925  
Special Items(1)
          1,055             1,482  
Adjusted EBITDA
  $ 375     $ 384     $ 1,116     $ 4,407  

(1) Special Items include the following:

Transaction and share registration costs related to AETI, Chart, and Diverse transactions of $1.0 million and $1.4 million in the three and nine months ended September 30, 2019, respectively.

$0.1 million related to stock exchange listing in the three and nine months ended September 30, 2019.

# # # # #

Investor Contact:

Andrew Puhala
Chief Financial Officer
832-456-6500
[email protected]

SOURCE: Stabilis Solutions, Inc.

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