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Stabilis Solutions Announces Third Quarter 2020 Results

·11 min read

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
ir@stabilis-solutions.com

SOURCE: Stabilis Solutions, Inc.



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