HOUSTON, TX / ACCESSWIRE / March 6, 2024 / Stabilis Solutions, Inc., ("Stabilis" or the "Company") (Nasdaq:SLNG), a leading provider of clean energy production, storage, and delivery solutions to multiple end markets, today announced financial results for the fourth quarter and full year ended December 31, 2023.
PERFORMANCE HIGHLIGHTS
- Generated positive fourth quarter and full-year net income
- Delivered $6.7 million of cash flow from operations in full year 2023
- More than $11.0 million of cash and available liquidity and net leverage ratio of 0.6x as of December 31, 2023
- Commenced deliveries on previously announced multi-year LNG bunkering contract with Carnival Corporation
- Anticipate marine bunkering business to represent more than one-third of total revenue for the full year 2024
MANAGEMENT COMMENTARY
"Our fourth quarter performance was a strong finish to an historic year for Stabilis," stated Westy Ballard, President and Chief Executive Officer. "In 2023, we made measurable strides forward with our marine strategy through the successful execution of bunkering contracts in Florida and California, together with the award of a multi-year customer supply agreement with Carnival Corporation in Galveston Texas. We are building a strong, scalable platform equipped to support increased demand for our solutions."
"Looking ahead, we continue to shift our business model from commodity spot-sales toward longer duration, take-or-pay contractual revenue," continued Ballard. "We believe this approach ensures further optimization of our asset base and increases the visibility of cash flow generation, positioning us to opportunistically invest in the people, systems and liquefaction capacity required to support future growth. Entering 2024, we remain confident in the positive demand trajectory for our business, along with our proven ability to provide reliable, end-to-end last mile solutions for every customer, every time."
STRATEGIC AND OPERATIONAL UPDATE
- Strong commercial and operational momentum, improved balance sheet optionality. Stabilis believes that its operating scale, fortified balance sheet, diverse end-market exposure, established customer relationships and increased demand for small-scale LNG solutions will position the business to maximize its return on invested capital. Stabilis invested $10.3 million in total capital expenditures in 2023, which included growth capital of $7.8 million largely related to the critical components of a new LNG train and specialized marine bunkering equipment. At year-end 2023, the Company had more than $11.0 million in total available liquidity.
- Commenced operations for Carnival Corporation, advancing marine bunkering strategy. In December 2023, Stabilis successfully commenced LNG fueling operations and related services for the Carnival Jubilee under a previously announced contract. Additionally, the Company has continued to advance its commercial discussions with a number of additional potential marine users of LNG. Looking ahead, Stabilis' continues to focus on expanding its capabilities directly to the waterfront of strategic ports across the U.S., and abroad.
- Increased aerospace customer quoting activity, supports aerospace strategy. Stabilis' high-purity methane continues to become the preferred fuel for space rockets, allowing for improved engine efficiency and thrust, ease of storage, and reduced environmental impact. Total sales volumes of LNG to aerospace customers amounted to approximately 3.4 million gallons in 2023, or 6.8% of Stabilis' total sales volumes. The Company currently anticipates that its total aerospace-related sales volumes will increase materially in 2024.
FOURTH QUARTER AND FULL YEAR CALL AND WEBCAST
Stabilis will host a conference call on Thursday, March 7, 2024, at 9:00 am ET to review the Company's financial results, discuss recent events and conduct a question-and-answer session.
A webcast of the conference call will be available in the Investor Relations section of the Company's corporate website at https://investors.stabilis-solutions.com/events. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download, and install any necessary audio software.
To participate in the live teleconference:
| Domestic Live: | 800-225-9448 |
| International Live: | 203-518-9708 |
| Conference ID: | SLNGQ423 |
To listen to a replay of the teleconference, which will be available through March 14, 2024:
| Domestic Live: | 800-388-6509 |
| International Live: | 402-220-1111 |
ABOUT STABILIS SOLUTIONS
Stabilis Solutions, Inc. is a leading provider of clean energy production, storage, and delivery solutions to multiple end markets. To learn more, visit www.stabilis-solutions.com.
CAUTIONARY STATEMENTS 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," "feels," "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 our current beliefs, based on information currently available. Most of these factors are outside our 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 6, 2024 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
Selected Consolidated Operating Results
(Unaudited, in thousands, except per share data)
| Three Months Ended | Twelve Months Ended | ||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenues: | |||||||||||||||||
Revenues | $ | 18,049 | $ | 15,316 | $ | 29,587 | $ | 73,114 | $ | 98,823 | |||||||
Operating expenses: | |||||||||||||||||
Costs of revenues | 12,008 | 12,056 | 22,749 | 54,919 | 77,694 | ||||||||||||
Change in unrealized loss (gain) on natural gas derivatives | (219 | ) | (267 | ) | 905 | (541 | ) | 878 | |||||||||
Selling, general and administrative expenses | 3,469 | 3,002 | 3,548 | 12,893 | 13,191 | ||||||||||||
Gain from disposal of fixed assets | (221 | ) | (1,002 | ) | - | (1,223 | ) | (34 | ) | ||||||||
Depreciation expense | 1,872 | 2,003 | 2,075 | 7,878 | 8,664 | ||||||||||||
Total operating expenses | 16,909 | 15,792 | 29,277 | 73,926 | 100,393 | ||||||||||||
Income (loss) from operations before equity income | 1,140 | (476 | ) | 310 | (812 | ) | (1,570 | ) | |||||||||
Net equity income from foreign joint venture operations: | |||||||||||||||||
Income from equity investment in foreign joint venture | 431 | 332 | 755 | 1,897 | 1,881 | ||||||||||||
Foreign joint venture operating related expenses | (54 | ) | (48 | ) | (44 | ) | (206 | ) | (283 | ) | |||||||
Net equity income from foreign joint venture operations | 377 | 284 | 711 | 1,691 | 1,598 | ||||||||||||
Income (loss) from operations | 1,517 | (192 | ) | 1,021 | 879 | 28 | |||||||||||
Other income (expense): | |||||||||||||||||
Interest expense, net | (19 | ) | 60 | (154 | ) | (256 | ) | (591 | ) | ||||||||
Interest expense, net - related parties | (7 | ) | (15 | ) | (50 | ) | (78 | ) | (179 | ) | |||||||
Other income (expense) | (49 | ) | (3 | ) | (86 | ) | (176 | ) | (185 | ) | |||||||
Total other income (expense) | (75 | ) | 42 | (290 | ) | (510 | ) | (955 | ) | ||||||||
Income (loss) from continuing operations before income tax expense | 1,442 | (150 | ) | 731 | 369 | (927 | ) | ||||||||||
Income tax expense | 20 | 57 | 513 | 244 | 265 | ||||||||||||
Net income (loss) from continuing operations | 1,422 | (207 | ) | 218 | 125 | (1,192 | ) | ||||||||||
Loss from discontinued operations, net of income tax | - | - | (553 | ) | - | (1,994 | ) | ||||||||||
Net income (loss) | $ | 1,422 | $ | (207 | ) | $ | (335 | ) | $ | 125 | $ | (3,186 | ) | ||||
Net income (loss) per common share: | |||||||||||||||||
Basic income (loss) per common share from continuing operations | $ | 0.08 | $ | (0.01 | ) | $ | 0.01 | $ | 0.01 | $ | (0.07 | ) | |||||
Basic loss per common share from discontinued operations | - | - | (0.03 | ) | - | (0.11 | ) | ||||||||||
Basic net income (loss) per common share | 0.08 | (0.01 | ) | (0.02 | ) | 0.01 | (0.17 | ) | |||||||||
Diluted income (loss) per common share from continuing operations | 0.08 | (0.01 | ) | 0.01 | 0.01 | (0.07 | ) | ||||||||||
Diluted loss per common share from discontinued operations | - | - | (0.03 | ) | - | (0.11 | ) | ||||||||||
Diluted net income (loss) per common share | $ | 0.08 | $ | (0.01 | ) | $ | (0.02 | ) | $ | 0.01 | $ | (0.17 | ) | ||||
EBITDA | $ | 3,340 | $ | 1,808 | $ | 3,010 | $ | 8,581 | $ | 8,507 | |||||||
Adjusted EBITDA | $ | 2,900 | $ | 539 | $ | 3,915 | $ | 6,817 | $ | 9,613 | |||||||
Stabilis Solutions, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited, in thousands, except share and per share data)
| December 31, | ||||||||
| 2023 | 2022 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 5,374 | $ | 11,451 | ||||
Accounts receivable, net | 7,752 | 16,326 | ||||||
Inventories, net | 169 | 205 | ||||||
Prepaid expenses and other current assets | 1,677 | 2,186 | ||||||
Assets held for sale | - | 2,049 | ||||||
Total current assets | 14,972 | 32,217 | ||||||
Property, plant and equipment: | ||||||||
Cost | 110,646 | 103,368 | ||||||
Less accumulated depreciation | (61,167 | ) | (55,699 | ) | ||||
Property, plant and equipment, net | 49,479 | 47,669 | ||||||
Goodwill | 4,314 | 4,314 | ||||||
Investments in foreign joint ventures | 12,009 | 11,606 | ||||||
Right-of-use assets and other noncurrent assets | 525 | 774 | ||||||
Total assets | $ | 81,299 | $ | 96,580 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,518 | $ | 4,474 | ||||
Accrued liabilities | 8,355 | 19,642 | ||||||
Current portion of long-term notes payable | 1,682 | 848 | ||||||
Current portion of long-term notes payable - related parties | - | 2,435 | ||||||
Current portion of finance and operating lease obligations | 164 | 133 | ||||||
Total current liabilities | 11,719 | 27,532 | ||||||
Long-term notes payable, net of current portion and debt issuance costs | 7,747 | 8,650 | ||||||
Long-term portion of finance and operating lease obligations | 21 | 183 | ||||||
Other noncurrent liabilities | - | 348 | ||||||
Total liabilities | 19,487 | 36,713 | ||||||
Commitments and contingencies | ||||||||
Stockholders' Equity: | ||||||||
Preferred stock; $0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding at December 31, 2023 and December 31, 2022 | - | - | ||||||
Common stock; $0.001 par value, 37,500,000 shares authorized, 18,573,391 and 18,420,067 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively | 19 | 19 | ||||||
Additional paid-in capital | 102,057 | 100,137 | ||||||
Accumulated other comprehensive income (loss) | (18 | ) | 82 | |||||
Accumulated deficit | (40,246 | ) | (40,371 | ) | ||||
Total stockholders' equity | 61,812 | 59,867 | ||||||
Total liabilities and stockholders' equity | $ | 81,299 | $ | 96,580 | ||||
Stabilis Solutions, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited, in thousands)
| Three Months Ended | Twelves Months Ended | |||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income (loss) from continuing operations | $ | 1,422 | $ | (207 | ) | $ | 218 | $ | 125 | $ | (1,192 | ) | ||||
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities: | ||||||||||||||||
Depreciation | 1,872 | 2,003 | 2,075 | 7,878 | 8,664 | |||||||||||
Stock-based compensation expense | 387 | 513 | 607 | 2,082 | 2,348 | |||||||||||
Gain on disposal of assets | (221 | ) | (1,002 | ) | - | (1,223 | ) | (34 | ) | |||||||
Income from equity investment in joint venture | (431 | ) | (332 | ) | (755 | ) | (1,897 | ) | (1,881 | ) | ||||||
Distributions from equity investment in joint venture | 412 | - | - | 1,225 | 1,550 | |||||||||||
Cash settlements from natural gas derivatives, net | - | - | 142 | - | (1,037 | ) | ||||||||||
Realized and unrealized (gains) losses from natural gas derivatives, net | 32 | 49 | 1,014 | 572 | 465 | |||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | (1,617 | ) | (1,372 | ) | (6,036 | ) | 4,019 | (7,013 | ) | |||||||
Inventories | (41 | ) | - | 29 | 36 | 73 | ||||||||||
Prepaid expenses and other current assets | 554 | 121 | (152 | ) | 1,425 | 1,395 | ||||||||||
Accounts payable and accrued liabilities | (1,084 | ) | 1,752 | 5,380 | (7,717 | ) | 10,554 | |||||||||
Other | 47 | (47 | ) | 223 | 187 | (256 | ) | |||||||||
Net cash provided by operating activities from continuing operations | 1,332 | 1,478 | 2,745 | 6,712 | 13,636 | |||||||||||
Net cash provided by operating activities from discontinued operations | - | - | 323 | - | 1,061 | |||||||||||
Net cash provided by operating activities | 1,332 | 1,478 | 3,068 | 6,712 | 14,697 | |||||||||||
Cash flows from investing activities: | ||||||||||||||||
Acquisition of fixed assets | (1,270 | ) | (3,771 | ) | (2,186 | ) | (10,252 | ) | (3,932 | ) | ||||||
Proceeds from sale of fixed assets | 1,255 | - | - | 1,255 | 100 | |||||||||||
Proceeds from sale of assets held for sale | - | - | - | - | 2,049 | |||||||||||
Proceeds from sale of the Brazil operations | 87 | - | 200 | 87 | 200 | |||||||||||
Net cash provided by (used in) investing activities from continuing operations | 72 | (3,771 | ) | (1,986 | ) | (8,910 | ) | (1,583 | ) | |||||||
Net cash used in investing activities from discontinued operations | - | - | - | - | (334 | ) | ||||||||||
Net cash provided by (used in) investing activities | 72 | (3,771 | ) | (1,986 | ) | (8,910 | ) | (1,917 | ) | |||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds from borrowings on notes payable | - | - | - | - | 1,000 | |||||||||||
Payments on short and long-term notes payable | (319 | ) | (129 | ) | (245 | ) | (1,179 | ) | (1,800 | ) | ||||||
Payments on notes payable and finance leases-related party | (622 | ) | (613 | ) | (586 | ) | (2,435 | ) | (1,255 | ) | ||||||
Payments of debt issuance costs | - | - | - | (108 | ) | - | ||||||||||
Employee tax payments from restricted stock withholdings | - | (162 | ) | - | (162 | ) | (85 | ) | ||||||||
Cash used in financing activities from continuing operations | (941 | ) | (904 | ) | (831 | ) | (3,884 | ) | (2,140 | ) | ||||||
Cash used in financing activities from discontinued operations | - | - | - | - | (113 | ) | ||||||||||
Net cash used in financing activities | (941 | ) | (904 | ) | (831 | ) | (3,884 | ) | (2,253 | ) | ||||||
Effect of exchange rate changes on cash | (3 | ) | (10 | ) | 98 | 5 | 14 | |||||||||
Net increase (decrease) in cash and cash equivalents | 460 | (3,207 | ) | 349 | (6,077 | ) | 10,541 | |||||||||
Cash and cash equivalents, beginning of period | 4,914 | 8,121 | 11,102 | 11,451 | 910 | |||||||||||
Cash and cash equivalents, end of period | $ | 5,374 | $ | 4,914 | $ | 11,451 | $ | 5,374 | $ | 11,451 | ||||||
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 from continuing operations 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 United States of America ("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 income (loss), the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA (in thousands).
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Net income (loss) | $ | 1,422 | $ | (207 | ) | $ | (335 | ) | $ | 125 | $ | (3,186 | ) | |||
Loss from discontinued operations | - | - | 553 | - | 1,994 | |||||||||||
Net income (loss) from continuing operations | 1,422 | (207 | ) | 218 | 125 | (1,192 | ) | |||||||||
Depreciation | 1,872 | 2,003 | 2,075 | 7,878 | 8,664 | |||||||||||
Interest expense, net | 26 | (45 | ) | 204 | 334 | 770 | ||||||||||
Income tax expense | 20 | 57 | 513 | 244 | 265 | |||||||||||
EBITDA | 3,340 | 1,808 | 3,010 | 8,581 | 8,507 | |||||||||||
Special items* | (440 | ) | (1,269 | ) | 905 | (1,764 | ) | 1,106 | ||||||||
Adjusted EBITDA | $ | 2,900 | $ | 539 | $ | 3,915 | $ | 6,817 | $ | 9,613 | ||||||
* | For the three months ended December 31, 2023, special items consist of subtraction for change in unrealized gain on natural gas derivatives of $0.2 million and subtraction of $0.2 million for a gain on disposition of fixed assets. For the three months ended September 30, 2023, special items consist of subtraction for change in unrealized gain on natural gas derivatives of $0.3 million and subtraction of $1.0 million for a gain on disposition of fixed assets. For the twelve months ended December 31, 2023, special items consist of subtraction for change in unrealized gain on natural gas derivatives of $0.5 million and subtraction of $1.2 million for a gain on disposition of fixed assets. For the three months ended December 31, 2022, special items consist of an add-back for change in unrealized loss on natural gas derivatives of $0.9 million. For the twelve months ended December 31, 2022, special items consists of an add-back for change in unrealized loss on natural gas derivatives of $0.9 million and an add-back of one-time costs related to an expired contract of $0.2 million. |
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Investor Contact:
Andrew Puhala
Chief Financial Officer
832-456-6502
[email protected]
SOURCE: Stabilis Solutions